View on SEC.govFinancial Institutions, Inc. Reports Net Income Available to Common Shareholders of $20.8 million, or $1.04 per Diluted Share, for the Second Quarter of 2026 The Company's community bank subsidiary delivered strong loan growth of 2.7% during the quarter and its wealth manager's assets under management surpassed a new milestone of $4.0 billion WARSAW, N.Y., July 23, 2026 – Financial Institutions, Inc. (NASDAQ: FISI) (the "Company," "we" or "us") today reported financial and operational results for the second quarter ended June 30, 2026, reflecting strong performance by subsidiaries Five Star Bank (the "Bank") and Courier Capital, LLC ("Courier Capital"), including healthy loan growth, all-time-high assets under management ("AUM") and sustained profitability.
| KEY FINANCIAL METRICS | Quarter-over-Quarter ("QoQ") | Year-over-Year ("YoY") | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands, except per share data Return metrics annualized | Q2 2026 | Q1 2026 | Q2 2025 | Variance | % | Variance | % | |||||||||
| Net income | $21,184 | $20,985 | $17,532 | $199 | 0.9% | $3,652 | 20.8% | |||||||||
| Net income available to common shareholders | 20,819 | 20,621 | 17,168 | 198 | 1.0% | 3,651 | 21.3% | |||||||||
| Diluted earnings per common share | $1.04 | $1.04 | $0.85 | $- | 0.0% | $0.19 | 22.4% | |||||||||
| Return on average assets | 1.35% | 1.37% | 1.13% | (2) | bps | 22 | bps | |||||||||
| Return on average equity | 13.31% | 13.43% | 11.78% | (12) | bps | 153 | bps | |||||||||
| Return on average tangible common equity(1) | 14.88% | 15.04% | 13.27% | (16) | bps | 161 | bps | |||||||||
| Efficiency ratio | 55.33% | 57.06% | 59.68% | (173) | bps | (435) | bps | |||||||||
| Total loans (end of period) | $4,752,965 | $4,627,587 | $4,536,002 | $125,378 | 2.7% | $216,963 | 4.8% | |||||||||
| Total deposits (end of period) | $5,299,465 | $5,337,881 | $5,156,014 | $(38,416) | -0.7% | $143,451 | 2.8% |
Second Quarter 2026 Highlights and Key Developments
- Total loans of $4.75 billion at June 30, 2026 grew 2.7% from March 31, 2026, driven by robust commercial lending, while deposits of $5.30 billion were down modestly quarter-over-quarter, reflecting public deposit seasonality.
- Net interest income reached a new quarterly high of $53.4 million and net interest margin of 3.70% reflected expansion of 3 and 21 basis points from the linked and year-ago quarters, respectively.
- Noninterest income of $11.0 million was up 2.6% and 3.2% from the linked and year-ago quarters, respectively, supported by increased investment advisory fees as Courier Capital's AUM surpassed $4.0 billion.
- The efficiency ratio improved to 55%, reflecting both strong revenue generation and disciplined expense management, as noninterest expense of $35.6 million held flat with the linked quarter.
- Net charge-offs were 0.11% of average loans in the second quarter of 2026, while the ratio of allowance for credit losses on loans to total loans increased to 1.00% at June 30, 2026.
"We delivered another quarter of strong and profitable results, highlighted by annualized loan growth of more than 10%, healthy revenue generation and prudent expense management," said President and Chief Executive Officer Martin K. Birmingham. "Commercial loan growth was robust, driven by our core Western and Central New York markets, and our pipelines are healthy heading into the second half of the year. In our wealth business, assets under management grew to more than $4.0 billion as of June 30, 2026, as new business activity complemented market performance. Overall, our results continue to reflect disciplined execution by each of our business lines and our commitment to sustainable profitability and long-term value creation."
Chief Financial Officer and Treasurer W. Jack Plants II added, "Our disciplined approach to managing funding costs supported further net interest margin expansion to 3.70% for the second quarter. Given current rate dynamics, we are beginning to see deposit costs level off and remain focused on preserving margin stability amid a competitive environment. Heading into the third quarter, we remain focused on deposit retention and acquisition, credit disciplined loan growth and effective expense management. Capital strength remains a key pillar of our financial performance, with a tangible common equity ratio(1) of 9.02%, a common equity Tier 1 ratio of 11.44%, and a return on average tangible common equity(1) of 14.88%."
| NET INTEREST INCOME | QoQ | YoY | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands | Q2 2026 | Q1 2026 | Q2 2025 | Variance | % | Variance | % | |||||||||
| Interest income | $83,076 | $81,563 | $82,867 | $1,513 | 1.9% | $209 | 0.3% | |||||||||
| Interest expense | 29,715 | 29,570 | 33,745 | 145 | 0.5% | (4,030) | -11.9% | |||||||||
| Net interest income | 53,361 | 51,993 | 49,122 | 1,368 | 2.6% | 4,239 | 8.6% | |||||||||
| Net interest margin (tax-equivalent basis)(2) | 3.70% | 3.67% | 3.49% | 3 | bps | 21 | bps | |||||||||
| Average interest-earning assets | $5,785,900 | $5,724,534 | $5,651,374 | $61,366 | 1.1% | $134,526 | 2.4% | |||||||||
| Average interest-bearing liabilities | 4,559,420 | 4,513,440 | 4,518,370 | 45,980 | 1.0% | 41,050 | 0.9% |
Net interest income was $53.4 million, up $1.4 million from the linked quarter and up $4.2 million from the second quarter of 2025. Net interest margin of 3.70% reflected expansion of 3 and 21 basis points from the linked and year-ago quarters, respectively, driven by lower interest-bearing liability costs.
- Average interest earning assets of $5.79 billion were up $61.4 million from the first quarter of 2026 and up $134.5 million from the second quarter of 2025. The linked quarter variance reflected increases in both average loans and investment securities, partially offset by a small decrease in the average balance of Federal Reserve interest-earning cash. The year-over-year variance reflected a $139.2 million increase in average balance of loans, partially offset by a $10.7 million decrease in the average balance of Federal Reserve interest-earning cash, as average balances of investment securities remained relatively consistent. The yield on interest-earning assets was 5.76% in both the first and second quarters of 2026, compared to 5.88% in the second quarter of 2025.
- Average interest-bearing liabilities of $4.56 billion were up $46.0 million from the first quarter of 2026 and up $41.1 million from the second quarter of 2025. The linked quarter variance was due to increases in the average balances of savings and money market deposits and short-term borrowings, partially offset by decreases in long-term borrowings, average interest-bearing demand deposits and time deposits. The year-over-year variance reflected increases in the average balances of time deposits, short-term borrowings and savings and money market deposits, partially offset by decreases in average long-term borrowings and average interest-bearing demand deposits. The cost of interest-bearing liabilities was 2.61%, reflecting decreases of 4 and 39 basis points from the linked and year-ago quarters, respectively.
Noninterest Income
| SELECT NONINTEREST INCOME CATEGORIES | QoQ Change | YoY Change | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands | Q2 2026 | Q1 2026 | Q2 2025 | $% | $% | ||||||||
| Investment advisory | $3,287 | $3,061 | $2,885 | $226 | 7.4% | $402 | 13.9% | ||||||
| Investments in limited partnerships | (140) | 224 | 307 | (364) | -162.5% | (447) | -145.6% | ||||||
| Income from derivative instruments, net | 518 | 239 | 339 | 279 | 116.7% | 179 | 52.8% | ||||||
| Net gain (loss) on other assets | 27 | (481) | - | 508 | -105.6% | 27 | N/A | ||||||
| Other | 1,200 | 1,770 | 1,284 | (570) | -32.2% | (84) | -6.5% | ||||||
| Total noninterest income | 10,954 | 10,673 | 10,617 | 281 | 2.6% | 337 | 3.2% |
Noninterest income was $11.0 million in the second quarter of 2026, versus $10.7 million in the first quarter of 2026 and $10.6 million in the second quarter of 2025. The linked quarter and year-over-year variances were driven by a variety of factors, including increased investment advisory income, reflecting both new business and market performance, and increased income from derivative instruments, net, which is based on the number and value of interest rate swap transactions executed during the quarter. Detail on other select categories with notable variances follows:
- A loss on investments in limited partnerships, which are primarily small business investment companies, of $140 thousand was recognized in the second quarter of 2026, compared to gains of $224 thousand and $307 thousand in the linked and year-ago quarters, respectively. Income from these investments, which we account for under the equity method, fluctuates based on the maturity and performance of the underlying investments.
- A net gain on other assets of $27 thousand was recognized in the second quarter of 2026, compared to a net loss of $481 thousand in the first quarter of 2026 related to the write-down of two branch locations that were held for sale as of March 31, 2026. No gain or loss was recorded in the second quarter of 2025.
- Other noninterest income of $1.2 million was down from both the linked and year-ago quarters. The linked quarter variance was driven by a variety of factors, including insurance recoveries recorded in the first quarter of 2026 related to a previously disclosed deposit-related charge-off.
Noninterest Expense and Income Taxes
| SELECT NONINTEREST EXPENSE CATEGORIES | QoQ Change | YoY Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands | Q2 2026 | Q1 2026 | Q2 2025 | $% | $% | |||||||
| Salaries and employee benefits | $19,165 | $18,601 | $18,070 | $564 | 3.0% | $1,095 | 6.1% | |||||
| Computer and data processing | 5,512 | 6,211 | 5,879 | (699) | -11.3% | (367) | -6.2% | |||||
| Total noninterest expense | 35,605 | 35,595 | 35,682 | 10 | 0.0% | (77) | -0.2% |
Noninterest expense was $35.6 million in both the first and second quarters of 2026 and $35.7 million in the second quarter of 2025. Detail on select categories with notable variances follows:
- Salaries and employee benefits expense was $564 thousand higher than the first quarter of 2026, primarily driven by the timing of annual merit increases as well as the impact of an additional business day in the recent quarter, and $1.1 million higher than the second quarter of 2025, reflecting a combination of factors, including annual merit increases, incentive compensation and investments in personnel.
- Computer and data processing expense was $699 thousand and $367 thousand lower than the linked and year-ago quarters, respectively, due in part to the termination of a vendor relationship in the first quarter of 2026.
| INCOME TAXES | QoQ | YoY | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands | Q2 2026 | Q1 2026 | Q2 2025 | Variance | % | Variance | % | |||||||
| Income tax expense | $4,418 | $3,847 | $3,963 | $571 | 14.8% | $455 | 11.5% | |||||||
| Tax credit on investments placed in service/amortized | 1,045 | 1,045 | 1,103 | - | 0.0% | (58) | -5.3% | |||||||
| Effective tax rate | 17.3% | 15.5% | 18.4% | 1.8% | -1.2% |
Income tax expense was $4.4 million for the second quarter of 2026, compared to $3.8 million in the first quarter of 2026 and $4.0 million in the second quarter of 2025. Income tax expense reflects federal and state tax benefits that the Company recognized related to tax credit investments placed in service and/or amortized during each period, as outlined above.
- The effective tax rate, which was 17.3% for the second quarter of 2026, fluctuates on a quarterly basis primarily due to the level of pre-tax earnings or loss and may differ from statutory rates due to interest income from tax-exempt securities, earnings on COLI and the impact of repositionings, the tax impact of restricted stock award vesting, and the impact of tax credit investments.
| SELECT BALANCE SHEET DATA | QoQ Change | YoY Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands, end of period | Q2 2026 | Q1 2026 | Q2 2025 | $% | $% | |||||||
| Total assets | $6,334,952 | $6,294,783 | $6,143,766 | $40,169 | 0.6% | $191,186 | 3.1% | |||||
| Total investment securities | 989,764 | 1,085,771 | 1,008,268 | (96,007) | -8.8% | (18,504) | -1.8% | |||||
| Commercial business and commercial mortgage | 3,210,384 | 3,078,180 | 2,941,371 | 132,204 | 4.3% | 269,013 | 9.1% | |||||
| Residential real estate | 738,681 | 727,640 | 722,880 | 11,041 | 1.5% | 15,801 | 2.2% | |||||
| Consumer indirect and other consumer | 803,900 | 821,767 | 871,751 | (17,867) | -2.2% | (67,851) | -7.8% | |||||
| Total loans | 4,752,965 | 4,627,587 | 4,536,002 | 125,378 | 2.7% | 216,963 | 4.8% | |||||
| Total deposits | 5,299,465 | 5,337,881 | 5,156,014 | (38,416) | -0.7% | 143,451 | 2.8% | |||||
| Short-term borrowings | 182,000 | 114,000 | 101,000 | 68,000 | 59.6% | 81,000 | 80.2% | |||||
| Long-term borrowings, net | 78,694 | 78,621 | 114,960 | 73 | 0.1% | (36,266) | -31.5% |
Total loans of $4.75 billion at June 30, 2026 were up $125.4 million from the end of the linked quarter and up $217.0 million from June 30, 2025.
- Strong commercial lending activity in the Bank's Western and Central New York markets drove both the linked quarter and year-over-year growth.
Total deposits were $5.30 billion at June 30, 2026, down $38.4 million from March 31, 2026, and up $143.5 million from June 30, 2025.
- The linked quarter variance was primarily due to seasonally lower public deposit balances, while the year-over-year increase reflected increases in public, nonpublic and reciprocal deposit balances, partially offset by a decrease in brokered deposits. Public deposits represented 22% of total deposits at June 30, 2026, 23% at March 31, 2026, and 21% at June 30, 2025.
| LIQUIDITY SOURCES | QoQ Change | YoY Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands, end of period | Q2 2026 | Q1 2026 | Q2 2025 | $% | $% | |||||||
| Unencumbered securities | $29,876 | $42,049 | $132,898 | $(12,173) | -28.9% | $(103,022) | -77.5% | |||||
| FHLBNY borrowing availability | 182,426 | 280,164 | 240,211 | (97,738) | -34.9% | (57,785) | -24.1% | |||||
| FRB excess cash | 39,564 | 28,943 | 18,098 | 10,621 | 36.7% | 21,466 | 118.6% | |||||
| FRB discount window | 900,825 | 919,931 | 856,993 | (19,106) | -2.1% | 43,832 | 5.1% | |||||
| Total on-balance sheet liquidity | 1,152,691 | 1,271,087 | 1,248,200 | (118,396) | -9.3% | (95,509) | -7.7% |
The Company maintains liquidity, both on and off-balance sheet, to meet customer demand. As outlined in the table above, at June 30, 2026, the Company had approximately $1.15 billion in available liquidity, excluding brokered deposit capacity, in addition to cash and cash equivalents of $99.2 million and available unsecured lines of credit totaling $155.0 million.
Capital Strength and Shareholder Returns
| REGULATORY CAPITAL RATIOS | Q2 2026 | Q1 2026 | Q2 2025 | QoQ Change | YoY Change | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Leverage Ratio | 10.06% | 9.89% | 9.45% | 17 | bps | 61 | bps | |||||
| Common Equity Tier 1 Ratio | 11.44% | 11.37% | 10.84% | 7 | bps | 60 | bps | |||||
| Tier 1 Capital Ratio | 11.76% | 11.70% | 11.17% | 6 | bps | 59 | bps | |||||
| Total Risk Based Capital Ratio | 14.20% | 14.16% | 13.27% | 4 | bps | 93 | bps |
The Company's regulatory capital ratios at June 30, 2026 continued to exceed all regulatory capital requirements to be considered well capitalized.
| SELECT SHAREHOLDERS' EQUITY AND PER SHARE DATA | QoQ | YoY | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands, except per share data | Q2 2026 | Q1 2026 | Q2 2025 | Variance | % | Variance | % | |||||||||
| Shareholders' equity | $643,441 | $631,670 | $601,668 | $11,771 | 1.9% | $41,773 | 6.9% | |||||||||
| Common shareholders' equity | 626,156 | 614,385 | 584,383 | 11,771 | 1.9% | 41,773 | 7.1% | |||||||||
| Tangible common equity(1) | 566,007 | 554,140 | 523,837 | 11,867 | 2.1% | 42,170 | 8.1% | |||||||||
| Common book value per share | $31.77 | $31.21 | $29.03 | $0.56 | 1.8% | $2.74 | 9.4% | |||||||||
| Tangible common book value per share(1) | $28.72 | $28.15 | $26.03 | $0.57 | 2.0% | $2.69 | 10.3% | |||||||||
| Common equity to assets ratio | 9.88% | 9.76% | 9.51% | 12 | bps | 37 | bps | |||||||||
| Tangible common equity to tangible assets ratio(1) | 9.02% | 8.89% | 8.61% | 13 | bps | 41 | bps |
Shareholders' equity grew to $643.4 million at June 30, 2026, compared to $631.7 million at March 31, 2026, and $601.7 million at June 30, 2025, primarily due to net income, net of dividends, retained.
- The increase in shareholders' equity supported significant year-over-year expansion of both the common equity to assets ratio, which was 9.88% at June 30, 2026, and the tangible common equity to tangible assets ratio(1), or the TCE ratio, which was 9.02% at June 30, 2026.
The Company declared a common stock dividend of $0.32 per common share in the second quarter of 2026, consistent with the linked quarter and reflecting an increase of $0.01, or 3.2%, over the year-ago quarter, returning 30% of second quarter net income to common shareholders.
As of June 30, 2026, 503,313 shares, or approximately half of the amount authorized by the Board of Directors, remained available under the repurchase program that was approved in September 2025. The Company did not repurchase shares of its common stock under the share repurchase program in the second quarter of 2026.
Credit Quality
| SELECT CREDIT QUALITY METRICS | QoQ | YoY | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dollars in thousands | Q2 2026 | Q1 2026 | Q2 2025 | Variance | % | Variance | % | |||||||||
| Non-performing loans | $39,007 | $38,475 | $32,436 | $532 | 1.4% | $6,571 | 20.3% | |||||||||
| Total non-performing loans to total loans | 0.82% | 0.83% | 0.72% | (1) | bps | 11 | bps | |||||||||
| Allowance for credit losses "ACL" - loans | 47,497 | 44,661 | 47,291 | 2,836 | 6.4% | 206 | 0.4% | |||||||||
| ACL - loans to total loans ratio | 1.00% | 0.97% | 1.04% | 3 | bps | (4) | bps | |||||||||
| Provision for credit losses - loans | $4,133 | $2,355 | $2,377 | $1,778 | 75.5% | $1,756 | 73.9% | |||||||||
| Provision for credit losses | 3,108 | 2,239 | 2,562 | 869 | 38.8% | $546 | 21.3% | |||||||||
| Net charge-offs/average loans (annualized) | 0.11% | 0.44% | 0.36% | (33) | bps | (25) | bps |
The Company has remained strategically focused on the importance of credit discipline, allocating resources to credit and risk management functions as the loan portfolio has grown.
- Non-performing loans were $39.0 million, or 0.82% of total loans, at June 30, 2026. The increase from one year prior primarily reflects one well-collateralized commercial business loan that moved to nonaccrual status in the first quarter of 2026, offset in part by the partial charge-off of a previously disclosed nonaccrual commercial business relationship for which a specific reserve was in place.
- Provision for credit losses was $3.1 million in the second quarter of 2026 and was driven by a combination of factors, including loan growth and fluctuation in the balance of unfunded commitments. The provision for credit losses on unfunded commitments, which is included in the provision for credit losses as required by the current expected credit loss standard ("CECL"), totaled a credit of $1.0 million in the second quarter of 2026, compared to a credit of $116 thousand in the first quarter of 2026 and a provision of $185 thousand in the second quarter of 2025.
Subsequent Events
The Company is required, under U.S. generally accepted accounting principles ("GAAP"), to evaluate subsequent events through the filing of its consolidated financial statements for the quarter ended June 30, 2026 on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of June 30, 2026, and will adjust amounts preliminarily reported, if necessary, in its Form 10-Q as filed with the Securities and Exchange Commission (the "SEC").
Conference Call
The Company will host an earnings conference call and audio webcast on July 24, 2026, at 8:30 a.m. Eastern Time. The call will be hosted by Martin K. Birmingham, President and Chief Executive Officer, and W. Jack Plants II, Chief Financial Officer and Treasurer. Within the United States, participants may access the call by dialing 1-877-425-9470 and requesting the “Financial Institutions, Inc. Second Quarter 2026 Earnings Conference Call.” A live webcast will also be available at https://viavid.webcasts.com/starthere.jsp?ei=1767913&tp_key=12f3894d15 in listen-only mode. A replay of the webcast will be available on the Company’s IR website, www.FISI-Investors.com, for at least 30 days.
About Financial Institutions, Inc.
Financial Institutions, Inc. (NASDAQ: FISI) is a financial holding company with approximately $6.3 billion in assets offering banking and wealth management products and services. Its Five Star Bank subsidiary provides consumer and commercial banking and lending services to individuals, municipalities and businesses through banking locations spanning Western and Central New York and a commercial loan production office serving the Mid-Atlantic region. Its Courier Capital, LLC subsidiary offers customized investment management, consulting and retirement plan services to individuals, businesses, institutions, foundations and retirement plans. Learn more at FISI-Investors.com.
Non-GAAP Financial Information
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of these non-GAAP measures to GAAP measures is included in Appendix A to this document.
The Company believes that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, performance trends and financial position. Our management uses these measures for internal planning and forecasting purposes and we believe that our presentation and discussion, together with the accompanying reconciliations, allows investors, security analysts and other interested parties to view our performance and the factors and trends affecting our business in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP measures, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure to evaluate the Company. Non-GAAP financial measures have inherent limitations, are not uniformly applied and are not audited. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Safe Harbor Statement
This press release may contain forward-looking statements as defined by Section 21E of the Securities Exchange Act of 1934, as amended, that involve significant risks and uncertainties. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "anticipate," "believe," "continue," "estimate," "expect," "focus," "forecast," "intend," "may," "plan," "preliminary," "should," "target" or "will." Statements herein are based on certain assumptions and analyses by the Company and factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; inflation; tariffs; changes in deposit flows and the cost and availability of funds; fraudulent deposit activity; the Company’s ability to implement its strategic plan, including by expanding its commercial lending footprint and integrating its acquisitions; whether the Company experiences greater credit losses than expected; whether the Company experiences breaches of its, or third party, information systems; the attitudes and preferences of the Company's customers; legal and regulatory proceedings and related matters, including any action described in our reports filed with the SEC, could adversely affect us and the banking industry in general; the competitive environment; fluctuations in the fair value of securities in its investment portfolio; changes in the regulatory environment and the Company's compliance with regulatory requirements; general economic and credit market conditions nationally and regionally; and macroeconomic volatility related to global political unrest. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language and risk factors included in the Company's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other documents filed with the SEC. Except as required by law, the Company undertakes no obligation to revise these statements following the date of this press release.
(1) See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
(2) Calculated on a tax-equivalent basis assuming a Federal income tax rate of 21%.
For additional information contact:
Kate Croft
Director of Investor Relations and Corporate Communications
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited) (Amounts in thousands, except per share amounts)
| Metric | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|
| Total Assets | $6.16B | $6.12B | $6.34B | $6.14B | $6.29B | $6.27B | $6.29B | $6.33B |
| Cash and Equivalents | $249.57M | $966K | $167.35M | $93.03M | $185.95M | $274K | $85.45M | $99.17M |
| Fin Total Investment Securities | $16.19M | $18.26M | $18.62M | $20.8M | $18.96M | $21.63M | $19.77M | $989.76M |
| Fin Afs Securities | $85.66M | $13K | $12K | $11K | $9K | $3.97M | $3.04M | $910.47M |
| Fin Htm Securities | $121.28M | $116M | $113.11M | $92.12M | $87.63M | $84.71M | $82.08M | $79.3M |
| Mortgage Loans Held for Sale | $2.5M | $2.28M | $387K | $2.36M | $2.25M | $3.37M | $1.03M | $2.5M |
| Fin Deposits | $5.31B | $5.1B | $5.37B | $5.16B | $5.36B | $5.21B | $5.34B | $5.3B |
| Short Term Borrowings | $55M | $99M | $55M | $101M | $55M | $109M | $114M | $182M |
| Long Term Debt | $124.77M | $223.84M | $124.92M | $114.96M | $115M | $302.65M | $78.62M | $78.69M |
| Total Stockholders Equity | $500.34M | $568.98M | $589.93M | $601.67M | $621.72M | $628.85M | $631.67M | $643.44M |
| Aoci | -$102.03M | -$52.6M | -$42M | -$42.21M | -$36.76M | -$33.03M | -$39.33M | -$43.35M |
(1) See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited) (Amounts in thousands, except per share amounts)
| Metric | Q1 '24 | Q2 '24 | Q3 '24 | Q4 '24 | Q1 '25 | Q2 '25 | Q3 '25 | Q4 '25 | Q1 '26 | Q2 '26 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Income | — | — | $13.47M | -$82.81M | $16.88M | $17.53M | $20.48M | $19.98M | $20.99M | $21.18M |
| Operating Net Income Loss Available to Common Stockholde 551d72 | — | — | $13.1M | -$83.18M | $16.51M | $17.17M | $20.11M | $19.62M | $20.62M | $20.82M |
| Eps Basic | — | — | $0.85 | -$5.35 | $0.82 | $0.85 | $1.00 | $0.97 | $1.05 | $2.11 |
| Eps Diluted | — | — | $0.84 | -$5.32 | $0.81 | $0.85 | $0.99 | $0.96 | $1.04 | $1.04 |
| Interest Income | — | — | $607K | $1.31M | $774K | $410K | $344K | $493K | $283K | $83.08M |
| Interest Expense | — | — | $37.23M | $36.49M | $34.19M | $33.75M | $32.63M | $32.44M | $29.57M | $29.72M |
| Net Interest Income | — | — | $40.68M | $41.63M | $46.86M | $49.12M | $51.79M | $52.21M | $51.99M | $53.36M |
| Net Interest Income After Provision | — | — | $37.58M | $35.17M | $43.94M | $46.56M | $49.06M | $48.81M | $49.75M | $50.25M |
| Total Noninterest Income | — | — | $9.44M | -$91.04M | $10.37M | $10.62M | $12.06M | $11.91M | $10.67M | $10.95M |
| Other Noninterest Income Investments In Limited Partnerships | — | — | $400K | $837K | $415K | $307K | $223K | $457K | $224K | -$140K |
| Other Derivative Gain Loss On Derivative Net | — | — | $212K | $0 | $250K | $339K | $847K | $1.11M | $239K | $518K |
| Total Noninterest Expense | — | — | $32.47M | $59.4M | $33.69M | $35.68M | $35.88M | $36.72M | $35.6M | $35.61M |
| Compensation and Benefits | — | — | $15.88M | $17.16M | $16.9M | $18.07M | $18.52M | $19.32M | $18.6M | $19.17M |
| Other Information Technology and Data Processing | — | — | $5.35M | $6.61M | $5.49M | $5.88M | $5.79M | $5.93M | $6.21M | $5.51M |
| Occupancy and Equipment | — | — | $3.37M | $3.79M | $3.59M | $3.98M | $3.81M | $4.1M | $3.87M | $3.94M |
| Professional Fees | — | — | $1.97M | $1.57M | $1.69M | $1.45M | $1.69M | $1.69M | $1.35M | $1.26M |
| Other Federal Deposit Insurance Corporation Premium Expense | — | — | $1.09M | $1.55M | $1.47M | $1.39M | $1.23M | $984K | $986K | $987K |
| Selling and Marketing | — | — | $371K | $465K | $342K | $495K | $491K | $482K | $524K | $592K |
| Operating Amortization of Intangible Assets | — | — | $112K | $109K | $107K | $105K | $103K | $100K | $98K | $96K |
| Other Deposi Related Charged Off Items Recoveries Expense | $19.18M | $398K | $410K | — | -$294K | $233K | $144K | — | $109K | $126K |
| Income Before Tax | — | — | $14.55M | -$115.27M | $20.62M | $21.5M | $25.24M | $24M | $24.83M | $25.6M |
| Income Tax Expense | — | — | $1.08M | -$32.46M | $3.75M | $3.96M | $4.76M | $4.02M | $3.85M | $4.42M |
| Preferred Dividends | — | — | $365K | $365K | $365K | $364K | $365K | $364K | $364K | $365K |
| Other Gain Loss On Tax Credit Investments | — | — | -$170K | -$636K | -$514K | -$512K | -$513K | -$446K | -$452K | -$350K |
| Other Gain Loss On Sales of Loans Net | — | — | $220K | $186K | $117K | $140K | $285K | $195K | $125K | $181K |
| Other Gain Loss On Sale of Other Assets | — | — | $138K | $0 | $0 | $0 | -$281K | -$225K | -$481K | $27K |
| Other Noninterest Income Service Charges On Deposits | — | — | $1.1M | $1.07M | $1.05M | $1.09M | $1.14M | $1.08M | $1.04M | $1.08M |
| Other Card Interchange Income | — | — | $1.9M | $2.05M | $1.84M | $1.94M | $2.01M | $2.01M | $1.89M | $2.06M |
| Other Bank Owned Life Insurance Income | — | — | $1.4M | $1.43M | $2.78M | $2.97M | $2.85M | $2.79M | $2.77M | $2.88M |
| Other Noninterest Income Loan Servicing | — | — | $88K | $295K | $123K | $180K | $181K | $208K | $151K | $201K |
(1) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
(2) The efficiency ratio is calculated by dividing noninterest expense by net revenue, i.e., the sum of net interest income (tax-equivalent basis assuming a Federal income tax rate of 21%) and noninterest income before net gains on investment securities. This is a banking industry measure not required by GAAP.
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited) (Amounts in thousands)
| Six Months Ended | 2026 | 2025 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | Second | First | Fourth | Third | Second | |||||||||
| SELECT AVERAGE BALANCES: | 2026 | 2025 | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||
| Federal funds sold and interest-earning deposits | $29,301 | $55,306 | $28,347 | $30,266 | $48,418 | $31,461 | $39,027 | |||||||
| Investment securities (1) | 1,066,571 | 1,078,600 | 1,077,633 | 1,055,385 | 1,066,829 | 1,059,244 | 1,071,628 | |||||||
| Loans: | ||||||||||||||
| Commercial business | 741,484 | 699,141 | 745,977 | 736,942 | 731,314 | 726,315 | 720,347 | |||||||
| Commercial mortgage | 2,367,615 | 2,212,786 | 2,392,003 | 2,342,957 | 2,313,465 | 2,239,666 | 2,221,576 | |||||||
| Residential real estate loans | 654,822 | 646,001 | 655,028 | 654,614 | 650,190 | 648,642 | 645,007 | |||||||
| Residential real estate lines | 74,523 | 74,860 | 74,853 | 74,189 | 75,288 | 75,774 | 75,010 | |||||||
| Consumer indirect | 787,178 | 843,763 | 779,336 | 795,107 | 823,521 | 838,026 | 839,294 | |||||||
| Other consumer | 33,892 | 40,850 | 32,723 | 35,074 | 36,917 | 37,741 | 39,485 | |||||||
| Total loans | 4,659,514 | 4,517,401 | 4,679,920 | 4,638,883 | 4,630,695 | 4,566,164 | 4,540,719 | |||||||
| Total interest-earning assets | 5,755,386 | 5,651,307 | 5,785,900 | 5,724,534 | 5,745,942 | 5,656,869 | 5,651,374 | |||||||
| Goodwill and other intangible assets, net | 60,256 | 60,663 | 60,207 | 60,305 | 60,404 | 60,505 | 60,610 | |||||||
| Total assets | 6,249,798 | 6,218,412 | 6,271,961 | 6,227,388 | 6,261,856 | 6,159,886 | 6,216,657 | |||||||
| Interest-bearing liabilities: | ||||||||||||||
| Interest-bearing demand | 709,029 | 738,055 | 701,768 | 716,370 | 713,033 | 687,978 | 730,979 | |||||||
| Savings and money market | 1,941,869 | 1,964,884 | 1,976,903 | 1,906,445 | 1,924,952 | 1,881,445 | 1,953,412 | |||||||
| Time deposits | 1,679,954 | 1,598,381 | 1,676,759 | 1,683,185 | 1,692,138 | 1,643,342 | 1,631,407 | |||||||
| Short-term borrowings | 116,782 | 90,636 | 125,331 | 108,138 | 79,913 | 110,011 | 86,099 | |||||||
| Long-term borrowings, net | 88,923 | 120,648 | 78,659 | 99,302 | 133,242 | 114,976 | 116,473 | |||||||
| Total interest-bearing liabilities | 4,536,557 | 4,512,604 | 4,559,420 | 4,513,440 | 4,543,278 | 4,437,752 | 4,518,370 | |||||||
| Noninterest-bearing demand deposits | 947,322 | 925,043 | 944,037 | 950,644 | 955,880 | 960,089 | 923,409 | |||||||
| Total deposits | 5,278,174 | 5,226,363 | 5,299,467 | 5,256,644 | 5,286,003 | 5,172,854 | 5,239,207 | |||||||
| Total liabilities | 5,613,678 | 5,630,349 | 5,633,343 | 5,593,794 | 5,629,101 | 5,549,575 | 5,619,834 | |||||||
| Shareholders’ equity | 636,120 | 588,063 | 638,618 | 633,594 | 632,755 | 610,311 | 596,823 | |||||||
| Common equity | 618,835 | 570,778 | 621,333 | 616,309 | 615,470 | 593,026 | 579,538 | |||||||
| Tangible common equity (2) | 558,579 | 510,115 | 561,126 | 556,004 | 555,066 | 532,521 | 518,928 | |||||||
| Common shares outstanding: | ||||||||||||||
| Basic | 19,665 | 20,290 | 19,687 | 19,642 | 20,093 | 20,122 | 20,107 | |||||||
| Diluted | 19,931 | 20,291 | 19,941 | 19,922 | 20,347 | 20,336 | 20,294 | |||||||
| SELECTED AVERAGE YIELDS: (Tax equivalent basis) | ||||||||||||||
| Investment securities (3) | 4.47% | 4.30% | 4.46% | 4.48% | 4.48% | 4.45% | 4.34% | |||||||
| Loans | 6.07% | 6.23% | 6.07% | 6.07% | 6.20% | 6.29% | 6.26% | |||||||
| Total interest-earning assets | 5.76% | 5.84% | 5.76% | 5.76% | 5.86% | 5.93% | 5.88% | |||||||
| Interest-bearing demand | 1.06% | 1.18% | 1.08% | 1.04% | 1.20% | 1.09% | 1.21% | |||||||
| Savings and money market | 2.31% | 2.71% | 2.33% | 2.29% | 2.46% | 2.62% | 2.67% | |||||||
| Time deposits | 3.45% | 4.19% | 3.38% | 3.53% | 3.73% | 3.88% | 4.08% | |||||||
| Short-term borrowings | 2.52% | 1.95% | 2.62% | 2.40% | 1.77% | 2.41% | 1.80% | |||||||
| Long-term borrowings, net | 6.91% | 5.17% | 6.99% | 6.84% | 6.31% | 5.53% | 5.35% | |||||||
| Total interest-bearing liabilities | 2.63% | 3.03% | 2.61% | 2.65% | 2.83% | 2.92% | 3.00% | |||||||
| Net interest rate spread | 3.13% | 2.81% | 3.15% | 3.11% | 3.03% | 3.01% | 2.88% | |||||||
| Net interest margin | 3.68% | 3.42% | 3.70% | 3.67% | 3.62% | 3.65% | 3.49% |
(1) Includes investment securities at adjusted amortized cost.
(2) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
(3) The interest on tax-exempt securities is calculated on a tax-equivalent basis assuming a Federal income tax rate of 21%.
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited) (Amounts in thousands)
| Six Months Ended | 2026 | 2025 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | Second | First | Fourth | Third | Second | |||||||||
| ASSET QUALITY DATA: | 2026 | 2025 | Quarter | Quarter | Quarter | Quarter | Quarter | |||||||
| Allowance for Credit Losses – Loans | ||||||||||||||
| Beginning balance | $47,386 | $48,041 | $44,661 | $47,386 | $47,292 | $47,291 | $48,964 | |||||||
| Net loan charge-offs (recoveries): | ||||||||||||||
| Commercial business | 2,967 | 1,960 | (23) | 2,990 | 46 | 123 | 1,903 | |||||||
| Commercial mortgage–construction | - | - | - | - | (10) | (357) | - | |||||||
| Commercial mortgage–multifamily | - | - | - | - | - | - | - | |||||||
| Commercial mortgage–non-owner occupied | (2) | 595 | (1) | (1) | - | (1) | 596 | |||||||
| Commercial mortgage–owner occupied | (1) | (2) | - | (1) | - | (1) | (1) | |||||||
| Residential real estate loans | 19 | 133 | - | 19 | (4) | (25) | 92 | |||||||
| Residential real estate lines | 27 | 27 | 30 | (3) | - | - | 27 | |||||||
| Consumer indirect | 2,990 | 3,091 | 1,140 | 1,850 | 2,239 | 1,926 | 942 | |||||||
| Other consumer | 377 | 615 | 151 | 226 | 140 | 396 | 491 | |||||||
| Total net charge-offs (recoveries) | 6,377 | 6,419 | 1,297 | 5,080 | 2,411 | 2,061 | 4,050 | |||||||
| Provision for credit losses – loans | 6,488 | 5,669 | 4,133 | 2,355 | 2,505 | 2,062 | 2,377 | |||||||
| Ending balance | $47,497 | $47,291 | $47,497 | $44,661 | $47,386 | $47,292 | $47,291 | |||||||
| Net charge-offs (recoveries) to average loans (annualized): | ||||||||||||||
| Commercial business | 0.81% | 0.57% | -0.01% | 1.65% | 0.02% | 0.07% | 1.06% | |||||||
| Commercial mortgage–construction | 0.00% | 0.00% | 0.00% | 0.00% | -0.01% | -0.31% | 0.00% | |||||||
| Commercial mortgage–multifamily | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||||
| Commercial mortgage–non-owner occupied | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||||
| Commercial mortgage–owner occupied | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||||
| Residential real estate loans | 0.01% | 0.04% | 0.00% | 0.01% | 0.00% | -0.02% | 0.06% | |||||||
| Residential real estate lines | 0.07% | 0.07% | 0.16% | -0.03% | 0.00% | 0.00% | 0.14% | |||||||
| Consumer indirect | 0.77% | 0.74% | 0.59% | 0.94% | 1.08% | 0.91% | 0.45% | |||||||
| Other consumer | 2.24% | 3.04% | 1.85% | 2.61% | 1.50% | 4.16% | 4.99% | |||||||
| Total loans | 0.28% | 0.29% | 0.11% | 0.44% | 0.21% | 0.18% | 0.36% | |||||||
| Supplemental information (1) | ||||||||||||||
| Non-performing loans: | ||||||||||||||
| Commercial business | $7,677 | $3,671 | $7,677 | $6,698 | $4,709 | $3,799 | $3,671 | |||||||
| Commercial mortgage–construction | 20,520 | 19,621 | 20,520 | 20,520 | 20,321 | 19,794 | 19,621 | |||||||
| Commercial mortgage–multifamily | 540 | - | 540 | 540 | 540 | 540 | - | |||||||
| Commercial mortgage–non-owner occupied | - | 164 | - | - | - | - | 164 | |||||||
| Commercial mortgage–owner occupied | 981 | - | 981 | 983 | 1,095 | 1,102 | - | |||||||
| Residential real estate loans | 6,974 | 5,885 | 6,974 | 7,434 | 6,443 | 5,877 | 5,885 | |||||||
| Residential real estate lines | 412 | 299 | 412 | 431 | 374 | 212 | 299 | |||||||
| Consumer indirect | 1,772 | 2,571 | 1,772 | 1,767 | 2,155 | 2,482 | 2,571 | |||||||
| Other consumer | 131 | 225 | 131 | 102 | 118 | 145 | 225 | |||||||
| Total non-performing loans | 39,007 | 32,436 | 39,007 | 38,475 | 35,755 | 33,951 | 32,436 | |||||||
| Foreclosed assets | 552 | 142 | 552 | 552 | 94 | 142 | 142 | |||||||
| Total non-performing assets | $39,559 | $32,578 | $39,559 | $39,027 | $35,849 | $34,093 | $32,578 | |||||||
| Total non-performing loans to total loans | 0.82% | 0.72% | 0.82% | 0.83% | 0.77% | 0.74% | 0.72% | |||||||
| Total non-performing assets to total assets | 0.62% | 0.53% | 0.62% | 0.62% | 0.57% | 0.54% | 0.53% | |||||||
| Allowance for credit losses – loans to total loans | 1.00% | 1.04% | 1.00% | 0.97% | 1.02% | 1.03% | 1.04% | |||||||
| Allowance for credit losses – loans to non-performing loans | 122% | 146% | 122% | 116% | 133% | 139% | 146% |
(1) At period end.
FINANCIAL INSTITUTIONS, INC. Appendix A — Reconciliation to Non-GAAP Financial Measures (Unaudited) (In thousands, except per share amounts)
| Six Months Ended | 2026 | 2025 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | Second | First | Fourth | Third | Second | |||||||||
| 2026 | 2025 | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||
| Ending tangible assets: | ||||||||||||||
| Total assets | $6,334,952 | $6,294,783 | $6,274,140 | $6,288,052 | $6,143,766 | |||||||||
| Less: Goodwill and other intangible assets, net | 60,149 | 60,245 | 60,343 | 60,443 | 60,546 | |||||||||
| Tangible assets | $6,274,803 | $6,234,538 | $6,213,797 | $6,227,609 | $6,083,220 | |||||||||
| Ending tangible common equity: | ||||||||||||||
| Common shareholders’ equity | $626,156 | $614,385 | $611,569 | $604,435 | $584,383 | |||||||||
| Less: Goodwill and other intangible assets, net | 60,149 | 60,245 | 60,343 | 60,443 | 60,546 | |||||||||
| Tangible common equity | $566,007 | $554,140 | $551,226 | $543,992 | $523,837 | |||||||||
| Tangible common equity to tangible assets (1) | 9.02% | 8.89% | 8.87% | 8.74% | 8.61% | |||||||||
| Common shares outstanding | 19,706 | 19,686 | 19,797 | 20,130 | 20,128 | |||||||||
| Tangible common book value per share (2) | $28.72 | $28.15 | $27.84 | $27.02 | $26.03 | |||||||||
| Average tangible assets: | ||||||||||||||
| Average assets | $6,249,798 | $6,218,412 | $6,271,961 | $6,227,388 | $6,261,856 | $6,159,886 | $6,216,657 | |||||||
| Less: Average goodwill and other intangible assets, net | 60,256 | 60,663 | 60,207 | 60,305 | 60,404 | 60,505 | 60,610 | |||||||
| Average tangible assets | $6,189,542 | $6,157,749 | $6,211,754 | $6,167,083 | $6,201,452 | $6,099,381 | $6,156,047 | |||||||
| Average tangible common equity: | ||||||||||||||
| Average common equity | $618,835 | $570,778 | $621,333 | $616,309 | $615,470 | $593,026 | $579,538 | |||||||
| Less: Average goodwill and other intangible assets, net | 60,256 | 60,663 | 60,207 | 60,305 | 60,404 | 60,505 | 60,610 | |||||||
| Average tangible common equity | $558,579 | $510,115 | $561,126 | $556,004 | $555,066 | $532,521 | $518,928 | |||||||
| Net income available to common shareholders | $41,440 | $33,681 | $20,819 | $20,621 | $19,616 | $20,112 | $17,168 | |||||||
| Return on average tangible common equity (3) | 14.96% | 13.31% | 14.88% | 15.04% | 14.02% | 14.98% | 13.27% |
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by common shares outstanding.
(3) Net income available to common shareholders (annualized) divided by average tangible common equity.
