Slide 1: Investor Presentation: Fourth Quarter 2024 Earnings Presentation
Investor Presentation Financial Institutions, Inc. (Nasdaq: FISI) Fourth Quarter 2024 Earnings Presentation Updated March 10, 2025
Slide 2: Important Information
Update on March 10, 2025 This investor presentation was updated on March 10, 2025, to reflect the amended fourth quarter and full year 2024 financials that the Company concurrently filed in a Current Report on Form 8-K/A, following the Company’s settlement of an auto lending litigation, which was al
Slide 3: Overview of Financial Institutions, Inc.
Company Overview Overview of Financial Institutions, Inc. $548M Market cap NASDAQ: FISI • Innovative financial holding company headquartered in Western $6.11B Total assets New York offering banking and wealth management services through its subsidiaries, Five Star Bank and Courier Capital, LLC • Exp
Slide 4: Why FISI
Company Overview Why FISI Strategic focus designed to deliver long-term value • Results-driven community bank with strong retail and commercial franchises 10.54% ◦ Serving financially stable markets and well-positioned for growth in several New York State metros CET1 ratio at ◦ Launched commercial l
Slide 5: Q4 '24 Common Equity Raise and Securities Portfolio Restructuring
Company Overview Q4 ‘24 Common Equity Raise and Securities Portfolio Restructuring Securities Sold: $653.5M Strategic actions to accelerate profitability in meaningful way (Market Value) AFS Pre-Tax Loss: $100.2M • Q4 ’24 common stock public offering of 4.6M shares → net proceeds of $108.5M Weighted
Slide 6: Full Year 2025 Guidance
Company Overview Full Year 2025 Guidance Strategic fourth quarter 2024 actions expected to enhance profitability Flat deposit balances >1.10% Full-year net interest margin 1-3% full year loan Return on average of 3.45%-3.55% growth as non-public deposit growth is expected to offset the outflow of as
Slide 7: Fourth Quarter 2024 Key Results
Financial Highlights • The Company reported a net loss available to common shareholders of $83.2M, or ($5.07) per diluted share, compared to net income of $13.1M, or $0.84 per diluted share, in Q3 ’24 and $9.4M, or $0.61 per diluted share, in Q4 ’23. • Provision for credit losses was $6.5M in Q4 ’24
Slide 8: Recent Earnings Performance
Financial Highlights Recent Earnings Performance Last five quarters Earnings Summary(1) Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Average interest-earning assets $5,726.6 $5,804.9 $5,765.9 $5,611.7 $5,715.8 Net interest margin (tax equivalent basis) 2.78% 2.78% 2.87% 2.89% 2.91% Net interest income 39.9 40
Slide 9: Diversified Loan Portfolio
High Quality Lending Average yield of 6.28% in the fourth quarter of 2024 6% 20% 11% Diversified Loan Portfolio 13% Total Loans Total loans have grown at a 5.3% $4.48B 19% CAGR since year-end 2020 16% 15% Consumer Indirect & Other Consumer Non-Owner Occupied Commercial Mortgage Commercial Business R
Slide 10: Commercial Lending
High Quality Lending $3.5 Total Commercial Loans Billions Commercial Lending 8.1% CAGR $3.0 Commercial loans of $2.86B at December 31, 2024 $2.74 $2.86 • Commercial loans increased $104.8M, or 3.8%, during the fourth quarter of 2024 $2.5 $0.66 and increased $123.9M, or 4.5%, year-over-year $2.34 $0.
Slide 11: Commercial Lending
High Quality Lending 1% Commercial Lending 2% 2% 4% 3% Outstanding balance of $2.86B and committed credit 3% exposure of $3.79B at December 31, 2024 6% • Commercial banking business operates across the Bank’s core Upstate New Total York markets and in the Mid-Atlantic region, following its successfu
Slide 12: Strong Mid-Atlantic Performance & Opportunity
High Quality Lending Strong Mid-Atlantic Performance & Opportunity Leveraging technology to seamlessly collaborate with Mid-Atlantic team and onboard new customers despite geographic divide • Commercial LPO opened in Baltimore suburb of Ellicott City in Q1 ’22 serving the Mid-Atlantic region $395M ◦
Slide 13: Commercial Real Estate (CRE)
High Quality Lending Commercial Real Estate (CRE) CRE loans of $1.91B and committed credit exposure of $2.29B as of December 31, 2024 44% • Well diversified, with ~720 loan facilities consolidated into ~260 separate lending relationships, with ~$2.6M average loan size ◦ 73% of CRE clients have loan
Slide 14: Office and Multifamily CRE
High Quality Lending Office and Multifamily CRE 68% of FISI’s office exposure, or 12% of CRE exposure, relates to Class B or Medical space 16% <1% • Office CRE outstanding balances of $377M and committed credit exposure of $394M ◦ <$50M of office exposure in CBDs2 represents ~12% of office and ~2% o
Slide 15: Residential Lending
High Quality Lending Residential Lending Held Portfolio Residential Real Estate 1.3% CAGR $725.8M held portfolio and $280.8M serviced for others $727.2 $725.8 Millions $689.6 portfolio at December 31, 2024 $700 $655.8 $667.6 $77.4 $75.6 $89.8 $78.5 $77.7 $600 • Residential held portfolio was relativ
Slide 16: Indirect Auto Remains Core Competency
High Quality Lending Indirect Auto Remains Core Consumer Indirect Portfolio Competency 0.2% CAGR Millions $845.8M portfolio at December 31, 2024 $1,023.6 $1,000 $958.0 $948.8 • Consumer indirect portfolio was down $28.9, or 3.3%, from September 30, 2024 $840.4 $845.8 and down $103.1M, or 10.9%, from
Slide 17: Solid Asset Quality
High Quality Lending Solid Asset Quality Disciplined credit culture supports consistency of asset quality metrics • Thorough credit review exercise undertaken at the outset of COVID-19 pandemic reinforced confidence in health of loan portfolio ◦ During Q2 ’22, COVID-19 at-risk pool was eliminated, a
Slide 18: Allowance for Credit Losses
High Quality Lending • Allowance for credit losses – loans to total loans increased 6 bps on linked quarter basis • Q4 ’24 provision for credit losses of $6.5M, compared to $3.1M in Q3 ’24 ◦ The higher provision on a linked quarter basis was driven by a combination of factors, including higher loan
Slide 19: Securities Portfolio
Securities and Deposits 3.2% CAGR $1,384 Millions $1,400 $206 $1,143 $1,200 Securities Portfolio $1,000 $900 $189 $1,036 $148 $1,027 $116 $800 $1.03B at December 31, 2024 $272 $600 $1,178 $954 $888 $911 $400 $628 • Primarily comprised of agency wrapped mortgage-backed securities with $200 intermedia
Slide 20: Total Deposits
Securities and Deposits Total Deposits $5.10B at December 31, 2024 323 ~$89M municipal Average deposit customers as of balances per • Total deposits were $5.10B, down $201.9M, or 3.8%, from September 30, 2024, MRQ-end branch1 and down $108.2M, or 2.1%, from one year prior ◦ Linked quarter decrease p
Slide 21: Liquidity
Securities and Deposits Liquidity Diverse deposit gathering capabilities and eligible ~18% ~88% collateral support a robust liquidity position of total deposits Loan to deposit are uninsured ratio • Q4 ’24 available committed liquidity remains strong, as supported through nonpublic deposits unencumb
Slide 22: Net Interest Income & Margin
Revenue Net Interest Income & Margin Q4 ’24 net interest income of $41.6M and net interest margin of 2.91% • Net interest income of $41.6M increased $1.0M, or 2.3%, from the linked quarter $180 7.00% and $1.7M, or 4.4%, from the year-ago Millions $167 $166 $164 quarter $160 $155 6.00% • Net interest
Slide 23: Balance Sheet Providing Ample Cash Flow
Revenue In addition to cash flow from loans, principal cash flow off of investment securities of ~$141M expected over next 12 months, allowing for reinvestment into loans Balance Sheet Q4 ‘24 Q4 ’24 Balance Avg. NTM Roll Off Roll On at Monthly Cash Providing Ample Select Interest Earning Assets Q4 ‘
Slide 24: Noninterest Income
Revenue Noninterest Income Q4 ’24 loss reflective of strategic investment securities restructuring that supports NII growth in 2025 Courier • The Company recorded a loss for noninterest income of $91.0M in Q4 ’24, due to the previously mentioned Capital securities portfolio repositioning, compared t
Slide 25: Expense Management & Operating Leverage
Expense Management & Operating Leverage Quarterly Noninterest Expense $59.4 $60 Millions $54.0 Noninterest Expense $50 $19.0 $23.0 $40 $35.0 Q4 ’24 expense was $59.4M $33.0 $0.2 $32.5 $0.1 $30 $0.4 $20 $35.0 $35.0 $32.8 $36.2 $32.1 • Q4 ’24 noninterest expense of $59.4M compares to $32.5M in 3Q ’24
Slide 26: Well-Capitalized
Capital Management & Investment Considerations Well-Capitalized Exceeding well-capitalized regulatory thresholds and well-positioned to support future growth 16% 13.61% 14% 13.12% 13.25% 12.13% 12.13% 12% 10.63% 10.68% 10.87% 10.18% 10.28% 9.78% 10.54% 9.76% 10% 9.42% 9.43% 9.15% 8.25% 8.23% 8.33% 8
Slide 27: Investment Thesis and Profile
Capital Management & Investment Considerations ✓ Positioned well for profitable, organic growth ✓ Results-driven community bank with strong retail and commercial franchises ✓ Wealth management business diversifies revenue and complements core banking franchise ✓ Disciplined credit culture with stron
Slide 28: Thank you for your interest in Financial Institutions, Inc.
Thank you for your interest in Financial Institutions, Inc. Nasdaq: FISI Investor Relations Contacts Kate Croft Director of Investor and External Relations Jack Plants Appendix Chief Financial Officer & Corporate Treasurer FISI-Investors@five-starbank.com Learn more at www.FISI-Investors.com 28
Slide 29: Strong Executive Leadership Team Positioned to Drive Growth and Operational Excellence
Appendix Strong Executive Leadership Team Positioned to Drive Growth and Operational Excellence Martin K. Birmingham Samuel J. Burruano Jr. W. Jack Plants II President & Chief Executive Officer EVP, Chief Legal Officer & Corporate EVP, CFO & Treasurer Secretary overseeing financial planning and anal
Slide 30: Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations In addition to results presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this presentation contains certain non-GAAP financial measures. The Company believes that providing certain non-GAAP financial measures provides investors wit