Results highlighted by robust earnings and strong profitability metrics, including a 28.4% year-over-year increase in earnings per diluted share, return on average assets of 1.37%, return on average equity of 13.43% and an efficiency ratio of 57%
WARSAW, N.Y., April 23, 2026 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (NASDAQ: FISI) (the "Company," "we" or "us"), parent company of Five Star Bank (the "Bank") and Courier Capital, LLC ("Courier Capital"), today reported financial and operational results for the first quarter ended March 31, 2026, that reflect the Company's strong focus on high quality earnings and sustained profitability.
The Company reported net income of $21.0 million in the first quarter of 2026, compared to net income of $20.0 million in the fourth quarter of 2025 and $16.9 million in the first quarter of 2025. After preferred stock dividends, net income available to common shareholders was $20.6 million, or $1.04 per diluted share, in the first quarter of 2026, compared to net income of $19.6 million, or $0.96 per diluted share, in the fourth quarter of 2025, and $16.5 million, or $0.81 per diluted share, in the first quarter of 2025.
First Quarter 2026 Highlights and Key Developments:
Net interest margin of 3.67% reflected expansion of 5 and 32 basis points from the linked and year-ago quarters, respectively.
Return on average assets of 1.37% and efficiency ratio of 57% reflected strong revenue generation, supported by net interest income of $52.0 million and noninterest income of $10.7 million, as well as disciplined expense management, as noninterest expenses totaled $35.6 million for the first quarter of 2026.
Total loans of $4.63 billion at March 31, 2026 were up $74.3 million, or 1.6%, from March 31, 2025, driven by commercial lending in the Bank's Western and Central New York markets. While loans were down modestly on a linked quarter basis, reflecting higher payoffs and paydowns, we continue to target full year growth of 5%.
Total deposits at March 31, 2026 were $5.34 billion, up $131.5 million, or 2.5%, from December 31, 2025, and down modestly from March 31, 2025, primarily due to lower use of brokered deposits year-over-year and the completion of the Company's BaaS wind-down.
The Company's strong capital position enabled the repurchase of 163,197 common shares at an average price of $31.50 per share, during the quarter. Since December 2025, the Company has repurchased 500,066 shares, reflecting our commitment to maximizing capital in the best interest of shareholders.
In February, the Company's Board of Directors approved a 3.2% increase in its quarterly cash dividend to $0.32 per common share, a reflection of both its ongoing commitment to building shareholder value and its confidence in the Company’s long-term sustainable growth strategy.
"Our first quarter results demonstrate the strength of our community bank franchise, disciplined execution by our team and focus on profitability, which came together to support a more than 28% year-over-year increase in earnings per diluted share, a 27-basis-point year-over-year expansion of return on average assets, and further improvement in our efficiency ratio," said President and Chief Executive Officer Martin K. Birmingham. "Credit-disciplined loan production remains a priority for our team, and while first quarter originations were offset by higher-than-typical payoffs and paydowns, our pipelines are healthy and continue to build, supporting our confidence in our 5% full year 2026 loan growth target. We also continue to expect full-year charge-off activity to fall within our guided range, even with first quarter’s charge-off of a portion of a single commercial exposure, which as previously disclosed has been on nonaccrual status and for which specific reserve was in place. Heading into the second quarter, we remain committed to building full relationships with current and prospective customers, demonstrating continued expense discipline and generating profitable growth in 2026."
Chief Financial Officer and Treasurer W. Jack Plants II added, "During the first quarter, we continued the execution of our strategic actions to further strengthen our capital position and enhance shareholder value. As previously disclosed, in January we completed the refinancing of $65.0 million of legacy sub-debt issuances. We also continued to return capital to shareholders during the first quarter through the repurchase of 163,197 common shares and the increase of our common stock dividend by 3.2%. We delivered meaningful expansion in our return on average tangible common equity ratio(1), which increased to 15.04%, up 102 basis points from the linked quarter and 168 basis points from the prior year quarter. Collectively, these results underscore the strength of our balance sheet, the effectiveness of our disciplined capital management strategy, and our ongoing commitment to sustainable profitability and long-term shareholder returns."
Net Interest Income and Net Interest Margin
Net interest income was $52.0 million for the first quarter of 2026, a decrease of $218 thousand from the fourth quarter of 2025, and an increase of $5.1 million from the first quarter of 2025.
Average interest-earning assets for the current quarter of $5.72 billion were down $21.4 million from the fourth quarter of 2025 and up $73.3 million from the first quarter of 2025. The linked quarter decrease reflected an $18.2 million decrease in the average balance of Federal Reserve interest-earning cash and an $11.4 million decrease in the average balance of investment securities, partially offset by an $8.2 million increase in average loans. On a year-over-year basis, a $145.1 million increase in average loans was partially offset by a $41.5 million decrease in the average balance of Federal Reserve interest-earning cash and a $30.3 million decrease in the average balance of investment securities.
Average interest-bearing liabilities for the current quarter were $4.51 billion, reflecting a decrease of $29.8 million from the linked quarter and an increase of $6.7 million from the year-ago quarter. The decrease from the fourth quarter of 2025 was primarily due to a $33.9 million decrease in average long-term borrowings, an $18.5 million decrease in average savings and money market deposits and a $9.0 million decrease in average time deposits, partially offset by a $28.2 million increase in average short-term borrowings and a $3.3 million increase in average interest-bearing demand deposits. The modest year-over-year increase was primarily due to a $118.2 million increase in average time deposits and a $12.9 million increase in average short-term borrowings, partially offset by a $70.0 million decrease in average savings and money market deposits, a $28.8 million decrease in interest-bearing demand deposits and a $25.6 million decrease in long-term borrowings. The BaaS platform wind-down completed in the first quarter of 2026 was the primary driver of the reduction in average savings and money market deposits.
Net interest margin was 3.67% in the current quarter as compared to 3.62% in the fourth quarter of 2025, and 3.35% in the first quarter of 2025. Both the 5-basis-point increase from the linked quarter and 32-basis point increase from the year-ago quarter were driven by lower interest-bearing liability costs.
Noninterest Income
The Company reported noninterest income of $10.7 million for the first quarter of 2026, compared to $11.9 million in the fourth quarter of 2025 and $10.4 million in the first quarter of 2025.
Investment advisory income of $3.1 million was relatively flat with the fourth quarter of 2025 and $324 thousand higher than the first quarter of 2025, reflecting both new business and market performance.
Income from investments in limited partnerships of $224 thousand was $233 thousand lower than the fourth quarter of 2025 and $191 thousand lower than the first quarter of 2025. The Company has made several investments in limited partnerships, primarily small business investment companies, and accounts for these investments under the equity method. Income from these investments fluctuates based on the maturity and performance of the underlying investments.
Income from derivative instruments, net, of $239 thousand was $871 thousand lower than the linked quarter, and relatively flat with the year-ago quarter. Income from derivative instruments, net, is based on the number and value of interest rate swap transactions executed during the quarter combined with the impact of changes in the fair value of borrower-facing trades.
A net gain on investment securities of $328 thousand was recognized in the first quarter of 2026, compared to a net gain of $225 thousand in the fourth quarter of 2025. No gain was recorded in the first quarter of 2025.
A net loss on other assets of $481 thousand was recognized in the first quarter of 2026 related to the write-down of two branch locations that are held for sale as of March 31, 2026, compared to a net loss of $225 thousand in the fourth quarter of 2025 related to ongoing asset reviews and disposals. No gain or loss was recorded in the first quarter of 2025.
Other noninterest income of $1.8 million was $340 thousand higher than the fourth quarter of 2025 and $194 thousand higher than the first quarter of 2025. The linked quarter and year-over-year variances were 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
Noninterest expense was $35.6 million in the first quarter of 2026, compared to $36.7 million in the fourth quarter of 2025, and $33.7 million in the first quarter of 2025.
Salaries and employee benefits expense of $18.6 million was $722 thousand lower than the fourth quarter of 2025 and $1.7 million higher than the first quarter of 2025. The linked quarter variance was primarily driven by lower incentive compensation and lower medical expenses in the most recent quarter. The year-over-year increase reflected a combination of factors, including annual merit increases, incentive compensation and investments in personnel.
Professional services expense of $1.4 million was down $336 thousand and $341 thousand from the linked and year-ago quarters, respectively. The linked quarter decrease was due in part to the lower level of interest rate swap transactions executed during the most recent quarter and lower other professional and consulting fees. The year-over-year decline was primarily due to lower audit-related expenses and lower other professional and consulting fees.
Computer and data processing expense of $6.2 million was $277 thousand higher than the fourth quarter of 2025 and $724 thousand higher than the first quarter of 2025. The linked and year-over-year increases were due in part to the termination of a vendor relationship during the first quarter of 2026.
The Company recorded deposit-related charge-offs of $109 thousand, compared to $77 thousand in the fourth quarter of 2025. In the first quarter of 2025, the Company recorded deposit-related charge-off recoveries of $294 thousand, primarily driven by insurance proceeds related to a past commercial deposit charged-off item.
Other noninterest expense of $3.9 million was down $178 thousand from the linked quarter and $546 thousand from the year-ago quarter. The year-over-year variance was driven by a variety of factors, including lower other bank charges in the first quarter of 2026.
Income Taxes
Income tax expense was $3.8 million for the first quarter of 2026, compared to $4.0 million in the fourth quarter of 2025 and $3.7 million in the first quarter of 2025. The Company also recognized federal and state tax benefits related to tax credit investments placed in service and/or amortized during the first quarter of 2026, fourth quarter of 2025, and first quarter of 2025, resulting in income tax expense reductions of $1.0 million, $1.2 million, and $1.1 million, respectively.
The effective tax rate was 15.5% for the first quarter of 2026, 16.7% for the fourth quarter of 2025, and 18.2% for the first quarter of 2025. The effective tax rate fluctuates on a quarterly basis primarily due to the level of pre-tax earnings or loss and may differ from statutory rates because of interest income from tax-exempt securities, earnings on COLI, the tax impact of the COLI repositioning, and the impact of tax credit investments.
Balance Sheet and Capital Management
Total assets were $6.29 billion at March 31, 2026, up $20.6 million from December 31, 2025, and down $45.7 million from March 31, 2025.
Investment securities were $1.09 billion at March 31, 2026, up $78.6 million from December 31, 2025 and up $45.7 million from March 31, 2025.
Total loans were $4.63 billion at March 31, 2026, a decrease of $30.3 million, or 0.7%, from December 31, 2025, and an increase of $74.3 million, or 1.6%, from March 31, 2025.
Commercial business loans totaled $746.4 million, up $8.1 million, or 1.1%, from December 31, 2025, and up $37.3 million, or 5.3%, from March 31, 2025.
Commercial mortgage loans totaled $2.33 billion, a decrease of $10.5 million, or 0.4%, from December 31, 2025, and an increase of $103.5 million, or 4.6%, from March 31, 2025.
Residential real estate loans totaled $652.9 million, down $4.1 million, or 0.6%, from December 31, 2025, and up $8.9 million, or 1.4%, from March 31, 2025.
Consumer indirect loans totaled $787.9 million, down $19.4 million, or 2.4%, from December 31, 2025, and down $65.3 million, or 7.7%, from March 31, 2025.
Total deposits were $5.34 billion at March 31, 2026, up $131.5 million, or 2.5%, from December 31, 2025, and down $35.0 million, or 0.7%, from March 31, 2025. The increase from December 31, 2025 was primarily driven by seasonally higher public deposit balances and an increase in reciprocal deposits, partially offset by a decrease in non-public deposits. The decrease from March 31, 2025 was driven by a decrease in brokered and non-public deposits, partially offset by increases in reciprocal and public deposits. The recently completed wind-down of the Company's BaaS line of business was the primary driver of the decreases in both brokered and non-public deposits, as BaaS-related deposits declined from approximately $55 million at March 31, 2025, to zero at March 31, 2026. The Company carried a higher level of brokered deposits amid the BaaS wind-down, which it has since reduced given growth of reciprocal and public deposits. Public deposit balances represented 23% of total deposits at March 31, 2026, 21% at December 31, 2025, and 23% at March 31, 2025.
Short-term borrowings were $114.0 million at March 31, 2026, compared to $109.0 million at December 31, 2025, and $55.0 million at March 31, 2025. Short-term borrowings and brokered deposits have historically been used to manage the seasonality of public deposits. Long-term borrowings, net, were $78.6 million at March 31, 2026, compared to $193.7 million at December 31, 2025, and $124.9 million at March 31, 2025.
Shareholders' equity was $631.7 million at March 31, 2026, compared to $628.9 million at December 31, 2025, and $589.9 million at March 31, 2025. Both the linked quarter period-end and year-over-year increases were primarily due to net income, net of dividends, retained.
Common book value per share was $31.21 at March 31, 2026, an increase of $0.32, or 1.0%, from $30.89 at December 31, 2025, and an increase of $2.73, or 9.6%, from $28.48 at March 31, 2025. Tangible common book value per share(1) was $28.15 at March 31, 2026, an increase of $0.31, or 1.1%, from $27.84 at December 31, 2025, and an increase of $2.69, or 10.6%, from $25.46 at March 31, 2025. The common equity to assets ratio was 9.76% at March 31, 2026, compared to 9.75% at December 31, 2025, and 9.03% at March 31, 2025. Tangible common equity to tangible assets(1), or the TCE ratio, was 8.89%, 8.87% and 8.15% at March 31, 2026, December 31, 2025, and March 31, 2025, respectively. The year-over-year increases in both ratios were reflective of the increase in shareholders' equity.
During the first quarter of 2026, the Company declared a common stock dividend of $0.32 per common share, an increase of $0.01, or 3.2%, over the linked and year-ago quarters. The dividend returned 30% of first quarter net income to common shareholders.
The Company's regulatory capital ratios at March 31, 2026 continued to exceed all regulatory capital requirements to be considered well capitalized.
Leverage Ratio was 9.89% compared to 9.69% and 9.24% at December 31, 2025, and March 31, 2025, respectively.
Common Equity Tier 1 Capital Ratio was 11.37% compared to 11.11% and 10.38% at December 31, 2025, and March 31, 2025, respectively.
Tier 1 Capital Ratio was 11.70% compared to 11.43% and 10.71% at December 31, 2025, and March 31, 2025, respectively.
Total Risk-Based Capital Ratio was 14.16%, compared to 14.90% and 13.09% at December 31, 2025, and March 31, 2025, respectively. The year-end 2025 total risk-based capital ratio was elevated as a result of the additional $80.0 million of capital on the balance sheet at that time related to the 2025 Notes, which impacted the ratio by approximately 150 basis points.
During the first quarter of 2026, the Company repurchased 163,197 common shares for an average price of $31.50 per share under the repurchase plan that was approved in September 2025. As of March 31, 2026, 503,313 shares remained available for repurchase under the plan, which does not have an expiration date.
Credit Quality
Non-performing loans were $38.5 million, or 0.83% of total loans, at March 31, 2026, compared to $35.8 million, or 0.77% of total loans, at December 31, 2025, and $40.0 million, or 0.88% of total loans, at March 31, 2025. The increase from December 31, 2025 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 commercial business relationship placed on nonaccrual status in 2023 and for which a specific reserve was in place. Net charge-offs were $5.1 million, representing 0.44% of average loans on an annualized basis, for the current quarter, as compared to $2.4 million, or an annualized 0.21% of average loans, in the fourth quarter of 2025 and $2.4 million, or an annualized 0.21%, in the first quarter of 2025.
At March 31, 2026, the allowance for credit losses on loans to total loans ratio was 0.97%, compared to 1.02% at December 31, 2025 and 1.08% at March 31, 2025. The year-over-year decrease was due to a combination of factors, including a decrease in consumer indirect loan balances, lower loss rates due to higher prepayment assumptions and lower qualitative factors that are primarily quantitatively informed by historical data.
Provision for credit losses was $2.2 million in the current quarter, compared to $3.4 million in the linked quarter and $2.9 million in the prior year quarter. Provision for credit losses on loans was $2.4 million in the current quarter, compared to $2.5 million in the fourth quarter of 2025 and $3.3 million in the first quarter of 2025. The allowance for unfunded commitments, also included in provision for credit losses as required by the current expected credit loss standard ("CECL"), totaled a credit of $116 thousand in the first quarter of 2026, $899 thousand in the fourth quarter of 2025, and a credit of $364 thousand in the first quarter of 2025. The provision for credit losses for the first quarter of 2026 was driven by a combination of factors, including the fluctuation in the balance of unfunded commitments.
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. The ratio of allowance for credit losses on loans to non-performing loans was 116% at March 31, 2026, 133% at December 31, 2025, and 122% at March 31, 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 March 31, 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 March 31, 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 April 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. The live webcast will be available in listen-only mode on the Company’s website at www.FISI-investors.com. Within the United States, listeners may also access the call by dialing 1-833-470-1428 and providing the access code 416712. The webcast replay will be available on the Company’s website 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 Five-StarBank.com and 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.
FINANCIAL INSTITUTIONS, INC. | |||||||||||||||||||
2026 | 2025 | ||||||||||||||||||
SELECTED BALANCE SHEET DATA: | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
Cash and cash equivalents | $ | 85,451 | $ | 108,751 | $ | 185,945 | $ | 93,034 | $ | 167,352 | |||||||||
Investment securities: | |||||||||||||||||||
Available for sale | 1,003,697 | 922,472 | 923,592 | 916,149 | 926,992 | ||||||||||||||
Held-to-maturity, net | 82,074 | 84,709 | 87,625 | 92,121 | 113,105 | ||||||||||||||
Total investment securities | 1,085,771 | 1,007,181 | 1,011,217 | 1,008,270 | 1,040,097 | ||||||||||||||
Loans held for sale | 1,034 | 3,365 | 2,252 | 2,356 | 387 | ||||||||||||||
Loans: | |||||||||||||||||||
Commercial business | 746,425 | 738,307 | 740,603 | 726,218 | 709,101 | ||||||||||||||
Commercial mortgage–construction | 513,615 | 488,558 | 441,034 | 536,552 | 566,359 | ||||||||||||||
Commercial mortgage–multifamily | 578,731 | 588,732 | 592,634 | 496,223 | 475,867 | ||||||||||||||
Commercial mortgage–non-owner occupied | 922,628 | 942,219 | 893,884 | 873,207 | 899,679 | ||||||||||||||
Commercial mortgage–owner occupied | 316,781 | 322,776 | 321,555 | 309,171 | 286,391 | ||||||||||||||
Residential real estate loans | 652,861 | 657,001 | 648,397 | 647,205 | 643,983 | ||||||||||||||
Residential real estate lines | 74,779 | 75,121 | 76,109 | 75,675 | 74,769 | ||||||||||||||
Consumer indirect | 787,888 | 807,310 | 838,671 | 833,452 | 853,176 | ||||||||||||||
Other consumer | 33,879 | 37,842 | 37,536 | 38,299 | 43,953 | ||||||||||||||
Total loans | 4,627,587 | 4,657,866 | 4,590,423 | 4,536,002 | 4,553,278 | ||||||||||||||
Allowance for credit losses – loans | 44,661 | 47,386 | 47,292 | 47,291 | 48,964 | ||||||||||||||
Total loans, net | 4,582,926 | 4,610,480 | 4,543,131 | 4,488,711 | 4,504,314 | ||||||||||||||
Total interest-earning assets | 5,787,556 | 5,755,696 | 5,739,699 | 5,614,008 | 5,733,743 | ||||||||||||||
Goodwill and other intangible assets, net | 60,245 | 60,343 | 60,443 | 60,546 | 60,651 | ||||||||||||||
Total assets | 6,294,783 | 6,274,140 | 6,288,052 | 6,143,766 | 6,340,492 | ||||||||||||||
Deposits: | |||||||||||||||||||
Noninterest-bearing demand | 953,397 | 962,724 | 959,404 | 940,341 | 945,182 | ||||||||||||||
Interest-bearing demand | 744,690 | 672,323 | 776,445 | 704,871 | 773,475 | ||||||||||||||
Savings and money market | 1,984,048 | 1,884,801 | 1,955,832 | 1,898,302 | 2,033,323 | ||||||||||||||
Time deposits | 1,655,746 | 1,686,500 | 1,666,128 | 1,612,500 | 1,620,930 | ||||||||||||||
Total deposits | 5,337,881 | 5,206,348 | 5,357,809 | 5,156,014 | 5,372,910 | ||||||||||||||
Short-term borrowings | 114,000 | 109,000 | 55,000 | 101,000 | 55,000 | ||||||||||||||
Long-term borrowings, net | 78,621 | 193,653 | 115,000 | 114,960 | 124,917 | ||||||||||||||
Total interest-bearing liabilities | 4,577,105 | 4,546,277 | 4,568,405 | 4,431,633 | 4,607,645 | ||||||||||||||
Shareholders’ equity | 631,670 | 628,854 | 621,720 | 601,668 | 589,928 | ||||||||||||||
Common shareholders’ equity | 614,385 | 611,569 | 604,435 | 584,383 | 572,643 | ||||||||||||||
Tangible common equity(1) | 554,140 | 551,226 | 543,992 | 523,819 | 511,992 | ||||||||||||||
Accumulated other comprehensive loss | (39,327 | ) | $ | (33,030 | ) | $ | (36,758 | ) | $ | (42,214 | ) | $ | (41,995 | ) | |||||
Common shares outstanding | 19,686 | 19,797 | 20,130 | 20,128 | 20,110 | ||||||||||||||
Treasury shares | 1,013 | 902 | 570 | 572 | 590 | ||||||||||||||
CAPITAL RATIOS AND PER SHARE DATA: | |||||||||||||||||||
Leverage ratio | 9.89 | % | 9.69 | % | 9.77 | % | 9.45 | % | 9.24 | % | |||||||||
Common equity Tier 1 capital ratio | 11.37 | % | 11.11 | % | 11.15 | % | 10.84 | % | 10.38 | % | |||||||||
Tier 1 capital ratio | 11.70 | % | 11.43 | % | 11.48 | % | 11.17 | % | 10.71 | % | |||||||||
Total risk-based capital ratio | 14.16 | % | 14.90 | % | 13.60 | % | 13.27 | % | 13.09 | % | |||||||||
Common equity to assets | 9.76 | % | 9.75 | % | 9.61 | % | 9.51 | % | 9.03 | % | |||||||||
Tangible common equity to tangible assets(1) | 8.89 | % | 8.87 | % | 8.74 | % | 8.61 | % | 8.15 | % | |||||||||
Common book value per share | $ | 31.21 | $ | 30.89 | $ | 30.03 | $ | 29.03 | $ | 28.48 | |||||||||
Tangible common book value per share(1) | $ | 28.15 | $ | 27.84 | $ | 27.02 | $ | 26.02 | $ | 25.46 | |||||||||
See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
FINANCIAL INSTITUTIONS, INC. | |||||||||||||||||||
2026 | 2025 | ||||||||||||||||||
First | Fourth | Third | Second | First | |||||||||||||||
SELECTED STATEMENT OF OPERATIONS DATA: | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Interest income | $ | 81,563 | $ | 84,649 | $ | 84,422 | $ | 82,867 | $ | 81,051 | |||||||||
Interest expense | 29,570 | 32,438 | 32,633 | 33,745 | 34,187 | ||||||||||||||
Net interest income | 51,993 | 52,211 | 51,789 | 49,122 | 46,864 | ||||||||||||||
Provision for credit losses | 2,239 | 3,404 | 2,732 | 2,562 | 2,928 | ||||||||||||||
Net interest income after provision for credit losses | 49,754 | 48,807 | 49,057 | 46,560 | 43,936 | ||||||||||||||
Noninterest income: | |||||||||||||||||||
Service charges on deposits | 1,044 | 1,082 | 1,137 | 1,089 | 1,052 | ||||||||||||||
Card interchange income | 1,892 | 2,011 | 2,006 | 1,937 | 1,840 | ||||||||||||||
Investment advisory | 3,061 | 3,074 | 3,023 | 2,885 | 2,737 | ||||||||||||||
Company owned life insurance | 2,772 | 2,788 | 2,849 | 2,965 | 2,777 | ||||||||||||||
Investments in limited partnerships | 224 | 457 | 223 | 307 | 415 | ||||||||||||||
Loan servicing | 151 | 208 | 181 | 180 | 123 | ||||||||||||||
Income from derivative instruments, net | 239 | 1,110 | 847 | 339 | 250 | ||||||||||||||
Net gain on sale of loans held for sale | 125 | 195 | 285 | 140 | 117 | ||||||||||||||
Net gain on investment securities | 328 | 225 | 703 | 3 | - | ||||||||||||||
Net loss on other assets | (481 | ) | (225 | ) | (281 | ) | - | - | |||||||||||
Net loss on tax credit investments | (452 | ) | (446 | ) | (513 | ) | (512 | ) | (514 | ) | |||||||||
Other | 1,770 | 1,430 | 1,596 | 1,284 | 1,576 | ||||||||||||||
Total noninterest income | 10,673 | 11,909 | 12,056 | 10,617 | 10,373 | ||||||||||||||
Noninterest expense: | |||||||||||||||||||
Salaries and employee benefits | 18,601 | 19,323 | 18,522 | 18,070 | 16,898 | ||||||||||||||
Occupancy and equipment | 3,865 | 4,104 | 3,814 | 3,982 | 3,590 | ||||||||||||||
Professional services | 1,350 | 1,686 | 1,688 | 1,451 | 1,691 | ||||||||||||||
Computer and data processing | 6,211 | 5,934 | 5,789 | 5,879 | 5,487 | ||||||||||||||
FDIC assessments | 986 | 984 | 1,227 | 1,392 | 1,467 | ||||||||||||||
Advertising and promotions | 524 | 482 | 491 | 495 | 342 | ||||||||||||||
Amortization of intangibles | 98 | 100 | 103 | 105 | 107 | ||||||||||||||
Deposit-related charged-off items (recoveries) expense | 109 | 77 | 144 | 233 | (294 | ) | |||||||||||||
Other | 3,851 | 4,029 | 4,097 | 4,075 | 4,397 | ||||||||||||||
Total noninterest expense | 35,595 | 36,719 | 35,875 | 35,682 | 33,685 | ||||||||||||||
Income before income taxes | 24,832 | 23,997 | 25,238 | 21,495 | 20,624 | ||||||||||||||
Income tax expense | 3,847 | 4,017 | 4,761 | 3,963 | 3,746 | ||||||||||||||
Net income | 20,985 | 19,980 | 20,477 | 17,532 | 16,878 | ||||||||||||||
Preferred stock dividends | 364 | 364 | 365 | 364 | 365 | ||||||||||||||
Net income available to common shareholders | $ | 20,621 | $ | 19,616 | $ | 20,112 | $ | 17,168 | $ | 16,513 | |||||||||
FINANCIAL RATIOS: | |||||||||||||||||||
Earnings per share – basic | $ | 1.05 | $ | 0.98 | $ | 1.00 | $ | 0.85 | $ | 0.82 | |||||||||
Earnings per share – diluted | $ | 1.04 | $ | 0.96 | $ | 0.99 | $ | 0.85 | $ | 0.81 | |||||||||
Cash dividends declared on common stock | $ | 0.32 | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.31 | |||||||||
Common dividend payout ratio | 30.48 | % | 31.63 | % | 31.00 | % | 36.47 | % | 37.80 | % | |||||||||
Dividend yield (annualized) | 4.09 | % | 3.95 | % | 4.52 | % | 4.84 | % | 5.04 | % | |||||||||
Return on average assets (annualized) | 1.37 | % | 1.27 | % | 1.32 | % | 1.13 | % | 1.10 | % | |||||||||
Return on average equity (annualized) | 13.43 | % | 12.53 | % | 13.31 | % | 11.78 | % | 11.82 | % | |||||||||
Return on average common equity (annualized) | 13.57 | % | 12.64 | % | 13.45 | % | 11.88 | % | 11.92 | % | |||||||||
Return on average tangible common equity (annualized)(1) | 15.04 | % | 14.02 | % | 14.98 | % | 13.27 | % | 13.36 | % | |||||||||
Efficiency ratio(2) | 57.06 | % | 57.43 | % | 56.78 | % | 59.68 | % | 58.79 | % | |||||||||
Effective tax rate | 15.5 | % | 16.7 | % | 18.9 | % | 18.4 | % | 18.2 | % | |||||||||
See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
The efficiency ratio is calculated by dividing noninterest expense by net revenue, i.e., the sum of net interest income (fully taxable equivalent) and noninterest income before net gains on investment securities. This is a banking industry measure not required by GAAP.
FINANCIAL INSTITUTIONS, INC. | |||||||||||||||||||
2026 | 2025 | ||||||||||||||||||
First | Fourth | Third | Second | First | |||||||||||||||
SELECTED AVERAGE BALANCES: | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Federal funds sold and interest-earning deposits | $ | 30,266 | $ | 48,418 | $ | 31,461 | $ | 39,027 | $ | 71,767 | |||||||||
Investment securities(1) | 1,055,385 | 1,066,829 | 1,059,244 | 1,071,628 | 1,085,649 | ||||||||||||||
Loans: | |||||||||||||||||||
Commercial business | 736,942 | 731,314 | 726,315 | 720,347 | 677,700 | ||||||||||||||
Commercial mortgage | 2,342,957 | 2,313,465 | 2,239,666 | 2,221,576 | 2,203,899 | ||||||||||||||
Residential real estate loans | 654,614 | 650,190 | 648,642 | 645,007 | 647,005 | ||||||||||||||
Residential real estate lines | 74,189 | 75,288 | 75,774 | 75,010 | 74,709 | ||||||||||||||
Consumer indirect | 795,107 | 823,521 | 838,026 | 839,294 | 848,282 | ||||||||||||||
Other consumer | 35,074 | 36,917 | 37,741 | 39,485 | 42,230 | ||||||||||||||
Total loans | 4,638,883 | 4,630,695 | 4,566,164 | 4,540,719 | 4,493,825 | ||||||||||||||
Total interest-earning assets | 5,724,534 | 5,745,942 | 5,656,869 | 5,651,374 | 5,651,241 | ||||||||||||||
Goodwill and other intangible assets, net | 60,305 | 60,404 | 60,505 | 60,610 | 60,717 | ||||||||||||||
Total assets | 6,227,388 | 6,261,856 | 6,159,886 | 6,216,657 | 6,220,187 | ||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||
Interest-bearing demand | 716,370 | 713,033 | 687,978 | 730,979 | 745,210 | ||||||||||||||
Savings and money market | 1,906,445 | 1,924,952 | 1,881,445 | 1,953,412 | 1,976,483 | ||||||||||||||
Time deposits | 1,683,185 | 1,692,138 | 1,643,342 | 1,631,407 | 1,564,987 | ||||||||||||||
Short-term borrowings | 108,138 | 79,913 | 110,011 | 86,099 | 95,223 | ||||||||||||||
Long-term borrowings, net | 99,302 | 133,242 | 114,976 | 116,473 | 124,871 | ||||||||||||||
Total interest-bearing liabilities | 4,513,440 | 4,543,278 | 4,437,752 | 4,518,370 | 4,506,774 | ||||||||||||||
Noninterest-bearing demand deposits | 950,644 | 955,880 | 960,089 | 923,409 | 926,696 | ||||||||||||||
Total deposits | 5,256,644 | 5,286,003 | 5,172,854 | 5,239,207 | 5,213,376 | ||||||||||||||
Total liabilities | 5,593,794 | 5,629,101 | 5,549,575 | 5,619,834 | 5,640,981 | ||||||||||||||
Shareholders’ equity | 633,594 | 632,755 | 610,311 | 596,823 | 579,206 | ||||||||||||||
Common equity | 616,309 | 615,470 | 593,026 | 579,538 | 561,921 | ||||||||||||||
Tangible common equity(2) | 556,004 | 532,521 | 532,521 | 518,928 | 501,204 | ||||||||||||||
Common shares outstanding: | |||||||||||||||||||
Basic | 19,642 | 20,093 | 20,122 | 20,107 | 20,073 | ||||||||||||||
Diluted | 19,922 | 20,347 | 20,336 | 20,294 | 20,285 | ||||||||||||||
SELECTED AVERAGE YIELDS: | |||||||||||||||||||
Investment securities (3) | 4.48 | % | 4.48 | % | 4.45 | % | 4.34 | % | 4.25 | % | |||||||||
Loans | 6.07 | % | 6.20 | % | 6.29 | % | 6.26 | % | 6.20 | % | |||||||||
Total interest-earning assets | 5.76 | % | 5.86 | % | 5.93 | % | 5.88 | % | 5.80 | % | |||||||||
Interest-bearing demand | 1.04 | % | 1.20 | % | 1.09 | % | 1.21 | % | 1.15 | % | |||||||||
Savings and money market | 2.29 | % | 2.46 | % | 2.62 | % | 2.67 | % | 2.75 | % | |||||||||
Time deposits | 3.53 | % | 3.73 | % | 3.88 | % | 4.08 | % | 4.31 | % | |||||||||
Short-term borrowings | 2.40 | % | 1.77 | % | 2.41 | % | 1.80 | % | 2.09 | % | |||||||||
Long-term borrowings, net | 6.84 | % | 6.31 | % | 5.53 | % | 5.35 | % | 5.00 | % | |||||||||
Total interest-bearing liabilities | 2.65 | % | 2.83 | % | 2.92 | % | 3.00 | % | 3.07 | % | |||||||||
Net interest rate spread | 3.11 | % | 3.03 | % | 3.01 | % | 2.88 | % | 2.73 | % | |||||||||
Net interest margin | 3.67 | % | 3.62 | % | 3.65 | % | 3.49 | % | 3.35 | % | |||||||||
Includes investment securities at adjusted amortized cost.
See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
The interest on tax-exempt securities is calculated on a tax-equivalent basis assuming a Federal income tax rate of 21%.
FINANCIAL INSTITUTIONS, INC. | |||||||||||||||||||
2026 | 2025 | ||||||||||||||||||
First | Fourth | Third | Second | First | |||||||||||||||
ASSET QUALITY DATA: | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||
Allowance for Credit Losses – Loans | |||||||||||||||||||
Beginning balance | $ | 47,386 | $ | 47,292 | $ | 47,291 | $ | 48,964 | $ | 48,041 | |||||||||
Net loan charge-offs (recoveries): | |||||||||||||||||||
Commercial business | 2,990 | 46 | 123 | 1,903 | 57 | ||||||||||||||
Commercial mortgage–construction | - | (10 | ) | (357 | ) | - | - | ||||||||||||
Commercial mortgage–multifamily | - | - | - | - | - | ||||||||||||||
Commercial mortgage–non-owner occupied | (1 | ) | - | (1 | ) | 596 | (1 | ) | |||||||||||
Commercial mortgage–owner occupied | (1 | ) | - | (1 | ) | (1 | ) | (1 | ) | ||||||||||
Residential real estate loans | 19 | (4 | ) | (25 | ) | 92 | 41 | ||||||||||||
Residential real estate lines | (3 | ) | - | - | 27 | - | |||||||||||||
Consumer indirect | 1,850 | 2,239 | 1,926 | 942 | 2,149 | ||||||||||||||
Other consumer | 226 | 140 | 396 | 491 | 124 | ||||||||||||||
Total net charge-offs (recoveries) | 5,080 | 2,411 | 2,061 | 4,050 | 2,369 | ||||||||||||||
Provision for credit losses – loans | 2,355 | 2,505 | 2,062 | 2,377 | 3,292 | ||||||||||||||
Ending balance | $ | 44,661 | $ | 47,386 | $ | 47,292 | $ | 47,291 | $ | 48,964 | |||||||||
Net charge-offs (recoveries) to average loans (annualized): | |||||||||||||||||||
Commercial business | 1.65 | % | 0.02 | % | 0.07 | % | 1.06 | % | 0.03 | % | |||||||||
Commercial mortgage–construction | 0.00 | % | -0.01 | % | -0.31 | % | 0.00 | % | 0.00 | % | |||||||||
Commercial mortgage–multifamily | 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 | % | |||||||||
Commercial mortgage–owner occupied | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | |||||||||
Residential real estate loans | 0.01 | % | 0.00 | % | -0.02 | % | 0.06 | % | 0.03 | % | |||||||||
Residential real estate lines | -0.03 | % | 0.00 | % | 0.00 | % | 0.14 | % | 0.00 | % | |||||||||
Consumer indirect | 0.94 | % | 1.08 | % | 0.91 | % | 0.45 | % | 1.03 | % | |||||||||
Other consumer | 2.61 | % | 1.50 | % | 4.16 | % | 4.99 | % | 1.19 | % | |||||||||
Total loans | 0.44 | % | 0.21 | % | 0.18 | % | 0.36 | % | 0.21 | % | |||||||||
Supplemental information(1) | |||||||||||||||||||
Non-performing loans: | |||||||||||||||||||
Commercial business | $ | 6,698 | $ | 4,709 | $ | 3,799 | $ | 3,671 | $ | 5,672 | |||||||||
Commercial mortgage–construction | 20,520 | 20,321 | 19,794 | 19,621 | 19,684 | ||||||||||||||
Commercial mortgage–multifamily | 540 | 540 | 540 | - | - | ||||||||||||||
Commercial mortgage–non-owner occupied | - | - | - | 164 | 4,766 | ||||||||||||||
Commercial mortgage–owner occupied | 983 | 1,095 | 1,102 | - | 349 | ||||||||||||||
Residential real estate loans | 7,434 | 6,443 | 5,877 | 5,885 | 6,035 | ||||||||||||||
Residential real estate lines | 431 | 374 | 212 | 299 | 316 | ||||||||||||||
Consumer indirect | 1,767 | 2,155 | 2,482 | 2,571 | 2,917 | ||||||||||||||
Other consumer | 102 | 118 | 145 | 225 | 279 | ||||||||||||||
Total non-performing loans | 38,475 | 35,755 | 33,951 | 32,436 | 40,018 | ||||||||||||||
Foreclosed assets | 552 | 94 | 142 | 142 | 196 | ||||||||||||||
Total non-performing assets | $ | 39,027 | $ | 35,849 | $ | 34,093 | $ | 32,578 | $ | 40,214 | |||||||||
Total non-performing loans to total loans | 0.83 | % | 0.77 | % | 0.74 | % | 0.72 | % | 0.88 | % | |||||||||
Total non-performing assets to total assets | 0.62 | % | 0.57 | % | 0.54 | % | 0.53 | % | 0.63 | % | |||||||||
Allowance for credit losses – loans to total loans | 0.97 | % | 1.02 | % | 1.03 | % | 1.04 | % | 1.08 | % | |||||||||
Allowance for credit losses – loans to non-performing loans | 116 | % | 133 | % | 139 | % | 146 | % | 122 | % | |||||||||
At period end.
FINANCIAL INSTITUTIONS, INC. | |||||||||||||||||||
2026 | 2025 | ||||||||||||||||||
First | Fourth | Third | Second | First | |||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||||
Ending tangible assets: | |||||||||||||||||||
Total assets | $ | 6,294,783 | $ | 6,274,140 | $ | 6,288,052 | $ | 6,143,766 | $ | 6,340,492 | |||||||||
Less: Goodwill and other intangible assets, net | 60,245 | 60,343 | 60,443 | 60,546 | 60,651 | ||||||||||||||
Tangible assets | $ | 6,234,538 | $ | 6,213,797 | $ | 6,227,609 | $ | 6,083,220 | $ | 6,279,841 | |||||||||
Ending tangible common equity: | |||||||||||||||||||
Common shareholders’ equity | $ | 614,385 | $ | 611,569 | $ | 604,435 | $ | 584,383 | $ | 572,643 | |||||||||
Less: Goodwill and other intangible assets, net | 60,245 | 60,343 | 60,443 | 60,546 | 60,651 | ||||||||||||||
Tangible common equity | $ | 554,140 | $ | 551,226 | $ | 543,992 | $ | 523,837 | $ | 511,992 | |||||||||
Tangible common equity to tangible assets(1) | 8.89 | % | 8.87 | % | 8.74 | % | 8.61 | % | 8.15 | % | |||||||||
Common shares outstanding | 19,686 | 19,797 | 20,130 | 20,128 | 20,110 | ||||||||||||||
Tangible common book value per share(2) | $ | 28.15 | $ | 27.84 | $ | 27.02 | $ | 26.03 | $ | 25.46 | |||||||||
Average tangible assets: | |||||||||||||||||||
Average assets | $ | 6,227,388 | $ | 6,261,856 | $ | 6,159,886 | $ | 6,216,657 | $ | 6,220,187 | |||||||||
Less: Average goodwill and other intangible assets, net | 60,305 | 60,404 | 60,505 | 60,610 | 60,717 | ||||||||||||||
Average tangible assets | $ | 6,167,083 | $ | 6,201,452 | $ | 6,099,381 | $ | 6,156,047 | $ | 6,159,470 | |||||||||
Average tangible common equity: | |||||||||||||||||||
Average common equity | $ | 616,309 | $ | 615,470 | $ | 593,026 | $ | 579,538 | $ | 561,921 | |||||||||
Less: Average goodwill and other intangible assets, net | 60,305 | 60,404 | 60,505 | 60,610 | 60,717 | ||||||||||||||
Average tangible common equity | $ | 556,004 | $ | 555,066 | $ | 532,521 | $ | 518,928 | $ | 501,204 | |||||||||
Net income available to common shareholders | $ | 20,621 | $ | 19,616 | $ | 20,112 | $ | 17,168 | $ | 16,513 | |||||||||
Return on average tangible common equity(3) | 15.04 | % | 14.02 | % | 14.98 | % | 13.27 | % | 13.36 | % | |||||||||
Tangible common equity divided by tangible assets.
Tangible common equity divided by common shares outstanding.
Net income available to common shareholders (annualized) divided by average tangible common equity.
CONTACT: For additional information contact: Kate Croft Director of Investor Relations and Corporate Communications (716) 817-5159 klcroft@five-starbank.com