Financial Institutions, Inc. Reports Net Income Available to Common Shareholders of $19.6 million, or $0.96 per Diluted Share, for the Fourth Quarter of 2025 and $73.4 million, or $3.61 per Diluted Share, for Full Year 2025

Rhea-AI Summary

Financial Institutions (NASDAQ: FISI) reported net income available to common shareholders of $19.6 million in Q4 2025 ($0.96 diluted) and $73.4 million for full-year 2025 ($3.61 diluted). Full-year net interest income reached a record $200.0 million and net interest margin expanded to 3.53%. Total loans were $4.66 billion and total deposits were $5.21 billion at year-end. The company completed an $80.0 million subordinated note private placement and repurchased 336,869 common shares in Q4.

Positive

• Net income available to common shareholders $73.4M (2025)
• Record net interest income $200.0M (full-year 2025)
• Net interest margin expanded to 3.53% (2025)
• Total loans grew 4.0% year-over-year to $4.66B
• Completed $80.0M subordinated notes issuance (BBB- rating)
• Repurchased 336,869 shares (≈1.7% outstanding)

Negative

• Total deposits down 2.8% from prior quarter
• Net interest margin down 3 bps linked quarter
• Average savings and money market balances declined year-over-year

Key Figures

Q4 2025 EPS: $0.96 per diluted share FY 2025 EPS: $3.61 per diluted share FY 2025 net income: $73.4 million +5 more

8 metrics

Q4 2025 EPS $0.96 per diluted share Net income available to common shareholders, Q4 2025

FY 2025 EPS $3.61 per diluted share Net income available to common shareholders, full year 2025

FY 2025 net income $73.4 million Net income available to common shareholders, 2025

Subordinated notes $80.0 million at 6.50% Fixed-to-floating rate subordinated notes due 2035, issued Dec 2025

Total loans $4.66 billion Loan balance at December 31, 2025

Total deposits $5.21 billion Deposit balance at December 31, 2025

Q4 net interest income $52.2 million Record quarterly net interest income, Q4 2025

FY 2025 ROAE 12.38% Return on average equity for full year 2025

Market Reality Check

Price: $32.94 Vol: Volume 97,352 is about 0....

normal vol

$32.94 Last Close

Volume Volume 97,352 is about 0.77x the 20-day average of 126,593, indicating muted trading interest into the earnings release. normal

Technical Shares at $31.97 are above the 200-day MA of $27.65 and sit within 5%–6% of the $33.73 52-week high, far above the $20.97 52-week low.

Peers on Argus

FISI fell 0.78% while key regional peers like BHB (-0.99%), GNTY (-1.46%), PFIS ...

FISI fell 0.78% while key regional peers like BHB (-0.99%), GNTY (-1.46%), PFIS (-2.72%), SUPV (-0.89%), and SHBI (-1.08%) also traded lower. However, the momentum scanner did not flag a coordinated sector move, suggesting the reaction is being treated as stock-specific.

Historical Context

5 past events · Latest: Jan 02 (Neutral)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 02	Earnings call scheduling	Neutral	-1.1%	Set date and access details for Q4 and full-year 2025 earnings call.
Dec 11	Subordinated notes issue	Positive	+0.4%	Completed <b>$80.0M</b> subordinated notes to redeem higher-cost debt and bolster capital.
Nov 17	Dividend declaration	Positive	-0.7%	Board approved <b>$0.31</b> common dividend plus preferred stock dividends.
Oct 23	Earnings release	Positive	-0.6%	Reported Q3 2025 with record net interest income and expanding net interest margin.
Oct 01	Earnings call scheduling	Neutral	-0.3%	Announced timing and access details for Q3 2025 earnings release and call.

Pattern Detected

Recent history shows that clearly positive catalysts, including earnings and dividends, have sometimes coincided with modest share price declines, while neutral scheduling or financing updates have seen small, aligned moves.

Recent Company History

Over the past several months, FISI has focused on earnings execution, capital actions, and investor communication. On Oct 23, 2025, it reported strong Q3 2025 earnings with record net interest income and solid loan growth, yet shares slipped modestly. A new share repurchase authorization followed in September 2025, and dividends were maintained via multiple 8-Ks. The Dec 11, 2025 subordinated notes placement strengthened capital for redeeming higher-cost debt. Today’s full-year 2025 results extend that profitability and balance sheet narrative.

Market Pulse Summary

This announcement details a full-year 2025 turnaround, with net income available to common sharehold...

Analysis

This announcement details a full-year 2025 turnaround, with net income available to common shareholders of $73.4 million and EPS of $3.61, driven by record net interest income and improved noninterest income after prior-year securities losses. Loan balances reached $4.66 billion and deposits $5.21 billion, while new $80.0 million subordinated notes support capital and debt refinancing. Investors may watch future loan growth, deposit composition, expense discipline, and capital deployment, including repurchases, for signs of sustainability.

Key Terms

fixed-to-floating rate subordinated notes, secured overnight financing rate, sofr, company owned life insurance, +4 more

8 terms

fixed-to-floating rate subordinated notes financial

"completed a private placement of $80.0 million of fixed-to-floating rate subordinated notes."

A fixed-to-floating rate subordinated note is a debt security that pays a set interest rate for an initial period and then switches to a variable rate tied to a market benchmark; it ranks below senior debt for repayment if the issuer has financial trouble. Investors care because it offers higher initial yield than senior bonds but carries greater credit and repayment risk and exposes holders to changing interest costs after the switch, like moving from a steady paycheck to one that fluctuates with the economy.

secured overnight financing rate financial

"reset quarterly to an interest rate per annum equal to the then-current three-month secured overnight financing rate"

A secured overnight financing rate (SOFR) is a daily benchmark interest rate that reflects the cost of borrowing cash overnight using U.S. Treasury securities as collateral. Think of it as the market price to “rent” cash for a day with a very safe pledge, similar to paying a short-term rental fee for money backed by government bonds. Investors track SOFR because it underpins pricing for loans, bonds and derivatives, so movements change borrowing costs, interest income and the valuation of interest-rate–linked positions.

sofr financial

"three-month secured overnight financing rate (“SOFR”) plus 312 basis points"

The Secured Overnight Financing Rate (SOFR) is a market benchmark that measures the cost of borrowing cash overnight using U.S. Treasury securities as collateral. Investors watch SOFR because it acts like a speedometer for short-term interest costs—affecting loan rates, bond yields and the pricing of interest-rate contracts—so movements change borrowing expenses, cash returns and the value of interest-sensitive investments.

company owned life insurance financial

"company owned life insurance ("COLI") income benefiting from the surrender and redeploy strategy"

Company owned life insurance is a life policy bought and owned by a business on the lives of employees, with the company as beneficiary. It acts like a combined insurance and savings account—premiums build a cash value the company can borrow against or use for future obligations—while a death benefit pays out if a covered employee dies. Investors care because these policies show up as corporate assets and cash flows, can provide tax and liquidity effects, and may affect executive compensation and balance-sheet transparency.

coli financial

"company owned life insurance ("COLI") income benefiting from the surrender and redeploy strategy"

Coli is shorthand for Escherichia coli, a common type of bacteria found in the environment, food and intestines of people and animals. For investors, E. coli matters because outbreaks or contamination can lead to product recalls, plant shutdowns, regulatory inspections, legal costs and lost sales—similar to an unwanted guest spoiling a large event and forcing organizers to pause operations and clean up before business can resume.

net interest margin financial

"Net interest margin was 3.62% in the current quarter as compared to 3.65%"

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

return on average assets financial

"highlighted by full year return on average assets and return on average equity of 1.20% and 12.38%"

Return on average assets (ROAA) measures how efficiently a company turns its assets into profit by comparing profit after expenses to the average value of its assets over a period (usually the average of beginning and ending assets). It matters to investors because it shows how well management uses the company’s resources to generate returns—think of it as how much profit a baker earns from the oven space they actually used over time.

return on average equity financial

"highlighted by full year return on average assets and return on average equity of 1.20% and 12.38%"

Return on average equity (ROAE) measures how much profit a company generates for its shareholders’ invested capital over a period, calculated by dividing net profit by the average shareholder equity during that period. It matters to investors because it shows how efficiently management turns owners’ money into earnings—like how much bread a baker bakes from the same oven space—helping compare profitability across companies and track performance over time.

AI-generated analysis. Not financial advice.

Quarterly and annual results reflect strong performance across the Company's commercial banking, consumer banking and wealth management business lines

WARSAW, N.Y., Jan. 29, 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 fourth quarter and year ended December 31, 2025, that reflect the Company's continued focus on profitable, organic growth.

The Company reported net income of $20.0 million in the fourth quarter of 2025, compared to net income of $20.5 million in the third quarter of 2025 and net loss of $82.8 million in the fourth quarter of 2024. After preferred stock dividends, net income available to common shareholders was $19.6 million, or $0.96 per diluted share, in the fourth quarter of 2025, compared to net income of $20.1 million, or $0.99 per diluted share, in the third quarter of 2025, and net loss of $83.2 million, or $5.07 per diluted share, in the fourth quarter of 2024.

For full year 2025, the Company reported net income of $74.9 million, compared to net loss of $41.6 million in 2024. After preferred dividends, net income available to common shareholders was $73.4 million, or $3.61 per diluted share, for 2025, compared to net loss of $43.1 million, or $2.75 per diluted share, for 2024.

Fourth Quarter and Full Year 2025 Highlights:

• In December 2025, the Company completed a private placement of $80.0 million of fixed-to-floating rate subordinated notes. The Notes received a BBB- rating from Kroll Bond Rating Agency, which revised the Company’s long-term outlook to Stable, reflecting sustained improvement in its profitability and its enhanced capital position.
• Net interest income reached quarterly and annual records of $52.2 million and $200.0 million, respectively, while full year net interest margin of 3.53% expanded 67 basis points year-over-year, and fourth quarter 2025 margin of 3.62% was down 3 basis points from the linked quarter, primarily driven by the impact of the December 2025 subordinated debt offering, and up 71 basis points from the year-ago quarter.
• Noninterest income was $11.9 million and $45.0 million for the quarter and year, respectively, benefiting from robust swap activity, growth in investment advisory income and AUM, and company owned life insurance ("COLI") income benefiting from the surrender and redeploy strategy initiated in January 2025.
• Total loans were $4.66 billion at December 31, 2025, reflecting increases of $67.4 million, or 1.5%, from September 30, 2025, and $178.7 million, or 4.0%, from December 31, 2024. Commercial loans grew $90.9 million, or 3.0%, during the quarter and $215.7 million, or 7.5%, during the year, to reach $3.08 billion.
• Total deposits were $5.21 billion at December 31, 2025, down $151.5 million, or 2.8%, from September 30, 2025, reflecting public deposit seasonality and a reduction in brokered deposits, and up $101.6 million, or 2.0%, from December 31, 2024, led by growth in reciprocal and public deposits that are anchored by commercial and public relationships.
• Strong capital position enabled the repurchase of 336,869 common shares, or 1.7% of shares outstanding, at an average price of $31.98 per share, during the quarter.
• Allowance for credit losses on loans to total loans was 1.02% at year-end 2025, compared to 1.03% at September 30, 2025, and 1.07% one year prior.

"Our 2025 performance reflects our team's strong execution against the targets we laid out at the start of this year and success in delivering profitable organic growth, highlighted by full year return on average assets and return on average equity of 1.20% and 12.38%, respectively, and an efficiency ratio of 58%. In 2025, our Board also approved a more than 3% increase in our quarterly dividend as well as a new stock repurchase plan, which we've since activated, reflecting its confidence in our ability to deliver consistent financial results and execute against our strategic priorities to deliver long-term value to shareholders," said President and Chief Executive Officer Martin K. Birmingham. "Strong demand from commercial borrowers in our core Upstate New York footprint drove full year loan growth of 4% and annualized fourth quarter growth of 6%. We also saw healthy commercial deposit growth in the fourth quarter, which is a testament to the value that relationship-based community banking provides small and mid-sized businesses in our markets. Deposit retention and acquisition remain a strong focus as we head into 2026."

Chief Financial Officer and Treasurer W. Jack Plants II added, "We ended 2025 with a productive fourth quarter that included a successful subordinated debt offering, allowing us to refinance 2015 and 2020 issuances at a more attractive rate. Given the strength of our financial performance this year and our capital position, we were pleased to repurchase 1.7%, or approximately $10.8 million, of common shares in the final weeks of December. Share repurchases are an important component of our capital deployment strategy, allowing us to efficiently return excess capital to shareholders while retaining growth capacity for our commercial pipelines. Heading into 2026, we remain focused on prudent balance sheet and expense management, credit-disciplined organic loan growth and deepening relationships with consumers, businesses, non-profits and municipalities across our core Upstate New York footprint."

Subordinated Notes Issuance and Repayment of Past Issuances

On December 11, 2025, the Company announced the completion of a private placement of $80.0 million of fixed-to-floating rate subordinated notes due 2035 (the “Notes”) to qualified institutional buyers and accredited institutional investors. The Notes have a maturity date of December 15, 2035, and bear interest, payable semi-annually, at the rate of 6.50% per annum, until December 15, 2030. Commencing on that date, the interest rate will reset quarterly to an interest rate per annum equal to the then-current three-month secured overnight financing rate (“SOFR”) plus 312 basis points, payable quarterly until maturity.

The Company is entitled to prepay the Notes, in whole or in part, at any time on or after December 15, 2030, and to prepay the Notes in whole or in part at any time upon certain other specified events. As expected, on January 15, 2026, the Company utilized a portion of the net proceeds of the 2025 issuance to redeem the $65.0 million in outstanding debt issuances from 2015 and 2020.

In connection with the issuance and sale of the Notes, the Company entered into registration rights agreements with the purchasers of the Notes pursuant to which the Company has agreed to take certain actions to provide for the exchange of the Notes for subordinated notes that are registered under the Securities Act of 1933, as amended, with substantially the same terms as the Notes.

Net Interest Income and Net Interest Margin

Net interest income was $52.2 million for the fourth quarter of 2025, an increase of $422 thousand from the third quarter of 2025, and an increase of $10.6 million from the fourth quarter of 2024.

Average interest-earning assets for the current quarter of $5.75 billion were up $89.1 million from the third quarter of 2025 and $30.2 million from the fourth quarter of 2024. The linked quarter increase reflected a $64.5 million increase in average loans, a $17.0 million increase in the average balance of Federal Reserve interest-earning cash and a $7.6 million increase in the average balance of investment securities. On a year-over-year basis, a $196.3 million increase in average loans was partially offset by a $93.0 million decrease in the average balance of investment securities and a $73.1 million decrease in the average balance of Federal Reserve interest-earning cash.

Average interest-bearing liabilities for the current quarter were $4.54 billion, reflecting an increase of $105.5 million from the linked quarter and an increase of $67.6 million from the year-ago quarter. The increase from the third quarter of 2025 was primarily due to a $48.8 million increase in average time deposits, a $43.5 million increase in average savings and money market deposits, a $25.1 million increase in average interest-bearing demand deposits, and an $18.3 million increase in average long-term borrowings. These increases were partially offset by a $30.1 million decrease in average short-term borrowings. The year-over-year increase was primarily due to a $147.1 million increase in average time deposits, a $23.4 million increase in average short-term borrowings and an $8.4 million increase in long-term borrowings, partially offset by a $67.1 million decrease in average savings and money market deposits and a $44.2 million decrease in interest-bearing demand deposits. Compared to the year-ago period, the BaaS platform wind-down that the Bank initiated in September 2024 was the primary driver of the reduction in average savings and money market deposits and also contributed to the increase in average time deposits, given the increase in brokered deposits on a year-over-year basis.

Net interest margin was 3.62% in the current quarter as compared to 3.65% in the third quarter of 2025, and 2.91% in the fourth quarter of 2024. The three-basis-point decrease from the linked quarter was primarily due to the impact of the previously mentioned subordinated debt offering that the Company completed in December 2025, and to a lesser extent a decrease in the average yield on loans. Year-over-year margin expansion was primarily driven by an increase in the average yield on investment securities, following the previously disclosed restructuring of the available-for-sale securities portfolio in December 2024, which supported an increase in the average yield on interest-earning assets, along with lower interest-bearing liability costs.

Net interest income was $200.0 million for the full year 2025, up $36.4 million from 2024. Net interest margin was 3.53% for the full year 2025, compared to 2.86% for 2024, reflective of the December 2024 investment securities restructuring.

Noninterest Income

The Company reported noninterest income of $11.9 million for the fourth quarter of 2025, compared to $12.1 million in the third quarter of 2025, and a net loss for noninterest income of $91.0 million in the fourth quarter of 2024.

• Investment advisory income of $3.1 million was $51 thousand higher than the third quarter of 2025 and $519 thousand higher than the fourth quarter of 2024, reflecting both new business and market-driven gains.
• Income from COLI of $2.8 million was $61 thousand lower than the third quarter of 2025 and $1.4 million higher than the fourth quarter of 2024, due to the previously disclosed restructuring of a portion of the Company's COLI portfolio into higher-yielding separate account policies in January 2025.
• Income from derivative instruments, net, of $1.1 million was $263 thousand and $1.1 million higher than in the linked and year-ago quarters, respectively. 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 $225 thousand was recognized in the fourth quarter of 2025. A net loss on investment securities of $100.1 million was recognized in the fourth quarter of 2024 related to the previously disclosed securities portfolio restructuring.

The Company recorded noninterest income of $45.0 million for full year 2025, compared to a net loss for noninterest income of $46.7 million for the full year 2024 due to the previously disclosed portfolio restructuring in the prior year period.

• A net gain on investment securities of $931 thousand was recognized in 2025, compared to a net loss on investment securities of $100.1 million in 2024.
• The Company's sale of the assets of its insurance subsidiary generated a $13.7 million gain in 2024. The $2.1 million decline in insurance income year-over-year was also attributable to the transaction.
• Income from company owned life insurance of $11.4 million was $5.9 million higher than in 2024 due to the previously disclosed surrender and redeploy strategy initiated in January 2025.

Noninterest Expense

Noninterest expense was $36.7 million in the fourth quarter of 2025, compared to $35.9 million in the third quarter of 2025, and $59.4 million in the fourth quarter of 2024.

• Salaries and employee benefits expense of $19.3 million was $801 thousand higher than the third quarter of 2025 and $2.2 million higher than the fourth quarter of 2024. The linked quarter variance was primarily driven by accruals for incentive compensation. The year-over-year increase reflected a combination of factors, including annual merit increases, incentive compensation and investments in personnel.
• Computer and data processing expense of $5.9 million was $145 thousand higher than the third quarter of 2025 and $674 thousand lower than the fourth quarter of 2024. The year-over-year decrease was driven by technology enhancement and upgrade initiatives recorded in the fourth quarter of 2024.
• As previously disclosed, the Company recorded a $23.0 million provision for litigation settlement in its fourth quarter 2024 financial results related to the final resolution of a long-standing auto lending litigation.
• Other noninterest expense of $3.6 million was relatively flat with the linked quarter and down $699 thousand from the year-ago quarter, due to a variety of drivers, including lower insurance and other bank charges in the most recent quarter.

Noninterest expense was $142.0 million for full year 2025, compared to $178.9 million for the full year 2024. The decline was driven by the previously disclosed deposit-related fraud event in the first quarter of 2024 and the aforementioned litigation settlement, both of which impacted 2024 results.

• Salaries and employee benefits expense of $72.8 million increased $6.7 million from the prior year, driven by an increase in health insurance benefit expense, reflecting continued elevated medical claims under the Company's self-insured plan, annual merit increases, incentive compensation and investments in personnel.
• Occupancy and equipment expense of $15.5 million was $1.1 million higher than 2024, primarily due to costs associated with the Company's ATM conversion and upgrade project that was completed in 2025.
• Professional services expense of $6.5 million was $1.2 million lower than 2024, primarily attributable to higher legal expenses incurred in the prior year associated with the Company's previously disclosed fraud event.

Income Taxes

Income tax expense was $4.0 million for the fourth quarter of 2025, compared to $4.8 million in the third quarter of 2025 and a benefit of $32.5 million in the fourth quarter of 2024. The Company also recognized federal and state tax benefits related to tax credit investments placed in service and/or amortized during the fourth quarter of 2025, third quarter of 2025, and fourth quarter of 2024, resulting in income tax expense reductions of $1.2 million, $1.1 million, and $1.2 million, respectively.

The effective tax rate was 16.7% for the fourth quarter of 2025, 18.9% for the third quarter of 2025, and -28.2% for the fourth quarter of 2024. 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. The effective tax rate for full year 2025 was 18.0%, compared to -38.9% in 2024, reflecting the impact of the previously mentioned securities transaction loss.

Balance Sheet and Capital Management

Total assets were $6.27 billion at December 31, 2025, down $13.9 million from September 30, 2025, and up $157.1 million from December 31, 2024.

Investment securities were $1.01 billion at December 31, 2025, relatively flat with both September 30, 2025 and December 31, 2024.

Total loans were $4.66 billion at December 31, 2025, an increase of $67.4 million, or 1.5%, from September 30, 2025, and an increase of $178.7 million, or 4.0%, from December 31, 2024.

• Commercial business loans totaled $738.3 million, down $2.3 million, or 0.3%, from September 30, 2025, and up $73.0 million, or 11.0%, from December 31, 2024.
• Commercial mortgage loans totaled $2.34 billion, an increase of $93.2 million, or 4.1%, from September 30, 2025, and an increase of $142.7 million, or 6.5%, from December 31, 2024. The linked quarter increase was primarily driven by growth in non-owner occupied and construction mortgage loans, while the year-over-year increase reflected growth across multifamily, non-owner occupied and owner occupied loans, partially offset by a decrease in construction mortgage loans.
• Residential real estate loans totaled $657.0 million, up $8.6 million, or 1.3%, from September 30, 2025, and up $6.8 million, or 1.0%, from December 31, 2024.
• Consumer indirect loans totaled $807.3 million, down $31.4 million, or 3.7%, from September 30, 2025, and down $38.5 million, or 4.5%, from December 31, 2024.

Total deposits were $5.21 billion at December 31, 2025, down $151.5 million, or 2.8%, from September 30, 2025, and up $101.6 million, or 2.0%, from December 31, 2024. The decrease from September 30, 2025 reflected seasonally lower public deposit balances and a reduction in brokered deposits, partially offset by increases in reciprocal and non-public deposits. The increase from December 31, 2024 reflected growth of reciprocal and public deposits, in addition to a higher level of brokered deposits, partially offset by a reduction in non-public deposits. Brokered deposits were utilized to offset the anticipated reduction in BaaS-related deposits, which totaled approximately $7 million at both December 31, 2025 and September 30, 2025, and approximately $100 million at December 31, 2024. Public deposit balances represented 21% of total deposits at December 31, 2025, 23% at September 30, 2025, and 21% at December 31, 2024.

Short-term borrowings were $109.0 million at December 31, 2025, compared to $55.0 million at September 30, 2025, and $99.0 million at December 31, 2024. Short-term borrowings and brokered deposits have historically been utilized to manage the seasonality of public deposits. Long term borrowings, net, were $193.7 million at December 31, 2025, compared to $115.0 million at September 30, 2025, and $124.8 million at December 31, 2024, reflecting the December 2025 subordinated-debt offering.

Shareholders' equity was $628.9 million at December 31, 2025, compared to $621.7 million at September 30, 2025, and $569.0 million at December 31, 2024. Both the linked quarter period-end and year-over-year increases were primarily due to net income, net of dividends, retained and a reduction in accumulated other comprehensive loss, partially offset by the impact of our stock repurchase program.

Common book value per share was $30.89 at December 31, 2025, an increase of $0.86, or 2.9%, from $30.03 at September 30, 2025, and an increase of $3.41, or 12.4%, from $27.48 at December 31, 2024. Tangible common book value per share⁽¹⁾ was $27.84 at December 31, 2025, an increase of $0.82, or 3.0%, from $27.02 at September 30, 2025, and an increase of $3.39, or 13.9%, from $24.45 at December 31, 2024. The common equity to assets ratio was 9.75% at December 31, 2025, compared to 9.61% at September 30, 2025, and 9.02% at December 31, 2024. Tangible common equity to tangible assets⁽¹⁾, or the TCE ratio, was 8.87%, 8.74% and 8.11% at December 31, 2025, September 30, 2025, and December 31, 2024, respectively. The year-over-year increases in both ratios were reflective of the increase in shareholders' equity.

During the fourth quarter of 2025, the Company declared a common stock dividend of $0.31 per common share, consistent with the linked quarter and reflecting an increase of $0.01, or 3.3%, over the year-ago quarter. The dividend returned 32% of fourth quarter net income to common shareholders.

The Company's regulatory capital ratios at December 31, 2025 continued to exceed all regulatory capital requirements to be considered well capitalized.

• Leverage Ratio was 9.69% compared to 9.77% and 9.15% at September 30, 2025, and December 31, 2024, respectively.
• Common Equity Tier 1 Capital Ratio was 11.11% compared to 11.15% and 10.54% at September 30, 2025, and December 31, 2024, respectively.
• Tier 1 Capital Ratio was 11.43% compared to 11.48% and 10.87% at September 30, 2025, and December 31, 2024, respectively.
• Total Risk-Based Capital Ratio was 14.90%, reflective of the additional $80.0 million of capital on the balance sheet at year-end related to the 2025 Notes, which impacted the ratio by approximately 150 basis points. The Total Risk-Based Capital Ratio was 13.60% and 13.25% at September 30, 2025, and December 31, 2024, respectively.

During the fourth quarter of 2025, the Company repurchased 336,869 common shares for an average price of $31.98 per share under the repurchase plan that was approved in September 2025. As of December 31, 2025, 669,510 shares remained available for repurchase under the plan, which does not have an expiration date.

Credit Quality

Non-performing loans were $35.8 million, or 0.77% of total loans, at December 31, 2025, compared to $34.0 million, or 0.74% of total loans, at September 30, 2025, and $41.4 million, or 0.92% of total loans, at December 31, 2024. The decrease from December 31, 2024 reflected a foreclosed participated loan and partial charge-off of a credit facility reported for the second quarter of 2025, both of which relate to a previously disclosed commercial business relationship placed on nonaccrual status in 2023. Net charge-offs were $2.4 million, representing 0.21% of average loans on an annualized basis, for the current quarter, as compared to $2.1 million, or an annualized 0.18% of average loans, in the third quarter of 2025 and $2.8 million, or an annualized 0.25%, in the fourth quarter of 2024. For full year 2025, net charge-offs to average loans were 0.24%, compared to 0.20% for 2024.

At December 31, 2025, the allowance for credit losses on loans to total loans ratio was 1.02%, compared to 1.03% at September 30, 2025 and 1.07% at December 31, 2024. The year-over-year decrease was due to a combination of factors, primarily driven by lower loss rates due to higher prepayment assumptions.

Provision for credit losses was $3.4 million in the current quarter, compared to $2.7 million in the linked quarter and $6.5 million in the prior year quarter. Provision for credit losses on loans was $2.5 million in the current quarter, compared to $2.1 million in the third quarter of 2025 and $6.1 million in the fourth quarter of 2024. The allowance for unfunded commitments, also included in provision for credit losses as required by the current expected credit loss standard ("CECL"), totaled $899 thousand in the fourth quarter of 2025, $670 thousand in the third quarter of 2025, and $321 thousand in the fourth quarter of 2024. The provision for credit losses for the fourth quarter of 2025 was driven by a combination of factors, including loan growth and higher expected utilizations for 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 133% at December 31, 2025, 139% at September 30, 2025, and 116% at December 31, 2024.

Subsequent Events

The Company is required, under generally accepted accounting principles ("GAAP"), to evaluate subsequent events through the filing of its consolidated financial statements for the year ended December 31, 2025, in its Annual Report on Form 10-K. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of December 31, 2025, and will adjust amounts preliminarily reported, if necessary.

Conference Call

The Company will host an earnings conference call and audio webcast on January 30, 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 441553. 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. Courier Capital, LLC 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 U.S. generally accepted accounting principles ("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.

For additional information contact:
Kate Croft
Director of Investor Relations and Corporate Communications
(716) 817-5159
klcroft@five-starbank.com

FINANCIAL INSTITUTIONS, INC.
Selected Financial Information (Unaudited)
(Amounts in thousands, except per share amounts)

SELECTED BALANCE SHEET DATA:		2025																2024
		December 31,				September 30,				June 30,				March 31,				December 31,
Cash and cash equivalents		$	108,751			$	185,945			$	93,034			$	167,352			$	87,321
Investment securities:
Available for sale			922,472				923,592				916,149				926,992				911,105
Held-to-maturity, net			84,709				87,625				92,121				113,105				116,001
Total investment securities			1,007,181				1,011,217				1,008,270				1,040,097				1,027,106
Loans held for sale			3,365				2,252				2,356				387				2,280
Loans:
Commercial business			738,307				740,603				726,218				709,101				665,321
Commercial mortgage–construction			488,558				441,034				536,552				566,359				582,619
Commercial mortgage–multifamily			588,732				592,634				496,223				475,867				470,954
Commercial mortgage–non-owner occupied			942,219				893,884				873,207				899,679				857,987
Commercial mortgage–owner occupied			322,776				321,555				309,171				286,391				288,036
Residential real estate loans			657,001				648,397				647,205				643,983				650,206
Residential real estate lines			75,121				76,109				75,675				74,769				75,552
Consumer indirect			807,310				838,671				833,452				853,176				845,772
Other consumer			37,842				37,536				38,299				43,953				42,757
Total loans			4,657,866				4,590,423				4,536,002				4,553,278				4,479,204
Allowance for credit losses–loans			47,386				47,292				47,291				48,964				48,041
Total loans, net			4,610,480				4,543,131				4,488,711				4,504,314				4,431,163
Total interest-earning assets			5,755,696				5,739,699				5,614,008				5,733,743				5,602,570
Goodwill and other intangible assets, net			60,343				60,443				60,564				60,651				60,758
Total assets			6,274,140				6,288,052				6,143,766				6,340,492				6,117,085
Deposits:
Noninterest-bearing demand			962,724				959,404				940,341				945,182				950,351
Interest-bearing demand			672,323				776,445				704,871				773,475				705,195
Savings and money market			1,884,801				1,955,832				1,898,302				2,033,323				1,904,013
Time deposits			1,686,500				1,666,128				1,612,500				1,620,930				1,545,172
Total deposits			5,206,348				5,357,809				5,156,014				5,372,910				5,104,731
Short-term borrowings			109,000				55,000				101,000				55,000				99,000
Long-term borrowings, net			193,653				115,000				114,960				124,917				124,842
Total interest-bearing liabilities			4,546,277				4,568,405				4,431,633				4,607,645				4,405,912
Shareholders’ equity			628,854				621,720				601,668				589,928				568,984
Common shareholders’ equity			611,569				604,435				584,383				572,643				551,699
Tangible common equity(1)			551,226				543,992				523,819				511,992				490,941
Accumulated other comprehensive loss		$	(33,030	)		$	(36,758	)		$	(42,214	)		$	(41,995	)		$	(52,604	)
Common shares outstanding			19,797				20,130				20,128				20,110				20,077
Treasury shares			902				570				572				590				623
CAPITAL RATIOS AND PER SHARE DATA:
Leverage ratio			9.69	%			9.77	%			9.45	%			9.24	%			9.15	%
Common equity Tier 1 capital ratio			11.11	%			11.15	%			10.84	%			10.38	%			10.54	%
Tier 1 capital ratio			11.43	%			11.48	%			11.17	%			10.71	%			10.87	%
Total risk-based capital ratio			14.90	%			13.60	%			13.27	%			13.09	%			13.25	%
Common equity to assets			9.75	%			9.61	%			9.51	%			9.03	%			9.02	%
Tangible common equity to tangible assets(1)			8.87	%			8.74	%			8.61	%			8.15	%			8.11	%
Common book value per share		$	30.89			$	30.03			$	29.03			$	28.48			$	27.48
Tangible common book value per share(1)		$	27.84			$	27.02			$	26.02			$	25.46			$	24.45

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)

SELECTED INCOME STATEMENT DATA:		Year Ended								2025																2024
		December 31,								Fourth				Third				Second				First				Fourth
		2025				2024				Quarter				Quarter				Quarter				Quarter				Quarter
Interest income		$	332,989			$	313,231			$	84,649			$	84,422			$	82,867			$	81,051			$	78,119
Interest expense			133,003				149,642				32,438				32,633				33,745				34,187				36,486
Net interest income			199,986				163,589				52,211				51,789				49,122				46,864				41,633
Provision for credit losses			11,626				6,150				3,404				2,732				2,562				2,928				6,461
Net interest income after provision for credit losses			188,360				157,439				48,807				49,057				46,560				43,936				35,172
Noninterest income (loss):
Service charges on deposits			4,360				4,233				1,082				1,137				1,089				1,052				1,074
Insurance			11				2,144				3				2				3				3				3
Card interchange			7,794				7,855				2,011				2,006				1,937				1,840				2,045
Investment advisory			11,719				10,713				3,074				3,023				2,885				2,737				2,555
Company owned life insurance			11,379				5,487				2,788				2,849				2,965				2,777				1,425
Investments in limited partnerships			1,402				2,382				457				223				307				415				837
Loan servicing			692				716				208				181				180				123				295
Income (loss) from derivative instruments, net			2,546				726				1,110				847				339				250				(37	)
Net gain on sale of loans held for sale			737				618				195				285				140				117				186
Net gain (loss) on investment securities			931				(100,055	)			225				703				3				-				(100,055	)
Net (loss) gain on other assets			(506	)			13,614				(225	)			(281	)			-				-				(19	)
Net loss on tax credit investments			(1,985	)			(775	)			(446	)			(513	)			(512	)			(514	)			(636	)
Other			5,875				5,661				1,427				1,594				1,281				1,573				1,291
Total noninterest income (loss)			44,955				(46,681	)			11,909				12,056				10,617				10,373				(91,036	)
Noninterest expense:
Salaries and employee benefits			72,813				66,126				19,323				18,522				18,070				16,898				17,159
Occupancy and equipment			15,490				14,361				4,104				3,814				3,982				3,590				3,791
Professional services			6,516				7,702				1,686				1,688				1,451				1,691				1,571
Computer and data processing			23,089				22,689				5,934				5,789				5,879				5,487				6,608
Supplies and postage			2,098				1,935				458				559				503				578				504
FDIC assessments			5,070				5,284				984				1,227				1,392				1,467				1,551
Advertising and promotions			1,810				1,573				482				491				495				342				465
Amortization of intangibles			415				552				100				103				105				107				109
Provision for litigation settlement			-				23,022				-				-				-				-				23,022
Deposit-related charged-off items			160				20,341				77				144				233				(294	)			354
Other			14,500				15,321				3,571				3,538				3,572				3,819				4,270
Total noninterest expense			141,961				178,906				36,719				35,875				35,682				33,685				59,404
Income (loss) before income taxes			91,354				(68,148	)			23,997				25,238				21,495				20,624				(115,268	)
Income tax expense (benefit)			16,487				(26,502	)			4,017				4,761				3,963				3,746				(32,457	)
Net income (loss)			74,867				(41,646	)			19,980				20,477				17,532				16,878				(82,811	)
Preferred stock dividends			1,458				1,459				364				365				364				365				365
Net income (loss) available to common shareholders		$	73,409			$	(43,105	)		$	19,616			$	20,112			$	17,168			$	16,513			$	(83,176	)
FINANCIAL RATIOS:
Earnings (loss) per share–basic		$	3.65			$	(2.75	)		$	0.98			$	1.00			$	0.85			$	0.82			$	(5.07	)
Earnings (loss) per share–diluted		$	3.61			$	(2.75	)		$	0.96			$	0.99			$	0.85			$	0.81			$	(5.07	)
Cash dividends declared on common stock		$	1.24			$	1.20			$	0.31			$	0.31			$	0.31			$	0.31			$	0.30
Common dividend payout ratio			33.97	%			-43.64	%			31.63	%			31.00	%			36.47	%			37.80	%			-5.92	%
Dividend yield (annualized)			3.98	%			4.40	%			3.95	%			4.52	%			4.84	%			5.04	%			4.37	%
Return on average assets (annualized)			1.20	%			-0.68	%			1.27	%			1.32	%			1.13	%			1.10	%			-5.38	%
Return on average equity (annualized)			12.38	%			-8.74	%			12.53	%			13.31	%			11.78	%			11.82	%			-63.70	%
Return on average common equity (annualized)			12.49	%			-9.39	%			12.64	%			13.45	%			11.88	%			11.92	%			-66.19	%
Return on average tangible common equity (annualized)(1)			13.93	%			-10.92	%			14.02	%			14.98	%			13.27	%			13.36	%			-75.36	%
Efficiency ratio(2)			58.13	%			82.35	%			57.43	%			56.78	%			59.68	%			58.79	%			117.13	%
Effective tax rate			18.0	%			-38.9	%			16.7	%			18.9	%			18.4	%			18.2	%			-28.2	%

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 (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.
Selected Financial Information (Unaudited)
(Amounts in thousands)

SELECTED AVERAGE BALANCES:		Year Ended								2025																2024
		December 31,								Fourth				Third				Second				First				Fourth
		2025				2024				Quarter				Quarter				Quarter				Quarter				Quarter
Federal funds sold and interest-earning deposits		$	47,560			$	115,635			$	48,418			$	31,461			$	39,027			$	71,767			$	121,530
Investment securities(1)			1,070,755				1,171,083				1,066,829				1,059,244				1,071,628				1,085,649				1,159,863
Loans:
Commercial business			714,100				689,585				731,314				726,315				720,347				677,700				658,038
Commercial mortgage			2,244,938				2,082,846				2,313,465				2,239,666				2,221,576				2,203,899				2,148,427
Residential real estate loans			647,722				648,604				650,190				648,642				645,007				647,005				649,549
Residential real estate lines			75,198				75,951				75,288				75,774				75,010				74,709				76,164
Consumer indirect			837,215				894,720				823,521				838,026				839,294				848,282				858,854
Other consumer			39,075				45,790				36,917				37,741				39,485				42,230				43,333
Total loans			4,558,248				4,437,496				4,630,695				4,566,164				4,540,719				4,493,825				4,434,365
Total interest-earning assets			5,676,563				5,724,214				5,745,942				5,656,869				5,651,374				5,651,241				5,715,758
Goodwill and other intangible assets, net			60,558				64,247				60,404				60,505				60,610				60,717				60,824
Total assets			6,214,610				6,129,430				6,261,856				6,159,886				6,216,657				6,220,187				6,121,449
Interest-bearing liabilities:
Interest-bearing demand			719,126				734,731				713,033				687,978				730,979				745,210				757,221
Savings and money market			1,933,787				2,012,139				1,924,952				1,881,445				1,953,412				1,976,483				1,992,059
Time deposits			1,633,345				1,511,507				1,692,138				1,643,342				1,631,407				1,564,987				1,545,071
Short-term borrowings			92,817				126,192				79,913				110,011				86,099				95,223				56,513
Long-term borrowings, net			122,393				124,679				133,242				114,976				116,473				124,871				124,795
Total interest-bearing liabilities			4,501,468				4,509,248				4,543,278				4,437,752				4,518,370				4,506,774				4,475,659
Noninterest-bearing demand deposits			941,650				953,417				955,880				960,089				923,409				926,696				947,428
Total deposits			5,227,908				5,211,794				5,286,003				5,172,854				5,239,207				5,213,376				5,241,779
Total liabilities			5,609,675				5,653,046				5,629,101				5,549,575				5,619,834				5,640,981				5,604,249
Shareholders’ equity			604,935				476,384				632,755				610,311				596,823				579,206				517,200
Common equity			587,650				459,092				615,470				593,026				579,538				561,921				499,910
Tangible common equity(2)			527,092				394,845				555,066				532,521				518,928				501,204				439,086
Common shares outstanding:
Basic			20,099				15,683				20,093				20,122				20,107				20,073				16,415
Diluted			20,318				15,683				20,347				20,336				20,294				20,285				16,415
SELECTED AVERAGE YIELDS: (Tax equivalent basis)
Investment securities(3)			4.38	%			2.20	%			4.48	%			4.45	%			4.34	%			4.25	%			2.38	%
Loans			6.24	%			6.36	%			6.20	%			6.29	%			6.26	%			6.20	%			6.28	%
Total interest-earning assets			5.87	%			5.48	%			5.86	%			5.93	%			5.88	%			5.80	%			5.45	%
Interest-bearing demand			1.17	%			1.18	%			1.20	%			1.09	%			1.21	%			1.15	%			1.34	%
Savings and money market			2.62	%			3.03	%			2.46	%			2.62	%			2.67	%			2.75	%			2.94	%
Time deposits			3.99	%			4.66	%			3.73	%			3.88	%			4.08	%			4.31	%			4.53	%
Short-term borrowings			2.50	%			2.67	%			1.77	%			2.41	%			1.80	%			2.09	%			0.15	%
Long-term borrowings, net			5.56	%			5.03	%			6.31	%			5.53	%			5.35	%			5.00	%			5.03	%
Total interest-bearing liabilities			2.95	%			3.32	%			2.83	%			2.92	%			3.00	%			3.07	%			3.24	%
Net interest rate spread			2.92	%			2.16	%			3.03	%			3.01	%			2.88	%			2.73	%			2.21	%
Net interest margin			3.53	%			2.86	%			3.62	%			3.65	%			3.49	%			3.35	%			2.91	%

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)

ASSET QUALITY DATA:		Year Ended								2025																2024
		December 31,								Fourth				Third				Second				First				Fourth
		2025				2024				Quarter				Quarter				Quarter				Quarter				Quarter
Allowance for Credit Losses – Loans
Beginning balance		$	48,041			$	51,082			$	47,292			$	47,291			$	48,964			$	48,041			$	44,678
Net loan charge-offs (recoveries):
Commercial business			2,129				98				46				123				1,903				57				131
Commercial mortgage–construction			(367	)			-				(10	)			(357	)			-				-				-
Commercial mortgage–multifamily			-				12				-				-				-				-				-
Commercial mortgage–non-owner occupied			594				(8	)			-				(1	)			596				(1	)			(5	)
Commercial mortgage–owner occupied			(3	)			(4	)			-				(1	)			(1	)			(1	)			(1	)
Residential real estate loans			104				95				(4	)			(25	)			92				41				(4	)
Residential real estate lines			27				-				-				-				27				-				-
Consumer indirect			7,256				7,927				2,239				1,926				942				2,149				2,557
Other consumer			1,151				566				140				396				491				124				100
Total net charge-offs (recoveries)			10,891				8,686				2,411				2,061				4,050				2,369				2,778
Provision for credit losses–loans			10,236				5,645				2,505				2,062				2,377				3,292				6,141
Ending balance		$	47,386			$	48,041			$	47,386			$	47,292			$	47,291			$	48,964			$	48,041
Net charge-offs (recoveries) to average loans (annualized):
Commercial business			0.30	%			0.01	%			0.02	%			0.07	%			1.06	%			0.03	%			0.80	%
Commercial mortgage–construction			-0.07	%			0.00	%			-0.01	%			-0.31	%			0.00	%			0.00	%			0.00	%
Commercial mortgage–multifamily			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%			0.00	%
Commercial mortgage–non-owner occupied			0.07	%			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			0.02	%			0.01	%			0.00	%			-0.02	%			0.06	%			0.03	%			0.00	%
Residential real estate lines			0.04	%			0.00	%			0.00	%			0.00	%			0.14	%			0.00	%			0.00	%
Consumer indirect			0.87	%			0.89	%			1.08	%			0.91	%			0.45	%			1.03	%			1.18	%
Other consumer			2.95	%			1.23	%			1.50	%			4.16	%			4.99	%			1.19	%			0.91	%
Total loans			0.24	%			0.20	%			0.21	%			0.18	%			0.36	%			0.21	%			0.25	%
Supplemental information(1)
Non-performing loans:
Commercial business		$	4,709			$	5,617			$	4,709			$	3,799			$	3,671			$	5,672			$	5,617
Commercial mortgage–construction			20,321				20,280				20,321				19,794				19,621				19,684				20,280
Commercial mortgage–multifamily			540				-				540				540				-				-				-
Commercial mortgage–non-owner occupied			-				4,773				-				-				164				4,766				4,773
Commercial mortgage–owner occupied			1,095				354				1,095				1,102				-				349				354
Residential real estate loans			6,443				6,918				6,443				5,877				5,885				6,035				6,918
Residential real estate lines			374				253				374				212				299				316				253
Consumer indirect			2,155				3,157				2,155				2,482				2,571				2,917				3,157
Other consumer			118				54				118				145				225				279				54
Total non-performing loans			35,755				41,406				35,755				33,951				32,436				40,018				41,406
Foreclosed assets			94				60				94				142				142				196				60
Total non-performing assets		$	35,849			$	41,466			$	35,849			$	34,093			$	32,578			$	40,214			$	41,466
Total non-performing loans to total loans			0.77	%			0.92	%			0.77	%			0.74	%			0.72	%			0.88	%			0.92	%
Total non-performing assets to total assets			0.57	%			0.68	%			0.57	%			0.54	%			0.53	%			0.63	%			0.68	%
Allowance for credit losses–loans to total loans			1.02	%			1.07	%			1.02	%			1.03	%			1.04	%			1.08	%			1.07	%
Allowance for credit losses–loans to non-performing loans			133	%			116	%			133	%			139	%			146	%			122	%			116	%

1. At period end.

FINANCIAL INSTITUTIONS, INC.
Appendix A — Reconciliation to Non-GAAP Financial Measures (Unaudited)
(In thousands, except per share amounts)

		Year Ended								2025																2024
		December 31,								Fourth				Third				Second				First				Fourth
		2025				2024				Quarter				Quarter				Quarter				Quarter				Quarter
Ending tangible assets:
Total assets										$	6,274,140			$	6,288,052			$	6,143,766			$	6,340,492			$	6,117,085
Less: Goodwill and other intangible assets, net											60,343				60,443				60,564				60,651				60,758
Tangible assets										$	6,213,797			$	6,227,609			$	6,083,202			$	6,279,841			$	6,056,327
Ending tangible common equity:
Common shareholders’ equity										$	611,569			$	604,435			$	584,383			$	572,643			$	551,699
Less: Goodwill and other intangible assets, net											60,343				60,443				60,564				60,651				60,758
Tangible common equity										$	551,226			$	543,992			$	523,819			$	511,992			$	490,941
Tangible common equity to tangible assets(1)											8.87	%			8.74	%			8.61	%			8.15	%			8.11	%
Common shares outstanding											19,797				20,130				20,128				20,110				20,077
Tangible common book value per share(2)										$	27.84			$	27.02			$	26.02			$	25.46			$	24.45
Average tangible assets:
Average assets		$	6,214,610			$	6,129,430			$	6,261,856			$	6,159,886			$	6,216,657			$	6,220,187			$	6,121,449
Less: Average goodwill and other intangible assets, net			60,558				64,247				60,404				60,505				60,610				60,717				60,824
Average tangible assets		$	6,154,052			$	6,065,183			$	6,201,452			$	6,099,381			$	6,156,047			$	6,159,470			$	6,060,625
Average tangible common equity:
Average common equity		$	587,650			$	459,092			$	615,470			$	593,026			$	579,538			$	561,921			$	499,910
Less: Average goodwill and other intangible assets, net			60,558				64,247				60,404				60,505				60,610				60,717				60,824
Average tangible common equity		$	527,092			$	394,845			$	555,066			$	532,521			$	518,928			$	501,204			$	439,086
Net (loss) income available to common shareholders		$	73,409			$	(43,105	)		$	19,616			$	20,112			$	17,168			$	16,513			$	(83,176	)
Return on average tangible common equity(3)			13.93	%			-10.92	%			14.02	%			14.98	%			13.27	%			13.36	%			-75.36	%

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.
   

FAQ

What did Financial Institutions (FISI) report for Q4 2025 net income available to common shareholders?

Q4 2025 net income available to common shareholders was $19.6 million, or $0.96 per diluted share. According to the company, this follows net income of $20.1 million in Q3 2025 and reflects improved profitability versus year-ago loss.

How did Financial Institutions (FISI) perform on net interest income and margin for full-year 2025?

Full-year 2025 net interest income was a record $200.0 million with a 3.53% net interest margin. According to the company, margin expanded 67 basis points year-over-year driven by higher yields on interest-earning assets.

What capital actions did Financial Institutions (FISI) take in December 2025 and January 2026?

The company completed an $80.0 million private placement of subordinated notes and redeemed prior issuances. According to the company, proceeds were partly used on January 15, 2026 to redeem $65.0 million of outstanding 2015 and 2020 debt.

How did loan and deposit balances change for Financial Institutions (FISI) at year-end 2025?

Total loans were $4.66 billion (up 4.0% YoY) and total deposits were $5.21 billion at December 31, 2025. According to the company, loan growth was driven by commercial demand while deposits reflected seasonal shifts and lower brokered balances.

What share repurchase activity did Financial Institutions (FISI) report in Q4 2025 and why does it matter?

The company repurchased 336,869 common shares at an average price of $31.98, representing about 1.7% of shares outstanding. According to the company, repurchases return excess capital to shareholders while preserving capacity for loan growth.