Financial Institutions, Inc. Reports Net Income Available to Common Shareholders of $20.8 million, or $1.04 per Diluted Share, for the Second Quarter of 2026
The Company's community bank subsidiary delivered strong loan growth of 2.7% during the quarter and its wealth manager's assets under management surpassed a new milestone of $4.0 billion
WARSAW, N.Y., July 23, 2026 – Financial Institutions, Inc. (NASDAQ: FISI) (the "Company," "we" or "us") today reported financial and operational results for the second quarter ended June 30, 2026, reflecting strong performance by subsidiaries Five Star Bank (the "Bank") and Courier Capital, LLC ("Courier Capital"), including healthy loan growth, all-time-high assets under management ("AUM") and sustained profitability.
KEY FINANCIAL METRICS
Quarter-over-Quarter ("QoQ")
Year-over-Year ("YoY")
Dollars in thousands, except per share data Return metrics annualized
Q2 2026
Q1 2026
Q2 2025
Variance
%
Variance
%
Net income
$
21,184
$
20,985
$
17,532
$
199
0.9
%
$
3,652
20.8
%
Net income available to common shareholders
20,819
20,621
17,168
198
1.0
%
3,651
21.3
%
Diluted earnings per common share
$
1.04
$
1.04
$
0.85
$
-
0.0
%
$
0.19
22.4
%
Return on average assets
1.35
%
1.37
%
1.13
%
(2
)
bps
22
bps
Return on average equity
13.31
%
13.43
%
11.78
%
(12
)
bps
153
bps
Return on average tangible common equity(1)
14.88
%
15.04
%
13.27
%
(16
)
bps
161
bps
Efficiency ratio
55.33
%
57.06
%
59.68
%
(173
)
bps
(435
)
bps
Total loans (end of period)
$
4,752,965
$
4,627,587
$
4,536,002
$
125,378
2.7
%
$
216,963
4.8
%
Total deposits (end of period)
$
5,299,465
$
5,337,881
$
5,156,014
$
(38,416
)
-0.7
%
$
143,451
2.8
%
Second Quarter 2026 Highlights and Key Developments
•
Total loans of $4.75 billion at June 30, 2026 grew 2.7% from March 31, 2026, driven by robust commercial lending, while deposits of $5.30 billion were down modestly quarter-over-quarter, reflecting public deposit seasonality.
•
Net interest income reached a new quarterly high of $53.4 million and net interest margin of 3.70% reflected expansion of 3 and 21 basis points from the linked and year-ago quarters, respectively.
•
Noninterest income of $11.0 million was up 2.6% and 3.2% from the linked and year-ago quarters, respectively, supported by increased investment advisory fees as Courier Capital's AUM surpassed $4.0 billion.
•
The efficiency ratio improved to 55%, reflecting both strong revenue generation and disciplined expense management, as noninterest expense of $35.6 million held flat with the linked quarter.
•
Net charge-offs were 0.11% of average loans in the second quarter of 2026, while the ratio of allowance for credit losses on loans to total loans increased to 1.00% at June 30, 2026.
"We delivered another quarter of strong and profitable results, highlighted by annualized loan growth of more than 10%, healthy revenue generation and prudent expense management," said President and Chief Executive Officer Martin K. Birmingham. "Commercial loan growth was robust, driven by our core Western and Central New York markets, and our pipelines are healthy heading into the second half of the year. In our wealth business, assets under management grew to more than $4.0 billion as of June 30, 2026, as new business activity complemented market performance. Overall, our results continue to reflect disciplined execution by each of our business lines and our commitment to sustainable profitability and long-term value creation."
Chief Financial Officer and Treasurer W. Jack Plants II added, "Our disciplined approach to managing funding costs supported further net interest margin expansion to 3.70% for the second quarter. Given current rate dynamics, we are beginning to see deposit costs level off and remain focused on preserving margin stability amid a competitive environment. Heading into the third quarter, we remain focused on deposit retention and acquisition, credit disciplined loan growth and effective expense management. Capital strength remains a key pillar of our financial performance, with a tangible common equity ratio(1) of 9.02%, a common equity Tier 1 ratio of 11.44%, and a return on average tangible common equity(1) of 14.88%."
Net Interest Income and Net Interest Margin
NET INTEREST INCOME
QoQ
YoY
Dollars in thousands
Q2 2026
Q1 2026
Q2 2025
Variance
%
Variance
%
Interest income
$
83,076
$
81,563
$
82,867
$
1,513
1.9
%
$
209
0.3
%
Interest expense
29,715
29,570
33,745
145
0.5
%
(4,030
)
-11.9
%
Net interest income
53,361
51,993
49,122
1,368
2.6
%
4,239
8.6
%
Net interest margin (tax-equivalent basis)(2)
3.70
%
3.67
%
3.49
%
3
bps
21
bps
Average interest-earning assets
$
5,785,900
$
5,724,534
$
5,651,374
$
61,366
1.1
%
$
134,526
2.4
%
Average interest-bearing liabilities
4,559,420
4,513,440
4,518,370
45,980
1.0
%
41,050
0.9
%
Net interest income was $53.4 million, up $1.4 million from the linked quarter and up $4.2 million from the second quarter of 2025. Net interest margin of 3.70% reflected expansion of 3 and 21 basis points from the linked and year-ago quarters, respectively, driven by lower interest-bearing liability costs.
•
Average interest earning assets of $5.79 billion were up $61.4 million from the first quarter of 2026 and up $134.5 million from the second quarter of 2025. The linked quarter variance reflected increases in both average loans and investment securities, partially offset by a small decrease in the average balance of Federal Reserve interest-earning cash. The year-over-year variance reflected a $139.2 million increase in average balance of loans, partially offset by a $10.7 million decrease in the average balance of Federal Reserve interest-earning cash, as average balances of investment securities remained relatively consistent. The yield on interest-earning assets was 5.76% in both the first and second quarters of 2026, compared to 5.88% in the second quarter of 2025.
•
Average interest-bearing liabilities of $4.56 billion were up $46.0 million from the first quarter of 2026 and up $41.1 million from the second quarter of 2025. The linked quarter variance was due to increases in the average balances of savings and money market deposits and short-term borrowings, partially offset by decreases in long-term borrowings, average interest-bearing demand deposits and time deposits. The year-over-year variance reflected increases in the average balances of time deposits, short-term borrowings and savings and money market deposits, partially offset by decreases in average long-term borrowings and average interest-bearing demand deposits. The cost of interest-bearing liabilities was 2.61%, reflecting decreases of 4 and 39 basis points from the linked and year-ago quarters, respectively.
Noninterest Income
SELECT NONINTEREST INCOME CATEGORIES
QoQ Change
YoY Change
Dollars in thousands
Q2 2026
Q1 2026
Q2 2025
$
%
$
%
Investment advisory
$
3,287
$
3,061
$
2,885
$
226
7.4
%
$
402
13.9
%
Investments in limited partnerships
(140
)
224
307
(364
)
-162.5
%
(447
)
-145.6
%
Income from derivative instruments, net
518
239
339
279
116.7
%
179
52.8
%
Net gain (loss) on other assets
27
(481
)
-
508
-105.6
%
27
N/A
Other
1,200
1,770
1,284
(570
)
-32.2
%
(84
)
-6.5
%
Total noninterest income
10,954
10,673
10,617
281
2.6
%
337
3.2
%
Noninterest income was $11.0 million in the second quarter of 2026, versus $10.7 million in the first quarter of 2026 and $10.6 million in the second quarter of 2025. The linked quarter and year-over-year variances were driven by a variety of factors, including increased investment advisory income, reflecting both new business and market performance, and increased income from derivative instruments, net, which is based on the number and value of interest rate swap transactions executed during the quarter. Detail on other select categories with notable variances follows:
•
A loss on investments in limited partnerships, which are primarily small business investment companies, of $140 thousand was recognized in the second quarter of 2026, compared to gains of $224 thousand and $307 thousand in the linked and year-ago quarters, respectively. Income from these investments, which we account for under the equity method, fluctuates based on the maturity and performance of the underlying investments.
•
A net gain on other assets of $27 thousand was recognized in the second quarter of 2026, compared to a net loss of $481 thousand in the first quarter of 2026 related to the write-down of two branch locations that were held for sale as of March 31, 2026. No gain or loss was recorded in the second quarter of 2025.
•
Other noninterest income of $1.2 million was down from both the linked and year-ago quarters. The linked quarter variance was driven by a variety of factors, including insurance recoveries recorded in the first quarter of 2026 related to a previously disclosed deposit-related charge-off.
Noninterest Expense and Income Taxes
SELECT NONINTEREST EXPENSE CATEGORIES
QoQ Change
YoY Change
Dollars in thousands
Q2 2026
Q1 2026
Q2 2025
$
%
$
%
Salaries and employee benefits
$
19,165
$
18,601
$
18,070
$
564
3.0
%
$
1,095
6.1
%
Computer and data processing
5,512
6,211
5,879
(699
)
-11.3
%
(367
)
-6.2
%
Total noninterest expense
35,605
35,595
35,682
10
0.0
%
(77
)
-0.2
%
Noninterest expense was $35.6 million in both the first and second quarters of 2026 and $35.7 million in the second quarter of 2025. Detail on select categories with notable variances follows:
•
Salaries and employee benefits expense was $564 thousand higher than the first quarter of 2026, primarily driven by the timing of annual merit increases as well as the impact of an additional business day in the recent quarter, and $1.1 million higher than the second quarter of 2025, reflecting a combination of factors, including annual merit increases, incentive compensation and investments in personnel.
•
Computer and data processing expense was $699 thousand and $367 thousand lower than the linked and year-ago quarters, respectively, due in part to the termination of a vendor relationship in the first quarter of 2026.
INCOME TAXES
QoQ
YoY
Dollars in thousands
Q2 2026
Q1 2026
Q2 2025
Variance
%
Variance
%
Income tax expense
$
4,418
$
3,847
$
3,963
$
571
14.8
%
$
455
11.5
%
Tax credit on investments placed in service/amortized
1,045
1,045
1,103
-
0.0
%
(58
)
-5.3
%
Effective tax rate
17.3
%
15.5
%
18.4
%
1.8
%
-1.2
%
Income tax expense was $4.4 million for the second quarter of 2026, compared to $3.8 million in the first quarter of 2026 and $4.0 million in the second quarter of 2025. Income tax expense reflects federal and state tax benefits that the Company recognized related to tax credit investments placed in service and/or amortized during each period, as outlined above.
•
The effective tax rate, which was 17.3% for the second quarter of 2026, fluctuates on a quarterly basis primarily due to the level of pre-tax earnings or loss and may differ from statutory rates due to interest income from tax-exempt securities, earnings on COLI and the impact of repositionings, the tax impact of restricted stock award vesting, and the impact of tax credit investments.
Balance Sheet Composition and Liquidity
SELECT BALANCE SHEET DATA
QoQ Change
YoY Change
Dollars in thousands, end of period
Q2 2026
Q1 2026
Q2 2025
$
%
$
%
Total assets
$
6,334,952
$
6,294,783
$
6,143,766
$
40,169
0.6
%
$
191,186
3.1
%
Total investment securities
989,764
1,085,771
1,008,268
(96,007
)
-8.8
%
(18,504
)
-1.8
%
Commercial business and commercial mortgage
3,210,384
3,078,180
2,941,371
132,204
4.3
%
269,013
9.1
%
Residential real estate
738,681
727,640
722,880
11,041
1.5
%
15,801
2.2
%
Consumer indirect and other consumer
803,900
821,767
871,751
(17,867
)
-2.2
%
(67,851
)
-7.8
%
Total loans
4,752,965
4,627,587
4,536,002
125,378
2.7
%
216,963
4.8
%
Total deposits
5,299,465
5,337,881
5,156,014
(38,416
)
-0.7
%
143,451
2.8
%
Short-term borrowings
182,000
114,000
101,000
68,000
59.6
%
81,000
80.2
%
Long-term borrowings, net
78,694
78,621
114,960
73
0.1
%
(36,266
)
-31.5
%
Total loans of $4.75 billion at June 30, 2026 were up $125.4 million from the end of the linked quarter and up $217.0 million from June 30, 2025.
•
Strong commercial lending activity in the Bank's Western and Central New York markets drove both the linked quarter and year-over-year growth.
Total deposits were $5.30 billion at June 30, 2026, down $38.4 million from March 31, 2026, and up $143.5 million from June 30, 2025.
•
The linked quarter variance was primarily due to seasonally lower public deposit balances, while the year-over-year increase reflected increases in public, nonpublic and reciprocal deposit balances, partially offset by a decrease in brokered deposits. Public deposits represented 22% of total deposits at June 30, 2026, 23% at March 31, 2026, and 21% at June 30, 2025.
LIQUIDITY SOURCES
QoQ Change
YoY Change
Dollars in thousands, end of period
Q2 2026
Q1 2026
Q2 2025
$
%
$
%
Unencumbered securities
$
29,876
$
42,049
$
132,898
$
(12,173
)
-28.9
%
$
(103,022
)
-77.5
%
FHLBNY borrowing availability
182,426
280,164
240,211
(97,738
)
-34.9
%
(57,785
)
-24.1
%
FRB excess cash
39,564
28,943
18,098
10,621
36.7
%
21,466
118.6
%
FRB discount window
900,825
919,931
856,993
(19,106
)
-2.1
%
43,832
5.1
%
Total on-balance sheet liquidity
1,152,691
1,271,087
1,248,200
(118,396
)
-9.3
%
(95,509
)
-7.7
%
The Company maintains liquidity, both on and off-balance sheet, to meet customer demand. As outlined in the table above, at June 30, 2026, the Company had approximately $1.15 billion in available liquidity, excluding brokered deposit capacity, in addition to cash and cash equivalents of $99.2 million and available unsecured lines of credit totaling $155.0 million.
Capital Strength and Shareholder Returns
REGULATORY CAPITAL RATIOS
Q2 2026
Q1 2026
Q2 2025
QoQ Change
YoY Change
Leverage Ratio
10.06
%
9.89
%
9.45
%
17
bps
61
bps
Common Equity Tier 1 Ratio
11.44
%
11.37
%
10.84
%
7
bps
60
bps
Tier 1 Capital Ratio
11.76
%
11.70
%
11.17
%
6
bps
59
bps
Total Risk Based Capital Ratio
14.20
%
14.16
%
13.27
%
4
bps
93
bps
The Company's regulatory capital ratios at June 30, 2026 continued to exceed all regulatory capital requirements to be considered well capitalized.
SELECT SHAREHOLDERS' EQUITY AND PER SHARE DATA
QoQ
YoY
Dollars in thousands, except per share data
Q2 2026
Q1 2026
Q2 2025
Variance
%
Variance
%
Shareholders' equity
$
643,441
$
631,670
$
601,668
$
11,771
1.9
%
$
41,773
6.9
%
Common shareholders' equity
626,156
614,385
584,383
11,771
1.9
%
41,773
7.1
%
Tangible common equity(1)
566,007
554,140
523,837
11,867
2.1
%
42,170
8.1
%
Common book value per share
$
31.77
$
31.21
$
29.03
$
0.56
1.8
%
$
2.74
9.4
%
Tangible common book value per share(1)
$
28.72
$
28.15
$
26.03
$
0.57
2.0
%
$
2.69
10.3
%
Common equity to assets ratio
9.88
%
9.76
%
9.51
%
12
bps
37
bps
Tangible common equity to tangible assets ratio(1)
9.02
%
8.89
%
8.61
%
13
bps
41
bps
Shareholders' equity grew to $643.4 million at June 30, 2026, compared to $631.7 million at March 31, 2026, and $601.7 million at June 30, 2025, primarily due to net income, net of dividends, retained.
•
The increase in shareholders' equity supported significant year-over-year expansion of both the common equity to assets ratio, which was 9.88% at June 30, 2026, and the tangible common equity to tangible assets ratio(1), or the TCE ratio, which was 9.02% at June 30, 2026.
The Company declared a common stock dividend of $0.32 per common share in the second quarter of 2026, consistent with the linked quarter and reflecting an increase of $0.01, or 3.2%, over the year-ago quarter, returning 30% of second quarter net income to common shareholders.
As of June 30, 2026, 503,313 shares, or approximately half of the amount authorized by the Board of Directors, remained available under the repurchase program that was approved in September 2025. The Company did not repurchase shares of its common stock under the share repurchase program in the second quarter of 2026.
Credit Quality
SELECT CREDIT QUALITY METRICS
QoQ
YoY
Dollars in thousands
Q2 2026
Q1 2026
Q2 2025
Variance
%
Variance
%
Non-performing loans
$
39,007
$
38,475
$
32,436
$
532
1.4
%
$
6,571
20.3
%
Total non-performing loans to total loans
0.82
%
0.83
%
0.72
%
(1
)
bps
11
bps
Allowance for credit losses "ACL" - loans
47,497
44,661
47,291
2,836
6.4
%
206
0.4
%
ACL - loans to total loans ratio
1.00
%
0.97
%
1.04
%
3
bps
(4
)
bps
Provision for credit losses - loans
$
4,133
$
2,355
$
2,377
$
1,778
75.5
%
$
1,756
73.9
%
Provision for credit losses
3,108
2,239
2,562
869
38.8
%
$
546
21.3
%
Net charge-offs/average loans (annualized)
0.11
%
0.44
%
0.36
%
(33
)
bps
(25
)
bps
The Company has remained strategically focused on the importance of credit discipline, allocating resources to credit and risk management functions as the loan portfolio has grown.
•
Non-performing loans were $39.0 million, or 0.82% of total loans, at June 30, 2026. The increase from one year prior primarily reflects one well-collateralized commercial business loan that moved to nonaccrual status in the first quarter of 2026, offset in part by the partial charge-off of a previously disclosed nonaccrual commercial business relationship for which a specific reserve was in place.
•
Provision for credit losses was $3.1 million in the second quarter of 2026 and was driven by a combination of factors, including loan growth and fluctuation in the balance of unfunded commitments. The provision for credit losses on unfunded commitments, which is included in the provision for credit losses as required by the current expected credit loss standard ("CECL"), totaled a credit of $1.0 million in the second quarter of 2026, compared to a credit of $116 thousand in the first quarter of 2026 and a provision of $185 thousand in the second quarter of 2025.
Subsequent Events
The Company is required, under U.S. generally accepted accounting principles ("GAAP"), to evaluate subsequent events through the filing of its consolidated financial statements for the quarter ended June 30, 2026 on Form 10-Q. As a result, the Company will continue to evaluate the impact of any subsequent events on critical accounting assumptions and estimates made as of June 30, 2026, and will adjust amounts preliminarily reported, if necessary, in its Form 10-Q as filed with the Securities and Exchange Commission (the "SEC").
Conference Call
The Company will host an earnings conference call and audio webcast on July 24, 2026, at 8:30 a.m. Eastern Time. The call will be hosted by Martin K. Birmingham, President and Chief Executive Officer, and W. Jack Plants II, Chief Financial Officer and Treasurer. Within the United States, participants may access the call by dialing 1-877-425-9470 and requesting the “Financial Institutions, Inc. Second Quarter 2026 Earnings Conference Call.” A live webcast will also be available at https://viavid.webcasts.com/starthere.jsp?ei=1767913&tp_key=12f3894d15 in listen-only mode. A replay of the webcast will be available on the Company’s IR website, www.FISI-Investors.com, for at least 30 days.
About Financial Institutions, Inc.
Financial Institutions, Inc. (NASDAQ: FISI) is a financial holding company with approximately $6.3 billion in assets offering banking and wealth management products and services. Its Five Star Bank subsidiary provides consumer and commercial banking and lending services to individuals, municipalities and businesses through banking locations spanning Western and Central New York and a commercial loan production office serving the Mid-Atlantic region. Its Courier Capital, LLC subsidiary offers customized investment management, consulting and retirement plan services to individuals, businesses, institutions, foundations and retirement plans. Learn more at FISI-Investors.com.
Non-GAAP Financial Information
In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures. A reconciliation of these non-GAAP measures to GAAP measures is included in Appendix A to this document.
The Company believes that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, performance trends and financial position. Our management uses these measures for internal planning and forecasting purposes and we believe that our presentation and discussion, together with the accompanying reconciliations, allows investors, security analysts and other interested parties to view our performance and the factors and trends affecting our business in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP measures, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure to evaluate the Company. Non-GAAP financial measures have inherent limitations, are not uniformly applied and are not audited. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Safe Harbor Statement
This press release may contain forward-looking statements as defined by Section 21E of the Securities Exchange Act of 1934, as amended, that involve significant risks and uncertainties. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "anticipate," "believe," "continue," "estimate," "expect," "focus," "forecast," "intend," "may," "plan," "preliminary," "should," "target" or "will." Statements herein are based on certain assumptions and analyses by the Company and factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: changes in interest rates; inflation; tariffs; changes in deposit flows and the cost and availability of funds; fraudulent deposit activity; the Company’s ability to implement its strategic plan, including by expanding its commercial lending footprint and integrating its acquisitions; whether the Company experiences greater credit losses than expected; whether the Company experiences breaches of its, or third party, information systems; the attitudes and preferences of the Company's customers; legal and regulatory proceedings and related matters, including any action described in our reports filed with the SEC, could adversely affect us and the banking industry in general; the competitive environment; fluctuations in the fair value of securities in its investment portfolio; changes in the regulatory environment and the Company's compliance with regulatory requirements; general economic and credit market conditions nationally and regionally; and macroeconomic volatility related to global political unrest. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language and risk factors included in the Company's Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other documents filed with the SEC. Except as required by law, the Company undertakes no obligation to revise these statements following the date of this press release.
(1) See Appendix A — Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
(2) Calculated on a tax-equivalent basis assuming a Federal income tax rate of 21%.
*****
For additional information contact:
Kate Croft
Director of Investor Relations and Corporate Communications
(716) 817-5159
klcroft@five-starbank.com
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited) (Amounts in thousands, except per share amounts)
2026
2025
SELECT BALANCE SHEET DATA:
June 30,
March 31,
December 31,
September 30,
June 30,
Cash and cash equivalents
$
99,174
$
85,451
$
108,751
$
185,945
$
93,034
Investment securities:
Available for sale
910,466
1,003,697
922,472
923,592
916,149
Held-to-maturity, net
79,298
82,074
84,708
87,625
92,119
Total investment securities
989,764
1,085,771
1,007,180
1,011,217
1,008,268
Loans held for sale
2,502
1,034
3,365
2,252
2,356
Loans:
Commercial business
768,549
746,425
738,307
740,603
726,218
Commercial mortgage–construction
558,036
513,615
488,558
441,034
536,552
Commercial mortgage–multifamily
565,027
578,731
588,732
592,634
496,223
Commercial mortgage–non-owner occupied
970,966
922,628
942,219
893,884
873,207
Commercial mortgage–owner occupied
347,806
316,781
322,776
321,555
309,171
Residential real estate loans
662,582
652,861
657,001
648,397
647,205
Residential real estate lines
76,099
74,779
75,121
76,109
75,675
Consumer indirect
771,126
787,888
807,310
838,671
833,452
Other consumer
32,774
33,879
37,842
37,536
38,299
Total loans
4,752,965
4,627,587
4,657,866
4,590,423
4,536,002
Allowance for credit losses – loans
47,497
44,661
47,386
47,292
47,291
Total loans, net
4,705,468
4,582,926
4,610,480
4,543,131
4,488,711
Total interest-earning assets
5,834,020
5,787,556
5,755,696
5,739,699
5,614,008
Goodwill and other intangible assets, net
60,149
60,245
60,343
60,443
60,546
Total assets
6,334,952
6,294,783
6,274,140
6,288,052
6,143,766
Deposits:
Noninterest-bearing demand
950,510
953,397
962,724
959,404
940,341
Interest-bearing demand
712,124
744,690
672,323
776,445
704,871
Savings and money market
1,964,402
1,984,048
1,884,801
1,955,832
1,898,302
Time deposits
1,672,429
1,655,746
1,686,500
1,666,128
1,612,500
Total deposits
5,299,465
5,337,881
5,206,348
5,357,809
5,156,014
Short-term borrowings
182,000
114,000
109,000
55,000
101,000
Long-term borrowings, net
78,694
78,621
193,653
115,000
114,960
Total interest-bearing liabilities
4,609,649
4,577,105
4,546,277
4,568,405
4,431,633
Shareholders’ equity
643,441
631,670
628,854
621,720
601,668
Common shareholders’ equity
626,156
614,385
611,569
604,435
584,383
Tangible common equity (1)
566,007
554,140
551,226
543,992
523,837
Accumulated other comprehensive loss
(43,349
)
(39,327
)
$
(33,030
)
$
(36,758
)
$
(42,214
)
Common shares outstanding
19,706
19,686
19,797
20,130
20,128
Treasury shares
993
1,013
902
570
572
CAPITAL RATIOS AND PER SHARE DATA:
Leverage ratio
10.06
%
9.89
%
9.69
%
9.77
%
9.45
%
Common equity Tier 1 capital ratio
11.44
%
11.37
%
11.11
%
11.15
%
10.84
%
Tier 1 capital ratio
11.76
%
11.70
%
11.43
%
11.48
%
11.17
%
Total risk-based capital ratio
14.20
%
14.16
%
14.90
%
13.60
%
13.27
%
Common equity to assets
9.88
%
9.76
%
9.75
%
9.61
%
9.51
%
Tangible common equity to tangible assets (1)
9.02
%
8.89
%
8.87
%
8.74
%
8.61
%
Common book value per share
$
31.77
$
31.21
$
30.89
$
30.03
$
29.03
Tangible common book value per share (1)
$
28.72
$
28.15
$
27.84
$
27.02
$
26.03
(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)
Six Months Ended
2026
2025
SELECT STATEMENT OF OPERATIONS
June 30,
Second
First
Fourth
Third
Second
DATA:
2026
2025
Quarter
Quarter
Quarter
Quarter
Quarter
Interest income
$
164,639
$
163,918
$
83,076
$
81,563
$
84,649
$
84,422
$
82,867
Interest expense
59,285
67,932
29,715
29,570
32,438
32,633
33,745
Net interest income
105,354
95,986
53,361
51,993
52,211
51,789
49,122
Provision for credit losses
5,347
5,490
3,108
2,239
3,404
2,732
2,562
Net interest income after provision for credit losses
Return on average tangible common equity (annualized) (1)
14.96
%
13.31
%
14.88
%
15.04
%
14.02
%
14.98
%
13.27
%
Efficiency ratio (2)
56.18
%
59.24
%
55.33
%
57.06
%
57.43
%
56.78
%
59.68
%
Effective tax rate
16.4
%
18.3
%
17.3
%
15.5
%
16.7
%
18.9
%
18.4
%
(1) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
(2) The efficiency ratio is calculated by dividing noninterest expense by net revenue, i.e., the sum of net interest income (tax-equivalent basis assuming a Federal income tax rate of 21%) and noninterest income before net gains on investment securities. This is a banking industry measure not required by GAAP.
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited)
(Amounts in thousands)
Six Months Ended
2026
2025
June 30,
Second
First
Fourth
Third
Second
SELECT AVERAGE BALANCES:
2026
2025
Quarter
Quarter
Quarter
Quarter
Quarter
Federal funds sold and interest-earning deposits
$
29,301
$
55,306
$
28,347
$
30,266
$
48,418
$
31,461
$
39,027
Investment securities (1)
1,066,571
1,078,600
1,077,633
1,055,385
1,066,829
1,059,244
1,071,628
Loans:
Commercial business
741,484
699,141
745,977
736,942
731,314
726,315
720,347
Commercial mortgage
2,367,615
2,212,786
2,392,003
2,342,957
2,313,465
2,239,666
2,221,576
Residential real estate loans
654,822
646,001
655,028
654,614
650,190
648,642
645,007
Residential real estate lines
74,523
74,860
74,853
74,189
75,288
75,774
75,010
Consumer indirect
787,178
843,763
779,336
795,107
823,521
838,026
839,294
Other consumer
33,892
40,850
32,723
35,074
36,917
37,741
39,485
Total loans
4,659,514
4,517,401
4,679,920
4,638,883
4,630,695
4,566,164
4,540,719
Total interest-earning assets
5,755,386
5,651,307
5,785,900
5,724,534
5,745,942
5,656,869
5,651,374
Goodwill and other intangible assets, net
60,256
60,663
60,207
60,305
60,404
60,505
60,610
Total assets
6,249,798
6,218,412
6,271,961
6,227,388
6,261,856
6,159,886
6,216,657
Interest-bearing liabilities:
Interest-bearing demand
709,029
738,055
701,768
716,370
713,033
687,978
730,979
Savings and money market
1,941,869
1,964,884
1,976,903
1,906,445
1,924,952
1,881,445
1,953,412
Time deposits
1,679,954
1,598,381
1,676,759
1,683,185
1,692,138
1,643,342
1,631,407
Short-term borrowings
116,782
90,636
125,331
108,138
79,913
110,011
86,099
Long-term borrowings, net
88,923
120,648
78,659
99,302
133,242
114,976
116,473
Total interest-bearing liabilities
4,536,557
4,512,604
4,559,420
4,513,440
4,543,278
4,437,752
4,518,370
Noninterest-bearing demand deposits
947,322
925,043
944,037
950,644
955,880
960,089
923,409
Total deposits
5,278,174
5,226,363
5,299,467
5,256,644
5,286,003
5,172,854
5,239,207
Total liabilities
5,613,678
5,630,349
5,633,343
5,593,794
5,629,101
5,549,575
5,619,834
Shareholders’ equity
636,120
588,063
638,618
633,594
632,755
610,311
596,823
Common equity
618,835
570,778
621,333
616,309
615,470
593,026
579,538
Tangible common equity (2)
558,579
510,115
561,126
556,004
555,066
532,521
518,928
Common shares outstanding:
Basic
19,665
20,290
19,687
19,642
20,093
20,122
20,107
Diluted
19,931
20,291
19,941
19,922
20,347
20,336
20,294
SELECTED AVERAGE YIELDS: (Tax equivalent basis)
Investment securities (3)
4.47
%
4.30
%
4.46
%
4.48
%
4.48
%
4.45
%
4.34
%
Loans
6.07
%
6.23
%
6.07
%
6.07
%
6.20
%
6.29
%
6.26
%
Total interest-earning assets
5.76
%
5.84
%
5.76
%
5.76
%
5.86
%
5.93
%
5.88
%
Interest-bearing demand
1.06
%
1.18
%
1.08
%
1.04
%
1.20
%
1.09
%
1.21
%
Savings and money market
2.31
%
2.71
%
2.33
%
2.29
%
2.46
%
2.62
%
2.67
%
Time deposits
3.45
%
4.19
%
3.38
%
3.53
%
3.73
%
3.88
%
4.08
%
Short-term borrowings
2.52
%
1.95
%
2.62
%
2.40
%
1.77
%
2.41
%
1.80
%
Long-term borrowings, net
6.91
%
5.17
%
6.99
%
6.84
%
6.31
%
5.53
%
5.35
%
Total interest-bearing liabilities
2.63
%
3.03
%
2.61
%
2.65
%
2.83
%
2.92
%
3.00
%
Net interest rate spread
3.13
%
2.81
%
3.15
%
3.11
%
3.03
%
3.01
%
2.88
%
Net interest margin
3.68
%
3.42
%
3.70
%
3.67
%
3.62
%
3.65
%
3.49
%
(1) Includes investment securities at adjusted amortized cost.
(2) See Appendix A – Reconciliation to Non-GAAP Financial Measures for the computation of this non-GAAP financial measure.
(3) The interest on tax-exempt securities is calculated on a tax-equivalent basis assuming a Federal income tax rate of 21%.
FINANCIAL INSTITUTIONS, INC. Selected Financial Information (Unaudited) (Amounts in thousands)
Six Months Ended
2026
2025
June 30,
Second
First
Fourth
Third
Second
ASSET QUALITY DATA:
2026
2025
Quarter
Quarter
Quarter
Quarter
Quarter
Allowance for Credit Losses – Loans
Beginning balance
$
47,386
$
48,041
$
44,661
$
47,386
$
47,292
$
47,291
$
48,964
Net loan charge-offs (recoveries):
Commercial business
2,967
1,960
(23
)
2,990
46
123
1,903
Commercial mortgage–construction
-
-
-
-
(10
)
(357
)
-
Commercial mortgage–multifamily
-
-
-
-
-
-
-
Commercial mortgage–non-owner occupied
(2
)
595
(1
)
(1
)
-
(1
)
596
Commercial mortgage–owner occupied
(1
)
(2
)
-
(1
)
-
(1
)
(1
)
Residential real estate loans
19
133
-
19
(4
)
(25
)
92
Residential real estate lines
27
27
30
(3
)
-
-
27
Consumer indirect
2,990
3,091
1,140
1,850
2,239
1,926
942
Other consumer
377
615
151
226
140
396
491
Total net charge-offs (recoveries)
6,377
6,419
1,297
5,080
2,411
2,061
4,050
Provision for credit losses – loans
6,488
5,669
4,133
2,355
2,505
2,062
2,377
Ending balance
$
47,497
$
47,291
$
47,497
$
44,661
$
47,386
$
47,292
$
47,291
Net charge-offs (recoveries) to average loans (annualized):
Commercial business
0.81
%
0.57
%
-0.01
%
1.65
%
0.02
%
0.07
%
1.06
%
Commercial mortgage–construction
0.00
%
0.00
%
0.00
%
0.00
%
-0.01
%
-0.31
%
0.00
%
Commercial mortgage–multifamily
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
Commercial mortgage–non-owner occupied
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
Commercial mortgage–owner occupied
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
Residential real estate loans
0.01
%
0.04
%
0.00
%
0.01
%
0.00
%
-0.02
%
0.06
%
Residential real estate lines
0.07
%
0.07
%
0.16
%
-0.03
%
0.00
%
0.00
%
0.14
%
Consumer indirect
0.77
%
0.74
%
0.59
%
0.94
%
1.08
%
0.91
%
0.45
%
Other consumer
2.24
%
3.04
%
1.85
%
2.61
%
1.50
%
4.16
%
4.99
%
Total loans
0.28
%
0.29
%
0.11
%
0.44
%
0.21
%
0.18
%
0.36
%
Supplemental information (1)
Non-performing loans:
Commercial business
$
7,677
$
3,671
$
7,677
$
6,698
$
4,709
$
3,799
$
3,671
Commercial mortgage–construction
20,520
19,621
20,520
20,520
20,321
19,794
19,621
Commercial mortgage–multifamily
540
-
540
540
540
540
-
Commercial mortgage–non-owner occupied
-
164
-
-
-
-
164
Commercial mortgage–owner occupied
981
-
981
983
1,095
1,102
-
Residential real estate loans
6,974
5,885
6,974
7,434
6,443
5,877
5,885
Residential real estate lines
412
299
412
431
374
212
299
Consumer indirect
1,772
2,571
1,772
1,767
2,155
2,482
2,571
Other consumer
131
225
131
102
118
145
225
Total non-performing loans
39,007
32,436
39,007
38,475
35,755
33,951
32,436
Foreclosed assets
552
142
552
552
94
142
142
Total non-performing assets
$
39,559
$
32,578
$
39,559
$
39,027
$
35,849
$
34,093
$
32,578
Total non-performing loans to total loans
0.82
%
0.72
%
0.82
%
0.83
%
0.77
%
0.74
%
0.72
%
Total non-performing assets to total assets
0.62
%
0.53
%
0.62
%
0.62
%
0.57
%
0.54
%
0.53
%
Allowance for credit losses – loans to total loans
1.00
%
1.04
%
1.00
%
0.97
%
1.02
%
1.03
%
1.04
%
Allowance for credit losses – loans to non-performing loans
122
%
146
%
122
%
116
%
133
%
139
%
146
%
(1) At period end.
FINANCIAL INSTITUTIONS, INC. Appendix A — Reconciliation to Non-GAAP Financial Measures (Unaudited) (In thousands, except per share amounts)
Six Months Ended
2026
2025
June 30,
Second
First
Fourth
Third
Second
2026
2025
Quarter
Quarter
Quarter
Quarter
Quarter
Ending tangible assets:
Total assets
$
6,334,952
$
6,294,783
$
6,274,140
$
6,288,052
$
6,143,766
Less: Goodwill and other intangible assets, net
60,149
60,245
60,343
60,443
60,546
Tangible assets
$
6,274,803
$
6,234,538
$
6,213,797
$
6,227,609
$
6,083,220
Ending tangible common equity:
Common shareholders’ equity
$
626,156
$
614,385
$
611,569
$
604,435
$
584,383
Less: Goodwill and other intangible assets, net
60,149
60,245
60,343
60,443
60,546
Tangible common equity
$
566,007
$
554,140
$
551,226
$
543,992
$
523,837
Tangible common equity to tangible assets (1)
9.02
%
8.89
%
8.87
%
8.74
%
8.61
%
Common shares outstanding
19,706
19,686
19,797
20,130
20,128
Tangible common book value per share (2)
$
28.72
$
28.15
$
27.84
$
27.02
$
26.03
Average tangible assets:
Average assets
$
6,249,798
$
6,218,412
$
6,271,961
$
6,227,388
$
6,261,856
$
6,159,886
$
6,216,657
Less: Average goodwill and other intangible assets, net
60,256
60,663
60,207
60,305
60,404
60,505
60,610
Average tangible assets
$
6,189,542
$
6,157,749
$
6,211,754
$
6,167,083
$
6,201,452
$
6,099,381
$
6,156,047
Average tangible common equity:
Average common equity
$
618,835
$
570,778
$
621,333
$
616,309
$
615,470
$
593,026
$
579,538
Less: Average goodwill and other intangible assets, net
60,256
60,663
60,207
60,305
60,404
60,505
60,610
Average tangible common equity
$
558,579
$
510,115
$
561,126
$
556,004
$
555,066
$
532,521
$
518,928
Net income available to common shareholders
$
41,440
$
33,681
$
20,819
$
20,621
$
19,616
$
20,112
$
17,168
Return on average tangible common equity (3)
14.96
%
13.31
%
14.88
%
15.04
%
14.02
%
14.98
%
13.27
%
(1) Tangible common equity divided by tangible assets.
(2) Tangible common equity divided by common shares outstanding.
(3) Net income available to common shareholders (annualized) divided by average tangible common equity.
