WARSAW, N.Y., July 01, 2025 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (NASDAQ: FISI) (the “Company”), the parent company of Five Star Bank and Courier Capital, LLC, will release results for the second quarter ending June 30, 2025 after the market closes on July 24, 2025. Management will host an earnings conference call and audio webcast on July 25, 2025 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 Finan ...

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Revenue and Income - Commercial business revenue increased to $17 million in Q1 2025 from $4 million in Q1 2024[228] - Total interest income rose by $2.6 million, or 2.6%, driven by a $7.4 million increase in rates despite a $1.1 million decrease in volume[230] - Total noninterest income decreased to $10.4 million in Q1 2025 from $10.9 million in Q1 2024, primarily due to the sale of the insurance subsidiary[234] - Investment advisory income increased by $155 thousand, or 6%, to $2.7 million in Q1 2025 compared to Q1 2024[235] - Income tax expense for Q1 2025 was $3.7 million, up from $356 thousand in Q1 2024, reflecting higher pre-tax income[243] Expenses and Efficiency - Total noninterest expense decreased significantly to $33.7 million in Q1 2025 from $54 million in Q1 2024, largely due to lower salaries and professional services expenses[239] - The efficiency ratio improved to 58.79% in Q1 2025 from 105.77% in Q1 2024, indicating better resource allocation[242] Credit Losses and Loan Portfolio - Provision for credit losses was $2.9 million in Q1 2025, compared to a benefit of $5.5 million in Q1 2024, reflecting loan growth and increased specific reserves[232] - The allowance for credit losses on loans was $48.964 million as of March 31, 2025, compared to $48.041 million at December 31, 2024[258] - The allowance for credit losses on loans increased to $49.0 million at March 31, 2025, up from $43.1 million at March 31, 2024, primarily due to increased loan balances and qualitative factors[264] - Non-performing loans decreased by $1.4 million to $40.0 million at March 31, 2025, compared to $41.4 million at March 31, 2024, representing 0.88% of total loans[271] - The ratio of allowance for credit losses to total loans was 1.08% at March 31, 2025, compared to 0.60% at March 31, 2024[264] - Total loans amounted to $4.55 billion, reflecting an increase of $74.1 million from $4.48 billion at December 31, 2024[258] - The composition of the loan portfolio included commercial business loans of $709.1 million (15.6% of total loans), up $43.8 million (7%) from December 31, 2024[258] - Total commercial mortgage loans reached $2.23 billion, representing 49% of total loans, with an increase of $28.7 million (1.3%) from $2.20 billion as of December 31, 2024[258] - The total consumer loans were $1.62 billion, or 35% of total loans, with a slight increase of $1.6 million from December 31, 2024[259] Deposits and Borrowings - Total deposits increased by $268.2 million, or 5%, to $5.37 billion as of March 31, 2025, compared to $5.10 billion at December 31, 2024[281] - Non-public deposits totaled $3.15 billion, representing 59% of total deposits as of March 31, 2025, down from 63% at December 31, 2024[282] - Public deposits increased to $1.22 billion, representing 23% of total deposits as of March 31, 2025, compared to 21% at December 31, 2024[283] - Reciprocal deposits rose to $796.6 million, accounting for 15% of total deposits as of March 31, 2025, up from $746.7 million at December 31, 2024[284] - Brokered deposits increased significantly to $204.3 million, representing 4% of total deposits as of March 31, 2025, compared to 2% at December 31, 2024[285] - Short-term borrowings decreased to $55 million as of March 31, 2025, down from $99 million at December 31, 2024[287] - Long-term borrowings remained stable at $124.9 million as of March 31, 2025, compared to $124.8 million at December 31, 2024[286] Capital and Liquidity - Total regulatory capital was $701.6 million as of March 31, 2025, with a total risk-based capital ratio of 13.09%[308] - Common Equity Tier 1 (CET1) capital was $556.7 million, representing a CET1 ratio of 10.38% as of March 31, 2025[308] - Shareholders' equity increased to $589.9 million at March 31, 2025, up $20.9 million from $569.0 million at December 31, 2024[304] - The company is classified as "well-capitalized" under the Basel III Capital Rules as of March 31, 2025[310] - The company actively manages liquidity to meet financial obligations, with structural liquidity ratios compliant with regulatory requirements[295] Investment Securities - The total investment securities portfolio was $1.1 billion as of March 31, 2025, with an increase in available-for-sale securities[245] - The available-for-sale investment securities portfolio had a net unrealized loss of $46.6 million at March 31, 2025, down from $61.6 million at December 31, 2024[246] - The Agency MBS portfolio as of March 31, 2025, had an aggregate fair value of $313.7 million with unrealized losses totaling $50.9 million[251] - 37 of the AFS securities were in an unrealized loss position for 12 months or longer, with unrealized losses of $48.9 million[251] - The fair value of non-Agency MBS was $359 thousand as of March 31, 2025, with no unrealized loss position[253] - The company does not consider any of the unrealized losses on Agency MBS as credit-related as of March 31, 2025[252] Economic Value and Interest Rate Sensitivity - Economic value of equity (EVE) at March 31, 2025 is $867,977, a decrease of $14,453 (-1.67%) from the pre-shock scenario compared to December 31, 2024[323] - Under the -200 basis points scenario, EVE changes by -0.33% to $865,086 at March 31, 2025, while it increases by 0.57% to $908,905 at December 31, 2024[323] - The sensitivity in the down rate shock scenarios to EVE becomes more negative at March 31, 2025, due to increased borrowings and a shift in deposit mix[323] - The overall value increase of the loan portfolio at March 31, 2025 is offset by deposits, leading to a decrease in EVE compared to December 31, 2024[323] - The estimated changes to net interest income over the 12-month period ending March 31, 2026, show a decrease of $17,486 (5.62%) under -300 bp scenario and an increase of $2,046 (1.02%) under +100 bp scenario[318] - The estimated changes to net interest income do not consider balance sheet growth or changes in the balance sheet mix[318]

Financial Data and Key Metrics Changes - Net interest income increased by over 12% from the fourth quarter and 17% year over year, with net interest margin expanding by 44 and 57 basis points respectively [4][5] - Non-interest income was $10,400,000, supported by enhancements to the company-owned life insurance portfolio and increased investment advisory income [5] - Net income for the quarter was $16,900,000, with diluted EPS at $0.81, and return on average common equity at 11.92% [16][24] Business Line Data and Key Metrics Changes - Total loans increased by 1.7% during the quarter, driven by commercial and industrial (C&I) and commercial real estate (CRE) lending [7] - Commercial business loans rose by 6.6% during the quarter, while commercial mortgage loans increased by 1.3% [9] - Consumer indirect balances were up nearly 1% from December 31, but down 7% year over year [11] Market Data and Key Metrics Changes - Deposits increased by 5.3% from year-end 2024, driven by higher public deposit balances and an increase in brokered deposits [13] - Nonperforming loans declined to $40,000,000, primarily related to two commercial relationships [10] Company Strategy and Development Direction - The company is focused on maintaining momentum from its capital raise and investment securities restructuring to deliver strong results throughout 2025 [5][24] - A new executive has joined the team to enhance customer growth and service excellence across the retail network [25][26] Management Comments on Operating Environment and Future Outlook - Management expressed caution regarding the uncertain economic landscape, particularly concerning tariffs, inflation, and interest rates [8][9] - The company maintains a conservative outlook for loan growth, expecting it to be concentrated in the first half of the year due to economic uncertainties [9][33] Other Important Information - The company expects non-interest income to be between $10,000,000 to $10,500,000 per quarter for 2025, reflecting an upward revision [19] - The provision for credit losses was $2,900,000, down from $6,500,000 in the linked quarter, with a net charge-off ratio of 21 basis points [21][23] Q&A Session Summary Question: Loan growth outlook for the year - Management is comfortable with their guidance, noting that uncertainty has led customers to pause investments [32][33] Question: NIM guidance and levers for improvement - Key levers include cash flow from the portfolio and deposit repricing, with CDs maturing at an average cost of about 4.5% [35][39] Question: COLI expected income over the next quarters - COLI income is expected to be elevated in the second quarter and then normalize, but at a higher level than previous quarters [42][44] Question: Provision outlook for credit - The guided ACL to average loans ratio is expected to hover around 107 to 108 basis points for the rest of the year [46]

Financial Data and Key Metrics Changes - Net interest income increased by more than 12% from the fourth quarter and 17% year over year, with net interest margin expanding by 44 and 57 basis points respectively [4] - Non-interest income was $10,400,000, supported by enhancements to the company-owned life insurance portfolio and increased investment advisory income [5] - Net income for the first quarter was $16,900,000, with diluted EPS at $0.81, driven by improved net interest income and effective non-interest expense management [16] - The efficiency ratio was 59%, consistent with the full-year target of below 60% [5] Business Line Data and Key Metrics Changes - Total loans increased by 1.7% during the quarter, driven by both commercial and industrial (C&I) and commercial real estate (CRE) lending [7] - Commercial business loans rose by 6.6% during the quarter, while commercial mortgage loans increased by 1.3% [8] - Consumer indirect balances were up just shy of 1% from December 31, but down 7% year over year [10] - Residential lending decreased by 1% from both the linked and year-ago quarters due to high competition and tight housing inventory [12] Market Data and Key Metrics Changes - Deposits increased by 5.3% from year-end 2024, driven by seasonally higher public deposit balances and an increase in brokered deposits [12] - Cash-related deposits totaled approximately $55,000,000 as of March 31, 2025, with expectations for a portion to remain on the balance sheet into the third quarter [13] Company Strategy and Development Direction - The company is focused on driving internal efficiency, controlling credit extension, and maintaining a disciplined approach to management [6] - The strategic focus includes sustainable customer growth and service excellence across its retail network and banking locations [25] - The company plans to continue evaluating options for subordinated debt facilities moving forward [14] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook for the industry due to uncertainties in the political and macroeconomic environments [6] - The company remains committed to a low single-digit growth guidance for 2025, reflecting a conservative approach amid economic volatility [8] - Management reiterated confidence in maintaining profitability and credit discipline despite the uncertain economic landscape [24] Other Important Information - The company welcomed a new executive with extensive experience in consumer banking, expected to contribute to strategic objectives [25] - The company filed its 2025 proxy statement, with new directors nominated to enhance corporate governance [26] Q&A Session Summary Question: Loan growth outlook for the year - Management is comfortable with their guidance, noting that uncertainty has led customers to pause anticipated investments [30][31] Question: NIM guidance and levers for improvement - Key levers include cash flow from the portfolio and deposit repricing, with about $500,000,000 of CDs maturing in the next nine months [33][34] Question: Expected COLI income over the next quarters - COLI income is expected to be elevated in the second quarter before normalizing, with a significant increase in yield due to restructuring [41][42] Question: Provision outlook for credit - The guided ACL to average loans ratio is expected to hover around 107 to 108 basis points for the rest of the year [45]

Financial Data and Key Metrics Changes - Net interest income increased by more than 12% from the fourth quarter and 17% year over year, with net interest margin expanding by 44 and 57 basis points respectively [4] - Non-interest income was $10,400,000, supported by enhancements to the company-owned life insurance portfolio and increased investment advisory income [5] - Net income for the first quarter was $16,900,000, with diluted EPS at $0.81, reflecting improved net interest income and effective non-interest expense management [15] - The efficiency ratio was 59%, consistent with the full-year target of below 60% [5] - Annualized return on average assets was 110 basis points, while return on average equity was 11.82% [5] Business Line Data and Key Metrics Changes - Total loans increased by 1.7% during the quarter, driven by both commercial and industrial (C&I) and commercial real estate (CRE) lending [6] - Commercial business loans rose by 6.6% during the quarter, while commercial mortgage loans increased by 1.3% [8] - Consumer indirect lending balances were up just shy of 1% from December 31, but down 7% year over year [10] - Residential lending decreased by 1% from both the linked and year-ago quarters due to high competition and tight housing inventory [12] Market Data and Key Metrics Changes - Deposits increased by 5.3% from year-end 2024, driven by seasonally higher public deposit balances and an increase in brokered deposits [12] - Cash-related deposits totaled approximately $55,000,000 as of March 31, 2025, with expectations for a portion to remain on the balance sheet into the third quarter [13] Company Strategy and Development Direction - The company is focused on maintaining momentum from its capital raise and investment securities restructuring to deliver strong results and profitability throughout 2025 [5] - A new executive was welcomed to the team to enhance customer growth and service excellence across the retail network [25] - The company intends to remain disciplined in credit extension and management amid a challenging economic environment [6] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding loan growth, indicating that uncertainty in the economic landscape may lead to a pause in anticipated investments by customers [30] - The company maintains a low single-digit growth guidance for 2025, reflecting a conservative approach given inflationary pressures and economic uncertainty [8] - Management reiterated a commitment to effective expense management while investing in people, processes, and technology for future growth [20] Other Important Information - The company expects non-interest income to be between $10,000,000 to $10,500,000 per quarter for 2025, an increase from previous guidance [18] - The provision for credit losses was $2,900,000 in the current quarter, down from $6,500,000 in the linked quarter [21] Q&A Session Summary Question: Loan growth outlook and conservativeness - Management is comfortable with their guidance, noting that uncertainty has led customers to pause investments [30] Question: NIM guidance and levers for improvement - Key levers include cash flow from the portfolio and deposit repricing, with about $500,000,000 of CDs maturing in the next nine months [33][34] Question: COLI expected income over the next quarters - COLI income is expected to be elevated in Q2 and then normalize, but at a higher level than previous quarters [40][42] Question: Provision outlook for credit - The guided ACL to average loans ratio is expected to hover around 107 to 108 basis points for the rest of the year [43]

Investor Presentation Nasdaq: FISI First Quarter 2025 April 28, 2025 Important Information Safe Harbor Statement & Other Information Statements contained in this presentation which are not historical facts and which pertain to future operating results of Financial Institutions, Inc. (the "Company") and its subsidiaries constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe the objectives, plans or goals of the C ...

Core Viewpoint - Financial Institutions (FISI) reported quarterly earnings of $0.81 per share, exceeding the Zacks Consensus Estimate of $0.74 per share, and showing significant growth from $0.11 per share a year ago, indicating a strong earnings surprise of 9.46% [1] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates only once in the last four quarters [2] - Financial Institutions posted revenues of $57.24 million for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.23%, compared to $50.98 million in the same quarter last year [2] - The current consensus EPS estimate for the upcoming quarter is $0.79, with expected revenues of $58.74 million, and for the current fiscal year, the EPS estimate is $3.24 on revenues of $238.18 million [7] Group 2: Stock Performance and Outlook - Financial Institutions shares have declined approximately 12.6% since the beginning of the year, while the S&P 500 has decreased by 6.1% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] - The outlook for the industry, specifically the Banks - Northeast sector, is relatively strong, ranking in the top 23% of over 250 Zacks industries, suggesting potential for better performance compared to lower-ranked industries [8]

Financial Performance - The Company reported net income of $16.9 million for Q1 2025, a significant recovery from a net loss of $82.8 million in Q4 2024 and an increase from net income of $2.1 million in Q1 2024[2] - Noninterest income for Q1 2025 was $10.4 million, a recovery from a noninterest loss of $91.0 million in Q4 2024[11] - Net income available to common shareholders in Q1 2025 was $16,513,000, compared to a loss of $83,176,000 in Q4 2024[39] - Earnings per share (diluted) for Q1 2025 was $0.81, recovering from a loss of $5.07 in Q4 2024[39] - Return on average assets (annualized) for Q1 2025 was 1.10%, a recovery from -5.38% in Q4 2024[39] - The efficiency ratio improved to 58.79% in Q1 2025 from 117.13% in Q4 2024, indicating better cost management[39] Interest Income and Margin - Net interest income increased to $46.9 million in Q1 2025, up $5.2 million (12.6%) from Q4 2024 and up $6.8 million (16.9%) from Q1 2024[5] - The net interest margin expanded to 3.35% in Q1 2025, an increase of 44 basis points from Q4 2024 and 57 basis points from Q1 2024[5] - Interest income for Q1 2025 was $81,051,000, an increase from $78,413,000 in Q1 2024, representing a growth of 2.1%[39] - Net interest income after provision for credit losses in Q1 2025 was $43,936,000, compared to $45,538,000 in Q1 2024, a decrease of 3.5%[39] Loans and Deposits - Total loans reached $4.55 billion at March 31, 2025, reflecting a quarterly increase of $74.1 million (1.7%) and a year-over-year increase of $111.2 million (2.5%)[5] - Total deposits were $5.37 billion at March 31, 2025, up $268.2 million (5.3%) from December 31, 2024, but down $23.8 million (0.4%) from March 31, 2024[5] - Total loans for Q1 2025 reached $4,493,825, an increase from $4,434,365 in Q4 2024, representing a growth of 1.3%[41] - Total deposits for Q1 2025 were $5,213,376, slightly down from $5,241,779 in Q4 2024, a decrease of 0.5%[41] Credit Quality - Non-performing loans were $40.0 million, or 0.88% of total loans, at March 31, 2025, down from $41.4 million or 0.92% at December 31, 2024[25] - The allowance for credit losses on loans to total loans ratio was 1.08% at March 31, 2025, compared to 1.07% at December 31, 2024[26] - Provision for credit losses was $2.9 million in the current quarter, compared to $6.5 million in the linked quarter[28] - The ratio of allowance for credit losses on loans to non-performing loans was 122% at March 31, 2025, down from 161% at March 31, 2024[29] - The provision for credit losses in Q1 2025 was $2,928,000, down from $6,461,000 in Q4 2024, indicating improved credit quality[39] - Net charge-offs for Q1 2025 totaled $2,369, a decrease from $2,778 in Q4 2024, reflecting a decline of 14.7%[43] Capital and Equity - Shareholders' equity increased to $589.9 million at March 31, 2025, up from $569.0 million at December 31, 2024, and $445.7 million at March 31, 2024[21] - Common book value per share increased to $28.48 at March 31, 2025, up $1.00 or 3.6% from $27.48 at December 31, 2024[22] - Common Equity Tier 1 Capital Ratio was 10.38% at March 31, 2025, down from 10.54% at December 31, 2024[27] - The leverage ratio was 9.24% at March 31, 2025, compared to 9.15% at December 31, 2024[27] - Tangible common equity increased to $511,992 thousand, up from $490,941 thousand at December 31, 2024, marking a growth of 4.28%[38] - The common equity increased to $561,921 in Q1 2025 from $499,910 in Q4 2024, representing a growth of 12.4%[41] Dividends - The Company approved a 3.3% increase in its quarterly cash dividend to $0.31 per common share, reflecting confidence in its long-term growth strategy[5] - The Company declared a common stock dividend of $0.31 per share, an increase of $0.01 or 3.3% over the linked and year-ago quarters, returning more than 37% of first quarter net income to common shareholders[23] - The company declared cash dividends of $0.31 per share in Q1 2025, slightly up from $0.30 in Q4 2024[39] Assets - Total assets increased to $6,340,492 thousand as of March 31, 2025, up from $6,117,085 thousand at December 31, 2024, representing a growth of 3.66%[38] - Total interest-earning assets increased to $5,733,743 thousand, up from $5,602,570 thousand at December 31, 2024, reflecting a growth of 2.34%[38] - Total assets as of Q1 2025 were $6,220,187, up from $6,121,449 in Q4 2024, marking an increase of 1.6%[41] - Average assets for Q1 2025 were $6,220,187 thousand, compared to $6,225,760 thousand in Q1 2024, showing a marginal decrease of 0.09%[44] Conference Call - The Company will host an earnings conference call on April 29, 2025, at 8:30 a.m. Eastern Time[31]

Core Insights - Financial Institutions, Inc. reported a net income of $16.9 million for Q1 2025, a significant recovery from a net loss of $82.8 million in Q4 2024 and an increase from $2.1 million in Q1 2024 [2][4][6] - The company experienced a 12.6% increase in net interest income, reaching $46.9 million, and a net interest margin expansion of 44 basis points to 3.35% [4][6][11] - Total loans increased by 1.7% quarter-over-quarter to $4.55 billion, driven by commercial business and mortgage lending [5][17][19] - Total deposits rose by 5.3% from the previous quarter to $5.37 billion, influenced by seasonal public deposit inflows [20][22] - The company declared a quarterly cash dividend of $0.31 per common share, reflecting a 3.3% increase, returning over 37% of Q1 net income to common shareholders [24] Financial Performance - Net income available to common shareholders was $16.5 million, or $0.81 per diluted share, compared to a net loss of $83.2 million, or $(5.07) per diluted share, in the previous quarter [2][4] - Noninterest income for Q1 2025 was $10.4 million, a recovery from a noninterest loss of $91.0 million in Q4 2024 [6][12] - Noninterest expense decreased to $33.7 million from $59.4 million in the previous quarter [14] Loan and Deposit Metrics - Total loans increased by $74.1 million, or 1.7%, during the quarter, with commercial business loans up 6.6% from the previous quarter [19][20] - Total deposits reached $5.37 billion, up $268.2 million from the previous quarter, with public deposit balances representing 23% of total deposits [20][22] Credit Quality - The company reported improved credit quality metrics, with net charge-offs at 0.21% of average loans, down from 0.25% in the previous quarter [29][31] - Non-performing loans were $40.0 million, or 0.88% of total loans, a slight decrease from the previous quarter [29][30] Capital Management - Total assets increased to $6.34 billion, up $223.4 million from the previous quarter [17][22] - Shareholders' equity rose to $589.9 million, driven by additional paid-in-capital from a common stock capital raise [22][23] - The company maintained strong capital ratios, with a Common Equity Tier 1 Capital Ratio of 10.38% [28][43]