Group 1 - Financial Institutions, Inc. will release its first quarter results for the period ending March 31, 2025, after market close on April 28, 2025 [1] - An earnings conference call and audio webcast will be hosted on April 29, 2025, at 8:30 a.m. Eastern Time, led by the President and CEO, Martin K. Birmingham, and CFO, W. Jack Plants II [2] - The company has approximately $6.1 billion in assets as of December 31, 2024, and offers banking and wealth management products and services [3] Group 2 - Five Star Bank, a subsidiary of Financial Institutions, Inc., provides consumer and commercial banking and lending services across Western and Central New York [3] - Courier Capital, LLC, another subsidiary, offers customized investment management, financial planning, and consulting services to a diverse clientele [3]

Financial Position - As of December 31, 2024, the Company had consolidated total assets of $6.12 billion, deposits of $5.10 billion, and shareholders' equity of $569.0 million[21]. - The Bank reported total assets of $6.08 billion, net loans of $4.43 billion, and deposits of $5.15 billion as of December 31, 2024[23]. - Courier Capital managed $3.09 billion in assets and generated total revenue of $10.3 million for the year ended December 31, 2024[24]. - As of December 31, 2024, the bank's portfolio of commercial business and commercial mortgage loans totaled $1.25 billion, representing 28% of total loans[145]. - Non-performing assets were $41.5 million, or 0.68% of total assets, as of December 31, 2024[146]. - At December 31, 2024, the bank had $3.56 billion in deposit liabilities with no fixed term, accounting for 70% of total deposits[151]. - Municipal deposits amounted to $1.07 billion, or 21% of total deposits, as of December 31, 2024[153]. - The company has $58.1 million in goodwill and $2.6 million in other intangible assets as of December 31, 2024[181]. Revenue and Income - The Company aims to increase market share within existing markets while exploring growth opportunities in non-interest income through acquisitions[31]. - The Company is committed to maintaining a diversified revenue stream and exploring strategic partnerships that align with its core competencies[32]. - The company declared dividends of $21.0 million in 2024 and $14.0 million in 2023[101]. - The company generates a significant portion of its revenue from dividends from its Bank subsidiary, which are subject to regulatory limitations[190]. - Investment advisory revenue may decrease due to poor investment performance, impacting overall revenues and net income[175]. - The company’s investment advisory business relies heavily on assets under management, which are influenced by market conditions and competition[176]. Loan Portfolio - The commercial business loan portfolio totaled $665.3 million, representing 15% of the total loan portfolio, with 21% at fixed interest rates and 79% at variable interest rates as of December 31, 2024[53]. - The commercial mortgage loan portfolio amounted to $2.20 billion, accounting for 49.1% of the total loan portfolio, with 34% at fixed interest rates and 66% at variable interest rates as of December 31, 2024[54]. - The residential real estate loan portfolio reached $650.2 million, or 15% of the total loan portfolio, with 74% at fixed interest rates as of December 31, 2024[58]. - The consumer indirect loan portfolio totaled $845.8 million, representing 19% of the total loan portfolio, primarily concentrated in indirect automobile loans as of December 31, 2024[60]. - The company exited the Pennsylvania automobile market effective January 1, 2024, to focus on its core Upstate New York market[61]. Regulatory Environment - The company is subject to extensive regulation under federal and state laws, primarily for the protection of depositors and the banking system[80]. - The company must comply with capital adequacy standards established by the Federal Reserve, based on Basel III[87]. - The company is required to maintain a leverage ratio of at least 4.0%[93]. - The company must notify the FRB prior to declaring and paying cash dividends if net earnings are insufficient to fund the dividend[100]. - The FDIC issued a special assessment in 2023 for banks with uninsured deposits exceeding $5 billion[106]. - The company did not opt into using the Community Bank Leverage Ratio and determined to comply with the Basel III Rules instead[92]. - The company is subject to a minimum capital conservation buffer of 2.5%[89]. - The most recent CRA evaluation resulted in an overall rating of "Satisfactory" for the company[109]. Risk Management - The Company is subject to various risks, including credit losses, regulatory changes, and market volatility, which could impact financial performance[19]. - The allowance for credit losses is established through charges to earnings, reflecting management's estimate of probable credit losses in the portfolio[68]. - The company has identified nine portfolio segments of loans for estimating the allowance for credit losses, including Commercial Loans/Lines and Residential Real Estate Loans[69]. - The company faces risks related to interest rate fluctuations, which can impact net interest income, loan demand, and defaults[192]. - The Federal Reserve's monetary policies have led to increased interest rates, affecting the company's financial conditions and operations[193]. - The company’s risk management framework must effectively identify and mitigate risks to avoid unexpected losses[191]. Employee and Workplace Culture - The Company prioritizes talent attraction and retention by fostering an inclusive and healthy workplace[34]. - The company was certified by Great Place To Work® for the second time in 2024, indicating a strong employee satisfaction culture[42]. - As of December 31, 2024, the company had 598 employees, a decrease of 26 employees or 4% from the previous year, primarily due to the sale of its insurance subsidiary[35]. Strategic Initiatives - The Company plans to leverage digital channels to enhance customer engagement and expand its reach into new geographies[29]. - The company aims to expand its branch network and invest in digital banking, but failure to implement these growth strategies could negatively affect loan portfolio quality and profitability[183]. - The company plans to pursue a growth strategy by expanding its branch network and considering acquisitions of various financial services firms, although competition for suitable targets may increase costs and limit options[186]. - The company has implemented a program to provide financial products and services to legal cannabis-related businesses, although exposure is expected to be tempered by the exit from the BaaS line of business[115]. Cybersecurity and Technology - The company relies heavily on information technology and internet services to process a large volume of daily transactions, increasing vulnerability to cyber-attacks and system failures[205]. - The company may need to allocate significant additional resources to enhance systems and address vulnerabilities due to evolving cyber threats[206]. - Compliance with evolving cybersecurity regulations is critical, as failure to do so could result in regulatory sanctions and reputational damage[207]. - Emerging technologies, including AI and cloud computing, present both opportunities and risks for the company, particularly regarding data security and operational efficiency[201][202]. Legal and Compliance Issues - Legal and regulatory proceedings could result in substantial costs and adversely affect the bank's financial condition and operating results[158]. - Non-compliance with the USA PATRIOT Act and Bank Secrecy Act could lead to fines and sanctions, affecting business operations[165]. - The company has adopted policies to comply with the requirements of the AMLA and related regulations, ensuring effective risk assessment processes[120]. - Regulatory authorities have increased scrutiny of the Bank Secrecy Act (BSA) and anti-money laundering programs, with potential legal and reputational consequences for non-compliance[119]. Capital and Funding - The company completed a public offering of 4,600,000 shares of common stock at $25.00 per share, resulting in net proceeds of $108.6 million[77]. - The company may need to raise additional capital in the future, which could be challenging if market conditions are unfavorable[200]. - Future capital resources may be increased through debt or equity securities, which could dilute current shareholders and affect common stock value[209]. - Provisions in the company's certificate of incorporation and bylaws may create anti-takeover effects, making acquisitions more difficult[210].

Core Viewpoint - Financial Institutions, Inc. has settled civil litigation related to its auto loan notification process, which had been ongoing since 2017, and will record a litigation accrual of $23.0 million in its fourth quarter 2024 financial statements [2]. Group 1: Legal Settlement - The legal action was related to language in repossession notices issued to defaulting borrowers between 2011 and 2021 [2]. - The settlement agreement was executed on March 7, 2025, and is subject to court approval [2]. - The company does not expect to accrue additional amounts for this matter in 2025 or future periods and anticipates no changes to its previously published 2025 guidance [2]. Group 2: Financial Impact - The litigation accrual of $23.0 million will result in an after-tax impact of $17.1 million [2]. - Details regarding the financial impact of the litigation accrual on fourth quarter and full-year 2024 results were included in Current Reports on Form 8-K filed with the SEC [2]. Group 3: Company Overview - Financial Institutions, Inc. is a financial holding company with approximately $6.1 billion in assets as of December 31, 2024 [4]. - The company offers banking and wealth management products and services through its subsidiary, Five Star Bank, which serves individuals, municipalities, and businesses in New York [4]. - Courier Capital, LLC, a subsidiary, provides customized investment management and financial planning services [4].

Core Viewpoint - Financial Institutions, Inc. has appointed Eric W. Marks as Senior Vice President and Chief Consumer Banking Officer of Five Star Bank, bringing nearly 20 years of banking experience to the role [1][2]. Company Overview - Financial Institutions, Inc. is a financial holding company with approximately $6.1 billion in assets as of December 31, 2024, offering banking and wealth management products and services [5]. - Five Star Bank, a subsidiary of Financial Institutions, Inc., provides consumer and commercial banking and lending services across Western and Central New York [5]. Leadership Appointment - Eric W. Marks will oversee the Bank's consumer lines of business, including Retail Banking, Residential Mortgage, and Small Business Banking, as well as the Customer Contact Center and Collections departments [2]. - Marks has a strong background in consumer banking leadership, financial oversight, and strategic planning, which will aid in driving sustainable customer growth and service excellence [2][3]. - He previously served as Retail Segment Chief Financial Officer at M&T Bank, where he held various roles over a 19-year tenure [3]. Strategic Focus - The appointment of Marks is expected to support the continued evolution and growth of Five Star Bank's consumer banking offerings, enhancing customer experience and community engagement [3]. - Marks expressed enthusiasm for joining a community bank with a rich history in Upstate New York and aims to deliver a simple, connected, and trusted banking experience [3][4].

Core Insights - The article emphasizes the importance of value investing as a popular strategy for identifying undervalued stocks that offer potential profits [2][3] - Zacks has developed a Style Scores system to help investors find stocks with specific traits, particularly in the Value category, where stocks with "A" grades and high Zacks Ranks are highlighted as strong value stocks [3] Company Analysis: Financial Institutions (FISI) - FISI currently holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential as a value stock [4] - The stock has a P/E ratio of 8.48, significantly lower than the industry average P/E of 11.13, suggesting it may be undervalued [4] - FISI's Forward P/E has fluctuated between 5.47 and 9.35 over the past year, with a median of 7.65, indicating variability in its valuation [4] - The P/B ratio for FISI is 0.91, compared to the industry average of 1.36, further supporting the notion of undervaluation [5] - Over the past year, FISI's P/B ratio has ranged from 0.59 to 0.95, with a median of 0.79, reflecting its attractive valuation metrics [5] - FISI's P/S ratio stands at 1.22, lower than the industry's average P/S of 1.93, reinforcing its potential as a value investment [6] Company Analysis: First Bank (FRBA) - First Bank has a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong investment potential [6] - The P/B ratio for First Bank is 0.74, which is also below the industry average of 1.36, suggesting it may be undervalued [7] - Over the past year, First Bank's P/B ratio has varied between 0.60 and 0.79, with a median of 0.70, indicating consistent valuation metrics [7] - Both FISI and FRBA are highlighted as likely undervalued stocks, supported by their strong earnings outlooks and favorable valuation metrics [7]

Core Points - Financial Institutions, Inc. announced a quarterly cash dividend of $0.31 per outstanding common share, reflecting a 3.3% increase from the previous quarter [1][2] - The annualized yield of the cash dividend is 4.4%, based on a closing share price of $28.00 on February 12, 2025 [2] - The company also declared dividends of $0.75 per share on Series A 3% preferred stock and $2.12 per share on Series B-1 8.48% preferred stock, payable on April 2, 2025 [3] Company Overview - Financial Institutions, Inc. is a financial holding company with approximately $6.1 billion in assets as of December 31, 2024 [4] - The company offers banking and wealth management products and services through its subsidiary, Five Star Bank, which serves individuals, municipalities, and businesses in Western and Central New York [4] - Courier Capital, LLC, another subsidiary, provides customized investment management, financial planning, and consulting services to a diverse clientele [4]

Investor Presentation Financial Institutions, Inc. (Nasdaq: FISI) Fourth Quarter 2024 Earnings Presentation January 30, 2025 Safe Harbor Statement 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 ...

Financial Performance - The Company reported a net loss of $65.7 million in Q4 2024, compared to a net income of $13.5 million in Q3 2024 and $9.8 million in Q4 2023, resulting in a loss of $4.02 per diluted share[3]. - Full year 2024 net loss was $24.5 million, down from a net income of $50.3 million in 2023, with a loss of $1.66 per diluted share compared to $3.15 per diluted share in 2023[4]. - The net loss for Q4 2024 was $(25,981,000), compared to a net income of $48,805,000 in Q4 2023, representing a significant downturn[46]. - Earnings per share (diluted) for Q4 2024 was $(1.66), a decrease from $3.15 in Q4 2023[46]. - Return on average assets (annualized) for Q4 2024 was -0.40%, down from 0.83% in Q4 2023[46]. - Return on average equity (annualized) for Q4 2024 was -5.15%, a decline from 11.86% in Q4 2023[46]. - Return on average tangible common equity was -6.58% for 2024, down from 14.64% in 2023, indicating a challenging year for profitability[51]. Asset and Loan Management - Total loans reached $4.48 billion at year-end 2024, reflecting a quarterly increase of $76.2 million (1.7%) and an annual increase of $17.1 million (0.4%)[6]. - Total loans increased to $4,437,496 thousand in 2024 from $4,322,612 thousand in 2023, representing a growth of 2.67%[48]. - Non-performing loans were $41.4 million, or 0.92% of total loans, at December 31, 2024, compared to 0.93% at September 30, 2024[32]. - Total non-performing loans increased to $41,406,000 in 2024 from $26,660,000 in 2023, marking a substantial increase of 55.3%[50]. - The ratio of total non-performing loans to total loans was 0.92% at the end of 2024, up from 0.60% in 2023, indicating a deterioration in asset quality[50]. Deposits and Funding - Total deposits were $5.10 billion at year-end 2024, down $201.9 million (3.8%) from Q3 2024 and down $108.2 million (2.1%) from the prior year end[6]. - Total deposits decreased to $5.10 billion at December 31, 2024, down $201.9 million, or 3.8%, from September 30, 2024[24]. - Total deposits grew to $5,211,794 thousand in 2024 from $5,108,561 thousand in 2023, an increase of 2.02%[48]. Capital and Equity - Shareholders' equity rose to $586.1 million at December 31, 2024, compared to $500.3 million at September 30, 2024[26]. - Shareholders' equity increased to $476,431 thousand in 2024 from $423,686 thousand in 2023, reflecting a growth of 12.43%[48]. - Common equity tier 1 ratio improved to 10.88%, up 145 basis points from year-end 2023, and the tangible common equity ratio increased to 8.40%, up 240 basis points[7]. - Tangible common equity increased to $508,065,000 in 2024 from $422,183,000 in 2023, representing a growth of 20.34%[51]. - Common shares outstanding increased to 20,077,000 in 2024 from 15,474,000 in 2023, reflecting a rise of 29.99%[51]. Expenses and Losses - Noninterest expense for the full year 2024 was $155.9 million, an increase of $18.7 million from 2023, primarily due to a deposit-related fraud event[18]. - Noninterest expense increased to $155,884,000 in Q4 2024 from $137,225,000 in Q4 2023, marking an increase of 13.6%[46]. - The efficiency ratio for Q4 2024 was 71.75%, up from 62.96% in Q4 2023, indicating a decrease in operational efficiency[47]. - A pre-tax loss of $100.2 million was recognized from the sale of $653.5 million of available-for-sale investment securities in Q4 2024[2]. Credit Losses and Provisions - The Company recorded a provision for credit losses of $6.5 million in Q4 2024, compared to $3.1 million in Q3 2024 and $5.3 million in Q4 2023[3]. - The allowance for credit losses on loans increased to $48,041 thousand, up from $44,678 thousand in the previous quarter[45]. - The provision for credit losses on loans for 2024 was $5,645,000, significantly lower than $14,213,000 in 2023, reflecting a decrease of 60.3%[50]. - The allowance for credit losses to total loans ratio was 1.07% at the end of 2024, slightly down from 1.14% in 2023[50]. Investment and Securities - Total investment securities increased to $1,027,106 thousand, up 1.1% from $1,008,095 thousand in the prior quarter[45]. - Investment securities decreased to $1,171,083 thousand in 2024 from $1,249,928 thousand in 2023, a decline of 6.27%[48]. Future Outlook - The Company will host an earnings conference call on January 31, 2025, at 8:30 a.m. Eastern Time[37].

Core Viewpoint - Financial Institutions, Inc. reported a significant net loss for the fourth quarter and full year of 2024, primarily due to a balance sheet restructuring and losses on investment securities, but anticipates improved performance moving forward due to strategic initiatives and capital raise efforts [3][4][6]. Financial Performance - The company recorded a net loss of $65.7 million in Q4 2024, compared to a net income of $13.5 million in Q3 2024 and $9.8 million in Q4 2023, resulting in a loss of $4.02 per diluted share [3][4]. - For the full year 2024, the net loss was $24.5 million, a stark contrast to the net income of $50.3 million in 2023, leading to a loss of $1.66 per diluted share [4][6]. - The provision for credit losses was $6.5 million in Q4 2024, up from $3.1 million in Q3 2024 and $5.3 million in Q4 2023 [3][34]. Balance Sheet Restructuring - The company executed a balance sheet restructuring plan, selling $653.5 million of available-for-sale investment securities, resulting in a pre-tax loss of $100.2 million [2][9]. - The net proceeds from the sale were reinvested into higher-yielding agency wrapped investment securities, which are expected to enhance future earnings [2][9]. Capital Management - The company completed an equity offering in December 2024, raising approximately $108.5 million, which was used to fund losses from the restructuring and improve capital positions [8][9]. - The common equity tier 1 ratio improved to 10.88% at year-end 2024, up 145 basis points from the previous year [8][30]. Loan and Deposit Trends - Total loans reached $4.48 billion at December 31, 2024, reflecting a modest increase of 1.7% from the previous quarter and 0.4% year-over-year [7][23]. - Total deposits decreased to $5.10 billion, down 3.8% from the previous quarter and 2.1% from the prior year, primarily due to seasonal public deposit outflows [7][24]. Noninterest Income and Expenses - The company reported a noninterest income loss of $91.0 million in Q4 2024, significantly down from $9.4 million in Q3 2024 and $15.4 million in Q4 2023, largely due to losses on investment securities [15][16]. - Noninterest expenses increased to $36.4 million in Q4 2024, compared to $32.5 million in Q3 2024, driven by nonrecurring expenses [17][18]. Credit Quality - Non-performing loans were $41.4 million, or 0.92% of total loans, at year-end 2024, slightly up from 0.93% in the previous quarter and significantly higher than 0.60% a year prior [32][33]. - The allowance for credit losses on loans to total loans ratio was 1.07% at year-end 2024, compared to 1.01% in the previous quarter and 1.14% a year ago [33][34].

Core Viewpoint - Financial Institutions, Inc. has appointed Angela J. Panzarella as a new independent member of the Boards of Directors for both the Company and its subsidiary, Five Star Bank, effective January 22, 2025 [1][8]. Group 1: Appointment Details - Angela Panzarella brings extensive leadership experience, including her role as CEO of the YWCA of Rochester and Monroe County and a 20-year tenure at Bausch + Lomb [2]. - Her appointment increases the Board size to twelve members, with eleven being independent and three appointed in the last four years [2]. - Panzarella will serve on the Audit and Management Development & Compensation Committees [2]. Group 2: Leadership Insights - The Chair of the Boards, Susan R. Holliday, expressed confidence that Panzarella's experience in the regulated healthcare industry will be a significant asset for the Company [3]. - Martin K. Birmingham, President and CEO, highlighted her proven ability to develop successful business strategies and her respected status in the Greater Rochester community [3]. Group 3: Background Information - Prior to her role at the YWCA, Panzarella was President of ACM Medical Laboratory, Inc., and held various executive roles at Bausch + Lomb [3]. - She has served on the boards of UR Medicine Home Care and the United Way of Greater Rochester, and holds a B.A. from St. John Fisher College and a J.D. from Albany Law School [4]. Group 4: Company Overview - Financial Institutions, Inc. is a financial holding company with approximately $6.2 billion in assets, offering banking and wealth management products and services [5]. - Its subsidiary, Five Star Bank, provides consumer and commercial banking services across Western and Central New York, along with a commercial loan production office in the Mid-Atlantic region [5].