Group 1 - Financial Institutions, Inc. has launched an underwritten public offering of shares of its common stock and intends to grant underwriters a 30-day option to purchase additional shares [1] - The net proceeds from the offering will be used for general corporate purposes, including balance sheet restructuring and repayment of indebtedness [2] - Keefe, Bruyette & Woods, Inc. is the sole bookrunner for the offering, with Piper Sandler & Co. acting as co-manager [2] Group 2 - The offering is made pursuant to a registration statement on Form S-3, which was declared effective by the SEC on December 4, 2024 [3] - A preliminary prospectus supplement has been filed with the SEC, and a final prospectus supplement will also be filed [3] Group 3 - 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 [5] - Courier Capital, LLC offers customized investment management and financial planning services [5]

Financial Performance - Total interest income for the three months ended September 30, 2024, was $77,911,000, an increase of 2.9% from $74,700,000 in the same period of 2023[5]. - Net interest income after provision for credit losses was $37,577,000 for the three months ended September 30, 2024, compared to $40,711,000 in the same period of 2023, reflecting a decrease of 5.2%[5]. - Noninterest income totaled $9,440,000 for the three months ended September 30, 2024, down from $10,486,000 in the same period of 2023, a decline of 9.9%[5]. - Net income for the three months ended September 30, 2024, was $13,466,000, compared to $14,022,000 in the same period of 2023, representing a decrease of 4.0%[5]. - Earnings per common share (diluted) for the three months ended September 30, 2024, was $0.84, down from $0.88 in the same period of 2023, a decline of 4.5%[5]. - Comprehensive income for the three months ended September 30, 2024, was $37,211,000, compared to a loss of $12,895,000 in the same period of 2023[7]. - Net income for the nine months ended September 30, 2024, was $2,070,000, while the comprehensive loss was $(6,323,000)[8]. - Net income available to common shareholders for the three months ended September 30, 2024, was $13.1 million, compared to $13.7 million for the same period in 2023, reflecting a decrease of 4.0%[22]. - For the nine months ended September 30, 2024, net income available to common shareholders was $40.1 million, up from $39.4 million in 2023, representing an increase of 1.8%[22]. Expenses and Provisions - The provision for credit losses was $3,104,000 for the three months ended September 30, 2024, compared to a benefit of $966,000 in the same period of 2023[5]. - Total noninterest expense decreased to $32,469,000 for the three months ended September 30, 2024, from $34,735,000 in the same period of 2023, a reduction of 6.5%[5]. - The allowance for credit losses on loans decreased to $44.678 million as of September 30, 2024, down from $51.082 million at the beginning of the year, reflecting a reduction of 12.5%[59]. - The provision for credit losses was $2.4 million for Q3 2024, compared to $1.4 million in Q3 2023[162]. Shareholder Information - The company declared cash dividends of $0.30 per common share for the three months ended September 30, 2024, consistent with the same period in 2023[5]. - Cash dividends declared for common stock amounted to $4,620,000 for the nine months ended September 30, 2024[8]. - The balance of preferred equity as of September 30, 2024, was $17,292,000[8]. - The company purchased $393,000 worth of common stock for treasury during the nine months ended September 30, 2024[8]. Assets and Liabilities - The company reported total assets of $XX billion as of September 30, 2024, reflecting growth from the previous quarter[5]. - Total shareholders' equity as of September 30, 2024, was $500,342,000, reflecting a decrease from $454,796,000 at the end of 2023[8]. - Total deposits reached $5.31 billion, reflecting an increase of $93.7 million, or 2%, from December 31, 2023[169]. - Estimated uninsured deposits were approximately $2.09 billion, or 39% of total deposits, as of September 30, 2024[169]. Loan Performance - The total loan portfolio amounted to $4.36 billion as of September 30, 2024, with a net loan amount of $4.36 billion after accounting for an allowance for credit losses of $44.68 million[32]. - Non-performing loans increased to $40.7 million, or 0.93% of total loans, as of September 30, 2024, up from $26.7 million or 0.60% at December 31, 2023[165]. - The company recognized no interest income on nonaccrual loans during the nine months ended September 30, 2024, with estimated interest income of $519 thousand if all such loans had been accruing interest[34]. - The total allowance for credit losses on loans at the end of the current period was $44.678 million, compared to $49.630 million at the end of the previous year, a decrease of 10.0%[61]. Market and Strategic Initiatives - The Company plans to wind down its Banking-as-a-Service (BaaS) offerings effective January 1, 2024, to focus on its core Upstate New York market[12]. - The company aims to maintain a diversified revenue stream and is prepared to pursue acquisition opportunities that align with its core competencies[127]. - The company has implemented a program to provide financial products and services to legal cannabis-related businesses, following New York State's legalization[128]. - The company anticipates that fluctuations in market interest rates may significantly impact its interest margins and income[124]. Risk Management - The company is subject to various risks, including credit losses, regulatory changes, and competition in the financial services industry[124]. - The company categorized loans into risk categories, with "Special Mention" loans indicating potential weaknesses that require close management attention[43]. - The company closely monitors the performance of modified loans, with 1,196 thousand in current payments for residential real estate loans modified due to financial difficulty[38].

Core Viewpoint - Earnings growth for Financial Institutions (NASDAQ: FISI) is expected to be flattish to slightly positive in 2024 and 2025, driven by subdued loan growth and slight margin expansion [1] Summary by Relevant Categories Earnings Outlook - The earnings growth for Financial Institutions is projected to be flattish to slightly positive for the years 2024 and 2025 [1] - Subdued loan growth is anticipated to impact overall earnings positively [1] - Slight margin expansion is expected to support the bottom line [1]

Financial Data and Key Metrics Changes - In Q3 2024, income available to common shareholders was $13.1 million or $0.84 per diluted share, down from $25.3 million or $1.62 per diluted share in the previous quarter, which included a $13.5 million pre-tax gain from the sale of the insurance business [4] - Return on average assets (ROAA) for Q3 was 89 basis points, with an efficiency ratio of 65%. Year-to-date ROAA was 90 basis points, and the efficiency ratio was 72%, impacted by a fraud event and the insurance sale [4] - Adjusted ROAA for the first nine months was 100 basis points, with an efficiency ratio of 65% [4] Business Line Data and Key Metrics Changes - Total deposits grew by $173.3 million or 3.4% from June 30, 2024, with public and non-public deposits increasing, offsetting a decrease in reciprocal balances [8][9] - Total loans decreased slightly from June 30, 2024, with increases in commercial mortgage and stability in residential loans offset by declines in commercial business and consumer indirect loans [10] - Non-performing loans increased due to a $15.5 million commercial relationship moved to non-accrual, but there were zero commercial net charge-offs in Q3 [11] Market Data and Key Metrics Changes - The company experienced intense competition in the residential lending space, with residential loans remaining flat at $724.4 million [13] - The Mid-Atlantic portfolio showed strong credit quality, with loans totaling $338 million as of September 30, 2024 [12] Company Strategy and Development Direction - The company is winding down its banking as a service offering, which represented only about 2% of total deposits, to focus on core community banking opportunities [5][6] - Strategic actions taken include the sale of the insurance business and adjustments within the indirect business to support the core community banking franchise [26] Management's Comments on Operating Environment and Future Outlook - Management remains focused on liquidity, capital, and earnings amid a challenging operating environment, with a common equity Tier 1 ratio of 10.28%, up 85 basis points from year-end 2023 [26] - The company expects loan growth to be at the low end of the guided range of 1% to 3% for 2024, with a focus on rebuilding the commercial pipeline [19][30] Other Important Information - Non-interest income for Q3 was $9.4 million, down from $24 million in the previous quarter, primarily due to the absence of gains from the insurance business sale [20] - The company recorded a provision for credit losses of $3.1 million in Q3, compared to $2 million in the previous quarter [23] Q&A Session Summary Question: Thoughts on margin with potential rate cuts in 2024 - Management indicated that over 30% of the loan portfolio is priced off SOFR prime, and they expect to remain neutral in margin impact with future rate cuts [28][29] Question: Outlook for loan growth and rebuilding the commercial pipeline - Management expressed confidence in mid-single-digit growth for 2025 as they focus on rebuilding the pipeline [30] Question: Expense management and future guidance - Management emphasized a focus on prudent expense management and indicated that exiting the banking as a service line would redirect resources to core business lines [31] Question: Expectations for loan to deposit betas during rate cuts - Management noted that deposit betas have shortened more than anticipated, and they expect them to align with historical trends over time [33] Question: Commentary on loan roll-off rates and yield pickup - Management confirmed that they have been selective in pricing requirements to maintain and expand margin, which has affected loan growth [34] Question: Anticipated one-time costs associated with the wind-down - Management stated that there would be no material one-time costs associated with the wind-down of the banking as a service offering [35]

Exhibit 99.1 FINANCIAL INSTITUTIONS, INC. ANNOUNCES THIRD QUARTER 2024 FINANCIAL RESULTS WARSAW, N.Y., October 24, 2024 – 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 third quarter ended September 30, 2024. Net income was $13.5 million in the third quarter of 2024, compared to $25.6 million in the second quarter of 2024 and $14.0 m ...

WARSAW, N.Y., Oct. 24, 2024 (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 third quarter ended September 30, 2024. Net income was $13.5 million in the third quarter of 2024, compared to $25.6 million in the second quarter of 2024 and $14.0 million in the third quarter of 2023. After preferred dividends, net income ...

Financial Institutions (FISI) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices. The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system. ...

WARSAW, N.Y., Oct. 01, 2024 (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 third quarter ending September 30, 2024 after the market closes on October 24, 2024. Management will host an earnings conference call and audio webcast on October 25, 2024 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, C ...

Investors might want to bet on Financial Institutions (FISI) , as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change. A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years. ...

We Are No matter how you stack it, things have been going really well for shareholders of Financial Institutions Inc. (NASDAQ:FISI). For those not familiar with the company, it is a small bank that provides full-service banking operations, investment advisory and wealth management services, and until recently — an insurance agency. Well, back in November 2023, I wrote an article about the company that took a bullish stance on it. At that time, shares were trading at low multiples. This, combined with a grow ...