Financial Data and Key Metrics Changes - First quarter net income available to common shareholders was $11.7 million or $0.76 per diluted share, consistent with the linked quarter but down from $14.6 million or $0.93 per diluted share in the prior year period, primarily due to higher provision for credit losses and increased expenses [5][39] - Net interest income for the first quarter was $41.8 million, down $1.3 million from the fourth quarter of 2022, reflecting fewer days in the quarter and higher cost of funds [29] - The overall cost of funds increased to 162 basis points, up 53 basis points from the linked fourth quarter [29] Business Line Data and Key Metrics Changes - Organic loan growth increased by 4.8% from December 31, 2022, supported by a strong pipeline and large commitments [11] - The commercial real estate (CRE) portfolio consists of assets with outstanding balances of $1.6 billion and committed credit exposure of $2.1 billion at March 31 [11] - The residential loan portfolio remained flat, while the consumer indirect loan portfolio was also flat at $1 million [14] Market Data and Key Metrics Changes - Deposits totaled $5.1 billion at March 31, up 4.3% from December 31, driven by seasonal inflows from tax payments and state funding [7] - Uninsured retail deposits made up approximately 14% of total deposits, with available committed liquidity remaining strong at approximately $1.2 billion [10] Company Strategy and Development Direction - The company announced a strategic expansion into the Central New York market to enhance its commercial and industrial lending focus [39] - The Banking-as-a-Service (BaaS) initiatives are expected to generate approximately $150 million of deposits in the last three quarters of 2023, contributing to non-public deposit growth goals [37] - The company aims to protect its margin, manage expenses effectively, and introduce its relationship-based approach to banking and wealth management to new customers [40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023 despite a challenging operating environment, highlighting strong loan growth and stable asset quality metrics [39] - The company expects mid-to-high single-digit growth in its total loan portfolio for the full year 2023, driven by commercial loan categories [36] - Management noted that the pipeline remains stable, but potential recessionary impacts could lead customers to postpone projects and investments [50] Other Important Information - The effective tax rate for 2023 is expected to fall within a range of 18% to 19% [22] - The company recorded a higher level of FDIC insurance expense due to regulatory changes and balance sheet growth [32] Q&A Session Summary Question: Loan growth expectations and market conditions - Management indicated that loan growth is expected to moderate in the second half of the year due to market conditions and potential recession impacts [48][50] Question: Changes to deposit service charges - The company eliminated the return to item fee and increased the de minimis overdraft amount, with expectations for lower NSF fees in the first quarter [51] Question: Update on Banking-as-a-Service initiatives - Management confirmed that onboarding clients is in process, with significant deposits expected to come over in the next 90 to 120 days [67]

Table of Contents Risks Related to Non-Banking Activities services industry and market volatility. Table of Contents The value of our goodwill and other intangible assets may decline in the future. Identifiable intangible assets other than goodwill consist of core deposit intangibles and other intangible assets (primarily customer relationships). Adverse events or circumstances could impact the recoverability of these intangible assets including loss of core deposits, significant losses of customer accounts ...

| --- | --- | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | Investor | | | | | | Presentation Financial Institutions, Inc. (NASDAQ: FISI) Fourth Quarter 2022 Earnings Presentation January 30, 2023 | | | | | Company Overview 3 Revenue 20 Appendix 26 Securities and Deposits 18 Non-GAAP Reconciliation 29 Statements contained in this presentation whic ...

Financial Performance & Key Metrics - As of September 30, 2021, Financial Institutions, Inc had total assets of $56 billion, loans of $37 billion, and deposits of $50 billion[4] - Shareholders' equity stood at $4940 million, with a Return on Average Common Equity (ROACE) of 1533% and a Return on Average Tangible Common Equity (ROATCE) of 1829%[4] - The company's Net Interest Income for Q3 2021 was $383 million, a 78% increase compared to Q3 2020[18] - Total loans at the end of Q3 2021 were $365 billion, up 24% from September 30, 2020; excluding PPP loans, the increase was 70%[18] Strategic Initiatives & Market Opportunities - The company is focused on growth in Buffalo and Rochester urban markets, where its market share is currently less than 2% in a combined $96 billion deposit market[6] - A digital transformation and Banking as a Service (BaaS) strategy is underway, with a focus on fintech partnerships and new revenue streams[29] - SDN Insurance Agency, LLC acquired Landmark Group and North Woods Capital Benefits LLC in 2021 to diversify revenue[23, 25] Portfolio Composition & Asset Quality - Consumer Indirect Lending portfolio was $9405 million as of September 30, 2021, representing 257% of total loans[50] - The company has a diversified commercial loan portfolio, with significant exposure in Commercial Real Estate ($13 billion), Commercial & Industrial ($11 billion), and Business Banking ($196 million)[46, 47] - Non-Performing Assets (NPAs) represented 012% of total assets as of September 30, 2021[4] Capital & Liquidity - The company's Tangible Common Equity to Tangible Assets ratio was 725% as of September 30, 2021[63] - The cost of deposits was 018% for the year-to-date period ending September 30, 2021[59] - The company maintains a strong liquidity position, supported by diverse deposit gathering capabilities and eligible collateral[61]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission File Number: 000-26481 Financial Institutions, Inc. (Exact name of registrant as specified in its charte ...

FINANCIAL INSTITUTIONS, INC. (Nasdaq: FISI) Third Quarter 2022 Earnings Presentation October 27, 2022 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 goals of the Company a ...

Financial Data and Key Metrics Changes - The company reported net income available to common shareholders of $13.5 million or $0.88 per diluted share, impacted by a $4.3 million provision for credit losses and $312,000 in income from the Paycheck Protection Program [7] - Pre-tax pre-provision income for the quarter increased by $770,000 or 3.9% from the prior year [7] - Net interest income was $43.1 million, up $1.5 million from the linked quarter, with a net interest margin (NIM) of 328 basis points, up 9 basis points from the linked quarter [25][26] Business Line Data and Key Metrics Changes - Organic loan growth was 2.7% from June 30, with commercial loans growing 4.8% from the end of the second quarter [8] - The residential portfolio grew 0.7% during the quarter but was down 1.2% from the same quarter in 2021 [15] - The consumer indirect portfolio stood at $997.4 million, down 4% from the linked quarter but up 6% from the year-ago period [17] Market Data and Key Metrics Changes - The company is experiencing pricing pressures amid an inflationary environment, impacting loan growth and customer borrowing behavior [13][14] - The commercial business portfolio is expected to drive mid to high single-digit growth in total loans for the full year [37] Company Strategy and Development Direction - The company is focusing on building its Five Star brand in the Mid-Atlantic market, leveraging the new team that has brought in approximately $69 million in outstandings [10][11] - The Banking-as-a-Service (BaaS) operating system is being developed to offer banking products through FinTech partners, aiming for lower-cost deposits and enhanced loan diversification [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the current economic environment, including inflation and rising interest rates, but remains confident in the strength of the loan portfolio [13][14] - The company expects continued operational efficiencies and is focused on strategic initiatives to improve profitability and operating leverage over time [48] Other Important Information - Non-interest income for the third quarter was $12.7 million, up 11.4% from the second quarter, with significant contributions from insurance and investment advisory services [28] - The company anticipates a low single-digit decline in non-interest income for the full year, reflecting pressures on mortgage banking revenue and wealth management fees [43] Q&A Session Summary Question: Margin outlook and balance sheet reaction to rate hikes - Management expects modest margin expansion through the fourth quarter and into 2023, with deposit betas increasing [52] Question: Provision for credit losses and reserve levels - The coverage ratio is currently about 114 basis points, and provisions will align with expected charge-offs and loan growth [54] Question: Cash flows from securities portfolio - Projected principal cash flow from the securities portfolio is about $150 million over the next 12 months [58] Question: Managing liquidity and loan growth focus - The company plans to use cash flow to support loan growth, particularly in the commercial sector [61] Question: Share buyback considerations - Management is cautious about share repurchases due to current capital ratios and market valuations [70]

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) Presents unaudited consolidated financial statements for Q2 2022, detailing financial condition, income, comprehensive income, equity, and cash flows with notes [Consolidated Statements of Financial Condition](index=3&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) Total assets grew to **$5.57 billion** from **$5.52 billion** at year-end 2021, while shareholders' equity declined to **$425.8 million** due to comprehensive loss Key Balance Sheet Items (in thousands) | Metric | June 30, 2022 | December 31, 2021 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$5,568,198** | **$5,520,779** | **+$47,419** | | Loans (net) | $3,721,566 | $3,639,760 | +$81,806 | | Securities Available for Sale | $1,057,018 | $1,178,515 | -$121,497 | | **Total Liabilities** | **$5,142,397** | **$5,015,637** | **+$126,760** | | Total Deposits | $4,820,516 | $4,827,090 | -$6,574 | | Short-term Borrowings | $109,000 | $30,000 | +$79,000 | | **Total Shareholders' Equity** | **$425,801** | **$505,142** | **-$79,341** | | Accumulated Other Comprehensive Loss | ($99,725) | ($13,207) | -$86,518 | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Q2 2022 net income decreased to **$15.6 million** from **$20.2 million** year-over-year, driven by a **$5.2 million** swing in credit loss provision and higher expenses Q2 2022 vs Q2 2021 Performance (in thousands, except per share data) | Metric | Q2 2022 | Q2 2021 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $41,597 | $37,732 | +$3,865 | | Provision (Benefit) for Credit Losses | $563 | ($4,622) | -$5,185 | | Noninterest Income | $11,360 | $10,190 | +$1,170 | | Noninterest Expense | $32,887 | $26,944 | +$5,943 | | **Net Income** | **$15,648** | **$20,200** | **-$4,552** | | **Diluted EPS** | **$0.99** | **$1.25** | **-$0.26** | Six Months 2022 vs 2021 Performance (in thousands, except per share data) | Metric | Six Months 2022 | Six Months 2021 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $81,155 | $75,589 | +$5,566 | | Provision (Benefit) for Credit Losses | $2,882 | ($6,603) | -$9,485 | | Noninterest Income | $22,682 | $23,149 | -$467 | | Noninterest Expense | $63,022 | $53,684 | +$9,338 | | **Net Income** | **$30,631** | **$40,910** | **-$10,279** | | **Diluted EPS** | **$1.93** | **$2.52** | **-$0.59** | [Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20%28Loss%29%20Income) Q2 2022 saw a comprehensive loss of **$17.0 million**, a shift from **$24.8 million** income in Q2 2021, primarily due to **$32.6 million** unrealized losses on securities Comprehensive (Loss) Income Summary (in thousands) | Metric | Q2 2022 | Q2 2021 | Six Months 2022 | Six Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $15,648 | $20,200 | $30,631 | $40,910 | | Other Comprehensive (Loss) Income | ($32,631) | $4,638 | ($86,518) | ($8,062) | | **Comprehensive (Loss) Income** | **($16,983)** | **$24,838** | **($55,887)** | **$32,848** | [Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity declined from **$505.1 million** to **$425.8 million** by June 30, 2022, primarily due to **$86.5 million** other comprehensive loss and stock repurchases Key Changes in Shareholders' Equity - Six Months Ended June 30, 2022 (in thousands) | Item | Amount | | :--- | :--- | | Balance at December 31, 2021 | $505,142 | | Net Income | $30,631 | | Other comprehensive loss, net of tax | ($86,518) | | Purchases of common stock for treasury | ($15,327) | | Cash dividends declared | ($9,562) | | **Balance at June 30, 2022** | **$425,801** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was **$81.8 million**, investing used **$98.9 million**, and financing provided **$47.7 million**, leading to a **$30.6 million** net cash increase Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Category | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $81,784 | $30,949 | | Net Cash Used in Investing Activities | ($98,857) | ($278,815) | | Net Cash from Financing Activities | $47,666 | $360,375 | | **Net Increase in Cash** | **$30,593** | **$112,509** | [Notes to Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Detailed notes disclose accounting policies, loan portfolio, investment securities, and derivatives, including a **$1.3 million** restructuring charge and a class-action lawsuit - The company originated over **$378 million** in Paycheck Protection Program (PPP) loans, with approximately **$369 million** having completed the forgiveness process as of June 30, 2022[44](index=44&type=chunk) - Restructuring charges of **$1.3 million** were incurred during Q2 2022 related to property valuation adjustments for branch facilities closed in 2020[60](index=60&type=chunk) - The company is defending a class-action lawsuit related to vehicle repossession notices, which could materially affect financial results if the outcome is unfavorable, with no liability accrued as of the reporting date[162](index=162&type=chunk) - The company's single reportable segment, Banking, generated net income of **$32.1 million** for the first six months of 2022, while the "All Other" category recorded a net loss of **$1.5 million**[183](index=183&type=chunk)[185](index=185&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 net income decline to normalized credit loss provision and increased expenses, while net interest income grew, and equity was impacted by unrealized losses - Q2 2022 net income decreased to **$15.6 million** from **$20.2 million** in Q2 2021, primarily due to a **$563 thousand** provision for credit losses versus a **$4.6 million** benefit in the prior-year quarter, and a **$5.9 million** increase in noninterest expense[199](index=199&type=chunk) - Net interest margin for Q2 2022 improved to **3.19%**, up **13 basis points** from **3.06%** in Q2 2021, benefiting from rising interest rates and redeployment of excess cash into higher-yielding assets[208](index=208&type=chunk) - Total loans grew by **$84.6 million** since year-end 2021 to **$3.76 billion**, driven by organic growth in consumer indirect and commercial loans[239](index=239&type=chunk) - Shareholders' equity decreased by **$79.3 million** since year-end 2021, primarily due to an **$86.5 million** increase in accumulated other comprehensive loss from unrealized losses on available-for-sale securities[262](index=262&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk is primarily interest rate risk, with a +100 basis point rate shock estimated to decrease net interest income by **0.71%** and EVE by **1.47%** Interest Rate Sensitivity Analysis (as of June 30, 2022) | Rate Shock Scenario | Estimated Change in Net Interest Income (12 months) | Estimated Change in Economic Value of Equity (EVE) | | :--- | :--- | :--- | | +300 bp | -2.19% | -3.67% | | +200 bp | -1.46% | -2.66% | | +100 bp | -0.71% | -1.47% | | -100 bp | -1.36% | +0.49% | [Controls and Procedures](index=71&type=section&id=ITEM%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[277](index=277&type=chunk) - No changes occurred during the quarter ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[278](index=278&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=72&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is defending a class-action lawsuit in Pennsylvania regarding vehicle repossession notices, with class certification granted, but no liability accrued - The company is party to a class-action lawsuit alleging that its post-repossession notices for vehicles did not comply with the Uniform Commercial Code in New York and Pennsylvania[281](index=281&type=chunk) - Class certification was granted for approximately **5,200** New York consumers and **300** Pennsylvania consumers, with the case scheduled to be ready for trial on March 6, 2023[281](index=281&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new share repurchase program for up to **766,447** shares was authorized in June 2022, following Q2 repurchases of **11,275** shares - A new share repurchase program for up to **766,447** shares of common stock was authorized in June 2022[282](index=282&type=chunk) [Exhibits](index=73&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed as part of the Form 10-Q, including SOX certifications from the CEO and CFO, and Inline XBRL data [Signatures](index=74&type=section&id=Signatures)

Financial Institutions, Inc. (NASDAQ:FISI) Q2 2022 Earnings Conference Call July 29, 2022 8:30 AM ET Company Participants Shelly Doran - Director of IR Marty Birmingham - President and CEO Jack Plants - CFO Justin Bigham - CBO Conference Call Participants Alex Twerdahl - Piper Sandler Marla Backer - Sidoti Operator Hello everyone and welcome to the Financial Institutions, Inc. Second Quarter Earnings Conference Call. My name is Charlie, and I'll be coordinating the call today. You'll have the opportunity to ...

FINANCIAL INSTITUTIONS, INC. (Nasdaq: FISI) Second Quarter 2022 Earnings Presentation July 28, 2022 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 goals of the Company are ...