On this page of StockholderLetter.com we present the latest annual shareholder letter from FINANCIAL INSTITUTIONS INC — ticker symbol FISI. Reading current and past FISI letters to shareholders can bring important insights into the investment thesis.
Executing with Discipline 2025 ANNUAL REPORT
TABLE OF CONTENTS Letter to Shareholders ......................................................... Pages 2-6 Leadership ................................................................................... Page 7 Board of Directors ......................................................................Page 8 Form 10-K..............................................................Begins After Page 8 Investor Information ............................................... Inside Back Cover Investment Considerations Positioned well for profitable, organic growth Results-driven community bank with strong commercial and retail franchises
Executing with discipline. In 2025, Financial Institutions, Inc. (Nasdaq: FISI) demonstrated the power of disciplined execution. We delivered strong financial performance, continued strengthening our balance sheet and advanced our strategic priorities. Our teams remained focused on the fundamentals of credit-disciplined lending, prudent capital management and strong operational performance. This mindset enabled us to outperform key profitability targets, deepen customer relationships across our markets and position our Company for sustained success. As we look to 2026, we will continue to execute with discipline against our strategic plan, designed to deliver simple, connected and trusted experiences to our customers and communities in support of long-term value creation for our shareholders. Wealth management business diversifies revenue and complements core banking franchise Disciplined credit culture with strong credit quality Experienced management team committed to rewarding shareholders, including through meaningful dividend yield and long-standing dividend history 1
To our shareholders, customers, associates and partners, Your company delivered strong financial results throughout 2025, reflecting disciplined execution and profitable growth across our enterprise. Our results, which included net income available to common shareholders of $73.4 million, or $3.61 per diluted share, were bolstered by a stronger earning asset profile coming out of 2024 and momentum from solid performance across each of our core business lines throughout 2025. Our team worked together to advance our strategy, which is rooted in community banking excellence, organic growth in Western and Central New York, prudent risk management and operational integrity. As we look ahead to 2026, we remain committed to disciplined execution against this strategy, to deliver a simple, connected and trusted banking experience to our customers and communities, in support of sustainable, long-term value creation for our shareholders. Liquidity, Capital and Earnings Through the past several years, we have focused on strengthening three foundational areas: liquidity, capital and earnings. Amidst the bank failures of 2023, we enhanced our available liquidity position to above $1.2 billion by December 31, 2023 a level we ve comfortably maintained since then, as liquidity exceeded $1.3 billion at year-end 2025. Our capital position was meaningfully strengthened in 2024, including through the sale of our insurance subsidiary in the second quarter that generated a $13.7 million gain and our fourth quarter public equity offering. The oversubscribed offering raised net proceeds of $108.5 million, allowing us to complete a transformative investment securities restructuring that meaningfully increased the yield on that portfolio. This brings us to 2025, a year focused on earnings, and one in which we delivered through continued momentum in core profitability. Improved Profitability Evident in Financial Results 2025 was a pivotal year for our Company in several ways. Net interest income reached a record $200.0 million and non-interest income proved durable at $45.0 million, despite having divested our insurance business in April 2024. We became a more profitable institution, generating 2 a return on average assets (ROAA) of 1.20% and a return on average equity (ROAE) of 12.38% for the year. These metrics solidly surpassed our original guides of 1.10% and 11.25% for ROAA and ROAE, respectively. Net interest margin of 3.53% for 2025 was toward the high end of our guided range of 3.45% to 3.55%. We became a more efficient institution, pushing our efficiency ratio down to 58%, below our original target of 60%. Annual loan growth similarly exceeded our guidance of up to 3%, reaching 4% on strong commercial demand. Behind these metrics is a solid community bank franchise that is well-positioned in the markets it serves, complemented by a growing wealth management firm that supports revenue diversification and provides opportunities to further deepen customer relationships. Enhanced Earning Asset Base Our 2024 investment securities restructuring allowed us to better optimize our balance sheet, providing us with a stronger earning asset base heading into 2025. The yield on our investment securities portfolio, which totaled approximately $1.0 billion at the end of both 2025 and 2024, increased 218 basis points year-over-year to 4.38%. This reflected both the 2024 restructuring and our active balance sheet management during 2025. At the same time, we further improved our earning asset mix through solid organic loan growth. Total loans were $4.66 billion at December 31, 2025, reflecting an increase of $178.7 million, or 4.0%, from December 31, 2024. This growth was reflective of strong competitive positioning and demand in our Upstate New York markets that supported a $215.7 million, or 7.5%, year-over-year increase in commercial loans. At year-end 2025, our commercial portfolio totaled $3.08 billion, representing approximately 66% of total loans. Consumer indirect loans made up approximately 17% of total loans, as we continued to moderate the size of this portfolio, while residential accounted for 16%. Further mix shift across asset classes is expected, given our expectation for approximately 5% loan growth in 2026, again driven by commercial.
Martin K. Birmingham, President and CEO of Five Star Bank and Financial Institutions, Inc. since 2013. 1 1.20% $3.61 $6.27B 2025 RETURN ON AVERAGE ASSETS 2025 EARNINGS PER DILUTED SHARE1 TOTAL ASSETS AT 12/31/25 Net income available to common shareholders per diluted share. 3
 • shareholder letter icon 4/6/2026 Letter Continued (Full PDF)
 • stockholder letter icon 4/27/2023 FISI Stockholder Letter
 • stockholder letter icon 4/12/2024 FISI Stockholder Letter
 • stockholder letter icon 4/14/2025 FISI Stockholder Letter
 • stockholder letter icon More "Banking & Savings" Category Stockholder Letters
 • Benford's Law Stocks icon FISI Benford's Law Stock Score = 96


FISI Shareholder/Stockholder Letter Transcript:

Executing
with Discipline
2025 ANNUAL REPORT

TABLE OF CONTENTS
Letter to Shareholders ......................................................... Pages 2-6
Leadership ................................................................................... Page 7
Board of Directors ......................................................................Page 8
Form 10-K..............................................................Begins After Page 8
Investor Information ............................................... Inside Back Cover
Investment
Considerations
Positioned well for
profitable, organic
growth
Results-driven
community bank
with strong commercial
and retail franchises

Executing with discipline.
In 2025, Financial Institutions, Inc. (Nasdaq: FISI)
demonstrated the power of disciplined execution.
We delivered strong financial performance, continued
strengthening our balance sheet and advanced our strategic
priorities. Our teams remained focused on the fundamentals
of credit-disciplined lending, prudent capital management
and strong operational performance. This mindset enabled
us to outperform key profitability targets, deepen customer
relationships across our markets and position our Company
for sustained success. As we look to 2026, we will continue to
execute with discipline against our strategic plan, designed
to deliver simple, connected and trusted experiences to our
customers and communities in support of long-term value
creation for our shareholders.
Wealth management
business diversifies revenue
and complements core
banking franchise
Disciplined
credit culture
with strong credit
quality
Experienced management
team committed to rewarding
shareholders, including through
meaningful dividend yield and
long-standing dividend history
1

To our shareholders, customers,
associates and partners,
Your company delivered strong financial
results throughout 2025, reflecting disciplined
execution and profitable growth across our
enterprise. Our results, which included net income
available to common shareholders of $73.4 million, or $3.61
per diluted share, were bolstered by a stronger earning
asset profile coming out of 2024 and momentum from
solid performance across each of our core business lines
throughout 2025. Our team worked together to advance
our strategy, which is rooted in community banking
excellence, organic growth in Western and Central New
York, prudent risk management and operational integrity.
As we look ahead to 2026, we remain committed to
disciplined execution against this strategy, to deliver a
simple, connected and trusted banking experience to our
customers and communities, in support of sustainable,
long-term value creation for our shareholders.
Liquidity, Capital and Earnings
Through the past several years, we have focused on
strengthening three foundational areas: liquidity, capital
and earnings. Amidst the bank failures of 2023, we
enhanced our available liquidity position to above $1.2
billion by December 31, 2023     a level we   ve comfortably
maintained since then, as liquidity exceeded $1.3 billion
at year-end 2025. Our capital position was meaningfully
strengthened in 2024, including through the sale of our
insurance subsidiary in the second quarter that generated
a $13.7 million gain and our fourth quarter public equity
offering. The oversubscribed offering raised net proceeds
of $108.5 million, allowing us to complete a transformative
investment securities restructuring that meaningfully
increased the yield on that portfolio. This brings us to 2025,
a year focused on earnings, and one in which we delivered
through continued momentum in core profitability.
Improved Profitability Evident in
Financial Results
2025 was a pivotal year for our Company in several ways.
Net interest income reached a record $200.0 million and
non-interest income proved durable at $45.0 million,
despite having divested our insurance business in April
2024. We became a more profitable institution, generating
2
a return on average assets (ROAA) of 1.20% and a return on
average equity (ROAE) of 12.38% for the year. These metrics
solidly surpassed our original guides of 1.10% and 11.25%
for ROAA and ROAE, respectively. Net interest margin of
3.53% for 2025 was toward the high end of our guided
range of 3.45% to 3.55%. We became a more efficient
institution, pushing our efficiency ratio down to 58%, below
our original target of 60%. Annual loan growth similarly
exceeded our guidance of up to 3%, reaching 4% on strong
commercial demand.
Behind these metrics is a solid community bank
franchise that is well-positioned in the markets it serves,
complemented by a growing wealth management firm that
supports revenue diversification and provides opportunities
to further deepen customer relationships.
Enhanced Earning Asset Base
Our 2024 investment securities restructuring allowed us
to better optimize our balance sheet, providing us with
a stronger earning asset base heading into 2025. The
yield on our investment securities portfolio, which totaled
approximately $1.0 billion at the end of both 2025 and 2024,
increased 218 basis points year-over-year to 4.38%. This
reflected both the 2024 restructuring and our active balance
sheet management during 2025.
At the same time, we further improved our earning
asset mix through solid organic loan growth. Total loans
were $4.66 billion at December 31, 2025, reflecting an
increase of $178.7 million, or 4.0%, from December 31,
2024. This growth was reflective of strong competitive
positioning and demand in our Upstate New York markets
that supported a $215.7 million, or 7.5%, year-over-year
increase in commercial loans. At year-end 2025, our
commercial portfolio totaled $3.08 billion, representing
approximately 66% of total loans. Consumer indirect loans
made up approximately 17% of total loans, as we continued
to moderate the size of this portfolio, while residential
accounted for 16%. Further mix shift across asset classes is
expected, given our expectation for approximately 5% loan
growth in 2026, again driven by commercial.

Martin K. Birmingham, President and CEO of Five Star Bank
and Financial Institutions, Inc. since 2013.
1
1.20%
$3.61
$6.27B
2025 RETURN ON
AVERAGE ASSETS
2025 EARNINGS
PER DILUTED SHARE1
TOTAL ASSETS
AT 12/31/25
Net income available to common shareholders per diluted share.
3


shareholder letter icon 4/6/2026 Letter Continued (Full PDF)
 

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