Financial Institutions Inc.

After preferred dividends, net income available to common shareholders was $17.2 million, or $0.85 per diluted share, in the second quarter of 2025, compared to $16.5 million, or $0.81 per diluted share, in the first quarter of 2025, and $25.3 million, or $1.62 per diluted share, in the second quarter of 2024.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

The increase from the first quarter of 2025 was primarily due to a $66.4 million increase in average time deposits that was partially offset by a $23.1 million decrease in average savings and money market deposits, a $14.2 million decrease in average interest-bearing demand deposits, a $9.1 million decrease in average short-term borrowings, and an $8.4 million decrease in average long-term borrowings.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

The year-over-year decrease was due to an $83.4 million decrease in average savings and money market deposits, a $54.0 million decrease in average short-term borrowings, a $10.0 million decrease in average interest-bearing demand deposits, and an $8.2 million decrease in average long-term borrowings, partially offset by a $125.7 million increase in average time deposits.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

Short-term borrowings were $101.0 million at June 30, 2025, compared to $55.0 million at March 31, 2025, and $202.0 million at June 30, 2024.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

Short-term borrowings and brokered deposits have historically been utilized to manage the seasonality of public deposits.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

The linked quarter period-end increase was due to net income, net of dividends, retained, while the year-over-year period end increase was primarily driven by additional paid-in-capital resulting from the common stock capital raise executed in the fourth quarter of 2024 and a decrease in accumulated other comprehensive loss between period ends following the investment securities restructuring in the fourth quarter of 2024.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

Second quarter 2025 financial results were highlighted by continued margin expansion, increased net interest income and durable noninterest revenues, which allowed us to deliver 4% growth in net income available to common shareholders from the linked first quarter, said President and Chief Executive Officer Martin K.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

Jack Plants II added, Our results continue to benefit from our team's focus on prudent balance sheet stewardship through redeployment of cash flows into higher yielding assets, active investment portfolio management and our ability to effectively reprice deposits, supporting a six basis point reduction in our overall cost of funds.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

Expenses in the second quarter were somewhat elevated, in part reflecting timing of certain expenses and some higher costs that we expect to be nonrecurring, and we will remain intently focused on expense management through the coming quarters to support positive operating leverage in 2025.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

Expansion from the linked quarter was due to increases in the average yields of both investment securities and loans, as well as lower average cost of interest-bearing liabilities, reflecting repricing of non-public and reciprocal deposits.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

Year-over-year margin expansion was driven by an increase in the average yield on investment securities, following the previously disclosed restructuring of the available-for-sale securities portfolio in December 2024, which supported an increase in the average yield on interest-earning assets.

SEC original ↗Financial Institutions Inc. — Earnings release (8-K exhibit)EX-99Jul 24, 2025

Legal Proceedings 69 ITEM 1A.

SEC original ↗Financial Institutions Inc. — 10-Q Quarterly report10-QAug 3, 2026