# FINANCIAL INSTITUTIONS INC (FISI) Informational only - not investment advice. CIK: 0000862831 SIC: 6021 National Commercial Banks SIC breadcrumb: [Finance, Insurance, And Real Estate](/division/H/) > [Depository Institutions](/major-group/60/) > [SIC 6021 National Commercial Banks](/industry/6021/) Latest 10-K filed: 2026-03-09 SEC page: https://www.sec.gov/edgar/browse/?CIK=862831 Filing source: https://www.sec.gov/Archives/edgar/data/862831/000119312526098467/fisi-20251231.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-03-09 · accession 0001193125-26-098467 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000862831.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 332,989,000 USD | 2025 | verified | | Net income | 74,867,000 USD | 2025 | verified | | Assets | 6,274,140,000 USD | 2025 | verified | | Free cash flow | 13,254,000 USD | 2025 | computed | | Net margin | 22.48% | 2025 | computed | | Revenue YoY | +6.31% | 2025 | computed | | ROE | 11.91% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. No market price, no rating, no forecast on this site. Not investment advice. ### Peer percentile fingerprint | Ratio | FISI | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 22.5% | 22.9% | 45 | 76 | | Revenue growth | 6.3% | 5.2% | 57 | 76 | | FCF margin | 4.0% | 22.0% | 5 | 65 | | ROE | 11.9% | 9.9% | 77 | 76 | | ROA | 1.2% | 1.1% | 71 | 76 | | Liabilities / equity | 8.98 | 8.12 | 64 | 76 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 6021 National Commercial Banks, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 332989000 | USD | 2025 | 2026-03-09 | | Net income | 74867000 | USD | 2025 | 2026-03-09 | | Assets | 6274140000 | USD | 2025 | 2026-03-09 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-09. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000862831.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | | | | | 115,231,000 | 130,110,000 | 152,732,000 | 168,800,000 | 161,299,000 | 167,205,000 | 196,107,000 | 286,133,000 | 313,231,000 | 332,989,000 | | Net income | | | | | | | | | 31,931,000 | 33,526,000 | 39,526,000 | 48,862,000 | 38,332,000 | 77,697,000 | 56,573,000 | 50,264,000 | -41,646,000 | 74,867,000 | | Diluted EPS | | | | | | | | | 2.10 | 2.13 | 2.39 | 2.96 | 2.30 | 4.78 | 3.56 | 3.15 | -2.75 | 3.61 | | Operating cash flow | | | | | | | | | 46,694,000 | 46,279,000 | 65,139,000 | 57,710,000 | 43,455,000 | 72,962,000 | 133,573,000 | 10,894,000 | 77,127,000 | 18,802,000 | | Capital expenditures | | | | | | | | | 7,619,000 | 7,740,000 | 2,842,000 | 3,639,000 | 4,264,000 | 9,403,000 | 8,369,000 | 2,992,000 | 4,974,000 | 5,548,000 | | Dividends paid | | | | | | | | | 11,484,000 | 12,496,000 | 14,947,000 | 15,799,000 | 16,496,000 | 16,991,000 | 17,594,000 | 18,286,000 | 18,515,000 | 24,716,000 | | Share buybacks | | | | | | | | 202,000 | | 148,000 | 113,000 | 293,000 | 209,000 | 9,235,000 | 15,340,000 | 571,000 | 426,000 | 11,419,000 | | Assets | | | | | | | | | 3,710,340,000 | 4,105,210,000 | 4,311,698,000 | 4,384,178,000 | 4,912,306,000 | 5,520,779,000 | 5,797,272,000 | 6,160,881,000 | 6,117,085,000 | 6,274,140,000 | | Liabilities | | | | | | | | | 3,390,286,000 | 3,724,033,000 | 3,915,405,000 | 3,945,231,000 | 4,443,943,000 | 5,015,637,000 | 5,391,667,000 | 5,706,085,000 | 5,548,101,000 | 5,645,286,000 | | Stockholders' equity | | | | | | | | | 320,054,000 | 381,177,000 | 396,293,000 | 438,947,000 | 468,363,000 | 505,142,000 | 405,605,000 | 454,796,000 | 568,984,000 | 628,854,000 | | Cash and cash equivalents | 55,187,000 | 42,959,000 | 39,058,000 | 57,583,000 | 60,436,000 | 59,692,000 | 58,151,000 | | | | | | | | | 124,442,000 | 87,321,000 | 108,751,000 | | Free cash flow | | | | | | | | | 39,075,000 | 38,539,000 | 62,297,000 | 54,071,000 | 39,191,000 | 63,559,000 | 125,204,000 | 7,902,000 | 72,153,000 | 13,254,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | | | | 27.71% | 25.77% | 25.88% | 28.95% | 23.76% | 46.47% | 28.85% | 17.57% | -13.30% | 22.48% | | Return on equity | | | | | | | | | 9.98% | 8.80% | 9.97% | 11.13% | 8.18% | 15.38% | 13.95% | 11.05% | -7.32% | 11.91% | | Return on assets | | | | | | | | | 0.86% | 0.82% | 0.92% | 1.11% | 0.78% | 1.41% | 0.98% | 0.82% | -0.68% | 1.19% | | Liabilities / equity | | | | | | | | | 10.59 | 9.77 | 9.88 | 8.99 | 9.49 | 9.93 | 13.29 | 12.55 | 9.75 | 8.98 | ## As-reported value updates No tracked differences above grepcent's stated thresholds and capped precision rule were found between the earliest XBRL-filed value and the value currently on file for the standardized annual metrics grepcent tracks. ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-03. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000862831.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q3 | 2022-09-30 | | | 0.88 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.76 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | | | 0.91 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 74,700,000 | 13,657,000 | 0.88 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 76,547,000 | 9,415,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 78,413,000 | 1,705,000 | 0.11 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 78,788,000 | 25,265,000 | 1.62 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 77,911,000 | 13,101,000 | 0.84 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 78,119,000 | -83,176,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 81,051,000 | 16,513,000 | 0.81 | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 82,867,000 | 17,168,000 | 0.85 | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 84,422,000 | 20,112,000 | 0.99 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 84,649,000 | 19,616,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 81,563,000 | 20,621,000 | 1.04 | reported discrete quarter | | 2026-Q2 | 2026-06-30 | 83,076,000 | 20,819,000 | 1.04 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from FISI's latest 10-K: [/company/FISI/business/](/company/FISI/business/). ## Risk Factors Verbatim Item 1A Risk Factors from FISI's latest 10-K: [/company/FISI/risk-factors/](/company/FISI/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/862831/000119312526330542/fisi-20260630.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-08-03 Report date: 2026-06-30 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Quarterly Report on Form 10-Q should be read in conjunction with the more detailed and comprehensive disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2025. In addition, please read this section in conjunction with our Unaudited Interim Consolidated Financial Statements and Notes to Consolidated Financial Statements contained herein. When necessary, prior year information has been reclassified to conform to the current-year presentation. FORWARD LOOKING INFORMATION Statements and financial analysis contained in this Quarterly Report on Form 10-Q that are based on other than historical data are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations or forecasts of future events and include, among others: • statements with respect to the beliefs, plans, objectives, goals, guidelines, expectations, anticipations, and future financial condition, results of operations, and performance of Financial Institutions, Inc. (the “Parent” or “FII”) and its subsidiaries (collectively, the “Company,” “we,” “our” or “us”); and • statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “continue,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “target,” “projects” or similar expressions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties, and actual results may differ materially from those presented, either expressed or implied, in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “Form 10-K”), including, but not limited to, those presented in the Management’s Discussion and Analysis of Financial Condition and Results of Operations. Factors that might cause such material differences include, but are not limited to: Credit Risks and Risks Related to Banking Activities • If we experience greater credit losses than anticipated, earnings may be adversely impacted; • We are subject to risks and losses resulting from fraudulent activities that could adversely impact our financial performance and results of operations; • Geographic concentration in our loan portfolio may unfavorably impact our operations; • Our commercial business and commercial mortgage loans increase our exposure to credit risks; • If our non-performing assets increase, our earnings will be adversely affected; • If our regulators impose limitations on our commercial real estate lending activities, earnings could be adversely affected; • Our indirect and consumer lending involves risk elements in addition to normal credit risk; • Lack of seasoning in portions of our loan portfolio could increase risk of credit defaults in the future; • We accept deposits that do not have a fixed term, and which may be withdrawn by the customer at any time for any reason; • Municipal deposits are price sensitive and could result in an increase in interest expense or funding fluctuations; • We are subject to environmental liability risk associated with our lending activities; and • We operate in a highly competitive industry and market area. Legal and Regulatory Risks • Legal and regulatory proceedings and related matters could adversely affect us and the banking industry in general; • Any future Federal Deposit Insurance Corporation (“FDIC”) insurance premium increases may adversely affect our earnings; • We are highly regulated, and any adverse regulatory action may result in additional costs, loss of business opportunities, and reputational damage; • Non-compliance with the USA PATRIOT Act, the Bank Secrecy Act, Office of Foreign Asset Control sanction requirements, or other applicable state and federal laws could subject us to fines, penalties, or other regulatory actions; • We are subject to the Community Reinvestment Act (the “CRA”) and fair lending laws, and failure to comply with these laws could lead to material penalties; • We are subject to additional various state and federal laws and regulations, and failure to comply with these laws and regulations could subject us to fines, sanctions, or other negative actions; • The policies of the Federal Reserve Board have a significant impact on our earnings; and • We offer financial services to a limited number of New York State-licensed cannabis businesses under New York State’s regulatory framework, with supporting policy and procedures, enhanced due diligence, monitoring, and required regulatory reporting. While federal law continues to classify cannabis as illegal, the risk of strict federal enforcement remains uncertain. Any significant change in federal enforcement posture could affect our ability to continue services to these customers and could increase our legal, regulatory, or compliance-related obligations. Risks Related to Non-Banking Activities • Our investment advisory and wealth management operations are subject to risk related to the regulation of the financial services industry and market volatility. 43 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS Strategic and Operational Risks • We make certain assumptions and estimates in preparing our financial statements that may prove to be incorrect, which could significantly impact our results of operations, cash flows and financial condition, and we are subject to new or changing accounting rules and interpretations, and the failure by us to correctly interpret or apply these evolving rules and interpretations could have a material adverse effect; • The value of our goodwill and other intangible assets may decline in the future; • We may be unable to successfully implement our growth strategies, including the integration and successful management of newly-acquired businesses; • Acquisitions may disrupt our business and dilute shareholder value; • Our tax strategies and the value of our deferred tax assets and liabilities could adversely affect our operating results and regulatory capital ratios; • Liquidity is essential to our businesses; • We rely on dividends from our subsidiaries for most of our revenue; and • If our risk management framework does not effectively identify or mitigate our risks, we could suffer losses. Market Risks • We are subject to interest rate risk, and fluctuations in market interest rates may affect our interest margins and income, demand for our products, defaults on loans, loan prepayments and the fair value of our financial instruments; • The soundness of other financial institutions could adversely affect us; and • We may need to raise additional capital in the future and such capital may not be available on acceptable terms or at all. Technology and Cybersecurity Risks • Emerging technology, including cloud computing and artificial intelligence (“AI”), introduces new risks while possibly being essential to support business strategy; • We rely on third parties to provide critical business services and protect the confidentiality, integrity, and availability of confidential data; • We, or our service providers, may experience a cyber-attack, system failure, natural disaster, or other uncontrollable event that may disrupt business operations; and • We are subject to evolving laws and regulations relating to cybersecurity protection and data privacy, and failure to comply could expose us to regulatory liability, reputational risk and financial risk. Risks Related to our Common Stock • We may not pay or may reduce the dividends on our common stock, and our ability to pay dividends is subject to certain restrictions; • We may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our common stock as to distributions and in liquidation, which could dilute our current shareholders or negatively affect the value of our common stock; • Our certificate of incorporation, our bylaws, and certain banking laws may have an anti-takeover effect; and • The market price of our common stock may fluctuate significantly in response to a number of factors. General Risk Factors • We may not be able to attract and retain skilled people; • Loss of key employees may disrupt relationships with certain customers; • We use financial models for business planning purposes that may not adequately predict future results; • We depend on the accuracy and completeness of information about or from customers and counterparties; • Our business may be adversely affected by conditions in the financial markets and economic conditions generally, including macroeconomic pressures such as inflation, supply chain issues, geopolitical risks associated with international conflict, and the impact of a prolonged U.S. government shutdown; • Severe weather, natural disasters, public health emergencies and pandemics, acts of war or terrorism, and other external events could significantly impact our business; • Negative public opinion could damage our reputation and impact business operations and revenues; and • Environmental, social and governance matters, and any related reporting obligations may impact our business. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advise readers that various factors, including those described above, could affect our financial performance and could cause our actual results or circumstances for future periods to differ materially from those anticipated or projected. See also Item 1A, Risk Factors, in the Annual Report on Form 10-K for the year ended December 31, 2025. Except as required by law, we do not undertake and specifically disclaim any obligation to publicly release any revisions to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. 44 Table of Contents MANAGEMENT'S DISCUSSION AND ANALYSIS GENERAL The Parent is a financial holding company headquartered in New York State, providing diversified financial services through its operating subsidiaries, Five Star Bank (the “Bank”) and Courier Capital, LLC (“Courier Capital”). The Company offers a broad array of deposit, lending and other financial services to individuals, municipalities and businesses in Western and Central New York through its wholly owned New York-chartered banking subsidiary, the Bank. The Bank also has commercial loan production offices in Ellicott City (Baltimore), Maryland, and Syracuse, New York, serving the Mid-Atlantic and Central New York regions. Our indirect lending network includes relationships with franchised automobile dealers in Western and Central New York, and the Capital District of New York. Courier Capital provides customized investment advice, wealth management, investment consulting and retirement plan services to individuals, businesses, institutions, foundations and retirement plans. Our primary sources of revenue are net interest income (interest earned on our loans and securities, net of interest paid on deposits and other funding sources) and noninterest income, particularly investment advisory and financial services provided to customers or ancillary services tied to loans and deposits. Business volumes and pricing drive revenue potential, and tend to be influenced by overall economic factors, including market interest rates, business spending, consumer confidence, economic growth, and competitive conditions within the marketplace. We are not able to predict market interest rate fluctuations with certainty and our asset/liability management strategy may not prevent interest r [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/862831/000119312526098467/fisi-20251231.htm Complete FY 2025 MD&A: /company/FISI/mda/fy2025/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-03-09 Report date: 2025-12-31 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of our financial position and results of operations and should be read in conjunction with the information set forth under Part I, Item 1A, Risk Factors, and our consolidated financial statements and notes thereto appearing under Part II, Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. INTRODUCTION Financial Institutions, Inc. (the “Parent” and together with all its subsidiaries, “we,” “our,” or “us”), is a financial holding company headquartered in New York State. We offer a broad array of deposit, lending, and other financial services to individuals, municipalities and businesses in Western and Central New York through our wholly-owned New York-chartered banking subsidiary, Five Star Bank (the “Bank”). We have loan production offices in Baltimore, Maryland, and Syracuse, New York, which expands our footprint into the Mid-Atlantic and Central New York regions. Our indirect lending network includes relationships with franchised automobile dealers in Western and Central New York, and the Capital District of New York. We offer customized investment advice, wealth management, investment consulting and retirement plan services through our wholly-owned subsidiary Courier Capital, LLC (“Courier Capital”) an SEC-registered investment advisory and wealth management firm. On April 1, 2024, the Company announced and closed the sale of the assets of its wholly owned subsidiary, SDN Insurance Agency, LLC (“SDN”), which provided a broad range of insurance services to personal and business clients, to NFP Property & Casualty Services, Inc. (“NFP”), a subsidiary of NFP Corp. The sale generated $27 million in proceeds, or a pre-tax gain of $13.7 million, after selling costs, of which $13.5 million was recognized in the second quarter of 2024. Following the sale of the assets of SDN, we changed the name of the entity to Five Star Advisors LLC to serve as a conduit for the Bank to refer insurance business to NFP. Our primary sources of revenue are net interest income (interest earned on our loans and securities, net of interest paid on deposits and other funding sources) and noninterest income, particularly investment advisory and financial services provided to customers or ancillary services tied to loans and deposits. Business volumes and pricing drive revenue potential, and tend to be influenced by overall economic factors, including market interest rates, business spending, consumer confidence, economic growth, and competitive conditions within the marketplace. We are not able to predict market interest rate fluctuations with certainty and our asset/liability management strategy may not prevent interest rate changes from having a material adverse effect on our results of operations and financial condition. EXECUTIVE OVERVIEW Private Placement of Subordinated Notes and Subsequent Repayment of Past Issuances On December 11, 2025, we completed a private placement of $80.0 million in aggregate principal of fixed-to-floating rate subordinated notes to qualified institutional buyers and institutional accredited investors that will be subsequently exchanged for subordinated notes with substantially the same terms (the “2025 Notes”) registered under the Securities Act of 1933, as amended (the “Securities Act”) pursuant to registration rights agreements with the purchasers of the 2025 Notes. The 2025 Notes have a maturity date of December 15, 2035, and bear interest, payable semi-annually, at the rate of 6.50% per annum until December 15, 2030. Commencing on that date, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month Secured Overnight Financial Rate (“SOFR”) plus 312 basis points, payable quarterly until maturity. We are entitled to repay the 2025 Notes, in whole or in part, at any time on or after December 15, 2030, and to prepay the 2025 Notes in whole or in part at any time upon certain other specified events. We used the net proceeds to redeem the $65.0 million in outstanding debt issuances from 2015 and 2020, on January 15, 2026, as well as for general corporate purposes, including the repurchase of common shares under our Board authorized stock repurchase plan. The 2025 Notes qualify as Tier 2 capital for regulatory purposes. 2025 Share Repurchase Program In September 2025, the Board approved a share repurchase program for up to 1,006,379 shares of its common stock, or approximately 5% of the Company’s then outstanding common shares (“2025 Share Repurchase Program”). The 2025 Share Repurchase Program replaced and terminated the prior share repurchase program authorized by the Board in June 2022. The 2025 Share Repurchase Program does not obligate us to purchase any shares, and it may be extended, modified, or discontinued at any time. As of December 31, 2025, 336,869 shares have been repurchased under the 2025 Share Repurchase Program at an average price of $31.98. - 37 - Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS 2025 Financial Performance Review We reported net income of $74.9 million for 2025, compared to a net loss of $41.6 million for 2024. This resulted in a 1.20% return on average assets and a 12.38% return on average equity. After preferred dividends, net income available to common shareholders was $73.4 million or $3.61 per diluted share for 2025, compared to net loss available to common shareholders of $43.1 million or $2.75 per diluted share for 2024. The net loss for 2024 was primarily the result of a strategic investment securities restructuring, in which a portion of the proceeds from our December 2024 common stock offering was used to fund losses on the sale of $653.5 million of available-for-sale securities (“AFS”) for a pre-tax loss of $100.2 million, or approximately $75 million after taxes. We declared cash dividends of $1.24 per common share during 2025, an increase of more than 3% compared with 2024. Net interest income was $200.0 million for 2025, compared to $163.6 million for 2024, an increase of $36.4 million. Fully-taxable equivalent net interest income was $200.2 million in 2025, an increase of $36.3 million, compared to 2024. Average interest-earning assets were $47.7 million lower than 2024 due to a $100.3 million decrease in average investment securities, and a $68.1 million decrease in the average balance of Federal Reserve interest-earning cash, partially offset by a $120.8 million increase in average loans. Net interest margin was 3.53% for 2025, compared to 2.86% for 2024, primarily due to an increase in the average yield on investment securities, following the restructuring of the AFS portfolio in December 2024, which supported an increase in the average yield on interest-earning assets, along with loan growth and lower interest-bearing liability costs. The provision for credit losses was $11.6 million in 2025 compared to a provision of $6.2 million in 2024. Net charge-offs were $10.9 million in 2025, representing 0.24% of average loans, compared with $8.7 million, or 0.20% of average loans in 2024. Non-performing loans decreased $5.7 million to $35.8 million compared to a year ago and represented 0.77% of total loans at December 31, 2025, compared to 0.92% of total loans at December 31, 2024. The decrease in non-performing loans in the current year reflected a foreclosed participated loan and partial charge-off of a credit facility recognized in the second quarter of 2025, both of which related to a commercial business relationship placed on nonaccrual status in 2023. We have remained strategically focused on the importance of credit discipline, allocating resources to credit and risk management functions as the loan portfolio has grown. The ratio of allowance for credit losses on loans to non-performing loans was 133% at December 31, 2025, compared to 116% at December 31, 2024, with the increase reflective of the lower level of nonperforming loans at December 31, 2025. Noninterest income was $45.0 million for 2025, compared to a net loss in noninterest income of $46.7 million for 2024. The 2024 net loss was reflective of the strategic investment securities portfolio restructuring in late December 2024 described above. Income from company owned life insurance (“COLI”) increased $5.9 million in 2025 compared to 2024, due to our surrender and redeploy strategy initiated in January 2025. The decrease in insurance income was reflective of the sale of the assets of our insurance agency subsidiary, SDN, in April 2024. The gain from this sale of $13.7 million was included in net gain (loss) on other assets in 2024. Noninterest expense for the full year 2025 totaled $142.0 million, a $36.9 million decrease compared to $178.9 million in the prior year. The decrease in noninterest expense was primarily attributable to higher expenses in 2024 related to the fraud matter in the first quarter of 2024, and the provision for a litigation settlement for a long-standing automobile lending litigation in the fourth quarter of 2024. Salaries and benefits expense of $72.8 million increased $6.7 million from 2024, primarily driven by an increase in health insurance benefit expense, reflecting continued elevated medial claims under our self-insured plan, annual merit increases, incentive compensation, and investments in personnel. Professional services expense of $6.5 million decreased $1.2 million from 2024 primarily due to legal expenses associated with the previously mentioned fraud event that incurred in 2024. Income tax expense for full year 2025 was $16.5 million, representing an effective tax rate of 18.05%, while income tax benefit for 2024 was -$26.5 million, which was reflective of the net loss for the year, representing an effective tax rate of 38.9%. Effective tax rates are impacted by items of income and expense not subject to federal or state taxation. The Company’s effective tax rates differ from statutory rates primarily because of interest income from tax-exempt securities, earnings on COLI and tax credit investments placed in service. Total assets were $6.27 billion at December 31, 2025, up $157.1 million from $6.12 billion at December 31, 2024. Investment securities were $1.01 billion at December 31, 2025, down $19.9 million from December 31, 2024. The decrease from year-end 2024 was primarily due to repayment, sales, and maturities of investment securities, and the use of cash to fund loan originations. - 38 - Table of Contents MANAGEMENT’S DISCUSSION AND ANALYSIS Total loans were $4.66 billion at December 31, 2025, up $178.7 million, or 4.0%, from December 31, 2024. The increase in loans in 2025 was primarily driven by organic commercial loan growth. The following discusses significant changes within our loan portfolio for the current year: • Commercial business loans were $738.3 million, an increase of $73.0 million, or 11%. • Commercial mortgage–construction loans were $488.6 million, a decrease of $94.1 million, or 16%. • Commercial mortgage–multifamily loans were $588.7 million, an increase of $117.8 million, or 25%. • Commercial mortgage–non-owner occupied loans were $942.2 million, an increase of $84.2 million, or 10%. • Commercial mortgage–owner-occupied loans were $322.8 million, an increase of $34.7 million, or 12%. • Consumer indirect loans were $807.3 million, a decrease of $38.5 million, or 5%. Total deposits were $5.21 billion at December 31, 2025, an increase of $101.6 million from December 31, 2024, which was attributable to growth in reciprocal and public deposits, in addition to a higher level of brokered deposits, partially offset by a reduction in non-public deposits. Brokered deposits were utilized to partially offset the anticipated reduction in BaaS-related deposits, which totaled approximately $7 million and $100 million at December 31, 2025, and 2024, r [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/FISI/mda/fy2025/ All MD&A years: /company/FISI/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/FISI/mda/fy2024/): filed 2025-03-12; accession 0000950170-25-037918 (https://www.sec.gov/Archives/edgar/data/862831/000095017025037918/fisi-20241231.htm) - [FY 2023 MD&A](/company/FISI/mda/fy2023/): filed 2024-03-13; accession 0000950170-24-030754 (https://www.sec.gov/Archives/edgar/data/862831/000095017024030754/fisi-20231231.htm) - [FY 2022 MD&A](/company/FISI/mda/fy2022/): filed 2023-03-09; accession 0000950170-23-007010 (https://www.sec.gov/Archives/edgar/data/862831/000095017023007010/fisi-20221231.htm) - [FY 2021 MD&A](/company/FISI/mda/fy2021/): filed 2022-03-10; accession 0000950170-22-003353 (https://www.sec.gov/Archives/edgar/data/862831/000095017022003353/fisi-20211231.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 6021 National Commercial Banks) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity Macro-to-micro threads including this sector: [Interest rates & the Fed](/thread/interest-rates-fed/), [Money & trade](/thread/money-trade/), [Consumer & credit](/thread/consumer-credit/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/FISI.md · JSON record: /company/FISI.json · verified financials: /company/FISI/financials.json / /company/FISI/financials.csv · machine TOC for the whole site: /llms.txt