FIISO · Financial Institutions, Inc.

Financial Institutions, Inc. reported strong first quarter 2026 results, with net income available to common shareholders of $20.6 million, or $1.04 per diluted share, representing a 28.4% year-over-year increase. The earnings beat was driven by net interest margin expansion to 3.67%, up 32 basis points from the prior year, as lower interest-bearing liability costs more than offset a slight decline in net interest income linked quarter. Noninterest income of $10.7 million was relatively stable, while noninterest expense decreased to $35.6 million, reflecting disciplined expense management. The efficiency ratio improved to 57%. Loan growth was modest, with total loans of $4.63 billion up 1.6% year-over-year, but management reiterated a 5% full-year growth target, citing healthy pipelines. Deposits grew 2.5% linked quarter to $5.34 billion, driven by seasonal public deposits and reciprocal deposits, partially offset by the completion of the BaaS wind-down. The company returned capital to shareholders through share repurchases (163,197 shares at $31.50) and a 3.2% dividend increase to $0.32 per share. Management expressed confidence in credit quality, noting that charge-offs remain within guided range despite a single commercial exposure. Overall, the results highlight strong profitability, margin expansion, and effective capital management.