Financial Institutions Inc. Reports $74.9 Million Net Income for Fiscal Year 2025

Financial Institutions Inc. (FISI), a New York-based financial holding company, reported a net income of $74.9 million for the fiscal year ending December 31, 2025, a significant turnaround from the $41.6 million net loss experienced in 2024. This translates to a return on average assets of 1.20% and a return on average equity of 12.38%. After accounting for preferred dividends, net income available to common shareholders reached $73.4 million, or $3.61 per diluted share, compared to a net loss of $43.1 million, or $2.75 per diluted share, in the previous year. The company attributed the prior year's loss primarily to a strategic investment securities restructuring, which involved selling $653.5 million of available-for-sale securities, resulting in a pre-tax loss of $100.2 million.

The company's net interest income increased to $200.0 million in 2025 from $163.6 million in 2024. The net interest margin also saw improvement, rising to 3.53% from 2.86% in the previous year. This was driven by an increase in the average yield on investment securities following the restructuring, as well as loan growth and lower interest-bearing liability costs. However, average interest-earning assets decreased by $47.7 million, primarily due to a reduction in average investment securities and Federal Reserve interest-earning cash, partially offset by an increase in average loans. The provision for credit losses increased to $11.6 million, while net charge-offs amounted to $10.9 million, representing 0.24% of average loans.

Strategic moves during the year included a private placement of $80 million in subordinated notes, used to redeem previous debt issuances and for general corporate purposes, including share repurchases. In September 2025, FISI authorized a share repurchase program for up to 1,006,379 shares of its common stock, replacing a prior program. As of December 31, 2025, 336,869 shares had been repurchased under the new program at an average price of $31.98. Courier Capital, the company's investment advisory and wealth management firm, had $3.60 billion in assets under management as of December 31, 2025, and total revenue of $11.6 million for the year.

Operationally, FISI reported total assets of $6.27 billion, an increase of $157.1 million from the previous year. Net loans increased by $178.7 million to $4.61 billion, driven by commercial loan growth. Total deposits also increased by $101.6 million to $5.21 billion, with growth in reciprocal and public deposits. The company's employee headcount stood at 631 as of December 31, 2025, an increase of 33 employees from the previous year. Non-performing loans decreased by $5.7 million to $35.8 million, representing 0.77% of total loans. The company's outlook includes a continued focus on organic growth, market expansion opportunities, and potential acquisitions to expand its core financial service businesses.