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Financial Institutions , Inc. Exhibit 99.1 FOR IMMEDIATE RELEASE FINANCIAL INSTITUTIONS , INC . ANNOUNCES SECOND QUARTER RESULTS WARSAW , N.Y. , July 29 , 2021 – Financial Institutions , Inc. ( NASDAQ : FISI ) ( the “ Company ” “ we ” or “ us ” ) , parent company of Five Star Bank ( the " Bank ” ) , SDN Insurance Agency , LLC ( " SDN " ) , Courier Capital , LLC ( " Courier Capital " ) and HNP Capital , LLC ( “ HNP Capital ” ) , today reported financial and operational results for the second quarter ended June 30 , 2021 . Net income for the quarter was $ 20.2 million compared to $ 11.1 million in the second quarter of 2020. After preferred dividends , net income available to common shareholders was $ 19.8 million , or $ 1.25 per diluted share , compared to $ 10.8 million , or $ 0.67 per diluted share , in the second quarter of 2020 . • The increase in quarterly net income was driven by a $ 4.6 million benefit for credit losses as compared to a provision of $ 3.7 million in the second quarter of 2020. Continued improvement in the national unemployment forecast , positive trends in qualitative factors and lower net charge - offs resulted in a release of credit loss reserves and the corresponding benefit for credit losses in the quarter . Pre - tax pre - provision income ( 1 ) for the quarter was $ 21.0 million , an increase of $ 3.7 million from the second quarter of 2020 . " Our Company delivered solid performance across all business lines in the quarter with year - over - year growth in net interest income and noninterest income and a quarterly efficiency ratio of 56 % , ” said President and Chief Executive Officer Martin K. Birmingham . “ Cost savings from our enterprise standardization program are offsetting the cost of important investments we are making in people and technology to improve relationships with our customers and enhance future profitability . Our team continued to do a great job serving our clients across our banking , insurance and investment businesses . " We once again benefitted from a positive provision in the quarter due to continued improvement in the operating environment . A strengthening economy is also reflected in net loan recoveries . " We opened two new branches in the City of Buffalo in June . Both branches are in areas undergoing redevelopment and revitalization and we are honored to play an important role . We look forward to delivering our unique style of community banking to our neighbors and helping them improve their financial well - being . ” Chief Financial Officer and Treasurer W. Jack Plants II added , " Net interest margin ( " NIM " ) was 3.06 % for the second quarter , down 23 basis points from 3.29 % in the first quarter of 2021. Second quarter NIM was impacted by an increase in our excess liquidity position coupled with a lower level of fee accretion related to Paycheck Protection Program ( “ PPP " ) loans in comparison to the first quarter . On a linked quarter basis , our excess liquidity position resulted in an increase in average investment securities and interest - earning deposits of $ 269 million , partially due to the seasonal inflow of public deposits . This resulted in approximately 12 basis points of NIM compression in the quarter . Second quarter PPP fee accretion was $ 1.5 million , down from $ 2.9 million in the prior quarter , negatively impacting second quarter NIM by approximately 11 basis points . Excluding all impacts of PPP loans , NIM was 3.02 % for the second quarter as compared to 3.15 % for the first quarter of 2021. " Buffalo Branch Openings Two new Five Star Bank branches opened in the City of Buffalo in June of 2021 , consistent with the Company's long - term strategy to expand in the urban markets of Buffalo and Rochester . The branches are in vibrant commercial corridors at 451 Elmwood Avenue and 2222 Seneca Street , extending the reach of Five Star Bank's distribution system in both northern and southern directions from the existing downtown branch . The Company is committed to the use of green and energy efficient materials . Materials sourced for the Elmwood Avenue and Seneca Street branches received certifications from Cradle to Cradle , Declare , Forest Stewardship Council , Green Square and GreenGuard . Additionally , materials with a high percentage of recycled content were used when possible . Net Interest Income and Net Interest Margin Net interest income was $ 37.7 million for the quarter , a decrease of $ 125 thousand from the first quarter of 2021 and an increase of $ 3.6 million from the second quarter of 2020 . • Average interest - earning assets for the quarter were $ 4.97 billion , $ 302.5 million higher than the first quarter of 2021 and $ 699.2 million higher than the second quarter of 2020. The increase was the result of an increase in the level of Federal Reserve Page 1