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Investor Presentation Nasdaq: FISI Third Quarter 2025 October 23, 2025
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2 Statements contained in this presentation which are not historical facts and which pertain to future operating results of Financial Institutions, Inc. (the “Company”) and its subsidiaries constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe the objectives, plans or goals of the Company are forward-looking. These forward-looking statements speak only of as of the date of this presentation. These forward-looking statements can generally be identified as such by the context of the statements, including words such as "anticipate,“ "believe," "continue," "estimate," "expect," "focus," "forecast," “guidance,” "intend," "may," "plan," "preliminary," "should,“ “target,” or "will,” and other similar expressions, whether in the negative or affirmative. These forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties. You should not place undue reliance on any such forward-looking statements. All forward- looking statements, express or implied, made herein are qualified in their entirety by this statement and the cautionary language and the risk and other factors detailed from time to time in the Company’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other documents filed with the Securities and Exchange Commission. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Except as required by law, the Company assumes no obligation to update any information presented herein. Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals presented. Please refer to the Appendix for a listing of acronyms and abbreviations used within this presentation. Table of Contents Company Overview 3 Full Year Guidance 4 Financial Highlights 5 Deposit Base 7 Lending 8 Securities Portfolio 14 Revenue 16 Expense Management 19 Asset Quality 20 Capital Management & Investment Considerations 23 Appendix 25 Acronyms & Abbreviations 26 Leadership Team 27 Liquidity 28 Additional CRE Detail: Federal Policy, DOGE and the Mid-Atlantic 29 Important Information Safe Harbor Statement & Other Information
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Serving financially stable markets and well-positioned for growth in key Upstate New York metros Headquartered in Western New York, serving 15 contiguous Upstate New York counties through 50 locations1 • Commercial LPO serving Mid-Atlantic region provides valuable geographic and client type diversification Experienced management team with extensive market knowledge and industry experience History of generating consistent, strong operating results Disciplined credit culture with solid credit quality over time Diversified core business lines: • Community banking services • Commercial and SMB lending • Wealth management Complementary auto lending business line provides steady cash flow and solid margin contributions: • Consumer Indirect auto lending offered through new auto dealer network in New York State, where public transportation is limited 3 Overview of Financial Institutions, Inc. $6.29B-asset financial holding company of Five Star Bank and Courier Capital 1 48 branches and 1 motor branch across 14 New York State counties, in addition to a commercial LPO located in Onondaga County Syracuse Rochester Buffalo Albany County with Five Star Bank branch or LPO Additional county within Five Star’s CRA footprint
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4 >1.15% Return on average assets >12.00% Return on average equity Full year NIM is now expected to fall between 3.50% to 3.55% using a spot-rate forecast as of most recent quarter-end. The previously published range was 3.45% to 3.55%. Approximately 3% annual loan growth driven by commercial loans Flat deposit balances as non-public deposit growth is expected to offset the outflow of BaaS-related deposits Noninterest income exceeding $42MM in 20251 Noninterest expense is now expected to be approximately $141MM in 20252 Efficiency ratio is now expected to be below 59% for the year, a reduction from the previously published 60% Effective tax rate of 18% to 19% including the impact of the amortization of tax credit investments placed in service in recent years, updated from 17% to 19% Annual NCOs to full year avg. loans of 0.25% to 0.35% reflective of credit-disciplined lending and strong fundamental underwriting processes 1 Noninterest income excluding gains/losses on securities, impairment of investment tax credits, limited partnership income, insurance income, and gains/losses on assets, including the previously disclosed insurance sale gain. Original guidance presented as between $9.5MM to $10MM per quarter 2 Noninterest expense guidance originally presented as approximately $35MM per quarter Full Year 2025 Guidance Based on strong year-to-date performance, the Company is making several upward revisions, including to its ROAA and ROAE expectations, and tightening or affirming other range
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5 “Our Company reported strong third quarter 2025 financial results, highlighted by record quarterly net interest income and robust noninterest income that pushed return on average assets and return on average equity up to 1.32% and 13.31%, respectively, and our efficiency ratio down to below 57%.” - Martin K. Birmingham, President & CEO Diluted earnings per common share: $0.99, an increase of 16.5% from $0.85 in 2Q25 ROAA (annualized): 1.32%, up 19 bps from linked quarter NIM: 3.65%, up 16 bps from linked quarter NII: $51.8MM, up $2.7MM, or 5.4%, from 2Q25 Total deposits: $5.36B, up $201.8MM, or 3.9% from 6/30/25, driven by seasonal public deposit inflows along with nonpublic deposit growth Total loans: $4.59B, up $54.4 million, or 1.2%, during the quarter Noninterest income: $12.1MM, up $1.4MM, or 13.6%, from 2Q25 Noninterest expense: $35.9MM, compared to $35.7MM in 2Q25 Improved credit quality metrics, as measured by NCOs to average loans of 18 bps, down from 36 bps for the linked quarter Provision for credit losses: $2.7MM, compared to $2.6MM in 2Q25 Recent Financial Results As of or for the quarter ended 9/30/25 $20.1MM Net income available to common shareholders
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6 Recent Financial Results Last five quarters earnings summary Earnings Summary Amounts in millions, except percentages and per share amounts 3Q24 4Q24 1Q25 2Q25 3Q25 Average interest-earning assets $5,611.7 $5,715.8 $5,651.2 $5,651.4 $5,656.9 Net interest margin (tax equivalent basis) 2.89% 2.91% 3.35% 3.49% 3.65% Net interest income $40.7 $41.6 $46.9 $49.1 $51.8 Noninterest income (loss) $9.4 ($91.0) $10.4 $10.6 $12.1 Total revenue (loss) $50.1 ($49.4) $57.2 $59.7 $63.8 Noninterest expense ($32.5) ($59.4) ($33.7) ($35.7) ($35.9) (Provision) for credit losses ($3.1) ($6.5) ($2.9) ($2.6) ($2.7) Income (loss) before income taxes $14.5 ($115.3) $20.6 $21.5 $25.2 Income tax (expense) benefit ($1.1) $32.5 ($3.7) ($4.0) ($4.8) Net income (loss) $13.5 ($82.8) $16.9 $17.5 $20.5 Preferred stock dividends ($0.4) ($0.4) ($0.4) ($0.4) ($0.4) Net income (loss) available to common shareholders $13.1 ($83.2) $16.5 $17.2 $20.1 Earnings (loss) per share – diluted $0.84 ($5.07) $0.81 $0.85 $0.99 Weighted average common shares outstanding – diluted 15.6 16.4 20.3 20.3 20.3
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7 Total deposits were $5.36B, up $201.8MM, or 3.9%, from linked quarter-end, and up $51.2MM, or 1.0%, from one year prior • BaaS deposits were ~$7MM at 9/30/25 and 6/30/25 and ~$103MM at 9/30/24; remainder expected to flow out in early 2026 Granularity of community banking franchise benefits deposit portfolio Lower-cost deposits from rural markets fund higher growth in metros markets • Offering public deposit products to municipalities, including local governments and school districts, providing seasonal, lower-cost funding source, which made up 23% of total deposits at 9/30/25 Differentiated reciprocal deposit portfolio comprised of many long- tenured Municipal and Commercial customer relationships • Through CDARS and ICS, we are able to meet the deposit needs of individual Municipal and Commercial customers requiring collateralization above the $250,000 FDIC insurance limit. • These product offerings in turn provide rates favorable to brokered deposits and further pricing benefit in a falling rate scenario. Strong Community Bank Deposit Base Serving consumers, businesses, municipalities and non-profits in Upstate New York $2.70 $2.77 $3.12 $3.21 $3.15 $1.10 $1.12 $1.02 $1.07 $1.23$0.25 $0.35 $0.26 $0.08 $0.18$0.77 $0.70 $0.82 $0.75 $0.80$4.83 $4.93 $5.21 $5.10 $5.36 12/31/2021 12/31/22 12/31/23 12/31/24 9/30/25 Nonpublic Deposits Public Deposits Brokered Deposits Reciprocal Deposits Total Deposits $ in billions | 2.7% CAGR
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8 Diversified Loan Portfolio Total loans have grown at a 5.7% CAGR since year- end 2021 1 BBU, or Business Banking Unit, refers to small business lending through commercial franchise Total Loan Mix $4.59B 65% of total loans are commercial, comprised of CRE, C&I & BBU1 Commercial Business 16% Construction Commercial Mortgage 10% Multifamily Commercial Mortgage 13% Non-owner Occupied Commercial Mortgage 19%Owner-Occupied Commercial Mortgage 7% Residential 16% Consumer Indirect 18% Other Consumer 1%
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Commercial Loan Mix $2.99B 9 Total commercial loans were up $48.3MMM, or 1.6%, from the linked quarter and up $230.2MM, or 8.3%, year-over-year Operating in financial stable geographic markets, primarily in NYS • Commercial teams situated in regional headquarters in Buffalo and Rochester, NY , supported by Upstate New York branch network and commercial LPOs in Central New York and the Mid-Atlantic • Syracuse, NY LPO well-positioned for anticipated growth from tech-fueled investments in Central New York under leadership of market president with 25+ years of local experience • LPO in suburban Baltimore, MD leverages decades of in-market and industry experience and deep relationships of the local CRE team to provide geographic and client diversification, including mix of stabilized projects, construction projects and residential AD&C projects (see Appendix for more detail on Mid-Atlantic) Disciplined approach to credit and risk management supports strong asset quality metrics Commercial Lending Total commercial loans of $2.99B and committed credit exposure of $3.97B at 9/30/25 9.5% of commercial loans are originated through Mid-Atlantic LPO Real Estate & Rental/Leasing 63% Construction 8% Manufacturing 7% Wholesale Trade 4% Accommodation & Food Services 6% Retail 3% Health Care 2% Finance & Insurance 1% Other 5%
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10 1 Recourse and loan-to-value (“LTV”) ratio calculated as of 9/30/25; original appraised value used for LTV ratio • Growth achieved without compromising strong credit culture • Portfolio factors in loan rollover risk, with ~25% of exposure scheduled to mature within next 12 mos. and another ~15% in 24 mos. • Large majority have full or limited personal or corporate recourse, providing comfort with loan rollover risk1 Commercial Real Estate Total CRE outstandings of $1.89B and committed credit exposure of $2.26B at 9/30/25 CRE Exposure Mix $2.26B ~$3.7MM weighted avg. loan commitment >70% of CRE clients have loan relationship <$10MM See Appendix slides 29-31 for additional CRE detail, including on DOGE and Mid-Atlantic ~630 loans consolidated into ~250 lending relationships Multifamily 45% Office 18% Retail 9% Hospitality 8% Home Builder 2% Industrial 6% Other 3% Land 9% Unsecured 0.3%
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11 Multifamily CRE outstanding balances of $774MM and committed credit exposure of $1.0B • Weighted avg. loan commitment: $$5.4MM • Criticized/classified: ~$22MM, or ~2% of asset class Loans $1MM+ • Avg. LTV: 59%1 • Recourse: >90% have full or limited personal or corporate recourse; those without have avg. LTV of ~55%1 and DSCR of ~1.5X Office CRE outstanding balances of $375MM and committed credit exposure of $393MM • Weighted avg. loan commitment: $3.7MM • Criticized/classified: ~$19MM, or <5% of asset class Loans $1MM+ • Avg. LTV: 52%1 • Recourse: ~75% have full or limited personal or corporate recourse; those without have avg. LTV of ~56% 1 and DSCR of ~1.4X 1 Recourse and loan-to-value (“LTV”) ratio calculated as of 9/30/25 on loans exceed $1MM; original appraised value used for LTV ratio 2 Loans with overlaying interest rate swaps are considered variable CRE: Office & Multifamily Internal stress testing conducted on quarterly basis analyzing several largest CRE asset classes Office Exposure Mix ~71% is Class B or Medical office space ~59% is in Upstate New York, remainder in Mid- Atlantic $393MM ~86% in Upstate New York ~47% in construction phase Multifamily Stats See Appendix slides 29-31 for additional CRE detail, including on DOGE and Mid-Atlantic Class B 40%Medical 31% Class A 16% Flex 12% Class C 0.1%
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12 Residential Real Estate $724.5MM held portfolio and $289.2MM serviced for others portfolio at 9/30/25 Residential held portfolio increased $1.6MM, or 0.2%, from 6/30/25 and was flat with 9/30/24 High quality portfolio in stable Upstate New York market with in-market originations through mortgage loan originators, Five Star Bank branch network and digital point-of-sale technology FICO: Weighted avg. credit score for residential loans of 742 at origination, and 764 for HELOCs Avg. balance: ~$102,100 avg. residential loan size and $24,800 avg. HELOC balance Approved seller-servicer for Freddie Mac and FHLBNY, supporting a residential sold and serviced for others portfolio of $289.2MM, with weighted avg. FICO score of 738 and avg. balance of $125,700 Full product menu featuring competitive construction offerings, as well as FHA, VA, USDA and SONYMA products Residential Lending Held Portfolio $ in millions | 2.6% CAGR $577.3 $589.9 $649.8 $650.2 $648.4 $78.5 $77.7 $77.4 $75.6 $76.1$655.8 $667.6 $727.2 $725.8 $724.5 17.8% 16.5% 16.3% 16.2% 15.8% 12/31/2021 12/31/2022 12/31/2023 12/31/2024 9/30/2025 Residential Real Estate Loans Residential Real Estate Lines Residential Loans & Lines/ Total Loans
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13 ~365 new auto dealer network in New York State ~3.5 years average duration 718 weighted avg. FICO score at origination prime lending Consumer indirect portfolio increased $5.2MM, or 0.6%, from 6/30/25 and decreased $36.0MM, or 4.1%, YoY Core competency with attractive risk-adjusted return profile Prime lending operation with natural risk dispersion given small loan size averaging ~$20,000 Demonstrated record of consistent performance across economic expansions, recessions and stagnation • Annual charge-off ratio has ranged 0.45% to 0.89% for 2008 to 2024, excluding the exceptionally low 0.14% reported in 2021; charge-off ratio was 0.91% in 3Q25, 0.45% in 2Q25, and 0.70% in 3Q24 Consumer Indirect Auto $838.7MM portfolio at 9/30/25 Consumer Indirect Lending Portfolio $ in millions | (3.6%) CAGR $958.0 $1,023.6 $948.8 $845.8 $838.7 26.0% 25.3% 21.3% 18.9% 18.3% 12/31/2021 12/31/2022 12/31/2023 12/31/2024 9/30/2025 Consumer Indirect Loans Consumer Indirect Loans/ Total Loans
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14 Primarily comprised of agency wrapped MBS with intermediate durations, which provide ongoing cash flow, coupled with investment grade municipal bonds that are classified as HTM • ~5.6 years avg. duration Active approach to investment securities management to balance yield, duration and risk, led the Company to complete a minor restructuring of ~$60MM in mortgage-backed securities in 2Q25 • 4.45% yield reflects 11 bps improvement from linked quarter Cash flows expected to be reinvested into the portfolio, as securities serve as collateral for Municipal deposit portfolio • ~$200MM principal cash flow NTM 1 AFS securities shown at fair value and HTM securities shown at amortized cost as of 9/30/25 Securities Portfolio $1.01B at 9/30/25 Securities Portfolio Mix1 Investment Securities Portfolio $ in millions | (8.7%) CAGR $206 $189 $148 $116 $88 $1,178 $954 $888 $911 $924 $1,384 $1,143 $1,036 $1,027 $1,011 25.1% 19.7% 16.8% 16.2% 16.1% 12/31/2021 12/31/2022 12/31/2023 12/31/2024 9/30/2025 Securities HTM, net Securities AFS Securities/ Total Assets AFS Agency MBS 53% AFS Agency CMOs 34% AFS Other 4% HTM Agency CMOs 2% HTM Agency MBS 3% HTM Municipal 3% HTM Agency Debt 1% HTM 9%
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15 Balance Sheet Providing Ample Cash Flow ~$1.1B in anticipated NTM cash flow from loan portfolios Select Interest Earning Assets 3Q25 Yield 3Q25 Roll Off Loan Yield 3Q25 Roll On Loan Yield Balance at 9/30/25 ($MMs) Avg. NTM Monthly Cash Flow1 ($MMs) Commercial Real Estate Loans 6.53% 6.99% 6.91% $1,979 $45 Commercial & Industrial Loans 6.46% 6.03% 6.66% $845 $11 Small Business Loans2 7.18% 8.22% 7.71% $151 $2 Residential Real Estate Loans 4.31% 4.82% 6.24% $648 $7 Consumer Indirect Loans 6.77% 6.81% 7.42% $839 $27 Consumer Direct Loans 8.54% 11.52% 11.95% $38 $1 1 Next 12-month average monthly loan cash flow projections based on contractual loan terms and historical prepayment assumptions that are based on a 12-month historical average 2 Small business represents small business loans generated through retail network and commercial BBU ~$200MM in additional NTM principal cash flow from investment securities portfolio will generally be reinvested into additional securities to support collateral position for municipal deposits
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16 NII of $51.8M increased $2.3MM, or 5.4% from the linked quarter and $11.1MM, or 27.3%, from the year-ago quarter NIM was 3.65% for the current quarter, up 16 bps from the linked quarter and up 76 bps than the year-ago quarter NII and NIM expansion supported by strategic investment securities restructuring completed in late 4Q24 as well as deposit repricing • 2Q25 investment securities portfolio yield of 4.34% was up 217 bps from 2Q24, reflecting the Company’s previously disclosed 4Q24 investment securities repositioning that followed its successful and oversubscribed public equity offering and up 9 bps from 1Q25, supported by minor restructuring in 2Q25 Effective repricing of deposits supported a 10 bps decrease in cost of funds in 3Q25, while average loan yield increased 3 bps • ~40% of loan portfolio is floating, with the majority priced off Prime and SOFR indexes Net Interest Income & Margin 3Q25 NII of $51.8MM and NIM of 3.65% Quarterly NII & NIM $ in millions Annual NII & NIM $ in millions Note: The interest on tax-exempt securities is calculated on a tax-equivalent basis assuming a Federal income tax rate of 21%. $40.7 $41.6 $46.9 $49.1 $51.8 2.89% 2.91% 3.35% 3.49% 3.65% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% $0 $10 $20 $30 $40 $50 3Q24 4Q24 1Q25 2Q25 3Q25 3Q25 $51.8 $154.7 $167.4 $165.7 $163.6 $189.4 3.14% 3.20% 2.94% 2.86% 3.35% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 2021 2022 2023 2024 TTM Net Interest Income NIM
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17 Select Banking Services Fee Income: $4.4MM Up $0.8MM, or 21%, from 2Q25 and $0.9MM, or 26%, from 3Q24, driven by higher swap fees Inclusive of card interchange income, service charges on deposits, loan servicing income, income from derivative instruments, net (swap fees), and gains on the sale of loans HFS Other Noninterest Income Streams Other Noninterest Income of $1.6MM was up $0.3MM, or 24%, and $0.2MM, or 19%, from 2Q25 and 3Q24, respectively The following categories of noninterest income totaled $0.1MM in 3Q25 and are excluded from the Company’s annual guidance: gains/losses on securities, impairment of investment tax credits, limited partnership income, insurance income, and gains/losses on assets, including the previously disclosed insurance sale gain Investment Advisory Income: $3.0MM Up $0.1MM, or 5%, and $0.2MM, or 8%, from the linked and year-ago quarters, respectively Primarily derived from wholly-owned RIA subsidiary, Courier Capital, LLC, with $3.56B in AUM as of 9/30/25 Branch-delivered investment advisory products and services also offered in collaboration with Principal Financial Network of the Northeast® Company Owned Life Insurance: $2.8MM Down $0.1MM, or 4%, and up $1.4MM, or 103%, from linked and year-ago quarters, respectively COLI enhanced through surrender/redeploy strategies in recent years, including in 1Q25, when the Company restructured a portion of the portfolio into higher-yielding separate account policies Diverse Noninterest Income 3Q25 noninterest income of $12.1MM made up 19% of quarterly revenue
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18 $3.56B in AUM at 9/30/25 3 RIA acquisitions since 2016 Supporting revenue diversification as the primary driver of the Company’s investment advisory income, which totaled $3.0MM in 3Q25 One of the largest RIAs serving Western New York by AUM and positioned for growth, having been enhanced through bolt-on acquisitions over the years and recent talent recruitment Complementing Five Star Bank’s relationship-based financial services offerings in its Upstate New York markets • Providing customized investment management, retirement planning, and consulting services • Focused on mass affluent and high-net-worth individuals and families, businesses, institutions, and foundations • Headquartered in Buffalo, NY with offices in Rochester and Jamestown, NY , Pittsburgh, PA and new office in Sarasota, FL, allowing the firm the better serve current and prospective clients in attractive market Courier Capital, LLC FISI’s wholly-owned RIA subsidiary is one of the largest serving Western New York
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19 Noninterest expense was $35.9MM in MRQ, compared to $35.7MM in 2Q25 and $32.5MM in 3Q24 • The linked quarter variance was primarily driven by higher salaries and employee benefits expenses, reflecting continued elevated medical claims under the Company's self-insured plan. • The year-over-year variance was also primarily driven by higher salaries and employee benefits, as well as increased occupancy and equipment expense and computer and data process expense. Efficiency ratio of ~57% in 3Q25, in-line with full year target • Focused on effectively managing expenses as we invest in people, processes and technology to support future growth and performance 1 Expenses related to the previously disclosed March ’24 fraud event presented as part of noninterest expense in quarterly chart, given legibility of breaking out small dollar values on a quarterly basis Noninterest Expense 3Q25 expense was $35.9MM Quarterly Noninterest Expense1 $ in millions Annual Noninterest Expense $ in millions $36.4 $23.0 $32.5 $59.4 $33.7 $35.7 $35.9 3Q24 4Q24 1Q25 2Q25 3Q25 Provision for litigation settlement Noninterest expense 3Q25 $35.8 $136.1 $105.6 $19.8 $0.3 $23.0 $23.0 $112.8 $129.4 $137.2 $178.9 $164.6 2021 2022 2023 2024 TTM Provision for litigation settlement March '24 fraud event related expenses Noninterest expense
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20 1 Non-performing assets, or NPAs, include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets Elevated NPLs and NPAs relative to FISI’s historic strong asset quality metrics are primarily associated with two separate commercial lending relationships in the Bank’s Upstate New York geography, one of which was placed on nonaccrual during the 3Q24 and the other in 4Q23 Increase in NCOs to average loans in 2Q25 related to the latter commercial business relationship, for which a specific reserve was in place Solid Asset Quality Last five quarters asset quality summary Select Asset Quality Metrics1 0.66% 0.68% 0.63% 0.53% 0.54% 0.93% 0.92% 0.88% 0.72% 0.74% 0.15% 0.25% 0.21% 0.36% 0.18% 1.01% 1.07% 1.08% 1.04% 1.03% 0.00% 0.50% 1.00% 1.50% 2.00% 9/30/24 12/31/24 3/31/25 6/30/25 9/30/25 NPAs /Total Assets NPLs/Total Loans NCOs (Recoveries)/Average Loans Allowance for Credit Losses on Loans/Total Loans
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21 1 Non-performing assets, or NPAs, include nonaccrual loans, loans past due 90 days or more and still accruing, and foreclosed assets From 2008 to 2024, year-end NPAs ranged from 0.17% to 0.68% of total assets, while annual NCOs to avg. loans ranged from 0.14% to 0.54% Thorough credit review exercise undertaken at the outset of COVID-19 pandemic reinforced confidence in health of loan portfolio During 2Q22, COVID-19 at-risk pool was eliminated, and all credits now monitored as part of standard loan monitoring process Increase in NPLs and NPAs beginning in 2023 largely associated with two separate commercial loan relationships, one of which was placed on nonaccrual during the 3Q24 and the other in 4Q23 Solid Asset Quality Disciplined credit culture supports consistency of asset quality metrics Select Annual Asset Quality Metrics Since 2008 Financial Crisis1 0.48% 0.68% 0.73% 0.92% 0.32% 0.20% 1.67% 1.07% 0.00% 0.50% 1.00% 1.50% 2.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 NPAs /Total Assets NPLs/Total Loans NCOs/Average Loans Allowance for Credit Losses on Loans/Total Loans
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22 Allowance for credit losses – loans to total loans relatively stable on linked quarter basis, down 1 bp 3Q25 provision for credit losses of $2.7MM, compared to $2.6MM in 2Q25 3Q25 provision was driven by a combination of factors, including the impact of loan growth partially offset by improvement in the forecasted loss rate for pooled loans and lower higher net charge- offs. Allowance for Credit Losses Allowance for credit losses - loans to total loans was 1.03% at 9/30/25 Allowance for Credit Losses – Loans $47.3 $0.3 -$1.1 $0.9 -$0.1 $47.3 6/30/25 Loan balances Forecasted loss rate Qualitative factors Specific reserves 9/30/25
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23 Well-Capitalized to Support Future Organic Growth Exceeding well-capitalized regulatory thresholds and well-positioned to support future growth Capital Ratio 12/31/21 12/31/22 12/31/23 12/31/24 9/30/25 Well- Capitalized Threshold Leverage 8.23% 8.33% 8.18% 9.15% 9.77% 5.00% CET1 capital 10.28% 9.42% 9.43% 10.54% 11.15% 6.50% Tier 1 capital 10.68% 9.78% 9.76% 10.87% 11.48% 8.00% Total RBC 13.12% 12.13% 12.13% 13.25% 13.60% 10.00% 11.15% CET1 ratio at 9/30/25, up 87 bps from one year prior 8.23% 9.77%10.28% 11.15%10.68% 11.48% 13.12% 13.60% 0% 2% 4% 6% 8% 10% 12% 14% 16% 12/31/2021 12/31/2022 12/31/2023 12/31/2024 9/30/2025 Leverage Ratio Common Equity Tier 1 Capital Ratio Tier 1 Capital Ratio Total Risk-Based Capital Ratio
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24 Results-driven community bank with strong retail and commercial franchises that’s well positioned for profitable, organic growth • Steady, upward performance over the long-term with steeper trajectory following recent actions to position us for stronger earnings potential • Disciplined credit culture with strong credit quality Wealth management business diversifies revenue and complements core banking franchise • Leading contributor of noninterest income, which makes up ~19% of revenue Experienced management team committed to rewarding shareholders, including through meaningful dividend yield and long-standing dividend history Attractive valuation, given discount to peers relative to performance guidance Investment Thesis and Profile Nasdaq: FISI Investment Profile As of 9/30/25 Closing Price $27.20 52-week High $29.78 52-week Low $20.97 Common Shares Outstanding 20.1MM Market Capitalization $547MM Price/NTM Consensus EPS 7.3x Price/Common Book Value Per Share 0. 94 Float 89% Average Daily Volume (MRQ) ~136,200 Dividend Per Share (annualized MRQ) $1.24 Dividend Yield (annualized MRQ) 4.52%
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Appendix 25
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• A&D: Acquisition and Development • ADC: Acquisition, Development and Construction • AFS: Available for Sale • AUM: Assets Under Management • B: Billions • BaaS: Banking-as-a-Service • BPS: Basis Points • BBU: Business Banking Unit • CAGR: Compound Annual Growth Rate • CBD: Central Business District • CDARs: Certificate of Deposit Account Registry Service • C&I: Commercial and Industrial • CMO: Collateralized Mortgage Obligation • COLI: Company Owned Life Insurance • CRE: Commercial Real Estate • DSCR: Debt Service Coverage Ratio • EPS: Earnings Per Share • GAAP: Generally Accepted Accounting Principles • GSA: General Services Administration • HELOC: Home Equity Line of Credit • HFS: Held for Sale • HTM: Held to Maturity • ICS: Insured Cash Sweeps • LPO: Loan Production Office • LTM: Last Twelve Months • LTV: Loan-to-Value Ratio • LQ: Linked Quarter • MBS: Mortgage-Backed Securities • MM: Millions • MRQ: Most Recent Quarter • NCO: Net Charge-Off • NII: Net Interest Income • NIM: Net Interest Margin • NOO: Non-Owner Occupied • NTM: Next Twelve Months • RIA: Registered Investment Advisor • RM: Relationship Manager • SMB: Small and Midsize Businesses • TTM: Trailing Twelve Months 26 Acronyms & Abbreviations Definitions of acronyms and abbreviations used within this presentation
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27 Strong Executive Leadership Team Positioned to drive growth and operational excellence Martin K. Birmingham President & Chief Executive Officer Samuel J. Burruano Jr. EVP, Chief Legal Officer & Corporate Secretary overseeing legal, corporate governance, and internal audit W. Jack Plants II EVP, Chief Financial Officer & Treasurer overseeing financial planning and analysis, accounting, tax, investor relations, treasury, operations and technology Laurie R. Collins SVP, Chief Human Resources Officer overseeing talent recruitment and development, training and incentives Gary A. Pacos SVP, Chief Risk Officer overseeing enterprise risk, BSA/AML, fraud, compliance, information security and credit administration Kevin B. Quinn SVP, Chief Commercial Banking Officer overseeing CRE and C&I lending, treasury management, merchant services and community development Blake G. Jones SVP, Chief Marketing Officer overseeing marketing, corporate communications, brand strategy and enterprise sales Eric W. Marks SVP, Chief Consumer Banking Officer overseeing retail banking, residential mortgage, customer contact center and collections
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28 Robust Liquidity Position Supported by diverse deposit gathering capabilities and eligible collateral $0.45 $0.16 $0.17 $0.18 $0.06 $0.20 $0.16 $0.29 $0.25 $0.29 $0.03 $0.06 $0.04 $0.02 $0.10 $0.61 $0.57 $0.81 $0.85 $0.96 $1.29 $0.95 $1.31 $1.31 $1.40 12/31/2021 12/31/2022 12/31/2023 12/31/2024 9/30/2025 Unencumbered Securities FHLBNY FRB Excess Cash FRB Discount Window Available Committed Liquidity $ in billions
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29 Six CRE loans with GSA/government tenants totaling $43.5MM, or ~1.5% of CRE loans • None located in Mid-Atlantic region; none cancelled year-to-date • One loan for ~$0.1MM is 100% leased to the USPS, while the remainder are only partially leased to government entities Canvassing of CRE customer base found de minimis exposure to GSA/government tenants in their broader real estate portfolios, and those with exposure are not expressing concern at present • Within Mid-Atlantic market, our largest customers have indicated that multifamily vacancy rates and rent have remained stable and there has been no declines in sales pace of single-family projects, given the persisting tight housing markets in the Mid-Atlantic • Closely monitoring portfolio as economic conditions evolve to understand how federal policy changes may impact future performance Loans to GSA/government tenanted buildings are outside our traditional market strategy given competition, non-recourse nature and more • Highly competitive, resulting in transactions with very low margin and low DSCR • Typically non-recourse, which is not aligned with our CRE portfolio, of which ~90% has some level of recourse • GSA leases typically contain cancellation clauses 1 Based on data from the U.S. Office of Personnel Management, Mid-Atlantic government employees predominantly in armed services positions, including the Navy, Army and Department of Defense, where personnel cuts are not anticipated High federal employment numbers in Virginia and Maryland given proximity to Washington, DC1 • VA: ~144,500 federal employees, representing 3.3% of employees statewide; largest percentages employed by the Navy (31.4%), Department of Defense (19.5%) and Army (10.5%) • MD: ~142,900 federal employees, or 4.6% of the state’s workforce; largest employes including the Department of Health and Human Services (28.1%), Navy (12.0%) and Army (10.6%) National federal employment statistics 1 • 3.0MM federal jobs, or 1.9% of all US jobs, as of year-end 2024 • Of those, ~2.3MM were full-time employees • Federal offices with the most personnel based on 2023 data were all military programs under the Defense Department (775,100 people), the Department of Veterans Affairs (433,700), and the Department of Homeland Security (212,000) Federal Policy & DOGE Impacts Federal Government/ GSA lending not part of market strategy
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30 3-person team 27 years on average of in-market lending experience $36MM of Mid-Atlantic loans are Office or Multifamily loans in Baltimore or DC CBD Mid-Atlantic market provides Five Star Bank with important geographic and client diversification, leveraging decades of in-market and industry experience and deep relationships of the local CRE team • Sponsors have proven track records, access to capital and long-term relationships with our RMs • High quality sponsors, many with $1B+ net worth, that have weathered numerous real estate cycles • Focused on sponsors that build-to-hold for their own portfolio • Consistent and conservative credit underwriting, with short tenor, reasonable leverage, no tenant concentration, consistent covenants, and diversified portfolios of sponsorship • All Mid-Atlantic loans originated post-COVID in higher-interest rate environment • Consistent with our approach across the Bank, senior management knows and regularly interacts with major CRE sponsors in this region Pace of Mid-Atlantic growth moderating since successful commercial LPO opening in 1Q22 • After launching in 1Q22, total loans associated with this office grew to $197MM by the end of 1Q23 • As of 9/30/25, the portfolio was $377.5MM, reflecting a $39MM, or ~12%, year-over-year increase in outstandings, with an average loan size of ~$6.1MM • ~$36MMof Mid-Atlantic loans are in Office or Multifamily CRE in the Baltimore or Washington, DC CBDs, representing 10% of total Mid-Atlantic loans and 2% of total CRE portfolio Mid-Atlantic deposit base linked to lending relationships • Modest deposit balances of $41MM as of 9/30/2025 Mid-Atlantic CRE: Overview Total loans of $377.5MM at 9/30/25
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31 1 Large floor plate office refers to more than 150Msf/floor Mid-Atlantic CRE: Exposure Mix & Appetite Mid-Atlantic CRE Exposure Mix $562MM at 9/30/25 Growth Opportunities • Flex/warehouse • Residential A&D and/or ADC loans • Suburban multifamily • Retail strip plazas • Medical office Limited Appetite • Properties in Baltimore/ Washington, DC CBDs • Large floor plate office1 • Big box retail • Hotels • Single tenant buildings Total exposure of $562MM at 9/30/25 Multifamily 26% Land development 25% Home Builder 4% Vacant land 2% Industrial 5% Retail Building 6% Other 2% Unsecured 1% Office-ClassA 8% Office-ClassB 5% Office-Flex 5% Office-Medical 11% Office 29%
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Thank you for your interest in Financial Institutions, Inc. Nasdaq: FISI Investor Relations Contacts Learn more at www.FISI-Investors.com FISI-Investors@Five-StarBank.com 32 Kate Croft Director of Investor & External Relations Jack Plants Chief Financial Officer & Corporate Treasurer