Slides
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Investor Presentation Nasdaq: FISI Third Quarter 2026 October 29, 2026
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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 Financial Highlights & Full Year Guidance 5 Deposit Base 8 Lending 9 Securities Portfolio 15 Revenue 16 Expense Management 19 Asset Quality 20 Capital Management & Investment Considerations 21 Appendix 22 Acronyms & Abbreviations 23 Leadership Team 24 Liquidity 25 Cash Flows 26 Additional CRE Detail 27 Non-GAAP Reconciliation 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 nearly 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, high-quality operating results Disciplined credit culture with long history of strong credit quality 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. $6.51B-asset financial holding company of Five Star Bank and Courier Capital 1 47 branches and one motor branch across 14 New York State counties, in addition to a commercial LPO located in Onondaga County, and one digital branch 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 Fully Tax Equivalent 2 Non-GAAP measure, please see reconciliation in Appendix Strong Execution and Momentum Strategic actions in recent years have translated to a stronger balance sheet and performance 9.43% 10.54% 11.11% 11.36% 2023 2024 2025 3Q26 Common Equity Tier 1 Ratio Expanded Earnings2025 • Improved profitability evident in full year 2025 results • New share repurchase plan approved in 4Q25, with active buybacks in 4Q25 and 1Q26 • Successful $80MM sub-debt offering in 4Q25 allowing for refinance of past issuances at favorable rate in 1Q26 Bolstered Capital2024 • Oversubscribed $108MM public equity offering and transformative investment securities restructuring in 4Q24 strengthened capital position and set stage for stronger earnings potential • Began wind-down of BaaS in 3Q24; completed in 1Q26 • Sold insurance subsidiary in 2Q24 Enhanced Liquidity2023 • Enhanced liquidity from $945MM at 12/31/22 to ~$1.3B by 12/31/23 • Strengthened executive leadership team throughout 2023 • Merged RIA subsidiaries and opened Syracuse commercial LPO 2.94% 2.86% 3.53% 3.69% 2023 2024 2025 YTD 2026 Net Interest Margin1 $23.69 $24.45 $27.84 $27.75 2023 2024 2025 3Q26 Tangible Common Book Value per Share2
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5 ≥1.30% Return on average assets guide raised from 1.22% ≥12.50% Return on average equity guide raised from 11.90% Full year NIM expected to be approximately 370 bps using a spot-rate forecast as of MRQ-end ~5% annual loan growth, driven by commercial loans and inclusive of continued indirect run -off, which is expected to exceed production in 2026 Low single-digit deposit growth Noninterest income expected to moderate from higher than typical 2025 results • 2026 COLI income now expected to exceed $11MM on a full year basis • Investment advisory income expected to increase at low double-digit rate versus 2025, up from previous guidance of mid single-digit growth • Swap fees expected to fall within a range of $750M to $1.2MM, lowered from previous guidance of $1MM to $2MM Low single-digit noninterest expense growth Efficiency ratio of below 57% for the year Effective tax rate of 16.5% to 17.0% (lowered from 17.5%) including the impact of the amortization of tax credit investments placed in service in recent years Annual NCOs to full year avg. loans of ~0.30%, updated from previous range of 0.25% to 0.35%, reflective of credit-disciplined lending and strong fundamental underwriting processes Full Year 2026 Guidance Noninterest income, effective tax rate and NCO ratio targets updated based on YTD performance
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6 1 Refers to earnings per common share “Our third quarter results underscore the strength of our relationship-driven business model and our unwavering commitment to disciplined execution.” - Martin K. Birmingham, President & CEO Diluted EPS1: $0.99, compared to $1.04 in LQ ROAA (annualized): 1.26%, compared to 1.35% in LQ NIM: 3.70%, consistent with LQ NII: $54.3MM, up $0.9MM, or 1.7%, from 2Q26 Total loans: $4.86B, up $102.9MM, or 2.2%, during the quarter Total deposits: $5.47B, up $175.5MM, or 3.3%, from LQ on broad based growth but led by seasonal public deposit inflows Noninterest income: $10.5MM, compared to $11.0MM in 2Q26 Noninterest expense: $36.8MM, compared to $35.6MM in LQ Credit quality metrics: Included NPLs to total loans of 79 bps, down 3 bps from LQ Provision for credit losses: $3.9MM, compared to $3.1MM in 2Q26 Third Quarter 2026 Highlights & Key Results As of or for the quarter ended 9/30/26 $19.6MM Net income available to common shareholders
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7 Recent Financial Results Last five quarters earnings summary Earnings Summary Amounts in millions, except percentages and per share amounts 3Q25 4Q25 1Q26 2Q26 3Q26 Average interest-earning assets $5,656.9 $5,745.9 $5,724.5 $5,785.9 $5,837.5 Net interest margin (tax equivalent basis) 3.65% 3.62% 3.67% 3.70% 3.70% Net interest income $51.8 $52.2 $52.0 $53.4 $54.3 Noninterest income $12.1 $11.9 $10.7 $11.0 $10.5 Total revenue $63.8 $64.1 $62.7 $64.3 $64.7 Noninterest expense ($35.9) ($36.7) ($35.6) ($35.6) ($36.8) Provision for credit losses ($2.7) ($3.4) ($2.2) ($3.1) ($3.9) Income before income taxes $25.2 $24.0 $24.8 $25.6 $24.0 Income tax expense ($4.8) ($4.0) ($3.8) ($4.4) ($4.1) Net income $20.5 $20.0 $21.0 $21.2 $20.0 Preferred stock dividends ($0.4) ($0.4) ($0.4) ($0.4) ($0.4) Net income available to common shareholders $20.1 $19.6 $20.6 $20.8 $19.6 Earnings per share – diluted $0.99 $0.96 $1.04 $1.04 $0.99 Weighted average common shares outstanding – diluted 20.3 20.3 19.9 19.9 19.9
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8 Total deposits were $5.47B, up $175.5MM, or 3.3%, from linked quarter-end, and up $117.1MM, or 2.2%, from one year prior 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 22% of total deposits at 9/30/26 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 Total Deposits $ in billions | 2.8% CAGR $2.77 $3.12 $3.21 $3.16 $3.19 $1.12 $1.02 $1.07 $1.09 $1.23 $0.35 $0.26 $0.08 $0.13 $0.22$0.70 $0.82 $0.75 $0.83 $0.84$4.93 $5.21 $5.10 $5.21 $5.47 12/31/22 12/31/23 12/31/24 12/31/25 9/30/26 Nonpublic Deposits Public Deposits Brokered Deposits Reciprocal Deposits
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9 Diversified Loan Portfolio with Ample Cash Flow Total loans have grown at a 4.7% CAGR since year- end 2022 1 BBU, or Business Banking Unit, refers to small business lending through commercial franchise Total Loan Mix $4.86B 68% of total loans are commercial, comprised of CRE, C&I & BBU1 $1.2B+ in cash flows from loans anticipated over next 12 months higher-yielding loans See Appendix slide 26 for more detail on roll-on/off activity Commercial Business 16% Construction Commercial Mortgage 13% Multifamily Commercial Mortgage 12% Non-owner Occupied Commercial Mortgage 21% Owner-Occupied Commercial Mortgage 7% Residential 15% Consumer Indirect 16% Other Consumer 1%
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Real Estate & Rental/Leasing 61% Construction 7% Manufacturing 7% Wholesale Trade 4% Accommodation & Food Services 6% Retail 4% Health Care 3% Finance & Insurance 1% Other 6% Commercial Loan Mix $3.31B 10 Total commercial loans were up $95.1MM, or 3.0%, versus LQ and up $315.8MM, or 10.6%, YoY • Growth driven by core Western and Central New York markets • 3Q26 growth led by CRE 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 $3.31B and committed credit exposure of $4.22B at 9/30/26 13% of commercial loans outstanding are through Mid-Atlantic LPO
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Multifamily 44% Office 21% Retail 10% Hospitality 8% Home Builder 1% Industrial 6% Other 3% Land 7% 11 1 Recourse and loan-to-value (“LTV”) ratio calculated as of 9/30/26; original appraised value used for LTV ratio Commercial Real Estate Total CRE outstandings of $2.12B and committed credit exposure of $2.40B at 9/30/26 CRE Exposure Mix $2.40B See Appendix slides 27-28 for additional CRE detail, including on the Mid-Atlantic • Growth achieved without compromising strong credit culture • Portfolio factors in loan rollover risk, with ~24% of exposure scheduled to mature within next 12 mos. and another ~26% in 24 mos. • Large majority have full or limited personal or corporate recourse, providing comfort with loan rollover risk 1 ~$4.3MM Average loan size (exposure) ~70% of clients have loan relationship <$10MM
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Class B 37% Medical 31% Class A 9% Flex 22% Class C 1% 12 1 Recourse and loan-to-value (“LTV”) ratio calculated as of 9/30/26 on loans exceeding $1MM; original appraised value used for LTV ratio 2 Percentages based on committed credit exposure for this asset class CRE: Office & Multifamily Internal stress testing conducted on quarterly basis analyzing several largest CRE asset classes $393MM ~86% in Upstate New York ~50% in construction phase No multifamily lending in Downstate/NYC region or rent regulated real estate exposure Office CRE outstanding balances of $439MM and committed credit exposure of $494MM • Weighted avg. loan commitment: $4.4MM • Criticized/classified: ~$23MM, or <5% of asset class Loans $1MM+ • Avg. LTV: 51% 1 • Recourse: ~75% have full or limited personal or corporate recourse; those without have avg. LTV of ~55%1 and DSCR of ~1.4X Multifamily CRE outstanding balances of $892MM and committed credit exposure of $1.1B • Weighted avg. loan commitment: $5.8MM • Criticized/classified: $5MM, or ~50 bps of asset class Loans $1MM+ • Avg. LTV: 51%1 • Recourse: >90% have full or limited personal or corporate recourse; those without have avg. LTV of ~52% 1 and DSCR of ~1.5X Office Exposure Mix 68% is Class B or Medical office space ~62% of total office exposure is in Upstate New York, remainder in Mid-Atlantic $494MM Multifamily Stats2 ~88% in Upstate New York ~51% in construction phase No multifamily lending in Downstate/NYC region or rent regulated real estate exposure
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13 Residential Real Estate $740.5MM held portfolio and $309.3MM serviced for others portfolio at 9/30/26 Residential held portfolio increased $1.8MM, or 0.2%, from 6/30/26 and $16.0MM, or 2.1%, from 9/30/25 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: ~$109,000 avg. residential loan size and ~$26,000 avg. HELOC balance Approved seller-servicer for Freddie Mac and FHLBNY, supporting a residential sold and serviced for others portfolio of $309.3MM, with weighted avg. FICO score of 739 and avg. balance of $131,000 Full product menu featuring competitive construction offerings, as well as FHA, VA, USDA and SONYMA products Residential Lending Held Portfolio $ in millions | 2.7% CAGR $589.9 $649.8 $650.2 $657.0 $663.2 $77.7 $77.4 $75.6 $75.1 $77.4$667.6 $727.2 $725.8 $732.1 $740.5 16.5% 16.3% 16.2% 15.7% 15.3% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 12/31/2022 12/31/2023 12/31/2024 12/31/2025 9/30/2026 Residential Real Estate Loans Residential Real Estate Lines Residential Loans & Lines/ Total Loans
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14 ~365 new auto dealer network in New York State ~3.5 years average duration 722 weighted avg. FICO score at origination prime lending Consumer indirect loans increased $7.9MM, or 1.0%, from 6/30/26 and decreased $59.6MM, or 7.1%, 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 NCO ratio has ranged 0.45% to 0.89% for 2008 to 2025, excluding the exceptionally low 0.14% reported in 2021; NCO ratio was 1.03% in 3Q26, 0.59% in 2Q26 and 0.91% in 3Q25 Consumer Indirect Auto $779.1MM portfolio at 9/30/26 Consumer Indirect Lending Portfolio $ in millions | (7.6%) CAGR $1,023.6 $948.8 $845.8 $807.3 $779.1 25.3% 21.3% 18.9% 17.3% 16.0% 12/31/2022 12/31/2023 12/31/2024 12/31/2025 9/30/2026 Consumer Indirect Loans Consumer Indirect Loans/ Total Loans
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$189 $148 $116 $85 $77 $954 $888 $911 $922 $958 $1,143 $1,036 $1,027 $1,007 $1,035 19.7% 16.8% 16.8% 16.1% 15.9% 7.5% 12.5% 17.5% 22.5% 27.5% 32.5% 37.5% 42.5% 47.5% 12/31/2022 12/31/2023 12/31/2024 12/31/2025 9/30/2026 Securities HTM, net Securities AFS Securities/ Total Assets 15 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 • ~4.4 years avg. duration Active approach to investment securities management to balance yield, duration and risk led the Company to complete a minor restructuring of $80MM in mortgage-based securities in 1Q26 • 4.46% yield, consistent with LQ and up 1 bp from 3Q25 Cash flows expected to be reinvested into the portfolio, as securities serve as collateral for Municipal deposit portfolio • ~$250MM principal cash flow NTM Note: The interest on tax-exempt securities is calculated on a tax-equivalent basis assuming a Federal income tax rate of 21%. 1 AFS securities shown at fair value and HTM securities shown at amortized cost as of 9/30/26 Securities Portfolio $1.03B at 9/30/26 Securities Portfolio Mix1 Investment Securities Portfolio $ in millions | (2.7%) CAGR AFS Agency MBS 37% AFS Agency CMOs 38% AFS Other 18% HTM Agency CMOs 1% HTM Agency MBS 2% HTM Municipal 3% HTM Agency Debt 1% HTM
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16 NII of $54.3MM increased $0.9MM, or 1.7%, from the LQ and $2.5MM, or 4.8%, from the year-ago quarter • LQ increase reflected impact of loan growth • YoY increase driven by a reduction in funding costs NIM was 3.70% for the current quarter, consistent with the LQ and up 5 bps from the year-ago quarter Effective repricing of deposits to help manage cost of funds, which was up 3 bps on a LQ basis and down 19 bps YoY • ~43% of loan portfolio is floating, with the majority priced off Prime and SOFR indexes Net Interest Income & Margin 3Q26 NII of $54.3MM and NIM of 3.70% Quarterly NII & NIM $ in millions Annual NII & NIM $ in millions Note: NIM is calculated on a tax-equivalent basis assuming a Federal income tax rate of 21%. 5 bps NIM YoY expansion $167.4 $165.7 $163.6 $200.0 $211.9 3.20% 2.94% 2.86% 3.53% 3.67% $0.02 $0.03 $0.03 $0.04 $0.04 $0.05 $0.05 $0.06 $0.06 $0. 0 $50.0 $100.0 $150.0 $200.0 $250.0 2022 2023 2024 2025 TTM NIM $51.8 $52.2 $52.0 $53.4 $54.3 3.65% 3.62% 3.67% 3.70% 3.70% 3.20% 3.30% 3.40% 3.50% 3.60% 3.70% 3.80% 3.90% $39 $41 $43 $45 $47 $49 $51 $53 3Q25 4Q25 1Q26 2Q26 3Q26
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17 Select Banking Services Fee Income: $3.7MM Down $0.4MM, or 9%, from 2Q26 and $0.8MM, or 18%, from 3Q25, primarily due to lower swap fees in MRQ Banking Services Fees are 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 $1.2MM was relatively flat with LQ and down $0.4MM, or 22%,from 3Q25 The following categories 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. Together these categories total a loss of $0.5MM in the MRQ. Investment Advisory Income: $3.3MM Up $0.1MM, or 2%, from LQ and $0.3MM, or 11%, YoY Primarily derived from wholly-owned RIA subsidiary, Courier Capital, LLC, with $4.00B in AUM as of 9/30/26 Branch-delivered investment advisory products and services also offered in collaboration with Principal Financial Network of the Northeast® Company Owned Life Insurance: $2.9MM Relatively flat with LQ and up $0.1M, or 3%, from the year- ago quarter 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 3Q26 noninterest income of $10.5MM made up 16% of quarterly revenue
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18 $4.00B in AUM at 9/30/26 3 RIA acquisitions since 2016 Supporting revenue diversification as the primary driver of the Company’s investment advisory income, which totaled $3.3MM in 3Q26, an increase of $0.1MM, or 2%, from LQ and $0.3MM, or 11%, YoY 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 Sarasota, FL, opened in 3Q25, 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 (NIE) was $36.8MM in MRQ, up $1.2MM, or 3%, from the LQ and $0.9MM, or 3%, from the year-ago quarter • Salaries and employee benefits expense, the largest component of NIE, increased $0.5MM, or 3%, QoQ and $1.1MM, or 6%, YoY . The LQ increase was driven by seasonally higher benefits expenses, while the YoY increase reflected hiring and annual merit increases. Efficiency ratio was 57% in 3Q256, 55% in 2Q26 and 57% in 3Q25 • Focused on effectively managing expenses as we invest in people, processes and technology to support future growth and performance Noninterest Expense 3Q26 expense was $36.8MM Quarterly Noninterest Expense $ in millions Annual Noninterest Expense $ in millions ~57% efficiency ratio in 3Q26 $35.9 $36.7 $35.6 $35.6 $36.8 3Q25 4Q25 1Q26 2Q26 3Q26 YTD '26 $108.0 $129.4 $137.2 $178.9 $142.0 $144.7 2022 2023 2024 2025 TTM
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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 Strong Asset Quality NPLs to total loans of 0.79% in 3Q26, down 3 bps from 2Q26 Select Annual Asset Quality Metrics Since 2008 Financial Crisis1 Disciplined credit culture supports consistency of asset quality metrics • Since ‘08, year-end NPAs have remained between 17 and 68 bps of total assets, while annual NCOs to avg. loans ranged from 14 to 54 bps • Thorough credit review exercise undertaken in at onset of pandemic in 2020 reinforced confidence in health of loan portfolio • Increase in NPLs and NPAs in ’23 was largely associated with two separate commercial loan relationships NCOs/ loans of 33 bps for 3Q26, compared to 11 bps in 2Q26 and 18 bps in 3Q25 Allowance for credit losses on loans to total loans ratio of 0.99% at 9/30/26, down 1 bp 6/30/26 and 4 bps from 3Q25 0.48% 0.65%0.73% 0.79% 0.32% 0.33% 1.67% 0.99% 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 2024 2025 1Q26 NPAs /Total Assets NPLs/Total Loans NCOs/Average Loans Allowance for Credit Losses on Loans/Total Loans
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21 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 ~16% 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 9/30/26 Closing Price $38.98 52-week High $42.97 52-week Low $25.61 Common Shares Outstanding 19.5MM Market Capitalization $761MM Price/LTM EPS 9.5x Price/NTM Consensus EPS 9.3x Price/Common Book Value Per Share 1.26 Float 88% Average Daily Volume (MRQ) ~145,000 Dividend Per Share (annualized MRQ) $1.28 Dividend Yield (annualized MRQ) 3.26% Exceeding well-capitalized regulatory thresholds & positioned to support growth
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Appendix 22
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• A&D: Acquisition and Development • AD&C: Acquisition, Development and Construction • AFS: Available for Sale • AUM: Assets Under Management • B: Billions • 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 • FHA: Federal Housing Administration • FHLBNY: Federal Home Loan Bank of New York • 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 • RBC: Risk-Based Capital • RIA: Registered Investment Advisor • RM: Relationship Manager • SOFR: Secured Overnight Financing Rate • SONYMA: State of New York Mortgage Agency • SMB: Small and Midsize Businesses • TTM: Trailing Twelve Months • USDA: U.S. Department of Agriculture • VA: U.S. Department of Veterans Affairs • YoY: Year-over-Year • YTD: Year-to-Date 23 Acronyms & Abbreviations Definitions of acronyms and abbreviations used within this presentation
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24 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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25 Robust Liquidity Position Supported by diverse deposit gathering capabilities and eligible collateral Available On-Balance Sheet Liquidity $ in billions $0.16 $0.17 $0.18 $0.13 $0.01 $0.16 $0.29 $0.25 $0.24 $0.20 $0.06 $0.04 $0.02 $0.05 $0.04 $0.57 $0.81 $0.85 $0.94 $0.92 $0.95 $1.31 $1.31 $1.37 $1.17 12/31/2022 12/31/2023 12/31/2024 12/31/2025 9/30/2026 Unencumbered Securities FHLBNY FRB Excess Cash FRB Discount Window
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26 Balance Sheet Providing Ample Cash Flow $1.2B+ in anticipated NTM cash flow from loan portfolio, with growth focused on commercial Select Interest Earning Assets 3Q26 Yield 3Q26 Roll Off Loan Yield 3Q26 Roll On Loan Yield Total Loans at 9/30/26 ($MMs) Commercial Real Estate Loans 6.19% 5.73% 6.50% $2,119 Commercial & Industrial Loans 6.07% 5.85% 6.24% $896 Small Business Loans2 7.26% 7.85% 7.44% $162 Residential Real Estate Loans 4.48% 4.85% 6.22% $663 Consumer Indirect Loans 6.77% 7.07% 6.80% $771 Consumer Direct Loans 8.95% 13.22% 12.89% $32 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 $1.2B+ loan cash flows anticipated over next 12 months to be reinvested in higher-yielding loans
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27 3-person team 27 years on average of in-market lending experience ~$40MM 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 has moderated 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 • $443.5MM portfolio as of 9/30/26, reflecting an increase of ~$66MM, or 17%, YoY, with an average loan size of ~$4.5MM • ~$40MM of 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 $33MM as of 9/30/26 Mid-Atlantic CRE: Overview Total loans of $443.5MM at 9/30/26
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28 1 Large floor plate office refers to more than 150Msf/floor Mid-Atlantic CRE: Exposure Mix & Appetite Mid-Atlantic CRE Exposure Mix $571MM at 9/30/26 Growth Opportunities • Flex/warehouse • Residential A&D and/or ADC loans • Retail strip plazas • Medical office • Multifamily construction Limited Appetite • Properties in Baltimore/ Washington, DC CBDs • Large floor plate office1 • Big box retail • Hotels • Single tenant buildings • Suburban multifamily Total exposure of $571MM at 9/30/26 Home Builder 2%Industrial 6% Land Development 19% Multifamily 23% Other 5% Retail Building 9% Vacant Land 3% Medical 11% Flex 14% Class B 4% Class A 4% Office 33%
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29 Source: Company filings 1 Tangible common equity divided by common shares outstanding Non-GAAP Reconciliations Tangible Common Book Value Per Share 3Q26 2025 2024 2023 Computation of ending tangible common equity: Common shareholders' equity $601,710 $611,569 $551,699 $437,504 Less: Goodwill and other intangible assets, net 60,055 60,343 60,758 72,504 Tangible common equity $541,655 $551,226 $490,941 $365,000 Common shares outstanding 19,521 19,797 20,077 15,407 Tangible common book value per share1 $27.75 $27.84 $24.45 $23.69 In addition to results presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this presentation contains certain non- GAAP financial measures. The Company believes that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, performance trends and financial position. Our management uses these measures for internal planning and forecasting purposes and we believe that our presentation and discussion, together with the accompanying reconciliations, allows investors, security analysts and other interested parties to view our performance and the factors and trends affecting our business in a manner similar to management. These non-GAAP measures should not be considered a substitute for GAAP measures and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure to evaluate the Company. Non-GAAP financial measures have inherent limitations, are not uniformly applied and are not audited. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names.
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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 30 Kate Croft Director of IR & Corporate Communications Jack Plants Chief Financial Officer & Corporate Treasurer