Financial Institutions, Inc. Announces Second Quarter Earnings

• Press Release
• Source: Financial Institutions, Inc.
• On 8:00 am EDT, Thursday July 23, 2009

WARSAW, N.Y., July 23, 2009 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (Nasdaq:FISI - News; the "Company"), the parent company of Five Star Bank, today announced financial results for the second quarter ended June 30, 2009. Net income for the Company was $2.6 million or $0.16 per diluted share for the second quarter of 2009, compared with $1.6 million or $0.12 per diluted share for the second quarter of 2008. For the first six months of 2009 net income was $5.6 million or $0.35 per diluted share, compared with $5.4 million or $0.43 per diluted share for the same period last year.

Related Quotes

Symbol	Price	Change
FISI	10.88	-0.47

{"s" : "fisi","k" : "c10,l10,p20,t10","o" : "","j" : ""}

 Highlights:
 * Net interest income for the second quarter of 2009 was
   $17.6 million, an increase of $1.5 million or 9% over second
   quarter of 2008.  For the first six months of 2009 net interest
   income was $35.0 million, an increase of $3.7 million or 12% over
   the first six months of 2008.  The increase is reflective of growth
   in the loan portfolio coupled with higher net interest margin.
 * Total loans were $1.219 billion at June 30, 2009, an increase of
   $207.8 million or 21% from June 30, 2008.
   -- Commercial loans were $523.7 million at June 30, 2009, an
      increase of $86.8 million or 20% from one year ago, and an
      increase of $40.4 million or 8% since March 31, 2009.
   -- Consumer loans were $694.9 million at June 30, 2009, an increase
      of $121.0 million or 21% from one year ago, and an increase of
      $20.2 million or 3% since March 31, 2009.
 * Net interest margin was 4.01% for the second quarter of 2009, an
   increase of 7 basis points from the second quarter of 2008.  For
   the six months ended June 30, 2009 net interest margin was 4.05%,
   an increase of 22 basis points from the same period last year.
 * "Well capitalized" position maintained with total shareholders'
   equity of $192.5 million, a leverage capital ratio of 7.84% and a
   total risk-based capital ratio of 11.94%.
 * Provision for loan losses for the second quarter of 2009 was
   $2.1 million and net charge-offs were $1.1 million. Provision for
   loan losses of $4.0 million for the first six months of 2009
   exceeded net charge-offs of $2.1 million resulting in a
   $1.9 million increase in the allowance for loan losses to
   $20.6 million or 1.69% of total loans.
 * The second quarter of 2009 includes other-than-temporary impairment
   charges of $1.7 million on selected investment securities that were
   partially offset by $1.2 million in net gain on investment
   securities.
 * The second quarter of 2009 includes a $923 thousand FDIC insurance
   special assessment charge.

"We continue to build momentum in our core community banking business and have followed-up on our strong start to 2009 with a solid second quarter," said Peter G. Humphrey, President and Chief Executive Officer of the Company. "Our business development success has been outstanding as both commercial and consumer loans are up approximately 20% from a year ago. These results are particularly gratifying in light of the current economic environment. As loans and deposits have increased over the past several quarters, our capital, liquidity and asset quality have remained strong. These factors, along with higher revenues and our discipline in containing the costs that we can control have positively impacted our core operations."

Net Interest Income

Net interest income for the second quarter of 2009 was $17.6 million, an increase of $1.5 million or 9% over the second quarter of 2008. For the first six months of 2009 net interest income was $35.0 million, an increase of $3.7 million or 12% over the first six months of 2008. Net interest margin was 4.01% for the second quarter of 2009, an increase of 7 basis points from the second quarter of 2008. For the six months ended June 30, 2009 net interest margin was 4.05%, an increase of 22 basis points from the same period last year. An improved mix of earning assets, primarily driven by growth in the loan portfolio, coupled with a significant decline in funding costs were the primary factors driving the increase in net interest income and margin.

Noninterest Income

Noninterest income for the second quarter of 2009 was $4.5 million, compared with $932 thousand for the second quarter of 2008. For the first six months of 2009 noninterest income was $9.2 million, an increase of $3.5 million over the first six months of 2008. Other-than-temporary impairment charges included in noninterest income amounted to $1.7 million on privately issued whole loan collateralized mortgage obligations ("CMOs") in the second quarter of 2009 and $3.8 million on privately issued whole loan CMOs and pooled trust preferred securities in the second quarter of 2008. The second quarter of 2009 also reflects a $1.2 million net gain on sale of investment securities, comprised of $2.6 million in gross gains on securities issued by U.S. government sponsored agencies and $1.4 million in gross losses on privately issued whole loan CMOs.

Noninterest Expense

Noninterest expense for the second quarter of 2009 was $16.4 million, an increase of $2.1 million from the second quarter of 2008. For the first six months of 2009 noninterest expense was $32.5 million, an increase of $3.9 million over the first six months of 2008. The most significant cause for the increase was a $2.1 million increase in FDIC insurance expense, including a $923 thousand special assessment incurred during the second quarter of 2009, a result of changes in FDIC deposit insurance coverage and changes in premiums mandated by the FDIC to replenish deposit insurance reserves. Noninterest expense for 2009 also reflects higher incentive compensation and pension benefit costs, increases in occupancy and equipment costs associated with the opening of two new branches in the suburban Rochester area during 2008, and increases in professional services expense.

Balance Sheet

Total assets at June 30, 2009 were $1.997 billion, up $101.3 million from $1.895 billion at June 30, 2008. Total loans were $1.219 billion at June 30, 2009, an increase of $207.8 million from $1.011 billion at June 30, 2008. Total deposits increased $104.5 million to $1.700 billion at June 30, 2009, versus $1.596 billion at June 30, 2008. The majority of the increase in deposits was attributed to an increase in nonpublic certificates of deposit.

Asset Quality and Capital Ratios

Net charge-offs increased by $262 thousand from the second quarter of 2008 to $1.1 million, or 0.38% of average loans and non-performing loans totaled $9.5 million, or 0.78% of total loans. For the six months ended June 30, 2009 net charge-offs increased in comparison to the same period last year by $572 thousand to $2.1 million, or 0.37% of average loans. The provision for loan losses was $2.1 million for the quarter, compared with $1.4 million in the same quarter a year ago. For the six months ended June 30, 2009 the provision for loan losses totaled $4.0 million, compared with $2.1 million in the same period last year. The allowance for loan losses was $20.6 million or 1.69% of total loans at June 30, 2009, compared with $16.0 million or 1.59% of total loans at June 30, 2008. At June 30, 2009 non-performing assets totaled $13.7 million, which included $3.2 million in non-performing investment securities on which interest payments are being deferred.

At June 30, 2009, all of the Company's regulatory capital ratios exceeded the guidelines required to be considered a "well capitalized" institution as established by the Company's primary banking regulators. Well capitalized levels are considered to be at least 5.00% for the leverage ratio and 10.00% for the total risk-based capital ratio. At June 30, 2009, the Company's leverage ratio was 7.84% and the total risk-based capital ratio was 11.94%.

About Financial Institutions, Inc.

With approximately $2.0 billion in assets, Financial Institutions, Inc. provides diversified financial services through its subsidiaries, Five Star Bank and Five Star Investment Services, Inc. Five Star Bank provides a wide range of consumer and commercial banking services to individuals, municipalities and businesses through a network of over 50 offices and more than 70 ATMs in Western and Central New York State. Five Star Investment Services provides brokerage and insurance products and services within the same New York State markets. The consolidated entity employs over 600 individuals. The Company's stock is listed on the Nasdaq Global Select Market under the symbol FISI. Additional information is available at the Company's website: www.fiiwarsaw.com.

Safe Harbor Statement

This press release may contain forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current beliefs or projections. There are a number of important factors that could affect the Company's forward-looking statements which include its ability to implement its strategic plan, its ability to redeploy investment assets into loan assets, the attitudes and preferences of its customers, the competitive environment, fluctuations in the fair value of securities in the investment portfolio, and general economic and credit market conditions nationally and regionally, The Company undertakes no obligation to revise these statements following the date of this press release.

 FINANCIAL INSTITUTIONS, INC.
 Summary of Quarterly Financial Data (Unaudited)

                         2009                       2008
                 --------------------  -------------------------------
                 June 30,   March 31,   Dec 31,   Sept 30,    June 30,
                 ---------  ---------  ---------  ---------  ---------

 SELECTED BALANCE SHEET DATA
 (Amounts in thousands)

 Cash and cash
  equivalents:
  Cash and
   due from
   banks        $   41,405     48,073     34,528     54,105     60,640
  Federal funds
   sold and
   interest
   -bearing
   deposits         39,910     74,616     20,659     22,599      2,409
                 ---------  ---------  ---------  ---------  ---------
   Total cash
    and cash
    equivalents     81,315    122,689     55,187     76,704     63,049

 Investment
  securities:
  Available
   for sale        498,561    553,710    547,506    607,357    669,752
  Held-to
   -maturity        47,465     60,675     58,532     64,434     56,508
                 ---------  ---------  ---------  ---------  ---------
   Total
    investment
    securities     546,026    614,385    606,038    671,791    726,260

 Loans held
  for sale           3,005      2,290      1,013      1,008        926

 Loans:
  Commercial       198,608    174,505    158,543    156,809    140,745
  Commercial
   real estate     282,048    266,176    262,234    248,267    250,872
  Agriculture       42,997     42,524     44,706     46,490     45,231
  Residential
   real estate     149,926    170,834    177,683    173,893    172,396
  Consumer
   indirect        319,735    283,465    255,054    227,971    177,967
  Consumer direct
   and home
   equity          225,258    220,440    222,859    224,693    223,538
                 ---------  ---------  ---------  ---------  ---------
   Total loans   1,218,572  1,157,944  1,121,079  1,078,123  1,010,749
  Allowance for
   loan losses      20,614     19,657     18,749     17,420     16,038
                 ---------  ---------  ---------  ---------  ---------
   Total loans,
    net          1,197,958  1,138,287  1,102,330  1,060,703    994,711

 Total interest
  -earning
  assets         1,802,489  1,843,522  1,743,141  1,789,499  1,749,808
 Goodwill           37,369     37,369     37,369     37,369     37,369
 Total assets    1,996,724  2,030,429  1,916,919  1,945,819  1,895,448

 Deposits:
  Noninterest
   -bearing
   demand          292,825    279,284    292,586    293,027    288,258
  Interest
   -bearing
   demand          357,443    392,353    344,616    376,098    338,290
  Savings and
   money market    366,373    396,644    348,594    383,456    372,317
  Certificates
   of deposit      683,619    668,999    647,467    607,833    596,890
                 ---------  ---------  ---------  ---------  ---------
   Total
    deposits     1,700,260  1,737,280  1,633,263  1,660,414  1,595,755

 Borrowings         79,977     78,761     70,820    114,684     89,465
 Total interest
  -bearing
  liabilities    1,487,412  1,536,757  1,411,497  1,482,071  1,396,962
 Shareholders'
  equity           192,455    191,676    190,300    152,770    188,998
 Common
  shareholders'
  equity (1)       139,213    138,519    137,226    135,195    171,417
 Tangible common
  shareholders'
  equity (2)       101,712    100,946     99,577     97,468    133,614
 Securities
  available for
  sale - fair
  value
  adjustment
  included in
  shareholders'
  equity, net
  of tax        $    3,081      3,503      3,463     (9,797)    (5,803)

 Common shares
  outstanding       10,821     10,805     10,798     10,806     10,913
 Treasury shares       527        543        550        542        435

 CAPITAL RATIOS

 Leverage ratio      7.84%       7.96       8.05       7.37       9.17
 Tier 1
  risk-based
  capital           10.69%      11.23      11.83      11.10      14.58
 Total risk
  based capital     11.94%      12.49      13.08      12.35      15.83
 Common equity
  to assets          6.97%       6.82       7.16       6.95       9.04
 Tangible common
  equity to
  tangible
  assets (2)         5.19%       5.07       5.30       5.11       7.19

 Common book
  value
  per share     $    12.86      12.82      12.71      12.51      15.71
 Tangible common
  book value
  per share (2) $     9.40       9.34       9.22       9.02      12.24


 FINANCIAL INSTITUTIONS, INC.
 Summary of Quarterly Financial Data (Unaudited)

                                          Quarterly Trends
                                --------------------------------------
               Six months ended      2009                2008
                   June 30,     --------------  ----------------------
                --------------  Second   First  Fourth   Third  Second
                 2009    2008   Quarter Quarter Quarter Quarter Quarter
                ------  ------  ------  ------  ------  ------  ------

 SELECTED INCOME STATEMENT DATA
 (Dollar amounts in thousands)

 Interest
  income       $46,395  49,808  23,302  23,093  24,582  24,558  24,536
 Interest
  expense       11,423  18,536   5,657   5,766   7,269   7,812   8,349
                ------  ------  ------  ------  ------  ------  ------
   Net interest
    income      34,972  31,272  17,645  17,327  17,313  16,746  16,187
 Provision for
  loan losses    3,994   2,074   2,088   1,906   2,586   1,891   1,358
                ------  ------  ------  ------  ------  ------  ------
   Net interest
    income after
    provision
    for loan
    losses      30,978  29,198  15,557  15,421  14,727  14,855  14,829
                ------  ------  ------  ------  ------  ------  ------

 Noninterest
  income
  (loss):
  Service
   charges on
   deposits      4,837   5,018   2,517   2,320   2,685   2,794   2,518
  ATM and
   debit card    1,719   1,608     908     811     853     852     856
  Loan
   servicing       727     418     470     257     134     112     232
  Company owned
   life
   insurance       535      46     275     260     294     223      27
  Broker-dealer
   fees and
   commissions     503     860     234     269     235     363     401
  Net gain on
   sale of loans
   held for sale   416     256     246     170      35      48      92
  Net gain on
   investment
   securities    1,207     220   1,153      54      56      12      47
  Impairment
   charge on
   investment
   securities   (1,783) (3,791) (1,733)    (50)(29,870)(34,554) (3,791)
  Net gain on
   sale of other
   assets          158     152      --     158      51     102     115
  Other            887     889     445     442     421     700     435
                ------  ------  ------  ------  ------  ------  ------
    Total
     noninterest
     income
     (loss)      9,206   5,676   4,515   4,691 (25,106)(29,348)    932
                ------  ------  ------  ------  ------  ------  ------

 Noninterest
  expense:
  Salaries and
   employee
   benefits     17,168  16,605   8,437   8,731   7,811   7,021   8,169
  Occupancy and
   equipment     5,559   5,147   2,683   2,876   2,713   2,642   2,567
  FDIC
   assessments   2,273     133   1,593     680     305     236      88
  Professional
   services      1,440   1,037     591     849     637     467     480
  Computer and
   data
   processing    1,179   1,161     562     617     669     603     580
  Supplies and
   postage         941     878     476     465     447     475     437
  Advertising
   and
   promotions      423     433     249     174     548     472     283
  Other          3,535   3,264   1,849   1,686   2,264   1,493   1,781
                ------  ------  ------  ------  ------  ------  ------
   Total
    noninterest
    expense     32,518  28,658  16,440  16,078  15,394  13,409  14,385
                ------  ------  ------  ------  ------  ------  ------

   Income (loss)
    before
    income
    taxes        7,666   6,216   3,632   4,034 (25,773)(27,902)  1,376
 Income tax
  expense
  (benefit)      2,071     806   1,004   1,067 (22,631)    524    (255)
                ------  ------  ------  ------  ------  ------  ------
   Net income
    (loss)     $ 5,595   5,410   2,628   2,967  (3,142)(28,426)  1,631
                ======  ======  ======  ======  ======  ======  ======

 Preferred
  stock
  dividends      1,843     741     925     918     426     371     370
                ------  ------  ------  ------  ------  ------  ------
   Net income
    (loss)
    applicable
    to common
    share
    -holders   $ 3,752   4,669   1,703   2,049  (3,568)(28,797)  1,261
                ======  ======  ======  ======  ======  ======  ======


 STOCK AND RELATED PER SHARE DATA

 Net income
  (loss) per
  share
   - basic     $  0.35    0.43    0.16    0.19   (0.33)  (2.68)   0.12
 Net income
  (loss) per
  share
  - diluted    $  0.35    0.43    0.16    0.19   (0.33)  (2.68)   0.12
 Cash dividends
  declared on
  common stock $  0.20    0.29    0.10    0.10    0.10    0.15    0.15

 Common dividend
  payout
  ratio (3)     57.14%   67.44   62.50   52.63      NA      NA  125.00
 Dividend yield
  (annualized)   2.95%    3.63    2.94    5.32    2.77    2.98    3.76

 Stock price
  (Nasdaq:FISI - News):
  High         $ 15.99   20.78   15.99   14.95   20.27   22.50   20.00
  Low          $  3.27   15.10    6.98    3.27   10.06   14.82   15.25
  Close        $ 13.66   16.06   13.66    7.62   14.35   20.01   16.06


 FINANCIAL INSTITUTIONS, INC.
 Summary of Quarterly Financial Data (Unaudited)

                                                    Six months ended
                                                        June 30,
                                                  --------------------
                                                    2009       2008
                                                  ---------  ---------

 SELECTED AVERAGE BALANCES
 (Amounts in thousands)

 Federal funds sold and interest-bearing
  deposits                                       $   46,376     38,270
 Investment securities (4)                          597,449    749,236
 Loans (5):
  Commercial                                        174,761    145,360
  Commercial real estate                            272,030    244,960
  Agriculture                                        42,528     44,938
  Residential real estate                           171,462    168,304
  Consumer indirect                                 284,329    147,242
  Consumer direct and home equity                   221,576    226,470
                                                  ---------  ---------
   Total loans                                    1,166,686    977,274
 Total interest-earning assets                    1,813,035  1,765,718
 Goodwill                                            37,369     37,369
 Total assets                                     1,988,185  1,894,194

 Interest-bearing liabilities:
  Interest-bearing demand                           363,745    343,783
  Savings and money market                          382,104    370,112
  Certificates of deposit                           672,153    624,774
  Borrowings                                         75,084     71,619
                                                  ---------  ---------
   Total interest-bearing liabilities             1,493,086  1,410,288

 Noninterest-bearing demand deposits                283,935    271,446
 Total deposits                                   1,701,937  1,610,115
 Total liabilities                                1,796,266  1,697,756
 Shareholders' equity                               191,919    196,438
 Common equity (1)                                  138,769    178,857
 Tangible common equity (2)                      $  101,187    140,969
 Common shares outstanding:
  Basic                                              10,720     10,909
  Diluted                                            10,756     10,951

 SELECTED AVERAGE YIELDS/
 RATES AND RATIOS
 (Tax equivalent basis)

 Federal funds sold and
  interest-bearing deposits                           0.23%       2.65
 Investment securities                                4.35%       4.98
 Loans                                                6.02%       6.80
 Total interest-earning assets                        5.32%       5.94
 Interest-bearing demand                              0.23%       1.10
 Savings and money market                             0.27%       1.24
 Certificates of deposit                              2.69%       4.02
 Borrowings                                           4.05%       5.26
 Total interest-bearing liabilities                   1.54%       2.64
 Net interest rate spread                             3.78%       3.30
 Net interest rate margin                             4.05%       3.83

 Net income (loss) (annualized returns on):
  Average assets                                      0.57%       0.57
  Average equity                                      5.88%       5.54
  Average common equity (6)                           5.45%       4.35
  Average tangible common equity (7)                  7.48%       5.52
 Efficiency ratio (8)                                69.60%      65.88


                                    Quarterly Trends
                 -----------------------------------------------------
                         2009                        2008
                 --------------------  -------------------------------
                   Second     First      Fourth     Third      Second
                  Quarter    Quarter    Quarter    Quarter    Quarter
                 ---------  ---------  ---------  ---------  ---------

 SELECTED AVERAGE BALANCES
 (Amounts in thousands)

 Federal funds
  sold and
  interest
  -bearing
  deposits      $   49,105     43,618     17,089     12,897     35,733
 Investment
  securities (4)   593,740    601,199    666,917    721,419    744,648
 Loans (5):
  Commercial       183,733    165,688    155,814    147,350    146,778
  Commercial
   real estate     275,275    268,749    255,882    249,769    248,290
  Agriculture       42,368     42,690     44,299     45,965     44,504
  Residential
   real estate     168,300    174,659    175,200    173,175    169,925
  Consumer
   indirect        301,112    267,360    244,891    200,586    156,728
  Consumer
   direct and
   home equity     222,122    221,024    222,235    222,241    223,906
                 ---------  ---------  ---------  ---------  ---------
   Total loans   1,192,910  1,140,170  1,098,321  1,039,086    990,131
 Total interest
  -earning
  assets         1,838,320  1,787,470  1,782,938  1,774,201  1,771,801
 Goodwill           37,369     37,369     37,369     37,369     37,369
 Total assets    2,012,337  1,963,764  1,924,174  1,908,577  1,897,514

 Interest
  -bearing
  liabilities:
  Interest
   -bearing
   demand          366,985    360,470    360,970    342,188    342,463
  Savings and
   money market    392,355    371,738    373,034    366,449    378,799
  Certificates
   of deposit      676,221    668,041    629,111    591,025    615,950
  Borrowings        78,763     71,363    105,164    118,023     73,902
                 ---------  ---------  ---------  ---------  ---------
   Total
    interest
    -bearing
    liabilities  1,514,324  1,471,612  1,468,279  1,417,685  1,411,114

 Noninterest
  -bearing
  demand
  deposits         286,155    281,690    284,643    294,136    275,570
 Total deposits  1,721,716  1,681,939  1,647,758  1,593,798  1,612,782
 Total
  liabilities    1,819,891  1,772,377  1,766,239  1,727,473  1,702,211
 Shareholders'
  equity           192,446    191,387    157,935    181,104    195,303
 Common
  equity (1)       139,253    138,281    136,887    163,527    177,722
 Tangible common
  equity (2)    $  101,709    100,660     99,191    125,754    139,872
 Common shares
  outstanding:
  Basic             10,723     10,716     10,717     10,738     10,879
  Diluted           10,765     10,747     10,717     10,738     10,928


 SELECTED AVERAGE YIELDS/
 RATES AND RATIOS
 (Tax equivalent basis)

 Federal funds
  sold and
  interest
  -bearing
  deposits            0.21%      0.25       1.09       2.10       2.18
 Investment
  securities          4.16%      4.54       4.72       4.66       4.92
 Loans                5.99%      6.04       6.35       6.52       6.65
 Total interest
  -earning assets     5.24%      5.39       5.69       5.73       5.83
 Interest
  -bearing demand     0.20%      0.25       0.69       0.86       0.89
 Savings and
  money market        0.27%      0.27       0.68       0.93       1.02
 Certificates
  of deposit          2.63%      2.76       3.09       3.33       3.72
 Borrowings           3.91%      4.21       4.23       4.30       5.05
 Total interest
  -bearing
  liabilities         1.50%      1.59       1.97       2.19       2.38
 Net interest
  rate spread         3.74%      3.80       3.72       3.54       3.45
 Net interest
  rate margin         4.01%      4.09       4.07       3.98       3.94

 Net income
  (loss)
  (annualized
  returns on):
  Average assets      0.52%      0.61      (0.65)     (5.93)      0.35
  Average equity      5.48%      6.29      (7.91)    (62.44)      3.36
  Average common
   equity (6)         4.91%      6.01     (10.37)    (70.06)      2.85
  Average
   tangible
   common
   equity (7)         6.72%      8.25     (14.31)    (91.10)      3.63
 Efficiency
  ratio (8)          69.49%     69.72      66.65      58.10      64.21


 FINANCIAL INSTITUTIONS, INC.
 Summary of Quarterly Financial Data (Unaudited)

                                          Quarterly Trends
                                --------------------------------------
               Six months ended      2009                2008
                   June 30,     --------------  ----------------------
                --------------  Second   First  Fourth   Third  Second
                 2009    2008   Quarter Quarter Quarter Quarter Quarter
                ------  ------  ------  ------  ------  ------  ------

 ASSET QUALITY DATA
 (Dollar amounts in thousands)

 Nonaccrual
  loans        $ 9,496   6,254   9,496   8,826   8,189   7,609   6,254
 Accruing loans
  past due 90
  days or more       2       1       2     301       7      32       1
                ------  ------  ------  ------  ------  ------  ------
  Total non
   -performing
   loans         9,498   6,255   9,498   9,127   8,196   7,641   6,255
 Foreclosed
  assets         1,046   1,235   1,046     877   1,007   1,009   1,235
 Non-performing
  investment
  securities     3,175      --   3,175   3,396      49      --      --
                ------  ------  ------  ------  ------  ------  ------
  Total non
   -performing
   assets      $13,719   7,490  13,719  13,400   9,252   8,650   7,490
                ======  ======  ======  ======  ======  ======  ======


 Net loan
  charge-offs  $ 2,129   1,557   1,131     998   1,257     509     869
 Net
  charge-offs
  to average
  loans
  (annualized)    0.37%   0.32    0.38    0.35    0.46    0.20    0.35
 Total non
  -performing
  loans to
  total loans     0.78%   0.62    0.78    0.79    0.73    0.71    0.62
 Total non
  -performing
  assets to
  total assets    0.69%   0.40    0.69    0.66    0.48    0.44    0.40
 Allowance for
  loan losses
  to total
  loans           1.69%   1.59    1.69    1.70    1.67    1.62    1.59
 Allowance for
  loan losses
  to non
  -performing
  loans            217%    256     217     215     229     228     256


 (1)  Excludes preferred shareholders' equity.
 (2)  Excludes preferred shareholders' equity, goodwill and other
      intangible assets.
 (3)  Common dividend payout ratio equals dividends declared during
      the period divided by earnings per share for the equivalent
      period.  There is no ratio shown for periods where the Company
      both declares a dividend and incurs a loss during the period
      because the ratio would result in a negative payout since the
      dividend declared (paid out) will always be greater than 100% of
      earnings.
 (4)  Average investment securities shown at adjusted amortized cost.
 (5)  Includes nonaccrual loans.
 (6)  Net income available to common shareholders divided by average
      common equity.
 (7)  Net income available to common shareholders divided by average
      tangible equity.
 (8)  Efficiency ratio equals noninterest expense less other real
      estate expense and amortization of intangible assets as a
      percentage of net revenue, defined as the sum of tax-equivalent
      net interest income and noninterest income before net gains and
      impairment charges on investment securities.

Financial Institutions, Inc.
Ronald A. Miller, Executive VP & CFO
585.786.1102
ramiller@fiiwarsaw.com