Key Highlights

  • Net income was $20.0 million, or $0.99 per diluted share, flat in EPS from a year ago.
  • Net interest income reached a record $54.3 million.
  • Net interest Margin was 3.70%, up 5 basis points from a year ago.
  • Total loans grew 2.2% on the quarter to $4.86 billion.
  • Total deposits grew 3.3% on the quarter to $5.47 billion.

Earnings steady at $0.99 per share

Financial Institutions (NASDAQ:FISI), based in Warsaw, New York, is a financial Holding Company with about $6.5 billion in assets. Its Five Star Bank unit serves customers across Western and Central New York, while Courier Capital provides Investment management services. The company reported third quarter 2026 results on October 29, 2026.

Net income was $20.0 million, versus $21.2 million in the second quarter and $20.5 million a year earlier. Diluted EPS was $0.99, compared with $1.04 in the second quarter and $0.99 a year ago. Return on average Assets was 1.26%, return on average Equity was 12.32% and return on average tangible common equity was 13.75%.

Those return measures eased from 1.32%, 13.31% and 14.98% a year earlier, so profitability slipped slightly even as Balance Sheet growth continued.

Record net interest income

Net interest income reached a new quarterly high of $54.3 million, up nearly 5% from the prior year. Net interest margin was 3.70%, stable with the linked quarter and up 5 basis points year over year.

CFO W. Jack Plants II said performance benefited from growth in average earning assets and effective balance sheet management. The efficiency ratio was 56.84%, compared with 55.33% in the second quarter and 56.78% a year ago, and the company noted it stayed below 57%.

Investment advisory income, the leading contributor to non-interest income, rose 1.7% from the linked quarter and 10.6% from a year earlier. Total non-interest income was $10.5 million, down from $12.1 million a year earlier.

Loans and deposits grow

Total loans grew 2.2% from the end of the linked quarter and 5.8% from September 30, 2025, to $4.86 billion, driven by strong commercial lending. CEO Martin Birmingham said the commercial Franchise was the primary driver of Loan growth, supported by consumer indirect and residential Mortgage lending.

Total deposits rose 3.3% on the quarter and 2.2% year over year to $5.47 billion, with growth across all categories and seasonal support from public deposits.

On a calculated basis, loans grew about $102.9 million on the quarter while deposits grew about $175.5 million, so deposit growth exceeded loan growth.

Credit costs and capital position

Net charge-offs were 0.33% of average loans on an annualized basis, up from 0.11% in the second quarter and 0.18% a year ago, which Mr. Birmingham said remained within full-year guidance. Non-Performing Loans were $38.5 million, or 0.79% of total loans, down 3 basis points from the linked quarter.

The common equity Tier 1 ratio was 11.36% and the tangible common equity ratio was 8.40%. Shareholders' equity was $619.0 million, down from $643.4 million at June 30, 2026, which the company attributed to unrealized securities losses and share repurchases.

The quarterly Dividend was $0.32 per common share, unchanged from the second quarter and up $0.01 from a year earlier.

Share repurchases and watch points

The company repurchased 185,833 shares at an average price of $40.92 during the quarter, about $7.6 million on a calculated basis. Management said its capital position enabled the repurchases.

Readers following the name will likely watch whether the efficiency ratio stays under 57%, how the margin holds and whether commercial loan growth continues at a pace above deposit growth.