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Financial Institutions Inc (FISI)
NASDAQ:FISI
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Financial Institutions
(NASDAQ:FISI)
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Rating:59Neutral
Price Target:
$33.00
▲(6.93% Upside)
The score is held down primarily by weak and volatile reported financial performance (sharp revenue/profitability pressure), despite a solid capital structure. Offsetting factors include improving fundamentals and upbeat guidance from the earnings call, supportive recent corporate actions (refinancing and buybacks), and a modestly positive technical trend. Valuation is mixed: a strong yield helps, but the negative P/E reflects earnings instability.
Positive Factors
Loan and Deposit Growth
The growth in loans and deposits indicates strong demand for FISI's banking services, suggesting a robust market position and potential for future revenue expansion.
Improved Net Interest Margin
An improved net interest margin enhances profitability by increasing the spread between interest earned and interest paid, supporting long-term financial health.
Capital Management
This strategic capital management move strengthens FISI's balance sheet, improving its capital ratios and financial stability, which is crucial for long-term growth.
Negative Factors
Declining Revenue Growth
A persistent decline in revenue growth indicates potential operational challenges and market pressures, which could hinder future profitability and expansion.
Negative Margins
Sustained negative margins reflect operational inefficiencies and profitability challenges, posing risks to financial health and long-term viability.
Elevated Noninterest Expense
High noninterest expenses can erode profitability and limit the company's ability to invest in growth initiatives, impacting long-term financial performance.
Financial Institutions (FISI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$683.43M
Dividend Yield3.89%
Average Volume (3M)141.67K
Price to Earnings (P/E)9.4
Beta (1Y)0.95
Revenue Growth-28.00%
EPS Growth-174.60%
CountryUS
Employees598
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.96
Shares Outstanding20,130,547
10 Day Avg. Volume155,015
30 Day Avg. Volume141,667
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)0.75
Price to Sales (P/S)1.62
P/FCF Ratio5.93
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue2.93
Enterprise Value/Gross Profit6.83
Enterprise Value/Ebitda-19.44
Forecast
1Y Price Target
$37.00Price Target Upside19.90% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Financial Institutions Business Overview & Revenue Model
Company DescriptionFinancial Institutions, Inc. (FISI) operates as a diversified financial services company, primarily focusing on community banking, insurance, and asset management. Headquartered in the United States, FISI serves a broad spectrum of clients, including individuals, businesses, and institutions, by offering a range of core products such as checking and savings accounts, loans, investment management, and insurance products. The company aims to provide personalized financial solutions while maintaining a strong commitment to customer service and community engagement.
How the Company Makes MoneyFISI generates revenue through multiple streams, including interest income from loans and mortgages, fees from deposit accounts, and commissions from investment and insurance products. A significant portion of its earnings comes from the interest spread between the interest it pays on deposits and the interest it earns from its loan portfolio. Additionally, FISI earns income from service fees charged on various banking services and transaction fees related to investment management. The company also benefits from partnerships with insurance providers and investment firms, which enhance its product offerings and provide additional revenue through referral fees and commissions. These diverse revenue sources help FISI maintain a stable financial position and support its growth initiatives.
Financial Institutions Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presented a majority of positive operating and financial developments — solid profitability, year-over-year margin expansion, loan and AUM growth, disciplined capital actions, and constructive 2026 guidance (higher ROA target, NIM expansion and efficiency goals). Offsetting items include short-term margin sensitivity to rate/timing effects, intentional runoff in the indirect auto portfolio, deposit seasonality and BaaS wind-down, and expected higher personnel/medical costs in 2026. On balance, the company’s fundamentals, improved capital position, and upward guidance outweigh the headwinds.Q4-2025 Updates
Positive Updates
Strong Profitability
Net income available to common shareholders of $19.6 million in Q4 (EPS $0.96) and $73.4 million for FY2025 (EPS $3.61). Return on average assets of 120 bps and return on average equity of 12.38%, both above annual guidance.
Improved Net Interest Income and Margin
Net interest income of $200 million for the year; quarterly margin of 3.62% and full-year NIM of 3.53%. Quarterly margin expanded 71 bps year-over-year, and management targets mid-3.60s NIM for 2026.
Loan Growth
Total loans up 1.5% Q/Q and 4% YoY to $4.66 billion. Commercial business loans rose 11% YoY; commercial mortgage loans increased ~4% Q/Q and 6.5% YoY. Residential lending grew 1% Q/Q and 1% YoY.
Assets Under Advisement and Advisory Income Growth
AUM for Career Capital reached $3.6 billion, up $500.4 million or 16% YoY. Investment advisory income of $11.7 million, an increase of ~$1 million (over 9%) from 2024.
Capital Actions and Favorable Debt Issuance
Repurchased 1.7% of outstanding shares (~$11 million) in Q4 and completed an $80 million subordinated debt offering with a 5-year fixed rate of 6.5%; new notes received a BBB- rating from Kroll, reflecting improved profitability and capital position.
Deposit Franchise Resilience
Total deposits of $5.21 billion, up 2% YoY (despite seasonal Q/Q decline of 2.8%). Reciprocal deposit business strengthened, with >20% of customers and ~30% of balances having 10+ year relationships and average relationship tenure of five years.
Credit & Loss Reserves
Net charge-offs for 2025 were 24 bps (below the conservative budgeted 25–35 bps). Allowance for credit losses (ACL) to total loans was 102 bps, aligned with the company's credit risk framework.
Recurring Fee Income Strength
Full-year noninterest income of $45 million supported by COLI ($11.4 million for 2025) and strong advisory/swap fee performance: Q4 swap fee income of $1.1 million (up ~31% Q/Q) and full-year swap fees of $2.5 million (up $1.8 million YoY).
Negative Updates
Quarterly Margin Compression and Rate Sensitivity
Quarterly NIM was down 3 bps Q/Q and average loan yields decreased ~9 bps vs Q3 due in part to timing of the October rate cut and sub-debt activity. Management notes margin guidance excludes potential future rate cuts.
Consumer Indirect Loan Runoff
Consumer indirect loans declined 3.7% Q/Q and 4.5% YoY to $807 million. Company is intentionally allowing runoff to outpace originations and expects modest drift lower in 2026.
Quarterly Deposit Outflows and BaaS Wind-Down
Period-end deposits declined 2.8% from 9/30/25 due to seasonal public deposit outflows and lower broker deposits. Ongoing wind-down of Banking-as-a-Service (BaaS) removed ~$100 million of associated deposit balances (only ~$7 million remained at year-end expected to roll off in Q1).
Expense Pressures and Higher Medical Claims
Noninterest expense rose to $36.7 million in Q4 from $35.9 million in Q3 (due in part to performance-related incentive accruals). Full-year salaries and benefits increased driven by higher claims activity in the self-funded medical plan; management expects a higher run rate and mid-single-digit increase in salaries/benefits in 2026.
Capital Constraint on Buybacks
Common equity tier 1 (CET1) at ~11.1% year-end creates a capital constraint (management cites an 11% lower threshold), limiting pace of share repurchases despite repurchasing 1.7% in Q4.
Lumpy and Back-Weighted Loan Growth Guidance
Company targets ~5% loan growth for 2026 driven by commercial, but expects lighter activity in Q1 and a back-half weighting due to timing of closings and payoffs/paydowns.
Normalization of Certain 2025 One-Time Income Items
Company-owned life insurance (COLI) produced $11.4 million in 2025 after a surrender/redeploy strategy; management expects COLI income to normalize to ~ $10.5 million in 2026. Swap fee income is also expected to moderate to $1–$2 million (versus $2.5 million in 2025).
Sensitivity to Funding & Timing of Debt Actions
December subordinated debt issuance and mid-January retirement of prior sub-debt contributed several basis points of margin impact; timing of similar actions could continue to affect short-term margin dynamics.
Company Guidance
The company guided to a strong 2026 performance, targeting return on average assets of at least 122 basis points and return on average equity above 11.9%, with an efficiency ratio below 58% and a full‑year NIM in the mid‑3.60s; they expect about 5% loan growth (driven by commercial), low single‑digit deposit growth, and low single‑digit noninterest expense growth (with mid‑single‑digit salary & benefit increases). Key 2025 metrics cited as context include net income available to common of $19.6 million ($0.96 diluted) in Q4 and $73.4 million ($3.61) for the year, ROA of 120 bps, ROE of 12.38%, NII of $200 million, noninterest income of $45 million, full‑year margin of 3.53% (Q4 3.62%), total loans of $4.66 billion (up 1.5% Q/Q and 4% YoY), period‑end deposits of $5.21 billion (down 2.8% Q/Q, up 2% YoY), ACL/total loans of 102 bps, net charge‑offs budgeted at 25–35 bps (24 bps in 2025), CET1 at ~11.1% with an expected 40–50 bps build, $80 million of five‑year sub‑debt issued at 6.5%, Q4 buybacks of ~1.7% of shares (~$11 million; ~337k shares), AUM of $3.6 billion (up $500.4 million, 16%), COLI income expected to normalize to ~$10.5 million, and swap fees guided to $1–2 million.Financial Institutions Financial Statement Overview
Summary
Financial statements show meaningful pressure on revenue and profitability (negative margins and sharp recent revenue decline), partially offset by a stable balance sheet with very low leverage (debt-to-equity ~0.08). Cash generation is mixed, with decent cash generation relative to earnings but weaker operating cash conversion and declining free-cash-flow growth.Income Statement
The income statement shows significant volatility. The TTM data indicates a severe decline in revenue and profitability, with negative margins across the board. Historical data reveals a downward trend in revenue growth and profitability since 2022, with the most recent period showing a drastic revenue drop of over 92%. This suggests potential operational challenges or market conditions impacting the company's performance.45
Neutral
Balance Sheet
The balance sheet reflects a relatively stable financial position with a low debt-to-equity ratio of 0.08 in the TTM period, indicating conservative leverage. However, the negative return on equity in recent periods highlights profitability challenges. The equity ratio remains healthy, suggesting a solid capital structure, but the declining ROE is a concern for future profitability.60
Neutral
Cash Flow
Cash flow analysis reveals mixed results. The TTM period shows a decline in free cash flow growth, but the company maintains a strong free cash flow to net income ratio, indicating efficient cash generation relative to earnings. However, the operating cash flow to net income ratio is low, suggesting potential issues in converting earnings into cash.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 266.69M | 264.17M | 332.59M | 241.09M | 212.03M | 204.37M |
| Gross Profit | 114.52M | 88.03M | 197.29M | 198.25M | 207.89M | 154.87M |
| EBITDA | -40.26M | -60.47M | 71.14M | 79.08M | 105.27M | 53.62M |
| Net Income | -27.92M | -41.65M | 50.26M | 56.57M | 77.70M | 38.33M |
Balance Sheet | ||||||
| Total Assets | 6.29B | 6.12B | 6.16B | 5.80B | 5.52B | 4.91B |
| Cash, Cash Equivalents and Short-Term Investments | 185.94M | 87.33M | 1.01B | 1.08B | 1.26B | 721.94M |
| Total Debt | 202.15M | 256.61M | 343.32M | 312.45M | 103.91M | 78.92M |
| Total Liabilities | 5.67B | 5.55B | 5.71B | 5.39B | 5.02B | 4.44B |
| Stockholders Equity | 621.72M | 568.98M | 454.80M | 405.61M | 505.14M | 468.36M |
Cash Flow | ||||||
| Free Cash Flow | 24.01M | 72.15M | 7.90M | 125.20M | 63.56M | 39.19M |
| Operating Cash Flow | 24.41M | 77.13M | 10.89M | 133.57M | 72.96M | 43.45M |
| Investing Cash Flow | -212.72M | -8.23M | -310.09M | -325.16M | -633.42M | -531.07M |
| Financing Cash Flow | 124.68M | -106.02M | 293.17M | 242.94M | 545.69M | 468.55M |
Financial Institutions Technical Analysis
Positive
30.86
Price Trends
31.61
Positive
29.53
Positive
27.46
Positive
Market Momentum
0.57
Negative
67.25
Neutral
77.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FISI, the sentiment is Positive. The current price of 30.86 is below the 20-day moving average (MA) of 32.25, below the 50-day MA of 31.61, and above the 200-day MA of 27.46, indicating a bullish trend. The MACD of 0.57 indicates Negative momentum. The RSI at 67.25 is Neutral, neither overbought nor oversold. The STOCH value of 77.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FISI.
Financial Institutions Risk Analysis
Financial Institutions disclosed 47 risk factors in its most recent earnings report. Financial Institutions reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Financial Institutions Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $557.39M | 9.79 | 18.08% | 1.08% | 11.38% | 36.10% | |
77 Outperform | $523.88M | 9.30 | 14.72% | 1.53% | 24.90% | 28.06% | |
74 Outperform | $577.42M | 14.98 | 7.45% | 3.92% | 4.26% | -16.52% | |
74 Outperform | $585.40M | 11.76 | 13.37% | ― | 9.12% | 45.83% | |
72 Outperform | $490.24M | 8.98 | 12.00% | 4.95% | 3.93% | 17.48% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
59 Neutral | $683.43M | 9.40 | -4.98% | 3.89% | -28.00% | -174.60% |
* Financial Sector Average
FISI
Financial Institutions
34.27
7.86
29.76%
BHB
Bar Harbor Bankshares
35.17
4.58
14.97%
FMNB
Farmers National Banc Oh
13.16
-0.16
-1.20%
UNTY
Unity Bancorp
55.34
6.93
14.32%
CBNK
Capital Bancorp
31.91
0.88
2.83%
TCBX
Third Coast Bancshares
42.21
5.27
14.27%
Financial Institutions Corporate Events
Business Operations and StrategyStock BuybackFinancial DisclosuresPrivate Placements and Financing
Financial Institutions Posts Strong Q4 2025 Earnings Turnaround
Positive
Jan 29, 2026
On January 29, 2026, Financial Institutions, Inc. reported that net income available to common shareholders reached $19.6 million, or $0.96 per diluted share, for the fourth quarter of 2025 and $73.4 million, or $3.61 per diluted share, for full-year 2025, marking a strong turnaround from net losses a year earlier. Results were driven by record quarterly and annual net interest income of $52.2 million and $200.0 million, a 67-basis-point year-over-year expansion in full-year net interest margin to 3.53%, and solid noninterest income supported by swap activity, higher advisory fees and income from a life insurance redeployment strategy. The company grew total loans to $4.66 billion, led by 7.5% annual commercial loan growth, while deposits rose 2.0% year-over-year despite seasonal and funding mix pressures, and it maintained stable credit quality with an allowance for credit losses of 1.02% of loans at year-end. Capital strength underpinned a December 2025 private placement of $80 million of BBB–rated subordinated notes, used in part to refinance $65 million of higher-cost 2015 and 2020 debt in January 2026, and supported the repurchase of 336,869 common shares, or 1.7% of shares outstanding, in the fourth quarter, reinforcing management’s confidence in its earnings trajectory and long-term value strategy.
The most recent analyst rating on (FISI) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Financial Institutions stock, see the FISI Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
Financial Institutions Completes $80M Subordinated Notes Placement
Positive
Dec 11, 2025
On December 11, 2025, Financial Institutions, Inc. completed a private placement of $80 million in subordinated notes due 2035, with a fixed-to-floating interest rate structure. The proceeds will be used to redeem $65 million of higher-interest outstanding debt and for general corporate purposes. This strategic move is expected to temporarily elevate the company’s Total Risk-Based Capital ratio by approximately 150 basis points at year-end, reflecting improved profitability and capital position. The notes received a BBB- rating from Kroll Bond Rating Agency, indicating a stable long-term outlook for the company.
The most recent analyst rating on (FISI) stock is a Hold with a $33.00 price target. To see the full list of analyst forecasts on Financial Institutions stock, see the FISI Stock Forecast page.
Dividends
Financial Institutions Declares Quarterly Cash Dividend
Positive
Nov 17, 2025
On November 14, 2025, Financial Institutions, Inc.’s Board of Directors declared a quarterly cash dividend of $0.31 per common share, alongside dividends of $0.75 per share on Series A 3% Preferred Stock and $2.12 per share on Series B-1 8.48% Preferred Stock. These dividends are scheduled for payment on January 2, 2026, to shareholders recorded by December 15, 2025. This announcement underscores the company’s commitment to returning value to its shareholders and may enhance its attractiveness to investors seeking income through dividends.
The most recent analyst rating on (FISI) stock is a Hold with a $30.00 price target. To see the full list of analyst forecasts on Financial Institutions stock, see the FISI Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.