Key Highlights

  • Net income was $20.0 million, or $0.99 per diluted share, matching the year-earlier EPS.
  • Net interest income hit a record $54.3 million.
  • Net interest Margin was 3.70%, up 5 basis points from a year ago.
  • Total loans increased 2.2% over the quarter to $4.86 billion.
  • Total deposits increased 3.3% over the quarter to $5.47 billion.

EPS holds at $0.99 a share

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

Net income was $20.0 million, compared with $21.2 million in the second quarter and $20.5 million a year earlier. Diluted EPS came to $0.99, versus $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 slipped from 1.32%, 13.31% and 14.98% a year earlier, so profitability eased slightly even as Balance Sheet growth continued.

Net interest income sets a quarterly record

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

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

Investment advisory income, the largest 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 both expand

Total loans grew 2.2% from the linked quarter and 5.8% from September 30, 2025, reaching $4.86 billion, led by strong commercial lending. CEO Martin Birmingham said the commercial Franchise drove most of the 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 in every category and seasonal support from public deposits.

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

Credit costs and capital position

Net charge-offs equaled 0.33% of average loans on an annualized basis, up from 0.11% in the second quarter and 0.18% a year ago. Mr. Birmingham said that level remained within full-year guidance. Non-Performing Loans totaled $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 fell to $619.0 million from $643.4 million at June 30, 2026, which the company attributed to unrealized securities losses and share repurchases.

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

Buybacks and watch points

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

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