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Sep 30
Financial Institutions Q3 2025 Earnings Report
Financial Institutions, Inc. reported strong third quarter 2025 results, including net income available to common shareholders of $20.1 million, or $0.99 per diluted share.
Key Takeaways
Financial Institutions, Inc. delivered a strong third quarter in 2025, marked by record net interest income and robust noninterest income. The company achieved significant net interest margin expansion and solid loan and deposit growth, contributing to improved profitability and capital ratios. Credit quality metrics remained solid, with a decrease in annualized net charge-offs to average loans compared to the linked quarter.
Net income available to common shareholders reached $20.1 million, or $0.99 per diluted share, in Q3 2025.
Net interest margin expanded to 3.65%, a 76 basis point increase from the year-ago quarter, and net interest income hit an all-time quarterly high of $51.8 million.
Total loans grew by $54.4 million (1.2%) from the linked quarter to $4.59 billion, driven by commercial loan growth.
Regulatory and tangible capital ratios significantly improved on both a linked quarter and year-over-year basis, with the common equity to assets ratio at 9.61% and tangible common equity to tangible assets at 8.74%.
Financial Institutions
Financial Institutions
Financial Institutions Revenue by Segment
Revenue by Segment
Service charges on deposits Revenue
CapyFin.comInsurance income Revenue
CapyFin.comCard interchange income Revenue
CapyFin.comInvestment advisory Revenue
CapyFin.comCompany owned life insurance Revenue
CapyFin.comInvestments in limited partnerships Revenue
CapyFin.comLoan servicing Revenue
CapyFin.comIncome from derivative instruments, net Revenue
CapyFin.comNet gain on sale of loans held for sale Revenue
CapyFin.comNet gain on investment securities Revenue
CapyFin.comNet loss on sale and disposal of other assets Revenue
CapyFin.comNet loss on tax credit investments Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
The company anticipates continued momentum from its year-to-date performance to support a strong finish to 2025 and sustained incremental performance in 2026. They plan to continue investing in and growing their commercial, consumer, and wealth business lines, while also evaluating options for their subordinated debt.
Positive Outlook
- Year-to-date performance provides momentum for a strong finish to 2025.
- Company is positioned for sustained incremental performance in 2026.
- Board authorized a new, larger share repurchase program, indicating confidence in capital management flexibility.
- Continued investment and growth in commercial, consumer, and wealth business lines.
- Team remains steadfast in growing relationship-based banking and deposit gathering.
Challenges Ahead
- Ongoing wind-down of the Banking-as-a-Service (BaaS) offering, expected to complete in early 2026.
- Need to offset the anticipated reduction in BaaS-related deposits.
- Evaluation of options for subordinated debt, which may include redemption or refinancing.
- Health insurance benefit expense reflecting continued elevated medical claims under the Company's self-insured plan.
- Fluctuations in income from investments in limited partnerships based on underlying investment performance.