Financial Institutions, Inc. Announces Launch of Common Stock Offering

Rhea-AI Summary

Financial Institutions, Inc. (NASDAQ: FISI), parent company of Five Star Bank and Courier Capital, announced the launch of an underwritten public offering of common stock shares. The company will grant underwriters a 30-day option to purchase additional shares. Net proceeds will be used for general corporate purposes, including potential balance sheet restructuring through repositioning of available-for-sale debt securities portfolio and debt repayment.

The offering is being made through a Form S-3 registration statement, with Keefe, Bruyette & Woods serving as sole bookrunner and Piper Sandler as co-manager. FISI currently manages approximately $6.2 billion in assets, offering banking and wealth management services through Five Star Bank and Courier Capital across Western and Central New York.

Positive

• Strong asset base of $6.2 billion
• Strategic balance sheet restructuring initiative

Negative

• Potential shareholder dilution from new stock offering
• Need for debt repayment indicates financial obligations

Insights

Financial Analyst

The common stock offering announcement represents a significant capital raising initiative that could materially impact FISI's financial structure. The intended use of proceeds for balance sheet restructuring, particularly the repositioning of available-for-sale debt securities portfolio, suggests a strategic move to optimize their asset composition in response to the current interest rate environment. With $6.2 billion in assets, this portfolio restructuring could meaningfully impact their interest income and overall profitability. The potential debt repayment component also signals a focus on strengthening their capital position. However, the stock offering will likely result in dilution for existing shareholders, with the magnitude depending on the final size of the offering and exercise of the underwriters' option for additional shares.

Market Research Analyst

This capital raise comes at a pivotal time for regional banks, as the sector navigates challenges from higher interest rates and shifting deposit dynamics. The involvement of prominent underwriters KBW (Stifel) and Piper Sandler adds credibility to the offering. The focus on restructuring the securities portfolio suggests FISI is proactively addressing potential unrealized losses in their available-for-sale portfolio, a common challenge for banks in the current rate environment. The timing aligns with recent market trends showing increased investor appetite for regional bank equities, though the success of the offering will largely depend on pricing and market conditions. The stock's trading pattern may see increased volatility in the near term as the market digests this development.

WARSAW, N.Y., Dec. 11, 2024 (GLOBE NEWSWIRE) -- Financial Institutions, Inc. (Nasdaq: FISI) (the “Company”), parent company of Five Star Bank and Courier Capital, LLC, announced today that it has launched an underwritten public offering of shares of its common stock. The Company intends to grant the underwriters a 30-day option to purchase additional shares of its common stock.

The Company intends to use the net proceeds from this offering for general corporate purposes which may include a balance sheet restructuring through the repositioning of a substantial portion of our available-for-sale debt securities portfolio to support continued growth as well as the repayment of indebtedness.

Keefe, Bruyette & Woods, Inc., A Stifel Company is serving as the sole bookrunner for the offering, and Piper Sandler & Co. is acting as the co-manager.

Additional Information Regarding the Offering

The offering of common stock is being made pursuant to a registration statement on Form S-3 (File No. 333-283475) that was declared effective by the Securities and Exchange Commission (the “SEC”) on December 4, 2024. A preliminary prospectus supplement to which this communication relates has been filed with the SEC. A final prospectus supplement and accompanying prospectus will be filed with the SEC. Prospective investors should read the preliminary prospectus supplement and the accompanying prospectus and other documents the Company has filed with the SEC for more complete information about the Company and the offering. Copies of these documents are available at no charge by visiting the SEC’s website at www.sec.gov. When available, copies of the preliminary prospectus supplement, the final prospectus supplement and accompanying prospectus related to the offering may be obtained by contacting Keefe, Bruyette & Woods, Inc., A Stifel Company by telephone at (800) 966-1559 or by e-mail at USCapitalMarkets@kbw.com.

No Offer or Solicitation

This press release does not constitute an offer to sell, a solicitation of an offer to sell, or the solicitation of an offer to buy any securities. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Financial Institutions, Inc.

Financial Institutions, Inc. (NASDAQ: FISI) is an innovative financial holding company with approximately $6.2 billion in assets offering banking and wealth management products and services. Its Five Star Bank subsidiary provides consumer and commercial banking and lending services to individuals, municipalities and businesses through banking locations spanning Western and Central New York and a commercial loan production office serving the Mid-Atlantic region. Courier Capital, LLC offers customized investment management, financial planning and consulting services to individuals and families, businesses, institutions, non-profits and retirement plans. Learn more at Five-StarBank.com and FISI-Investors.com.

Special Note Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and are typically identified with words such as “may”, “could”, “should”, “will”, “would”, “believe”, “anticipate”, “estimate”, “expect”, “aim”, “intend”, “plan” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on the Company’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties, which change over time, and other factors, which could cause actual results to differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. If one or more of the factors affecting the Company’s forward-looking information and statements proves incorrect, then the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this press release. Therefore, the Company cautions you not to place undue reliance on the Company’s forward-looking information and statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 under the section entitled “Risk Factors,” and other documents filed by the Company with the SEC from time to time.

The Company disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law.

Investor Contact:
Kate Croft
Director of Investor and External Relations
(716) 817-5159
klcroft@five-starbank.com

FAQ

What is the purpose of FISI's common stock offering in December 2024?

The offering's proceeds will be used for general corporate purposes, including balance sheet restructuring through repositioning of available-for-sale debt securities portfolio and debt repayment.

How much in assets does Financial Institutions (FISI) manage as of December 2024?

Financial Institutions manages approximately $6.2 billion in assets, offering banking and wealth management services.

Who are the underwriters for FISI's 2024 common stock offering?

Keefe, Bruyette & Woods is serving as the sole bookrunner, while Piper Sandler & Co. is acting as the co-manager for the offering.

What is the duration of the additional share purchase option for FISI's underwriters?

The underwriters will have a 30-day option to purchase additional shares of common stock.

What regulatory approval has FISI received for this stock offering?

The offering is being made pursuant to a registration statement on Form S-3 that was declared effective by the SEC on December 4, 2024.