I'm LongbridgeAI, I can summarize articles.Revenue: As of FY2026 Q2, the actual value is USD 64.32 M.
EPS: As of FY2026 Q2, the actual value is USD 1.04, beating the estimate of USD 0.93.
Net Income and Profitability
Net income available to common shareholders for the second quarter of 2026 was $20,819 thousand, an increase of $3,651 thousand or 21.3% compared to $17,168 thousand in the second quarter of 2025. Net income was $21,184 thousand in Q2 2026, up from $17,532 thousand in Q2 2025, marking a $3,652 thousand or 20.8% increase year-over-year. The efficiency ratio improved to 55.33% in Q2 2026 from 59.68% in Q2 2025, reflecting a -435 basis point improvement. The return on average assets was 1.35% in Q2 2026, compared to 1.13% in Q2 2025, and the return on average tangible common equity was 14.88% in Q2 2026, up from 13.27% in Q2 2025.
Revenue and Income Streams
Net interest income reached $53,361 thousand in Q2 2026, an increase of $4,239 thousand or 8.6% from $49,122 thousand in Q2 2025. The net interest margin (tax-equivalent basis) expanded to 3.70% in Q2 2026, up 21 basis points from 3.49% in Q2 2025. Noninterest income totaled $10,954 thousand in Q2 2026, a 3.2% increase from $10,617 thousand in Q2 2025. Investment advisory income grew to $3,287 thousand in Q2 2026 from $2,885 thousand in Q2 2025, an increase of $402 thousand or 13.9%. Income from derivative instruments, net, increased to $518 thousand in Q2 2026 from $339 thousand in Q2 2025, representing a 52.8% increase. Investments in limited partnerships resulted in a loss of - $140 thousand in Q2 2026, compared to a gain of $307 thousand in Q2 2025, a decrease of - $447 thousand or -145.6%.
Operational Costs
Total noninterest expense was $35,605 thousand in Q2 2026, a slight decrease of - $77 thousand or -0.2% from $35,682 thousand in Q2 2025. Salaries and employee benefits expense increased by $1,095 thousand or 6.1% to $19,165 thousand in Q2 2026, from $18,070 thousand in Q2 2025. Computer and data processing expense decreased by - $367 thousand or -6.2% to $5,512 thousand in Q2 2026, from $5,879 thousand in Q2 2025. Income tax expense was $4,418 thousand in Q2 2026, up from $3,963 thousand in Q2 2025, an increase of 11.5%.
Loan and Deposit Growth
Total loans reached $4,752,965 thousand at June 30, 2026, representing a 4.8% increase from $4,536,002 thousand at June 30, 2025. Commercial business and commercial mortgage loans grew by $269,013 thousand or 9.1% year-over-year to $3,210,384 thousand. Residential real estate loans increased by $15,801 thousand or 2.2% to $738,681 thousand. Consumer indirect and other consumer loans decreased by - $67,851 thousand or -7.8% to $803,900 thousand. Total deposits were $5,299,465 thousand at June 30, 2026, up $143,451 thousand or 2.8% from $5,156,014 thousand at June 30, 2025.
Credit Quality
Non-performing loans were $39,007 thousand at June 30, 2026, an increase of $6,571 thousand or 20.3% from $32,436 thousand at June 30, 2025. The ratio of total non-performing loans to total loans was 0.82% at June 30, 2026, an increase of 11 basis points from 0.72% at June 30, 2025. The allowance for credit losses on loans was $47,497 thousand at June 30, 2026, a 0.4% increase from $47,291 thousand at June 30, 2025. The allowance for credit losses on loans to total loans ratio was 1.00% at June 30, 2026, a decrease of -4 basis points from 1.04% at June 30, 2025. Net charge-offs as a percentage of average loans (annualized) decreased to 0.11% in Q2 2026, compared to 0.36% in Q2 2025, a -25 basis point decrease. Provision for credit losses was $3,108 thousand in Q2 2026, up from $2,562 thousand in Q2 2025, an increase of $546 thousand or 21.3%.
Capital and Liquidity
Shareholders’ equity grew to $643,441 thousand at June 30, 2026, compared to $601,668 thousand at June 30, 2025, primarily due to retained net income. The tangible common equity to tangible assets ratio was 9.02% at June 30, 2026, an increase of 41 basis points from 8.61% at June 30, 2025. The Common Equity Tier 1 Ratio increased to 11.44% at June 30, 2026, up 60 basis points from 10.84% at June 30, 2025. Financial Institutions, Inc. had approximately $1.15 billion in available liquidity at June 30, 2026, excluding brokered deposit capacity, in addition to $99.2 million in cash and cash equivalents and $155.0 million in available unsecured lines of credit.
Outlook
Financial Institutions, Inc. is focused on deposit retention, acquisition, credit-disciplined loan growth, and effective expense management for the third quarter. The company anticipates current rate dynamics are beginning to stabilize deposit costs and aims to preserve margin stability in a competitive environment. Healthy pipelines for commercial loan growth are expected for the second half of the year.