Financial Institutions completes $80 million subordinated notes offering

Financial Institutions, Inc. (NASDAQ: FISI) completed a private placement of $80 million in subordinated notes to qualified institutional buyers and accredited institutional investors, the company announced.

The fixed-to-floating rate subordinated notes mature December 15, 2035, and bear interest at 6.50% per annum until December 15, 2030. After that date, the interest rate will reset quarterly to the three-month Secured Overnight Financing Rate plus 312 basis points. The notes received a BBB- rating from Kroll Bond Rating Agency.

The company plans to use net proceeds to redeem $65 million in outstanding debt from 2015 and 2020 issuances, with the remainder for general corporate purposes. The existing debt includes $35 million currently bearing approximately 8.17% interest and $30 million at approximately 8.11% interest.

"We are pleased with the successful completion of this subordinated debt offering, which allows us to refinance existing issuances at more attractive rates," said Martin K. Birmingham, president and chief executive officer.

Birmingham noted that the additional $80 million of capital on the balance sheet at year-end and the intended first-quarter redemption of $65 million in outstanding debt will temporarily elevate the company's Total Risk-Based Capital ratio by approximately 150 basis points.

Piper Sandler & Co. served as sole placement agent for the offering. The company entered into registration rights agreements with purchasers to provide for exchange of the notes for registered securities with substantially similar terms.

Financial Institutions, parent company of Five Star Bank and Courier Capital, LLC, reported approximately $6.3 billion in assets as of September 30, 2025.

You May Also Be Interested In