DEF 14A of Financial Institutions Inc, Apr 14, 2025

DEF 14A of Financial Institutions Inc

Filed Apr 14, 2025 · FY20240000950170-25-053504

Open on EDGAR

  1. BOARD COMPOSITION AND DIRECTOR NOMINEES

    BOARD COMPOSITION AND DIRECTOR NOMINEES

  2. DIRECTOR BIOGRAPHIES — NOMINEES

    DIRECTOR BIOGRAPHIES — NOMINEES

  3. DIRECTOR BIOGRAPHIES — NOMINEES

    | MARTIN K. BIRMINGHAM | | | | Director Since: 2013 Term Expires: 2025 New Term Expires: 2028 Age: 58 President & CEO | Business Experience | | | | – | President and Chief Executive Officer of the Company and the Bank since 2013 | | | – | President and Chief of Community Banking of the Bank (2012-2013) | | | – | Commercial Banking Executive and Rochester Region President of the Bank (2005-2012) | | | – | President, CEO and Director of former subsidiary, The National Bank of Geneva (2005) | | | – | President of Rochester Region, Bank of America (2004-2005) | | | – | Progressive corporate banking roles including Regional President, Fleet Financial Group/ Bank of America (1989-2004) | | | Current Nonprofit Boards | | | | – | New York Bankers Association (Chair and Past Treasurer); AAA of Central and Western New York, Inc. (Past Chair and Past Vice Chair); Greater Rochester Chamber of Commerce; MCC Foundation; ROC2025; St. John Fisher College (Past Chair); The Business Council of New York State; and University of Rochester Medical Center | | | Past Nonprofit Boards | | | | – | Federal Reserve Bank of NY Community Depository Institutions Advisory Council; The Strong National Museum of Play; St. Ann’s of Greater Rochester Foundation; United Way of Greater Rochester; American Red Cross; Seneca Park Zoo Society; and YMCA of Greater Rochester | | | Education | | | | – | St. Lawrence University | | | – | MBA, University of Rochester, Simon Business School | | | – | Honorary Doctorate of Humane Letters, St. John Fisher College |

  4. DIRECTOR BIOGRAPHIES — NOMINEES

    | BRUCE W. HARTING | | | | Director Since: 2022 Term Expires: 2025 New Term Expires: 2028 Age: 67 Independent Committee Membership: • Audit • Risk Oversight | Business Experience | | | | – | Managing Director, Wedbush Securities, since 2023 | | | – | Team Chief Investment Officer, Private Wealth Advisor at Rockefeller Capital Management (2022) | | | – | Managing Director, Investment Banking, Deutsche Bank (2017-2022) | | | – | Managing Director, Investment Banking, Credit Suisse (2015-2017) | | | – | Managing Director, Investment Banking, Barclays Capital (2012-2015) | | | – | Managing Director, Equity Research, Barclays Capital/ Lehman Brothers (1996-2012) | | | – | Senior Analyst, Equity Research, Salomon Brothers (1988-1996) | | | Past Nonprofit Boards | | | | – | Brooklyn Youth Choir | | | Education | | | | – | American University | | | – | M.A., University of Pennsylvania |

  5. DIRECTOR BIOGRAPHIES — NOMINEES

    | ANGELA J. PANZARELLA | | | | Director Since: 2025 Term Expires: 2025 New Term Expires: 2027 Age: 67 Independent Committee Membership: • Audit • Management Development & Compensation | Business Experience | | | | – | Chief Executive Officer of the YWCA of Rochester and Monroe County (2018-2020) | | | – | President of ACM Medical Laboratory, Inc. (2010-2015) | | | – | Industry Consultant (2008-2010) | | | – | Corporate Vice President, Global Vision Care at Bausch + Lomb (2002-2008) and President, Canada and Latin America (2007-2008) | | | – | Diverse business experience at Bausch + Lomb during 20-year tenure starting in 1988, with responsibilities including strategy, commercial operations, investor relations, product management, and legal (1988-2008) | | | – | Associate Attorney, Harris Beach PLLC (1982-1988) | | | Past Public Company Boards | | | | – | Transcat Inc. | | | Past Nonprofit Boards | | | | – | UR Medicine Home Care | | | – | United Way of Greater Rochester | | | – | St. Ann’s Community | | | Education | | | | – | BA, St. John Fisher College | | | – | JD, Albany Law School of Union University |

  6. DIRECTOR BIOGRAPHIES — NOMINEES

    | ROBERT L. SCHRADER | | | | Director Since: Nominee New Term Expires: 2028 Age: 53 Independent | Business Experience | | | | – | Certified Public Accountant and Senior Vice President, Chief Financial Officer of Paychex, since 2023 | | | – | Progressive corporate finance leadership roles at Paychex since joining the public company in 2014, including Vice President of Finance and Investor Relations (Corporate Controller), Senior Director of Financial Planning and Analysis, and Director of Internal Audit | | | – | Chief Financial Officer, Unither Pharmaceuticals (2013-2014) | | | – | Progressive leadership roles during 10-year tenure at Bausch + Lomb across multiple areas, including finance, global quality and operations, most recently serving as Vice President of Finance (2003-2013) | | | – | Audit Manager, PricewaterhouseCoopers, LLP (1997-2003) | | | Current Nonprofit Boards | | | | – | Junior Achievement of Central Upstate New York (current Advisory Board member, former member of Finance and Executive Committees) | | | Education | | | | – – | BS, State University at New York Brockport MBA, University of Rochester Simon School of Business |

  7. DIRECTOR BIOGRAPHIES — NOMINEES

    | KIM E. VANGELDER | | | | Director Since: 2016 Term Expires: 2025 New Term Expires: 2028 Age: 60 Independent Committee Membership: • Risk Oversight (Chair) • Nominating & Governance • Technology & Data | Business Experience | | | | – | Chief Information Officer of Eastman Kodak Company (“Kodak”), a global manufacturer focused on commercial print and advanced materials and chemicals, since 2004 | | | – | Progressive information technology leadership roles at Kodak with responsibilities including cybersecurity, global applications, and global technology infrastructure | | | – | Also served as Kodak’s Director of Worldwide Customer Operations from 2011 to 2014 | | | Current Nonprofit Boards | | | | – | Rochester Institute of Technology | | | – | Western New York Society for Information Management | | | Past Nonprofit Boards | | | | – | Rochester Area Community Foundation | | | – | Dean's Advisory Council for Golisano College of Computing and Information Sciences, Rochester Institute of Technology | | | Education | | | | – | Rochester Institute of Technology |

  8. DIRECTOR BIOGRAPHIES — NOMINEES

    | DONALD K. BOSWELL | | | | Director Since: 2017 Term Expires: 2026 Age: 73 Independent Committee Membership: • Nominating & Governance (Chair) • Technology & Data | Business Experience | | | | – | President and CEO, Seven Film & Theater Productions, since 2022 | | | – | President and CEO Emeritus and Consultant for the Western New York Public Broadcasting Association (WNED-TV; WBFO-FM) since 2021; President and CEO (1998-2021) | | | – | North Texas Public Broadcasting, Inc., Dallas/Fort Worth/Denton: Executive Vice President and COO (1997); Acting President (1996-1997); Vice President of Marketing and Corporate Development (1986-1996); and Vice President of Development (1982-1986) | | | – | KCTS-TV, Seattle: Vice President of Development (1981-1982) | | | – | WVIA-TV/FM, Pittston, Pennsylvania: Corporate Underwriting Specialist and Director of Community Relations/Producer (1977-1981) | | | Current Other Company Boards | | | | – | Vice Chair of Independent Health, since 2020 | | | Past Public Company Boards | | | | – | HSBC Bank USA, N.A. | | | Past Other Company Boards | | | | – | AAA National Board | | | – | Blue Cross Blue Shield (Health Now) | | | – | New Era Cap Company | | | Current Nonprofit Boards | | | | – | Artpark & Company; 43 x 79 Group; American Public Television; AAA of Central and Western New York, Inc.; and The John R. Oishei Foundation | | | Past Nonprofit Boards | | | | – | Buffalo AKG Art Museum; Buffalo Philharmonic Orchestra; Buffalo Science Museum; University of Buffalo Foundation; and American Friends of the Art Gallery of Ontario (Chair) | | | Education | | | | – | BS and M.ED., Pennsylvania State University | | | – | Management Development Certificate, The Wharton School at The University of Pennsylvania | | | – | Honorary Doctorate of Laws and Letters, Canisius College and D’Youville College |

  9. DIRECTOR BIOGRAPHIES — NOMINEES

    | DAWN H. BURLEW | | | | Director Since: 2017 Term Expires: 2027 Age: 61 Independent Committee Membership: • Technology & Data (Chair) • Management Development & Compensation • Risk Oversight | Business Experience | | | | – | President, Watkins Glen International since January 2024 | | | – | Director of Government Affairs & Business Development, Global Government Affairs Division of Corning Incorporated (2008-2024) | | | – | Town of Erin Supervisor since 2014 | | | – | Corning Incorporated: Corporate Real Estate Portfolio Manager (2002-2008); progressive corporate and management roles (1984-2002) | | | Current Nonprofit Boards | | | | – | Bethany Village (Chair); Chemung County Chamber of Commerce (Vice Chair); Guthrie Corning Hospital (Vice Chair); Incubator Works; International Motor Racing Research Center; and Southern Tier Economic Growth | | | Past Nonprofit Boards | | | | – | Business Council of New York State (Vice Chair); Chemung County Industrial Development Agency (Vice Chair); Chemung County Property Development Corp. (Vice Chair); Corning Community College Housing LLC; Corning’s Gaffer District; Corning Community College Development Foundation; Healthcare Association of New York State (HANYS); Southern Tier Central Regional Planning & Development; Three Rivers Development Corp. (Vice Chair); and Southern Tier Regional Economic Development Council | | | Education | | | | – | Cazenovia College and Keuka College |

  10. DIRECTOR BIOGRAPHIES — NOMINEES

    | ANDREW W. DORN, JR. | | | | Director Since: 2014 Term Expires: 2026 Age: 74 Independent Committee Membership: • Management Development & Compensation (Chair) • Executive • Risk Oversight | Business Experience | | | | – | Chair, Coal Ash Recycling, LLC, a private company focused on the beneficial reuse of coal ash to make lower carbon “green” concrete, since 2021 | | | – | Co-Managing Director of Energy Solutions Consortium, LLC (2015-2021) | | | – | Managing member of Moundsville Power LLC (2012-2015) | | | – | Chair and Chief Financial Officer of Demand Response Partners, Inc. (2008-2015) | | | – | President and Chief Investment Officer of Hunterview LLC (2008-2013) | | | – | Led formation of Great Lakes Bancorp, parent company of Greater Buffalo Savings Bank; President and Chief Executive Officer (1997-2008) | | | – | Led formation of Jamestown Savings Bank; President and Chief Executive Officer (1994-1997) | | | Past Public Company Boards | | | | – | Great Lakes Bancorp | | | Current Nonprofit Boards | | | | – | Health Foundation for Western & Central New York | | | – | The Western New York Foundation | | | Past Nonprofit Boards | | | | – | Brooks Memorial Hospital (Vice Chair); Buffalo Urban League; Chautauqua County Fund for the Arts (Chair); D’Youville College (Chair); Northern Chautauqua Chamber of Commerce (President); United Way of Chautauqua County (Vice Chair); and several additional community and nonprofit boards in Erie and Chautauqua counties | | | Education | | | | – | University at Buffalo-State University of New York | | | – | MBA, Canisius College |

  11. DIRECTOR BIOGRAPHIES — NOMINEES

    | ROBERT M. GLASER | | | | Director Since: 2014 Term Expires: 2026 Age: 78 Independent Committee Membership: • Audit (Chair) • Executive | Business Experience | | | | – | Certified Public Accountant and President of Glaser Consulting, LLC, a strategic consulting company, since 2016 | | | – | Retired Chair of the Board of Freed Maxick CPAs, P.C. (1994-2015) | | | – | Joined Freed Maxick CPAs, P.C. as a partner in 1981 and served as Chair and Managing Director (1994-2011) | | | – | Price Waterhouse (1968-1981) | | | Past Appointed Positions | | | | – | Chair of the Erie County Fiscal Stability Authority | | | – | Independent Judicial Election Qualification Commission for the Eighth Judicial District | | | Current Private Company Boards | | | | – | NA Realty Fund II | | | – | Noco, Inc. | | | Past Nonprofit Boards | | | | – | Audit Committee for Kaleida Health; CPA Associates, Inc.; and several nonprofit and cultural boards in Western New York | | | Education | | | | – | Canisius College |

  12. DIRECTOR BIOGRAPHIES — NOMINEES

    | SUSAN R. HOLLIDAY | | | | Director Since: 2002 Chair Since: 2021 Vice Chair: 2020-2021 Term Expires: 2026 Age: 69 Independent Committee Membership: • Executive (Chair) | Business Experience | | | | – | Chief Executive Officer of Dumbwaiter Design, LLC, a former full-service web and app design and development firm (2011-2023) | | | – | President and Publisher of the Rochester Business Journal (1988-2016) | | | Past Public Company Boards | | | | – | Rochester Gas & Electric Corp | | | Current Private Company Boards | | | | – | Complemar Partners, Inc. | | | Past Other Company Boards | | | | – | Key Bank of New York | | | Current Nonprofit Boards | | | | – | Greater Rochester Chamber of Commerce (Past Chair); Health Care Trustees of New York State (Past Chair); Healthcare Association of New York State; Riedman Foundation (Trustee); Rochester Institute of Technology (Vice Chair); and University of Rochester Medical Center (Past Chair) | | | Past Nonprofit Boards | | | | – | MCC Foundation; Rochester Museum & Science Center (Chair); United Way of Greater Rochester (Vice Chair); and various additional community and nonprofit boards | | | Education | | | | – | Cornell University | | | – | MBA, Rochester Institute of Technology |

  13. DIRECTOR BIOGRAPHIES — NOMINEES

    | ROBERT N. LATELLA | | | | Director Since: 2005 Chair: 2014-2021 Vice Chair: 2012-2014 Term Expires: 2027 Age: 82 Independent Committee Membership: • Executive • Nominating & Governance • Technology & Data | Business Experience | | | | – | Of Counsel at the law firm Barclay Damon, LLP since 2009; Partner (2004-2009) | | | – | Previous Roles: Chief Operating Officer of Integrated Nano-Technologies, LLC; Chief Operating Officer of the Genesee Corporation; Chief Financial Officer of The Case Hoyt Corporation; and Managing Partner of Harter Secrest & Emery LLP | | | Past Public Company Boards | | | | – | Genesee Corporation | | | Past Other Company Boards | | | | – | Marine Midland Bank–Rochester | | | Current Nonprofit Boards | | | | – | University of Rochester Medical Center (Member, Executive Committee and Past Chair); Highland Hospital of Rochester (Senior Member of Board and Past Chair); Highland Community Development Corporation; Highland Living Center; and The Highlands at Brighton | | | Past Nonprofit Boards | | | | – | Monroe Community College (Trustee and Chair); Monroe Community College Foundation, Inc.; and several additional community and nonprofit boards | | | Education | | | | – | Fordham College | | | – | LLB, Vanderbilt University School of Law | | | – | LLM, New York University School of Law |

  14. DIRECTOR BIOGRAPHIES — NOMINEES

    | MARK A. ZUPAN, PHD | | | | Director Since: 2021 Term Expires: 2027 Age: 65 Independent Committee Membership: • Audit • Risk Oversight | Business Experience | | | | – | President of Alfred University since 2016 | | | – | Simon Business School at the University of Rochester: Director of the Bradley Policy Center and Olin Professor of Economics and Public Policy (2014-2016) and Dean and Professor of Economics and Public Policy (2004-2014) | | | – | Dean and Professor of Economics at Eller College of Management, University of Arizona (1997-2003) | | | – | Visiting Professor, Amos Tuck School of Business Administration at Dartmouth College (Fall 1995) | | | – | Marshall School of Business at the University of Southern California: Associate Dean (1992-1994), Associate Professor (1991-1996) and Assistant Professor (1986-1991) | | | Past Public Company Boards | | | | – | Constellation Brands | | | – | PaeTec Holding Corporation | | | – | Steuben Trust Company | | | Current Nonprofit Boards | | | | – | Allegany County Economic Development Committee | | | Past Nonprofit Boards | | | | – | Harley School; Western New York Regional Economic Development Council; and United Way of Southern Arizona | | | Education | | | | – | BA, Economics, Harvard University | | | – | Ph.D., Economics, Massachusetts Institute of Technology (MIT) |

  15. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION We use a combination of cash and stock-based compensation to attract and retain qualified candidates to serve as non-employee members on our Board of Directors. In setting director compensation, we consider the significant amount of time that directors expend in fulfilling their duties, the skill levels required, and the competitive market for director compensation. Every two years, the Board’s MD&C Committee reviews director compensation and considers peer review related compensation guidance provided by its independent compensation consultant. This compensation review was most recently done in 2024, and recommendations were made by the MD&C Committee following that review. The Board sets director compensation based on recommendations provided by its MD&C Committee. During 2024, non-employee directors were eligible to receive a cash retainer for serving on our Board of Directors and the Board of Directors of the Bank, our wholly-owned subsidiary, and holding Board and committee chair positions . Non-employee directors may elect to receive any portion of their annual retainer in an equivalent grant of shares of our common stock. We provide our Chair a car allowance and reimburse other non-employee directors for reasonable travel expenses to attend meetings. The following chart sets forth the cash amount we pay non-employee directors for their service on the FII Board and the Board of Directors of the Bank, including the leadership roles noted below:

  16. DIRECTOR COMPENSATION

    | | FII | Five Star Bank | | Annual Retainer Fees: | | | | Chair | $73,500 | $36,500 | | Chair of the Audit Committee | 47,000 | 23,000 | | Chair of the Risk Oversight Committee | 45,500 | 22,000 | | Chair of the MD&C Committee | 43,500 | 21,500 | | Chair of the Nominating & Governance and Technology & Data Committees | 42,000 | 20,500 | | Other Directors | 37,000 | 18,000 |

  17. DIRECTOR COMPENSATION

    The stock-based compensation of non-employee members of the Board was in the form of receipt of a grant of restricted shares with a value of $35,000 on June 5, 2024, the date of the 2024 Annual Meeting of Shareholders. The number of shares issued was based upon the June 5, 2024 closing price of the Company’s common stock. 50% of the shares vest immediately upon the date of the grant, and the remaining 50% of the shares vest on the day prior to our 2025 Annual Meeting of Shareholders, provided that the director remains in continuous service as a director. Subject to the terms of individual award agreements, if a non-employee director ceases to serve as our director prior to the shares vesting, the unvested shares will be immediately forfeited. The 2024 restricted share awards do not entitle directors to receive any dividends paid with respect to unvested shares of restricted stock. For additional information regarding Stock Ownership Requirements for Directors, please see the discussion under “Stock Ownership Requirements” on page 5. Compensation paid to our non-employee directors in 2024 for service on the Boards of both FII and the Bank is summarized below.

  18. DIRECTOR COMPENSATION

    | | Fees Earned or Paid in Cash (1) | Stock Awards (2)(3) | All Other Compensation (4) | Total | | Director Name | ($) | ($) | ($) | ($) | | Donald K. Boswell | 62,500 | 34,997 | — | 97,497 | | Dawn H. Burlew | 62,500 | 34,997 | — | 97,497 | | Andrew W. Dorn, Jr. | 65,000 | 34,997 | — | 99,997 | | Robert M. Glaser | 70,000 | 34,997 | — | 104,997 | | Samuel M. Gullo | 55,000 | 34,997 | — | 89,997 | | Bruce W. Harting | 55,000 | 34,997 | — | 89,997 | | Susan R. Holliday | 110,000 | 34,997 | 9,000 | 153,997 | | Robert N. Latella | 55,000 | 34,997 | 40,000 | 129,997 | | Mauricio F. Riveros (5) | 2,260 | 17,507 | — | 19,767 | | Kim E. VanGelder | 67,500 | 34,997 | — | 102,497 | | Mark A. Zupan | 55,000 | 34,997 | — | 89,997 |

  19. DIRECTOR COMPENSATION

    (2) Annual retainer, including the portion elected to be paid in shares of common stock in lieu of cash. The number of shares of stock received by each director in lieu of cash during 2024: Mr. Boswell—708 shares, Ms. Burlew—1,360 shares, Mr. Glaser—2,654 shares, Mr. Latella—708 shares and Mr. Zupan—649 shares. (3) Aggregate grant date fair value, calculated in accordance with FASB Topic ASC 718, of 2,001 shares of restricted stock granted under the 2015 Long-Term Incentive Plan to each director. Mr. Riveros’ stock awards reflect the forfeiture of 1,000 shares following his retirement. (4) Each director serving on the Board as of December 31, 2024 held 1,000 shares of unvested restricted stock awards as of that date. No director held any stock options as of December 31, 2024. (5) Car allowance of $750 per month paid to Ms. Holliday for service as Chair of the Board during 2024 and a one-time $40,000 additional cash payment paid to Mr. Latella, as approved by the MD&C Committee, in recognition for additional leadership work he performed at the request of the Board’s Executive Committee. (6) Mr. Riveros retired from the Board on June 19, 2024, and was paid fees on a pro-rata basis through that date.

  20. 2024 Executive Compensation Program Highlights

    2024 Executive Compensation Program Highlights Our compensation philosophy focuses on attracting and retaining high-performing talent through market-competitive compensation programs that properly incentivize sustained business growth, operational excellence, and alignment with shareholder interests. We believe our programs accomplish this by: • Operating in a pay-for-performance environment by tying a significant portion of executive compensation to the achievement of performance goals aligned with the Company’s annual business plan, long-term strategic plan and ongoing shareholder value creation • Establishing market-competitive programs that enable us to attract, retain and motivate high-performing executive talent To ensure that these objectives are met, the MD&C Committee actively engaged with its independent compensation consultant and management throughout 2023 and 2024 to assist with structuring of the 2024 executive compensation program and overseeing the performance of our executive officers. Details of 2024 compensation program decisions implemented by the MD&C Committee are discussed throughout the CD&A. The financial impact of the strategic investment securities restructuring executed in December negatively impacted the level of achievement for the following 2024 performance goals: Pre-Provision Net Income (“PPNI”) under the 2024 Executive Incentive Plan (“EIP”), and Return on Average Assets (“ROAA”) and Relative Return on Average Equity (“ROAE”) under the 2022, 2023 and 2024 grants of Long-Term Incentive Plan (“LTIP”) Performance-Based Restricted Stock Units (“PSUs”). The MD&C Committee approved a normalizing adjustment for the financial impact of the investment securities restructuring to the 2024 EIP because the Board’s decision to implement this restructuring strategy occurred after the performance metrics were set, had a significant impact on PPNI, and was in the best long-term interest of the Company, given the positive impact that the improved investment securities portfolio yield is expected to have on several of the Company’s financial metrics in 2025 and in future years. The MD&C Committee determined that such adjustment was appropriate because the decision to realize the loss was not a result of and did not accurately reflect the executive officers’ 2024 performance. The MD&C Committee also adjusted PPNI under the 2024 EIP to exclude the fourth quarter 2024 provision for litigation accrual, as the Committee determined that the settlement was extraordinary in nature, not related to execution against strategic targets and not an indication of achievement of budget targets or future financial guidance. In addition, the Board’s decision to approve the settlement agreement achieved certainty in resolving a complex legal and financial legacy issue. The strategic investment securities restructuring also had a profound impact on LTIP performance metrics. PSU grants that were previously projected to meet at least threshold performance (2022 grant for the Relative ROAE metric, 2023 grant for the Relative ROAE metric, and 2024 grants for both the ROAA and Relative ROAE metrics) are now forecast to achieve a payout of 0% as a result of the impact of the investment securities restructuring. The MD&C Committee will consider the investment securities restructuring’s impact on projected PSU awards in determining future executive compensation decisions. Elements of our executive compensation program design are outlined in the following chart.

  21. 2024 Executive Compensation Program Highlights

    | Compensation Component | Purpose and Objectives | Key Features and Performance Metrics | | Base Salary (Cash) | • Salaries provide market-competitive fixed pay to reflect job responsibilities | Annual adjustments based on achievements and development in the prior year, competitive considerations, changes in scope/responsibilities, and the results of peer compensation reviews | | EIP (Cash) | • Motivate and reward NEOs for achievement of strategic goals over a one-year period | Gateway criteria for award payout: • Meet or exceed target capital funding levels measured using Basel III framework • NEO generally must be employed on date of payment Company performance metrics for 2024: – Pre-Provision Net Income (“PPNI”) (40%) – Total Loan Growth (20%) – Non-Public Deposit Growth (20%) – Net Charge-off Ratio (20%) Financial performance funds a total bonus pool for plan participants that allows for discretion to modify the award calculation based on individual and executive team performance up to 25%. | | LTIP – Time-Vested Restricted Stock Units (“RSUs”) | • Promotes retention of talent • Aligns NEO interests with long-term shareholder value creation through appreciation in stock price • Promotes meaningful stock ownership | • 50% of total long-term incentive at target • RSU awards vest three years from the date of grant based on continued satisfactory employment • NEO generally must be employed on the date of vesting | | LTIP – Relative ROAE PSU | • Promotes achievement of long-term value creation through achievement of strategic business objectives • Aligns NEO interests with long-term shareholder value creation through appreciation in stock price • Promotes meaningful stock ownership | • 25% of total long-term incentive at target • Gateway criteria for award payout: – Meet or exceed target capital funding levels measured using Basel III framework – NEO must receive a minimum individual performance evaluation rating of satisfactory or better for the performance period – NEO generally must be employed on date of vesting • Relative ROAE PSU awards based on the Company’s three-year ROAE against the NASDAQ Bank Index as the basis for comparison for the 2024 award • 100% of the award is subject to forfeiture if relative ROAE performance is below the 30th percentile of the peer group | | LTIP – ROAA PSU | • Promotes achievement of long-term value creation through achievement of strategic business objectives • Aligns NEO interests with long-term shareholder value creation through appreciation in stock price • Promotes meaningful stock ownership | • 25% of total long-term incentive at target • Gateway criteria for award payout: – Meet or exceed target capital funding levels measured using Basel III framework – NEO must receive a minimum individual performance evaluation rating of satisfactory or better for the performance period – NEO generally must be employed on date of vesting • ROAA PSU awards based on achievement of three-year average ROAA performance goals for the three-year performance period |

  22. 2024 EIP Results

    2024 EIP Results Our CEO earned a 2024 EIP award of 39.0% of his base salary, and our other NEOs earned the following percentage of their base salaries: Mr. Plants 31.2%, Mr. Quinn 27.2%, Mr. Burruano 27.3% and Ms. Collins 27.3%. EIP results were measured by the performance of PPNI, Total Loan Growth, Total Non-Public Deposit Growth and Net Charge-Off Ratio. The MD&C Committee evaluated executive management’s performance relative to funding targets established through the comprehensive 2024 budget cycle and approved actual funding based upon the Company’s percentage achievement of the performance measures respective of the weighting of each component. For the reasons noted above, the MD&C Committee decided to adjust PPNI to normalize for fourth quarter 2024 investment securities restructuring and provision for litigation settlement. • PPNI(1) of $54.5 million, which excludes the after-tax loss of $74.4 million related to the 2024 investment securities restructuring and the $17.1 million after-tax provision for litigation settlement recorded in the fourth quarter of 2024, was adversely impacted by the first quarter 2024 deposit-related fraud event, resulting in performance exceeding threshold but below target with a performance weighting of 32.8%. • Total Loan Growth was below threshold at 0.4%, as commercial loan growth was lower than planned, resulting in a performance weighting of 0%. • Non-Public Deposit Growth of 3.9% was below threshold due to in part to the Company’s decision to wind down its BaaS platform, announced in the third quarter of 2024, resulting in a performance weighting of 0%. • Net Charge-off Ratio was 0.20% for the year, reflecting a low level of charge-off experience for the majority of 2024, and resulted in a maximum performance weighting of 30.0%. This is a non-GAAP measure that management and the MD&C Committee believe is useful in understanding our financial performance and condition. PPNI is defined as a non-GAAP financial measure that equals net income excluding provision for credit losses adjustment net of tax (utilizing marginal tax rate) and the after-tax impact of the loss on the fourth quarter 2024 sale of investment securities and the after-tax impact of the fourth quarter 2024 provision for litigation settlement. Refer to the GAAP to Non-GAAP Reconciliations in Appendix A. The EIP payout totaled 62.8% of target which was based upon the achievement of the financial results relative to budget targets. Through extensive review and deliberation, the MD&C Committee members approved discretionary adjustments to the 2024 EIP payouts in consideration of the achievements from Team and Individual scorecards, coupled with individual contributions to the successful initiatives that were not captured when the scorecards were created in the first quarter of 2024. 2024 EIP target and actual business performance levels for the four plan measures are shown below:

  23. 2022 LTIP Results (2022 – 2024 Performance Period)

    2022 LTIP Results (2022 – 2024 Performance Period) On March 16, 2022, NEOs were granted RSUs and PSUs under the 2015 LTIP. The RSUs and PSUs vested on March 16, 2025, three years from the grant date. The performance measures for the 2022 PSUs were based on Relative ROAE (50% of units) and ROAA (50% of units). Relative ROAE performance was measured against our peer group (the NASDAQ Bank Index) for the performance period January 1, 2022 through December 31, 2024. The achievement of these performance metrics was adversely impacted by the strategic investment securities restructuring executed in the fourth quarter, which was a primary reason for the net loss reported by the Company in the fourth quarter and full year 2024, in addition to expenses associated with the previously disclosed provision for litigation accrual and fraud event.

  24. 2022 LTIP Results (2022 – 2024 Performance Period)

    | Relative ROAE Performance | 2022 PSU Payout Percentage of Target | | 80th Percentile and above | 150% | | 50th Percentile | 100% | | 30th Percentile | 25% | | Below 30th Percentile | 0% |

  25. 2022 LTIP Results (2022 – 2024 Performance Period)

    Our Relative ROAE for the period was 5.03% and ranked in the 13th percentile for the performance period, which resulted in a payout of 0% of target for the Relative ROAE-based PSUs.

  26. January 1, 2021 - December 31, 2024

    | ROAA Performance | 2022 PSU Payout Percentage of Target | | Maximum (1.054% and above) | 150% | | Target (1.013%) | 100% | | Threshold (.993%) | 25% | | Below Threshold (below .993%) | 0% |

  27. Compensation Philosophy

    | What we do | What we don’t do | | We include clawback provisions in compensation plans and have adopted a clawback policy with respect to incentive-based compensation to our executive officers | We do not allow pledging of our stock | | We incorporate pay-for-performance by aligning a substantial portion of NEO compensation to the achievement of short- and long-term business objectives | We do not allow hedging of our stock | | We include gateway requirements for performance-based payment under incentive plans of meeting or exceeding target capital funding levels measured using Basel III framework | We do not allow holding our stock in margin accounts | | We structure the compensation of our NEOs to include a substantial portion that is variable and at-risk | We do not provide excessive perks to our executives | | We use an external, independent compensation consultant | We do not gross-up payments to offset tax obligations | | We consider risks and adjust controls as appropriate when making pay decisions | We do not pay dividends or dividend equivalents on unvested equity awards | | We require appropriate stock ownership levels for NEOs | | | We include a “double trigger” provision for accelerated vesting of grants in the event of a change in control | | | We seek shareholder feedback with a “say on pay” vote annually | |

  28. Compensation Philosophy

    Our policies concerning executive Stock Ownership Requirements, clawback policy, restrictions on derivatives, pledging and hedging are described on pages 5 and 6. The MD&C Committee does not have any formal policies for allocating compensation among salary, annual cash incentive awards and long-term incentive equity grants, short- and long-term compensation or among cash and non-cash compensation. Instead, the MD&C Committee exercises judgment to establish a total compensation program for each executive officer that is a mix of current, short- and long-term incentive compensation, and cash and non-cash compensation, that the MD&C Committee believes is appropriate to achieve the goals of our executive compensation program and our corporate goals and objectives. In setting the elements of compensation, the MD&C Committee considers prior compensation paid and amounts realizable from prior stock-based awards, as well as other benefits provided by the Company. The MD&C Committee typically grants equity-based awards, including RSUs and PSUs, to our executive officers and other key employees on an annual grant cycle in March of each year and may also make off cycle awards from time to time on an as-needed basis. Awards to our directors are made immediately following the annual meeting of shareholders. The MD&C Committee does not currently grant stock options or stock appreciation rights. The Company does not time the disclosure of material non-public information for the purpose of affecting the value of executive compensation.

  29. Executive Incentive Plan

    Executive Incentive Plan The EIP is a performance-based cash plan designed to reward eligible executives, including our participating NEOs, for the achievement of corporate financial goals and demonstrated successful individual performance. The primary objective of the EIP is to provide participating NEOs with a direct link between their compensation and attainment of pre-established annual performance goals. We believe that the performance measures under the EIP contribute to our attaining and surpassing our annual business plan and achieving long-term strategic goals. The 2024 EIP utilized the same metrics used to calculate the funding of the award pool as last year with the exception of deposit growth. The definition for the deposit growth metric was updated to reflect Non-Public Deposit Growth, which replaced Core Deposit Growth at the same 20% weighting. Non-Public Deposit Growth considers core deposits, coupled with time deposits. In lower interest rate environments, time deposits are often viewed as a non-core funding source. However, when the yield curve is inverted, like 2024, alternative funding sources and deposit acquisition are highly competitive, so time deposits present opportunities to acquire customers and provide cross-sell opportunities. Therefore the performance metric was updated from core deposit growth to non-public deposit growth. The MD&C Committee has the ability to adjust the final calculated award pool based on performance levels of the executive team as measured on their Executive Performance Scorecards in order to reward individual and team performance. Executive performance scorecards are developed jointly on an annual basis between the CEO, NEOs and the MD&C Committee with a 50/50 weighting of individual executive and executive team goals directly aligned to our strategic plan. Incentive Opportunity We set target incentive opportunities and the total award pool under the EIP based on a percentage of base salary that reflects a market-level target compensation opportunity for each participating executive. The threshold and maximum percentages reflect both our review of market practices and judgment of the level of award opportunity appropriate for the performance goals established. The differences in opportunity also reflect each executive’s relative influence on achieving our performance goals based on his or her position. The actual amount of an executive’s award is based on our business results, subject to adjustment based on the executive’s individual performance within a total award pool.

  30. Executive Incentive Plan

    | | 2024 EIP Award Opportunity as a Percent of Salary (Interpolated between performance levels) | | | | Name | Threshold | Target | Maximum | | Martin K. Birmingham | 25.0% | 50% | 75.0% | | W. Jack Plants II | 20.0% | 40% | 60.0% | | Kevin B. Quinn | 20.0% | 40% | 60.0% | | Samuel J Burruano, Jr. | 17.5% | 35% | 52.5% | | Laurie R. Collins | 17.5% | 35% | 52.5% |

  31. Executive Incentive Plan

    Gateway Performance Criteria Our EIP for 2024 required the following gateway performance criteria to be achieved for executives to receive payment of an award under the plan: 1. The Bank must achieve a Tier 1 Capital Ratio determined by the MD&C Committee following the US Basel III capital framework. (The gateway performance requirement was set at 8.5% and the actual ratio as of December 31, 2024 was 11.2%.) 2. With appropriate discretion in the case of separation or retirement, executives must be employed at the time of payment. The Tier 1 Capital Ratio gateway metric was met. Company Performance Goals and Results Performance in the EIP for 2024 was measured based on four financial metrics that the MD&C Committee chose to reward our NEOs for generating profits, growing outstanding balances for both total loans and non-public deposits, and maintaining strong credit quality: PPNI, Total Loan Growth, Total Non-Public Deposit Growth and Net Charge-offs. The MD&C Committee set the goals for each performance measure based on our performance expectations in the long-term strategic plan and the 2024 operating plan in early 2024. Achievement of each performance measure is weighted to calculate the overall performance measurement relative to target. In the first quarter of 2024, the MD&C Committee established weighting, threshold, target, and maximum levels for each performance measure after analyzing the performance required and the potential shareholder value created at each award level, and consulting with its independent compensation consultant. Our 2024 performance goals and results:

  32. Executive Incentive Plan

    | | Weighting of | 2024 EIP Performance Goals | | | 2024 | | | | Performance | | | | Actual | Weighted | | Performance Measure | Measure | Threshold | Target | Maximum | Results | Performance | | PPNI(1) ($MM) | 40% | $44.87 | $59.83 | $68.80 | $54.47 | 32.8% | | Total Loan Growth | 20% | 0.94% | 1.45% | 1.81% | 0.41% | — | | Non-Public Deposit Growth | 20% | 4.22% | 6.49% | 8.11% | 3.92% | — | | Net Charge-Off Ratio | 20% | 0.43% | 0.34% | 0.26% | 0.20% | 30.0% |

  33. Executive Incentive Plan

    PPNI is a non-GAAP measure that management and the MD&C Committee believe is useful in understanding our financial performance and condition. The actual performance of this metric was adjusted by the MD&C Committee to remove the after-tax impact of the loss on the fourth quarter 2024 sale of investment securities and the after-tax impact of the fourth quarter 2024 provision for litigation settlement. Refer to the GAAP to Non-GAAP Reconciliations in Appendix A.

  34. We Consider Individual Performance

    | NEO | Individual Goal and Performance Considerations | | Martin K. Birmingham | • Guided refinement and execution of the Company’s long-term strategic plan in support of its vision of being a high-performing community bank offering a simple, connected, and trusted experience in its markets, including by simplifying the Company’s business lines through the wind-down of the Company’s BaaS offering • Led a successful and oversubscribed public common stock offering that generated net proceeds of more than $100 million, allowing for the execution of a strategic restructuring of the balance sheet and supporting a significant increase to tangible common equity • Successfully executed the sale of the Company’s insurance brokerage to a global firm, generating outstanding financial outcomes to the Company • Maintained strong internal and external relations regarding the first quarter 2024 fraud loss • Delivered quality core earnings results, as well as meaningful growth in stock price through year-end 2024, delivering positive returns to shareholders • Invested in the human capital bench and process, including through strategic hires and continued internal leadership development • Led continued strong community engagement across the Bank’s footprint | | W. Jack Plants II | • Assumed executive leadership responsibility over Technology, Operations, Indirect Lending and BaaS, drove forward-progress on key initiatives, and led thorough evaluation of BaaS line of business, supporting management’s and the Board’s decision to wind down the platform • Oversaw, together with the CEO, the Company’s public common stock offering, resulting in net proceeds of more than $100 million and engagement with many new and existing investors, and led execution of the subsequent balance sheet restructuring • Co-managed the insurance subsidiary asset sale, together with the Chief Legal Officer, resulting in outstanding financial outcomes and meaningful tangible equity accretion • Implemented a capital stress testing framework to link loss absorbing capital to CECL modeling assumptions for industry specific risks, coupled with the implementation of a formal Capital & Dividend Policy that includes credit concentration limits relative to regulatory capital • Established a process for repricing the money market product resulting in significant retention of deposits brought in through the initial campaign in 2023 | | Kevin B. Quinn | • Continued to support commercial growth, including within Mid-Atlantic and Central New York regions, where the Company established loan production offices in recent years • Integral in the development of updated policies and processes that strengthen controls and risk mitigation while also improving customer experience • Continued to execute on established roadmap for growth within Treasury Management products and services • Further strengthened business development relationships within key markets for growth |

  35. We Consider Individual Performance

    Calculation of EIP Awards The EIP award pool is the aggregate funding percentage for the performance period as determined by four financial metrics, multiplied by the aggregate sum of the target amount of each EIP participant who was employed on the last day of the performance period or who is entitled to a pro rata award for the performance period, and further multiplied by the individual performance factor. The MD&C Committee, in consultation with the CEO and the Chief Human Resource Officer (for awards other than their own), determines and approves the amount of each EIP participant’s award, if any, considering the participant’s target amount and the participant’s absolute and relative individual performance against their executive scorecard during the plan year. The aggregate total of all participants’ earned amounts for the plan year may not exceed the actual award pool as determined by four financial metrics and any adjustments to the pool that were approved to reward individual and team performance, unless the MD&C Committee determined otherwise. In 2024, there were seven participants in the EIP (our five NEOs and two other EMC participants). Discretionary adjustments for individual and executive team performance were applied to the financially-driven formulaic payout as shown in the table below. Awards for 2024 Performance Company performance goal achievement for 2024 was as follows: between Threshold and Target for PPNI, below Threshold for Loan Growth, below Threshold for Total Non-Public Deposit Growth and above Maximum for Net Charge-offs, yielding a calculated Award Percentage Achievement of 62.8% of the target award. 2024 EIP awards are summarized below:

  36. Long-Term Equity-Based Incentive Plan

    Long-Term Equity-Based Incentive Plan We award long-term incentives in the form of performance-vesting PSUs and time-vesting RSUs to reward executives for long-term growth in profitability and shareholder value through the successful execution of our strategic plan. We, in consultation with and based on market intelligence provided by the MD&C Committee’s independent compensation consultant, annually review our long-term incentives to ensure the design and grant-date value fall within a competitive range of long-term incentives relative to peer group companies. A change to the amount of annual RSU and PSU award grants was approved by the MD&C for 2024 after careful consideration of the 2024 peer group executive compensation benchmarking report provided by the MD&C Committee’s independent compensation consultant. The prior year grants of 17.5% RSU and 17.5% Target PSUs were increased to 20% RSUs and 20% Target PSUs to ensure alignment of total compensation of our NEOs with the peer group. Structure of Awards • Awards are granted in the form of RSUs and PSUs. RSUs and PSUs are grants valued in terms of Company stock, but Company stock is not issued at the time of grant. As a result, there are no dividends or dividend equivalents paid on RSUs and PSUs, and RSUs and PSUs do not have voting rights. Upon vesting, RSUs and PSUs are settled in shares of Company common stock. • 2024 RSUs cliff vest subject to continuous employment through the third anniversary of the grant date. • 2024 PSUs are subject to the following gateway performance requirements: o The Bank must achieve a Tier 1 Capital Ratio determined by the MD&C Committee following the US Basel III capital framework. (The gateway performance requirement was set at 8.5% and the actual ratio as of December 31, 2024 was 11.21%.) o The NEOs must receive a minimum individual performance evaluation rating on their individual executive performance scorecard of satisfactory or better for the performance period. • 2024 PSUs are earned based on achievement of two performance metrics at the end of the three-year period: o 50% of PSUs are based on a Relative ROAE measure for the 1/1/2024 – 12/31/2026 performance period, compared to the BANK – NASDAQ Bank Index peer group. 50% of the PSUs are based on average absolute ROAA for the 1/1/2024 – 12/31/2026 performance period. Performance levels required for vesting of PSU awards are reflected in the following chart:

  37. Long-Term Equity-Based Incentive Plan

    | Performance Measures & | 2024 Performance Goals | | | | Measurement Periods(1) | Threshold | Target | Maximum | | 3-Year Relative ROAE Ranking (2) (01/01/2024 – 12/31/2026) | 30th Percentile | 50th Percentile | 80th Percentile | | ROAA (01/01/2024 – 12/31/2026) | 0.849% | 0.884% | 0.920% |

  38. Long-Term Equity-Based Incentive Plan

    (1) PSUs are granted at the target level and results are interpolated for performance between Threshold and Target, and between Target and Maximum. (2) If our absolute ROAE is less than 0% for the performance period and our performance relative to the peer group is greater than the 50th percentile, the number of shares earned will not exceed Target. • For NEOs, the grant date value of the annual 2024 RSUs and PSUs awards is based on a percentage of base salary as shown below.

  39. Long-Term Equity-Based Incentive Plan

    | | 2024 Grant Date Value of RSUs and PSUs as a % of Base Salary | | | | | | Time-Based | Performance-Based PSUs | | | | Name | RSUs | Threshold | Target | Maximum | | Martin K. Birmingham | 30.00% | 15.00% | 30.00% | 45.00% | | W. Jack Plants II | 20.00% | 10.00% | 20.00% | 30.00% | | Kevin B. Quinn | 20.00% | 10.00% | 20.00% | 30.00% | | Samuel J. Burruano, Jr. | 20.00% | 10.00% | 20.00% | 30.00% | | Laurie R. Collins | 20.00% | 10.00% | 20.00% | 30.00% |

  40. Long-Term Equity-Based Incentive Plan

    The units awarded for the annual RSU and PSU grants on March 7, 2024 as described above were as follows:

  41. Long-Term Equity-Based Incentive Plan

    | | Time-Based RSUs | Performance-Based PSUs (1) | | | | Name | | Threshold | Target | Maximum | | Martin K. Birmingham | 11,614 | 5,807 | 11,614 | 17,421 | | W. Jack Plants II | 3,788 | 1,894 | 3,788 | 5,682 | | Kevin B. Quinn | 3,338 | 1,669 | 3,338 | 5,007 | | Samuel J. Burruano, Jr. | 3,110 | 1,555 | 3,110 | 4,665 | | Laurie R. Collins | 2,884 | 1,442 | 2,884 | 4,326 |

  42. Long-Term Equity-Based Incentive Plan

    (1) Performance for PSUs will be determined after the end of the performance period on 12/31/2026. PSUs are granted at the Target level and results are interpolated for performance between Threshold and Target and between Target and Maximum. More information on the status of existing equity grants is included in the Outstanding Equity Awards at December 31, 2024 table on page 56.

  43. The MD&C Committee

    | Month | Work Plan, Decision and Actions | | January – February March May July | • Approve payouts for EIP and LTIP based on prior year Company financial performance and individual performance • Review prior year performance goals and objectives for our CEO and evaluate performance considering these goals and objectives • Review and approve performance evaluations for EMC members • Approve annual base pay merit adjustments for the CEO and EMC members • Approve the plan design and corporate performance objectives for coming year executive and senior management compensation programs, which include our EIP and our LTIP performance metrics and awards • Review the MD&C Committee Charter and recommend any changes to the Board • Approve the pool of annual shares available for the CEO Equity Award Program • Update on executive compensation consultant RFP process. • Update on Say-On-Pay Vote for proxy • Approve the company compensation philosophy and policy • Review an update on Human Capital | | | • Review compensation consultant independence • Approve EIP and LTIP PSU financial goals for current year • Prepare for the Annual Meeting, review the draft CD&A and other applicable sections of the proxy • Review share ownership guidelines of executives for any recommended updates and executive compliance • Approve enterprise-wide line of business incentive plans • Approve annual employee RSU and PSU equity grants and form of awards. | | | • Review Board of Directors’ compensation with support from independent compensation consultant and make recommendations to the Board for approval • Review organization charts and management reports on succession planning and management development • Review and approve the CRO’s certification of compensation plans that evaluate risks associated with compensation philosophy and all compensation programs, including our incentive compensation plans | | | • Review succession planning and management development strategy • Approve social and country club perquisite • Review year-to-date executive performance • Review year-to-date usage of the CEO Equity Award program • Establish peer group for use in the next compensation planning cycle • Review year-to-date financial performance for EIP and MIP and period-to-date performance for LTIP awards (PSUs) • Review defined benefit pension plan performance • Review results of annual shareholder voting. |

  44. The MD&C Committee

    | Month | Work Plan, Decision and Actions | | October December | • Review year-to-date financial performance for EIP and MIP and period-to-date performance for LTIP awards (PSUs) • Review the employee benefit program for the following year • Review executives’ peer review compensation analysis and other relevant market information provided by independent compensation consultant • Review an update on Human Capital • Review executive compensation consultant update on emerging trends and regulatory and compliance updates • Review Equal Employment Opportunity and Affirmative Action Plans | | | • Review year-to-date financial performance and estimated results for EIP and MIP and period-to-date performance for LTIP awards (PSUs) • Discuss preliminary design and target compensation levels of executive compensation programs for the next year • Review projected NEOs for Proxy • Begin executive performance evaluations • Review year-to-date usage of the CEO Equity Award program • Executive Compensation Consultant Performance Review |

  45. The MD&C Committee Independent Compensation Consultant

    The MD&C Committee Independent Compensation Consultant The MD&C Committee completed a Request for Proposal process and completed interviews with three finalists in December 2023. After careful consideration the Committee selected Aon’s Human Capital Solution practice, a division of Aon plc (“Aon”) to serve as its independent compensation consultant commencing in February 2024. Aon reported directly to the Chair of the MD&C Committee, and regularly attended committee meetings. Aon does not have a personal or business relationship with any member of the MD&C Committee. The MD&C Committee assessed the independence of Aon considering SEC rules regarding compensation consultant independence. As part of this assessment, the MD&C Committee reviewed Aon’s compensation consultant independence letter and concluded that the services provided by Aon to the MD&C Committee do not raise any conflict-of-interest issues. The MD&C Committee currently retains Aon to: • Provide analysis on compensation levels, programs, practices and reported pay for both executives and directors within certain peer groups and the broader market; and • Provide the MD&C Committee with a report on compensation trends among our peers and the broader market. While Aon provided reports and recommendations to the MD&C Committee regarding our executive compensation programs, the MD&C Committee is solely responsible for determining the form of compensation, the final amount, and the level of performance targets used in our executive compensation plans. During 2024, the MD&C Committee requested Aon to provide the following assistance: • Review and update our peer group based on parameters determined by the MD&C Committee; • Review the CD&A for the proxy statement; • Analyze and present competitive market data of total executive compensation including base pay, annual cash incentive awards, long-term equity-based incentive awards and elements of other compensation; • Assist in the review and design of annual and long-term incentives; • Analyze and present competitive market data on director compensation; • Provide a regulatory update report; and • Provide a study and benchmark report on Executive and Director Share Ownership requirements.

  46. Peer Group for 2024 Compensation Decisions

    Peer Group for 2024 Compensation Decisions To attract, retain and motivate qualified executives, we periodically complete a market analysis of the total compensation package we offer members of the EMC against a peer group of comparable institutions in our industry whose executives manage similarly sized balance sheets and constituencies. We believe that our peer group fairly represents the market for executive talent in which we compete and includes institutions that share our business and market challenges. We use survey and peer group information as a point of reference, but we do not benchmark or target our compensation levels against this competitive information. The peer group that we used for 2024 compensation decisions includes publicly traded financial institutions that generally adhere to the following criteria: • Commercial banks listed on a national exchange; • Headquarters in New England, Mid-Atlantic and select Midwest U.S. states, excluding major metropolitan areas; • Asset sizes ranging from $4.0 billion to $11.1 billion; and • Additional refinement to exclude banks due to merger and acquisition activity or other considerations the MD&C Committee determines relevant. In determining the peer group, we considered whether the peers identified by proxy advisory firm Institutional Shareholder Services adhered to our criteria and included them if we believed they fit the criteria for our peers. We considered competitive market data from 2023 from the following peer group when determining 2024 compensation for the members of the EMC. The 2024 peer group contained the same peers as the 2023 peer group:

  47. Peer Group for 2024 Compensation Decisions

    | 1st Source Corporation | Independent Bank Corporation | | Arrow Financial Corporation | Lakeland Financial Corporation | | Bar Harbor Bankshares | Midland States Bancorp, Inc. | | Camden National Corporation | Park National Corporation | | CNB Financial Corporation | Peoples Bancorp Inc. | | Community Trust Bancorp, Inc. | QCR Holding, Inc. | | First Commonwealth Financial Corporation | S&T Bancorp, Inc. | | First Financial Corporation | Stock Yards Bancorp, Inc. | | German American Bancorp, Inc. | Tompkins Financial Corporation | | Horizon Bancorp, Inc. | Washington Trust Bancorp, Inc |

  48. Peer Group for 2025 Compensation Decisions

    Peer Group for 2025 Compensation Decisions We review peer group criteria annually to ensure continued proper market alignment with our executive talent. In July 2024, in consultation with Aon, the MD&C Committee determined that five peers in the 2024 group be replaced. Accordingly, the following peer group will be used when determining 2025 compensation for the members of the EMC:

  49. Peer Group for 2025 Compensation Decisions

    | Arrow Financial Corporation | Horizon Bancorp, Inc. | | Bar Harbor Bankshares | Independent Bank Corporation | | Camden National Corporation | Mercantile Bank Corporation | | Civista Bancshares, Inc. | Midland States Bancorp, Inc. | | CNB Financial Corporation | Park National Corporation | | Farmers National Banc Corp. | Peoples Bancorp Inc. | | First Busey Corporation | Premier Financial Corp. | | First Commonwealth Financial Corporation | S&T Bancorp, Inc. | | First Financial Corporation | Tompkins Financial Corporation | | German American Bancorp, Inc. | Washington Trust Bancorp, Inc |

  50. Executive Agreements

    Executive Agreements We have entered into executive agreements with Messrs. Birmingham, Plants, Quinn and Burruano and Ms. Collins that provide for change-in-control severance benefits, protection of our confidential and proprietary information and non-competition and non-solicitation restrictions in the event the executive’s employment with us terminates. We believe that severance protection, particularly in the context of a change-in-control transaction, can play a valuable role in attracting and retaining key executive officers in the banking industry. We consider these severance protections to be an important part of an executive’s compensation and to be consistent with similar benefits offered by our competitors. The occurrence or potential occurrence of a change-in-control transaction will create uncertainty regarding the continued employment of our executive officers. These transactions often result in significant organizational changes, particularly at the executive level. We believe that change-in-control benefits mitigate against the potential negative consequences to executives of actively pursuing possible change-in-control transactions that may be in the best interest of shareholders. The agreements provide for certain compensation and benefits if certain events occur during a protection period of six months before to 24 months following a change in control (the “Protection Period”), as defined in the agreements. The agreements also contain provisions for the protection of our confidential and proprietary information, as well as non-competition and non-solicitation restrictions. Each of the agreements is effective for an initial term of three years and automatically extends for additional terms of one year, unless, at least 90 days prior to the expiration of the initial term or an additional term, we give written notice to the executive that we do not intend to extend such term. Under the agreements, in the event of an executive’s termination for a reason other than for cause, as defined in the agreements, or if an executive terminates voluntarily under one or more of the specified circumstances that constitute a good reason within the Protection Period, the executive will receive an amount equal to the following: for Mr. Birmingham 2.99x; for Messrs. Plants and Burruano 2.00x; and for Mr. Quinn and Ms. Collins 1.25x, the sum of his or her base salary for the most recent calendar year ending before the date on which the change in control occurred plus the average of the executive’s annual cash incentive compensation for the three most recent calendar years ending before the date on which the change in control occurred. Such amount will be paid in a lump sum, less applicable deductions and withholdings, within 10 days of the executive’s termination date. We will also continue to pay for health and dental coverage, as follows: for and up to 36 months for Mr. Birmingham; for and up to 24 months for Messrs. Plants and Burruano, and up to 18 months for Mr. Quinn and Ms. Collins, for the executive and his or her covered dependents. In addition, all RSUs, PSUs and other rights that the executive may hold to purchase or otherwise acquire company stock will immediately fully vest, and in the case of PSUs, such PSUs will vest at the greater of target performance or actual performance through the executive’s termination date. RSUs and PSUs will be paid as soon as practicable following the executive’s termination date. The non-competition and non-solicitation provisions of the agreements are effective for a period of six months following the executive’s termination of employment provided that such termination does not entitle the executive to compensation or benefits under the agreement or another arrangement with us. In the event the executive’s employment terminates and such termination entitles the executive to compensation or benefits under another arrangement with us, the non-competition and non-solicitation provisions of the agreement will be effective for the period of time equal to the greater of: (i) the period of time during which the executive is receiving any compensation or benefits from us; or (ii) a period of six months following the executive’s termination of employment. In the event of termination that entitles the executive to compensation or benefits under his agreement, the non-competition and non-solicitation provisions of the agreements are effective 24 months for Mr. Birmingham; 18 months for Messrs. Plants and Burruano; and nine months for Mr. Quinn and Ms. Collins following the executive’s termination of employment. In all cases, the executive’s payments and benefits will be reduced, if necessary, to ensure that the payments and benefits to the executive will not be subject to the “golden parachute” excise tax imposed by Section 4999 of the Internal Revenue Code and the payments will be deductible by us. Further information regarding the benefits under the agreements is included under the Potential Payments Upon Termination of Employment or Change in Control section starting on page 59.

  51. Tax and Accounting Implications

    Tax and Accounting Implications The financial reporting and income tax consequences of individual compensation elements are important considerations for the MD&C Committee when analyzing the overall level of executive compensation and the individual components of executive compensation. Overall, the MD&C Committee seeks to balance our objective of ensuring an effective compensation package for our NEOs with the benefit from deductibility of compensation, while ensuring an appropriate and transparent impact on reported earnings and other closely followed financial measures. Section 162(m) of the Internal Revenue Code generally places a $1 million deduction limit on the amount of compensation paid by a publicly traded company in any one year to certain executive officers. The MD&C Committee believes that tax deductibility is one of many factors that should be considered in developing an appropriate compensation program for its executive officers, but reserves the right to approve compensation for an executive officer that exceeds the deduction limit of Section 162(m) in order to provide competitive compensation packages. Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, we are required to recognize compensation expense on our income statement over the requisite service period or performance period based on the grant date fair value of RSUs and PSUs.

  52. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table contains information concerning the compensation earned by our NEOs in each of the fiscal years ended December 31, 2024, 2023 and 2022 for which each officer was a NEO.

  53. SUMMARY COMPENSATION TABLE

    | Name & Principal Position | Year | Salary ($) | Stock Awards ($)(2) | Non-equity Incentive Plan Compensation ($) | Change in Pension Value ($)(3) | All Other Compensation ($)(4) | Total ($) | | Martin K. Birmingham | 2024 | 734,452 | 362,125 | 288,050 | — | 24,336 | 1,408,963 | | President and Chief | 2023 | 713,863 | 355,591 | 318,638 | 61,032 | 23,760 | 1,472,884 | | Executive Officer | 2022 | 691,578 | 373,097 | 406,046 | — | 19,956 | 1,490,677 | | W. Jack Plants II | 2024 | 359,198 | 118,110 | 112,701 | 7,260 | 19,351 | 616,620 | | EVP, Chief Financial | 2023 | 331,339 | 96,561 | 130,089 | 17,237 | 12,809 | 588,035 | | Officer and Treasurer | 2022 | 298,967 | 123,505 | 110,585 | — | 10,151 | 543,208 | | Kevin B. Quinn | 2024 | 316,487 | 104,079 | 86,569 | 17,267 | 26,235 | 550,637 | | SVP, Chief Commercial | 2023 | 307,130 | 89,431 | 109,845 | 17,604 | 20,913 | 544,923 | | Banking Officer | 2022 | 285,472 | 119,278 | 104,186 | 12,796 | 20,918 | 542,650 | | Samuel J. Burruano, Jr. | 2024 | 294,979 | 96,970 | 80,983 | 14,501 | 11,322 | 498,754 | | EVP, Chief Legal Officer & | 2023 | 276,517 | 80,501 | 93,477 | 20,424 | 10,290 | 481,210 | | Corporate Secretary | 2022 | 259,520 | 111,060 | 82,281 | 94 | 9,690 | 462,645 | | Laurie R. Collins(1) | 2024 | 273,470 | 89,923 | 75,078 | 9,777 | 9,540 | 457,788 | | SVP, Chief Human | 2023 | 257,949 | 75,103 | 83,050 | 14,826 | 9,300 | 440,229 | | Resources Officer | | | | | | | |

  54. SUMMARY COMPENSATION TABLE

    (1) Pursuant to SEC rules, compensation for 2022 is not required to be reported for Ms. Collins. (2) The grant date fair value of all stock awards has been calculated in accordance with FASB ASC Topic 718. In the case of RSUs, the value is determined by multiplying the number of RSUs granted by the closing price of our stock on the grant date reduced by the present value of the dividends expected to be paid on the underlying shares. For PSUs awarded during 2024, amounts shown reflect the grant date fair value of such awards for the three-year performance period beginning in 2024, based on the probable outcome of performance measures related to these PSUs at the grant date. The 2024 PSUs include both ROAA and Relative ROAE performance measures as described under the caption “Long-Term Equity-Based Incentive Plan” in the Compensation Discussion and Analysis section on page 44. The table below sets forth the grant date fair value for the PSUs granted during 2024:

  55. SUMMARY COMPENSATION TABLE

    | Executive Name | Probable Outcome of Performance Measures Grant Date Fair Value ($)* | Maximum Outcome of Performance Measures Grant Date Fair Value ($)* | | Martin K. Birmingham | 181,062 | 271,593 | | W. Jack Plants II | 59,055 | 88,582 | | Kevin B. Quinn | 52,039 | 78,059 | | Samuel J. Burruano, Jr. | 48,485 | 72,727 | | Laurie R. Collins | 44,962 | 67,442 |

  56. SUMMARY COMPENSATION TABLE

    * Amounts shown represent the grant date fair value of PSUs subject to the ROAA and Relative ROAE performance measures (i) based on the probable or target outcome as of the date the goals were set and (ii) based on achieving the maximum level of performance for the three-year performance period beginning in 2024. The grant date fair value of the ROAA- and the Relative ROAE-based PSUs awarded on March 7, 2024 was $15.59 per share, which was the closing share price of our common stock on that date reduced by the present value of the dividends expected to be paid on the underlying shares. (3) The amounts reported in this column reflect the aggregate change in the actuarial present value of each NEO’s accrued pension benefit under our defined benefit pension plan based on the assumptions used for FASB ASC Topic 715 at each measurement date. As such, changes reflect changes in value due to an increase or decrease in the FASB ASC Topic 715 discount rates, changes in the mortality tables, and changes due to the accrual of plan benefits. The methodology applies the “no negative number” position for reporting the change in pension value. Amounts reported in this column for 2024 are itemized in the following table captioned “All Other Compensation.”

  57. 2024 GRANTS OF PLAN-BASED AWARDS

    2024 GRANTS OF PLAN-BASED AWARDS The following table shows the plan-based awards granted during the fiscal year ended December 31, 2024 to each of our NEOs.

  58. 2024 GRANTS OF PLAN-BASED AWARDS

    | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All other Stock | Grant Date Fair Value of Stock | | Executive | Award | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Awards | Awards(3) | | Name | Description | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | ($) | | Martin K. Birmingham | EIP(1) | | 184,647 | 369,295 | 553,942 | | | | | | | | RSU(4) | 3/7/2024 | | | | | | | 11,614 | 181,062 | | | PSU(5) | 3/7/2024 | | | | 2,904 | 5,807 | 8,711 | | 90,531 | | | PSU(6) | 3/7/2024 | | | | 2,904 | 5,807 | 8,711 | | 90,531 | | W. Jack Plants II | EIP(1) | | 72,244 | 144,488 | 216,733 | | | | | | | | RSU(4) | 3/7/2024 | | | | | | | 3,788 | 59,055 | | | PSU(5) | 3/7/2024 | | | | 947 | 1,894 | 2,841 | | 29,527 | | | PSU(6) | 3/7/2024 | | | | 947 | 1,894 | 2,841 | | 29,527 | | Kevin B. Quinn | EIP(1) | | 63,654 | 127,308 | 190,962 | | | | | | | | RSU(4) | 3/7/2024 | | | | | | | 3,338 | 52,039 | | | PSU(5) | 3/7/2024 | | | | 835 | 1,669 | 2,504 | | 26,020 | | | PSU(6) | 3/7/2024 | | | | 835 | 1,669 | 2,504 | | 26,020 | | Samuel J. Burruano, Jr. | EIP(1) | | 51,912 | 103,824 | 155,736 | | | | | | | | RSU(4) | 3/7/2024 | | | | | | | 3,110 | 48,485 | | | PSU(5) | 3/7/2024 | | | | 778 | 1,555 | 2,333 | | 24,242 | | | PSU(6) | 3/7/2024 | | | | 778 | 1,555 | 2,333 | | 24,242 | | Laurie R. Collins | EIP(1) | | 48,127 | 96,254 | 144,380 | | | | | | | | RSU(4) | 3/7/2024 | | | | | | | 2,884 | 44,962 | | | PSU(5) | 3/7/2024 | | | | 721 | 1,442 | 2,163 | | 22,481 | | | PSU(6) | 3/7/2024 | | | | 721 | 1,442 | 2,163 | | 22,481 |

  59. 2024 GRANTS OF PLAN-BASED AWARDS

    This represents the annual cash incentive opportunity under our 2024 Executive Incentive Plan at threshold, target or maximum performance. The amount actually paid for 2024 is set forth in the Summary Compensation Table under the “Non-equity Incentive Plan Compensation” column. Please refer to the Compensation Discussion and Analysis under the caption “Executive Incentive Plan” starting on page 40 for additional information about the performance measures applicable to each payment. For PSUs, these columns show the potential number of shares that our NEOs could earn under our 2015 LTIP at threshold, target or maximum performance. The measures and potential payouts are described in more detail in the Compensation Discussion and Analysis section of this proxy statement under the caption “Long-Term Equity-Based Incentive Plan” on page 44. (3) See footnote 2 to the “Summary Compensation Table” for a description of the method used to determine the grant date fair value of stock awards. (4) The RSUs are granted annually to the NEOs as a component of their complete compensation package and vest on the third anniversary of the grant date, subject to the recipient’s continued employment with the Company. (5) The PSUs vest on March 1, 2027 and are subject to satisfaction of the gateway performance criteria and meeting the Relative ROAE performance measure and the recipient’s continued employment with the Company. (6) The PSUs vest on March 1, 2027 and are subject to satisfaction of the gateway performance criteria and meeting the ROAA performance measure and the recipient’s continued employment with the Company. For additional information regarding our EIP and our LTIP, please see the discussions under “Executive Incentive Plan” on page 40, and “Long-Term Equity-Based Incentive Plan” on page 44 in the CD&A.

  60. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2024

    OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2024

  61. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2024

    | | Stock awards | | | | | | | | | Equity | | | | | Equity | Incentive Plan | | | | | Incentive Plan | Awards: | | | | | Awards: | Market or | | | | | Number of | Payout Value | | | Number of | Market Value | Unearned | of Unearned | | | Shares or | of Shares or | Shares, Units, | Shares, Units, | | | Units of | Units of | or Other | or Other | | | Stock That | Stock That | Rights That | Rights That | | | Have Not | Have Not | Have Not | Have Not | | | Vested | Vested | Vested | Vested | | Executive Name | (#) | ($)(6) | (#)(7) | ($)(6) | | Martin K. Birmingham | 28,642(1) | 781,640 | 12,730 | 347,402 | | W. Jack Plants II | 9,290(2) | 253,524 | 3,742 | 102,119 | | Kevin B. Quinn | 8,554(3) | 233,439 | 3,392 | 92,568 | | Samuel J. Burruano, Jr. | 7,918(4) | 216,082 | 3,110 | 84,872 | | Laurie R. Collins | 7,420(5) | 202,492 | 2,888 | 78,814 |

  62. OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2024

    (1) 6,356 shares vest on March 16, 2025, 10,672 shares vest on March 21, 2026, and 11,614 shares vest on March 7, 2027. (2) 2,604 shares vest on March 16, 2025, 2,898 shares vest on March 21, 2026, and 3,788 shares vest on March 7, 2027. (3) 2,532 shares vest on March 16, 2025, 2,684 shares vest on March 21, 2026, and 3,338 shares vest on March 7, 2027. (4) 2,392 shares vest on March 16, 2025, 2,416 shares vest on March 21, 2026, and 3,110 shares vest on March 7, 2027. (5) 2,282 shares vest on March 16, 2025, 2,254 shares vest on March 21, 2026, and 2,884 shares vest on March 7, 2027. (6) Market values calculated by multiplying the closing market price of our common stock as of December 31, 2024, or $27.29 per share, by the number of unvested shares. This column shows outstanding unvested PSUs at threshold levels; however, as a result of the 2024 investment securities restructuring projected vesting is below threshold (0%) for the number of PSUs subject to ROAA performance measure granted on March 16, 2022, below threshold (0%) for the number of PSUs subject to Relative ROAE performance measure granted on March 16, 2022, below threshold (0%) for the number of PSUs subject to ROAA performance measure granted on March 21, 2023, below threshold (0%) for the number of PSUs subject to Relative ROAE performance measure granted on March 21, 2023, below threshold (0%) for the number of PSUs subject to ROAA performance measure granted on March 7, 2024, and below threshold (0%) for the number of PSUs subject to Relative ROAE performance measure granted on March 7, 2024. Consequently, these PSUs are not expected to become vested or earned.

  63. RESTRICTED STOCK VESTED IN 2024

    RESTRICTED STOCK VESTED IN 2024 The following table provides information about restricted stock held by our NEOs that vested in 2024.

  64. RESTRICTED STOCK VESTED IN 2024

    | Executive Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Martin K. Birmingham | 16,346 | 298,968 | | W. Jack Plants II | 3,578 | 65,442 | | Kevin B. Quinn | 3,653 | 66,813 | | Samuel J. Burruano, Jr. | 3,578 | 65,442 | | Laurie R. Collins | 3,000 | 72,120 |

  65. RESTRICTED STOCK VESTED IN 2024

    (1) Represents the number of vested shares multiplied by the closing market price of our common stock on the date of vesting.

  66. PENSION BENEFITS

    PENSION BENEFITS We maintain a defined benefit pension plan in which our NEOs included below have an accumulating benefit. The following Pension Benefits table provides information regarding the present value of the accumulated benefit, years of credited service and the amount of any pension payments made in 2024 for our NEOs under the New York State Bankers Retirement System Volume Submitter Plan as adopted by Financial Institutions, Inc. (the “New York Bankers Retirement Plan”).

  67. PENSION BENEFITS

    | | | Number of | Present | | | | Years | Value of | | | | Credited | Accumulated | | | | Service | Benefit(1) | | Executive Name | Plan Name | (#) | ($) | | Martin K. Birmingham | New York Bankers Retirement Plan | 18.75 | 552,522 | | W. Jack Plants II | New York Bankers Retirement Plan | 5.00 | 59,527 | | Kevin B. Quinn | New York Bankers Retirement Plan | 4.00 | 63,518 | | Samuel J. Burruano, Jr. | New York Bankers Retirement Plan | 8.00 | 108,119 | | Laurie R. Collins | New York Bankers Retirement Plan | 3.00 | 35,794 |

  68. PENSION BENEFITS

    (1) The Present Value of Accumulated Benefit was determined using the same assumptions used for financial reporting purposes under U.S. generally accepted accounting principles. For a discussion of the valuation method and all material assumptions applied in quantifying the present value of the accumulated benefits, refer to Note 19 – Employee Benefit Plans to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024. Benefits for Tier 1 participants under the defined benefit pension plan for employees with a Date of Participation prior to January 1, 2016 (Mr. Birmingham) are based on years of service and the NEO’s highest average compensation during five consecutive years of employment. Compensation used to determine benefits is all wages and other compensation as reported on the NEO’s form W-2. Normal retirement age for NEOs who first participated in our plan prior to January 1, 2004 is age 62 with ten years of vesting service, as defined in the plan. Normal retirement age is age 65 for any NEO who first participated in the plan on or after January 1, 2004. The normal retirement benefit is an annual pension benefit calculated as follows:

  69. POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL As discussed under “Other Factors Affecting Executive Compensation,” on page 51, we have entered into executive agreements, which include change of control provisions, with Messrs. Birmingham, Plants, Quinn, and Burruano and Ms. Collins. The agreements are designed to promote stability and continuity of our senior management. The agreements include a “double trigger” structure which provides that the executive officer will not receive a “change of control” payment unless both (i) a change in control occurs and (ii) the executive’s employment terminates involuntarily for reasons other than for cause or voluntarily for good reason, in either case, in connection with the change in control. Under the agreements, a change of control will be deemed to have occurred if: 1. any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than FII or a subsidiary of FII, becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of FII securities possessing 25% or more of the voting power for the election of directors of FII; or 2. there is consummated i. any consolidation, share exchange or merger in which FII is not the continuing or surviving corporation or pursuant to which any shares of our common stock are to be converted into cash, securities or other property, provided that the transaction is not with a corporation which was a subsidiary of FII immediately before the transaction; or ii. any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of FII; or 3. “approved directors” constitute less than a majority of the entire Board of Directors, with “approved directors” defined to mean the members of the Board of Directors of FII as of the date of the agreements and any subsequently elected members who are nominated or approved by at least a majority of the approved directors on the Board prior to such election. A change-in-control termination under the agreements requires that within six months prior to or 24 months following a change in control: (i) the executive’s employment is terminated other than for cause; or (ii) the executive terminates employment for “good reason.” Termination for “good reason” means that the executive has terminated employment because the executive’s compensation has been reduced, or the executive’s job duties have been materially changed or the executive’s principal place of employment has changed by more than 75 miles. If the circumstances that create the “good reason” are resolved upon notice, a “good reason” termination is generally not available. Each of the agreements requires that the executive not disclose or use confidential information of the Company both during and after the conclusion of the executive’s employment, and not solicit employees of FII and not compete with FII during the term of the agreement and during the greater of any period for which the executive is entitled to receive compensation or six months thereafter. Each of the agreements includes a continuation multiple and a continuation period which are used to calculate potential payments under the agreement as follows:

  70. POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL

    | Executive Name | Continuation Multiple | Continuation Period | | Martin K. Birmingham | 2.99 | 36 months | | W. Jack Plants II | 2.00 | 24 months | | Kevin B. Quinn | 1.25 | 18 months | | Samuel J. Burruano, Jr. | 2.00 | 24 months | | Laurie R. Collins | 1.25 | 18 months |

  71. POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL

    In the event an executive experiences a termination that qualifies after a change in control, compensation and benefits under the agreements include: (1) payment of the sum of the base salary for the most recent calendar year ending before the date of the change in control and the average of the annual cash incentive compensation earned for the three most recent calendar years ending before the date of the change in control multiplied by the continuation multiple, payable in equal installments over the continuation period; (2) the immediate vesting of all stock options, restricted shares and RSUs; and (3) payment of the cost to continue medical and dental benefits over the continuation period. The agreements also include a provision that limits change-in-control payments to executives in order to eliminate any potential excise taxes under Section 4999 of the Internal Revenue Code. In the event the calculated payment exceeds the Section 280G limit, the benefits will be reduced to an amount below the limit. The equity awards outstanding as of December 31, 2024 for each of the NEOs were issued under the Financial Institutions, Inc. 2015 LTIP. Under the Financial Institutions, Inc. 2015 LTIP, upon death or disability of a participant, the following will occur: (1) full vesting of all equity awards that are subject solely to the passage of time; and (2) the vesting of a pro rata portion of all equity awards whose vesting is based wholly or partially based on the achievement of performance-based goals, as determined by the MD&C Committee in its sole discretion. The following table includes the amount of compensation payable to each of the NEOs upon a termination of employment under certain circumstances on December 31, 2024.

  72. POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL

    | Executive Name | Benefit | Termination Without Cause or For Good Reason Following a Change in Control(2) ($) | Death or Disability ($) | | Martin K. Birmingham | Pay continuation | 3,364,748 | — | | | Equity award vesting(1) | 1,563,280 | 1,563,280 | | | Health benefits continuation | 56,806 | — | | | Total | 4,984,834 | 1,563,280 | | W. Jack Plants II | Pay continuation | 970,759 | — | | | Equity award vesting(1) | 479,758 | 479,758 | | | Health benefits continuation | 37,871 | — | | | Total | 1,488,388 | 479,758 | | Kevin B. Quinn | Pay continuation | 539,455 | — | | | Equity award vesting(1) | 439,587 | 439,587 | | | Health benefits continuation | 24,203 | — | | | Total | 1,003,246 | 439,587 | | Samuel J. Burruano, Jr. | Pay continuation | 775,830 | — | | | Equity award vesting(1) | 404,874 | 404,874 | | | Health benefits continuation | — | — | | | Total | 1,180,704 | 404,874 | | Laurie R. Collins | Pay continuation | 442,981 | — | | | Equity award vesting(1) | 377,694 | 377,694 | | | Health benefits continuation | 24,203 | — | | | Total | 844,877 | 377,694 |

  73. POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL

    (1) The figures shown reflect the value of those equity awards that would accelerate, calculated using a price per share of $27.29 which was the closing price for a share of our common stock as of December 31, 2024. The agreements also include a provision that limits change-in-control payments to executives in order to eliminate any potential excise taxes under Section 4999 of the Internal Revenue Code. In the event the calculated payment exceeds the Section 280G limit, the benefits will be reduced to an amount below the limit.

  74. CEO PAY RATIO

    CEO PAY RATIO In accordance with SEC rules, we are disclosing the ratio of the annual total compensation of our CEO, Martin K. Birmingham, to the annual total compensation of our median employee. For 2024: • The annual total compensation of our median employee was $60,967. • The annual total compensation of Mr. Birmingham, as reported on page 54 in the Summary Compensation Table, was $1,408,963. • Based upon this information, the ratio of the annual total compensation of Mr. Birmingham to the median employee was 23 to 1. Our median employee for 2024 was identified among all employees (other than Mr. Birmingham) as of December 31, 2024 based on annualized Medicare wages as reported in Box 5 of each employee’s 2024 W-2. Once we identified our median employee, we determined the median employee’s annual total compensation using a methodology consistent with that used for the Summary Compensation Table. We did not make any assumptions, adjustments or estimates with respect to annual total compensation. The pay ratio identified above is a reasonable estimate calculated in a manner consistent with SEC rules. Pay ratios that are reported by our peers may not be directly comparable to ours because of differences in the composition of each company’s workforce, as well as the assumptions and methodologies used in calculating the pay ratio, as permitted by SEC rules.

  75. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” (as defined by SEC rules) and certain financial performance of the Company. The MD&C Committee did not consider the pay versus performance disclosure when making its incentive compensation decisions. For further information about how we align executive compensation with the Company’s performance, see “Compensation Discussion and Analysis” starting on page 31. The following table provides information regarding compensation paid to our principal executive officer (“PEO”) and other NEOs along with our Total Shareholder Return (“TSR”), the TSR of the S&P U.S. SmallCap Banks Index (“Peer Group”), our net income, and the Company’s PPNI, which is the most important financial performance measure used by the Company to link compensation paid to the NEOs, for 2024, to Company performance.

  76. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs(3) | Value of Initial Fixed $100 Investment Based On: TSR(4) | Peer Group TSR(4) | Net (Loss) Income ($’000) | Company- Selected Measure (PPNI(5)) ($’000) | | 2024 | $1,408,963 | $1,350,492 | $530,950 | $532,453 | $109.51 | $132.44 | $(25,981) | $54,471 | | 2023 | $1,472,884 | $1,300,579 | $550,383 | $409,868 | $80.80 | $112.03 | $50,264 | $60,440 | | 2022 | $1,490,677 | $1,352,023 | $591,637 | $546,792 | $86.65 | $111.47 | $56,573 | $66,474 | | 2021 | $1,490,370 | $1,928,396 | $526,957 | $602,225 | $108.30 | $126.43 | $77,697 | $71,497 | | 2020 | $1,459,283 | $1,153,554 | $528,013 | $414,981 | $73.99 | $90.82 | $38,332 | $58,551 |

  77. PAY VERSUS PERFORMANCE

    (1) Martin K. Birmingham, President and Chief Executive Officer, was the PEO for each of the years presented in the table. (2) SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine “compensation actually paid” as reported in the Pay Versus Performance Table. “Compensation actually paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. In general, “compensation actually paid” is calculated as Summary Compensation Table total compensation adjusted to include the change in fair value of equity awards as of December 31 of the applicable year or, if earlier, the vesting date (rather than the grant date) and the pension value attributable to the applicable years’ service and any change in pension value attributable to plan amendments made in the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to Mr. Birmingham’s total compensation to determine the compensation actually paid:

  78. PAY VERSUS PERFORMANCE

    | | Martin K. Birmingham | | | | | | | 2024 | 2023 | 2022 | 2021 | 2020 | | Total Compensation as reported in Summary Compensation Table (SCT) | $1,408,963 | $1,472,884 | $1,490,677 | $1,490,370 | $1,459,283 | | Minus pension values reported in SCT | $— | $61,032 | $— | $21,893 | $157,872 | | Minus fair value of equity awards granted during fiscal year | $362,125 | $355,591 | $373,097 | $364,277 | $320,720 | | Plus pension value attributable to current year’s service and any change in pension value attributable to plan amendments made in the current year | $14,165 | $11,877 | $45,610 | $49,376 | $41,473 | | Plus fair value of equity compensation granted in current year—value at end of year-end | $633,892 | $372,537 | $309,664 | $420,015 | $283,680 | | Plus change in fair value for end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during current fiscal year | $(49,180) | $3,021 | $3,088 | $(3,365) | $(8,031) | | Plus change in fair value from end of prior fiscal year to end of current fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year | $(295,223) | $(143,117) | $(123,919) | $358,170 | $(144,259) | | Plus dividends or other earnings paid on stock or options awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year | $— | $— | $— | $— | $— | | Plus fair value of awards forfeited in current fiscal year determined at end of prior fiscal year | $— | $— | $— | $— | $— | | Compensation Actually Paid | $1,350,492 | $1,300,579 | $1,352,023 | $1,928,396 | $1,153,554 |

  79. PAY VERSUS PERFORMANCE

    In 2024, the non-PEO NEOs include W. Jack Plants II, EVP, Chief Financial Officer and Treasurer, Kevin B. Quinn, SVP, Chief Commercial Banking Officer, Samuel J. Burruano, Jr., EVP, Chief Legal Officer and Corporate Secretary, and Laurie R. Collins, SVP, Chief Human Resources Officer; in 2023, the non-PEO NEOs include Messrs. Plants, Quinn, and Burruano and Ms. Collins, and Justin W. Bigham, Former EVP, Chief Community Banking Officer and Sean M. Willett, Former EVP, Chief Administrative Officer; in 2022, the non-PEO NEOs include Messrs. Plants, Bigham, Willett and Quinn; in 2021, the non-PEO NEOs include Messrs. Plants, Bigham, Willett, and Burruano; and in 2020, the non-PEO NEOs include Messrs. Bigham and Willet, Joseph L. Dugan, Former SVP, Chief Experience and Go To Market Officer, Craig Burton, Former SVP, Commercial Real Estate Executive, and William L. Kreienberg, Former EVP, Chief Banking and Revenue Officer. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments in the table below were made to the average NEO’s total compensation to determine the compensation actually paid:

  80. PAY VERSUS PERFORMANCE

    | | Average NEOs | | | | | | | 2024 | 2023 | 2022 | 2021 | 2020 | | Total Compensation as reported in SCT | $530,950 | $550,383 | $591,637 | $526,957 | $528,013 | | Minus pension values reported in SCT | $12,201 | $18,138 | $3,199 | $16,521 | $16,217 | | Minus fair value of equity awards granted during fiscal year | $102,270 | $91,541 | $129,844 | $89,072 | $90,587 | | Plus pension value attributable to current year’s service and any change in pension value attributable to plan amendments made in the current year | $12,354 | $10,159 | $12,316 | $10,967 | $10,811 | | Plus fair value of equity compensation granted in current year—value at end of year-end | $179,022 | $59,640 | $107,769 | $102,701 | $55,620 | | Plus change in fair value for end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during current fiscal year | $(6,079) | $(1,512) | $(2,535) | $4,978 | $(3,048) | | Plus change in fair value from end of prior fiscal year to end of current fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year | $(69,323) | $(23,250) | $(29,352) | $62,215 | $(26,039) | | Plus dividends or other earnings paid on stock or options awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year | $— | $— | $— | $— | $— | | Plus fair value of awards forfeited in current fiscal year determined at end of prior fiscal year | $— | $(75,873) | $— | $— | $(43,572) | | Compensation Actually Paid | $532,453 | $409,868 | $546,792 | $602,225 | $414,981 |

  81. PAY VERSUS PERFORMANCE

    (4) TSR is determined based on the value of an initial fixed investment of $100 on December 31, 2019 and calculated on December 31 of each 2024, 2023, 2022, 2021 and 2020, respectively. The TSR peer group consists of the S&P U.S. SmallCap Banks, which is the same peer group used by the Company for purposes of Item 201(e) of Regulation S-K under the Exchange Act in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. PPNI is a non-GAAP measure that we believe is useful in understanding our financial performance and condition. PPNI equals net income excluding provision for credit losses adjustment net of tax (utilizing marginal tax rate) and the after-tax impact of the fourth quarter 2024 loss on the sale of investment securities and the fourth quarter 2024 provision for litigation settlement. Refer to the GAAP to Non-GAAP Reconciliations in Appendix A.

  82. Compensation Actually Paid vs. TSR 2020-2024

    Compensation Actually Paid vs. TSR 2020-2024

  83. Compensation Actually Paid vs. PPNI(1) 2020-2024

    Compensation Actually Paid vs. PPNI(1) 2020-2024 (1) PPNI is a non-GAAP measure that we believe is useful in understanding our financial performance and condition. PPNI equals net income excluding provision for credit losses adjustment net of tax (utilizing marginal tax rate) and the after-tax impact of the fourth quarter 2024 loss on the sale of investment securities and the fourth quarter 2024 provision for litigation settlement. Refer to the GAAP to Non-GAAP Reconciliations in Appendix A.