Financial Institutions Seeks 200-300 Basis Points of Positive Operating Leverage for 2027

Financial Institutions Inc. is working toward a preliminary 2027 target of 200 to 300 basis points of positive operating leverage, while aiming for an efficiency ratio approaching 55%, CFO W. Jack Plants II said Friday, Oct. 30.

Plants, the company’s CFO and treasurer, described the figures as current planning targets as management builds its 2027 plan. “We’re in the middle phases of building out our 2027 plan, but our target right now is positive operating leverage of 200 to 300 basis points and an efficiency ratio that’s approaching 55%,” Plants said.

He said accelerated loan growth could help the company reach the target while it maintains pricing discipline. The figures remain preliminary as the company continues developing its plan.

For the quarter ended Sept. 30, net income available to common shareholders was $19.626 million, or $0.99 per diluted share. The company’s efficiency ratio was 56.84%, compared with 55.33% in the second quarter and 56.78% in the third quarter of 2025.

Loans totaled $4.856 billion at Sept. 30, up 2.2% from the prior quarter and 5.8% from a year earlier. Deposits were $5.475 billion, up 3.3% from the second quarter and 2.2% year over year.

Net interest income was $54.291 million, rising 1.7% from the second quarter and 4.8% year over year. Net interest margin was 3.70%. It was unchanged from the prior quarter and up 5 basis points from the year-earlier quarter.

The company operates through Five Star Bank and Courier Capital. It offers banking and wealth-management services. Management expects to provide more detail on the 2027 plan with fourth-quarter earnings and full-year 2027 guidance.