Financial Institutions : Sustainability & Corporate Responsibility Report April 2024

Sustainability &

Corporate

Responsibility Report

Financial Institutions, Inc. (NASDAQ: FISI)

April 12, 2024

Important Information

Safe Harbor Statement

Statements contained in this presentation which are not historical facts and which pertain to future operating results of Financial Institutions, Inc. (the "Company") and its subsidiaries constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that

describe the objectives, plans or goals of the Company are forward-looking. These forward-looking statements can generally be identified as such by the context of the statements, including words such as "believe," "continues," "expect," "anticipate," "plan," "may," "would," "intend," "estimate," "guidance" and other similar expressions, whether in the negative or affirmative. These forward-looking statements involve significant risks and uncertainties and are subject to change. All forward-looking statements made herein are qualified by the cautionary language in the Company's Annual Report on Form 10-K, its Quarterly Reports on Form

10-Q and other documents filed with the Securities and Exchange Commission ("SEC"). These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Except as required by law, the Company assumes no obligation to update any information presented herein.

Table of Contents

CEO Letter	3	Our Community	11
Our Corporate Sustainability Program	4	Environmental Responsibility	16
Stakeholder Engagement	5	Governance	19
Our Associates	6	SASB Disclosures	23

2

Overview

1. Message From Our CEO

Fellow Shareholders, Partners, Community Members, and Stakeholders,

On behalf of Financial Institutions, Inc. and its affiliated companies, I am proud to share our first Sustainability & Corporate Responsibility Report. Grounded in our legacy of community-oriented banking

traditions representing rural Western New York for more than 200 years, a strong sense of corporate

responsibility is naturally woven into the culture of our business. It is visible in our financial support of community organizations, volunteer work across our footprint, and our dedication to improving consumer financial literacy and supporting the underbanked.

Our focus on promoting sustainable business practices helps us ensure our associates, customers and communities thrive, while also helping us deliver long-term shareholder value by supporting our efforts to grow revenue, reduce expenses, improve efficiencies, reduce risk and strengthen our reputation. Our enterprise-wide operations and corporate sustainability efforts are supported by a cross-functional team tasked with driving additional progress on initiatives that promote sustainability and further transparency. This report builds on the progress we made in recent years to formalize our program for managing environmental, social and governance related risks and we expect to continue evolving our disclosures.

I invite you read our Sustainability & Corporate Responsibility Report to learn more about the ways we're supporting people and communities, being responsible stewards of our environment and operating under strong corporate governance.

Cordially,

3

Overview

Our Corporate Sustainability Program

Overseen by our Chief Legal Officer and supported by a cross-functional team, updates on initiatives driving sustainability and transparency are reported directly to our President and CEO and Board of Directors

Our corporate sustainability program, which includes the identification, prudent management, and oversight of environmental, social and governance ("ESG") risks, is documented and has been provided to all employees ("associates") to memorialize our enterprise-wide commitment to, and create transparency around, our expectations. Our expectations are also set forth in underlying Human Rights and Environmental Responsibility policies and our Third-Party Vendor Code of Conduct, which serve to set our expectations for our vendors in these important areas.

We regularly monitor best practices, trends, and investor and community perspectives relative to sustainability, and continue to engage with our shareholders to better understand their views. We carefully consider the feedback we receive, adjust our focus and work as needed, and report on relevant matters through internal and public channels. We believe

in focusing our efforts where we can have the most impact and engaging in sustainable business practices that are crucial to our long-term growth. Against this backdrop, and

guided by the sustainability principles set out by the Sustainability Accounting Standards Board ("SASB"), our areas of focus include:

AssociatesCommunity Environmental Governance

Responsibility

More information can be found onour Five Star Bank website,our IR website, and inour most recent Community Report.

4

Overview

Building Relationships Through Stakeholder Engagement

Because each stakeholder group has unique needs and interests, our outreach takes different forms

Stakeholder	How We Engage	Primary Topics
Shareholders	•	Annual shareholder meeting	•	Financial performance
	• SEC filings and financial disclosures	• ESG and sustainable business practices
	•	Quarterly earnings calls	•	Executive compensation alignment
	• Robust Board reporting of investor engagement and internal planning to inform future	• Risk management, including privacy and information security
		engagement
Customers	•	Branch interactions	• Products and services that meet their unique needs
	•	Digital experiences	•	Financial education and literacy
	• Contact Center and customer helplines	• Privacy and information security
	• Publicly available regulatory filings
	•	Financial literacy trainings
Employees	•	Executive communications on weekly, monthly and annual basis	• Awareness and execution of strategic objectives
	• Associate-led Diversity, Equity & Inclusion Advisory Council ("DEI Council")	•	Corporate HEART values
	•	Coordinated volunteer efforts	• Diversity, equity and inclusion ("DEI")
	• Five Star Experience, our peer-to-peer recognition platform through which associates	• Corporate governance and business ethics
		can be recognized for their commitment to living our corporate HEART values -	• ESG matters, including sustainable business practices
		humble, empowered, ambitious, resilient and transparent	• Privacy and information security
Communities	•	Passionate employee volunteerism	• Community development and grants
	• Philanthropic and Community Reinvestment Act ("CRA") investments	•	Affordable housing
	• Community Development and CRA Loan Officers regularly assess and address	•	Financial education and literacy
		unique community needs relative to the access of fair and important banking products	• Consumer products and services
		and services	•	DEI
	• Financial education and outreach programs
Regulators	•	Proactive, periodic engagement by our CEO and other executive and senior leaders	• Board and management oversight
			• Responsible and ethical business practices
			• Risk management and governance frameworks
					5

Our Associates

Our Associates

Our Five Star Promise is the shared commitment of our Company and all associates towards building a culture rooted in teamwork, excellence, and integrity, consistent with our corporate values

• We are committed to compensating our employees fairly for the work they perform, investing in their careers and maintaining a workplace free of discrimination and harassment.
• We empower our associates to live our Five Star Promise and be an active part of evolving our culture. Some examples include:
• • Inviting associates to participate in annual and periodic engagement surveys that measure employee satisfaction and provide valuable feedback to leadership
  • Supporting our associate-led DEI Council (formerly the D&I Council) that facilitates the understanding and appreciation of diverse perspectives and recommends strategies for sustainable and impactful change enterprise-wide
  • Offering our STAR Volunteer program that enables associates to receive paid time off for volunteering in the community and putting forth ideas for further involvement
  • Using our peer-to-peer recognition platform, The Five Star Experience, to celebrate each other's successes, team efforts, and personal and professional milestones
  • Sharing ideas, diverse perspectives and personal stories from leadership and associates alike on our Culture Center internal webpage to promote an inclusive and accepting workplace

6

Our Associates

A Community Bank with HEART

Our goal is to attract, retain and develop a workforce that is diverse in background, knowledge, skill and experience

• We remain committed to providing equal employment opportunities for hiring, training, compensation, transfer, promotion, and other aspects of employment for all qualified applicants and employees without regard to race, religion, color, national origin, citizenship, sex, sexual orientation, gender identity, age, veteran status, disability, genetic information, or any other protected characteristics.
• We continue our commitment to equal employment opportunity through a robust affirmative action plan which includes annual compensation analyses and ongoing reviews of our selection and hiring practices alongside a continued focus on building and maintaining a diverse workforce. Each year, the Board's Management Development & Compensation ("MD&C") Committee reviews Management's performance of our affirmative action plan.
• Our Board-approvedanti-discrimination,anti-harassment, whistleblower, and anti-retaliation policies are updated and reviewed annually. We also make available to our associates an HR hotline where associates can make confidential and anonymous reports of misconduct.

Humble	Empowered	Ambitious
Take genuine interest.	Develop expertise.	Aim for excellence. Bring
Listen. Value diverse	Share your knowledge.	others with you. Celebrate
perspectives.	Take action.	our successes.

Resilient

Embrace change. Learn

from experiences.

Be part of the solution.

Transparent

Do the right thing.

Communicate clearly and often. Welcome feedback.

7

Our Associates

Prioritizing our Associates' Wellbeing

The health and wellbeing of our colleagues is a top priority and in recognition of this, we provide our employees a robust health and wellness package

• We continually evolve our benefits plans to remain competitive and meet the needs of our workforce. Our benefits package includes:
• • Health and welfare benefits with generous employer contributions
  • Company-paidshort-term disability and life insurance benefits
  • 401(k) savings program with Vanguard Investment Services
  • Combined paid time off and paid sick leave to ensure associates have maximum flexibility
  • Tuition and training reimbursement programs
• We support the wellness of all colleagues through various programs including health seminars and education programs with our expert employee benefits partners.
• • Among the tools we make available to all associates is access to CALM, a self-guided digital app that supports users' mental wellbeing through guided meditations, stretching exercises and more.
• Our Compensation Policy, which is reviewed and approved by our Board each year, memorializes our commitment to fair and equitable compensation. We regularly review our compensation programs to ensure fair and inclusive pay practices across our business within our compensation philosophy.

8

Our Associates

Promoting a Diverse, Equitable and Inclusive Workplace

Fostering an environment that values, welcomes, and facilitates the exchange of diverse perspectives and life experiences

• Our DEI Council, formed in 2020, continues to inform our Chief Human Resources Officer on employee initiatives to further our inclusive culture and is charged with supporting sustainable and impactful DEI practices, including:
• • Identifying opportunities and developing proposals to address the unique needs and challenges of our organization
  • Championing DEI by engaging and learning from associates throughout the organization
  • Advocating for and supporting communications and learning opportunities to build awareness and inclusion for many groups
  • Monitoring and communicating progress through an annual survey and employee feedback
  • Conducting internal training sessions on unconscious bias and other DEI topics
  • Facilitating DEI awareness through periodic updates delivered by the DEI Council on all-company calls, in our internal newsletter, and through posts on our internal website
• The DEI Council met regularly throughout 2023 to provide feedback and ideas that guide our DEI strategy.
• We conduct intentional, strategic hiring to supplement the organization with new skill sets and perspectives. Our talent acquisition team uses internal and external resources to source diverse slates of talent for every opening, enabling us to hire highly skilled and talented workers. We engage employees by offering referral bonuses for open positions.
• • In 2023, approximately 46% of total filled positions were filled by internal candidates. The majority of these internal candidates were promoted into new positions, reflecting our commitment to supporting our associates' career progression.

624

associates as of December 31, 2023

64% & 9%

of our workforce was made up of women and racial or ethnic minorities at year-end 2023, respectively

9

Our Associates

High-Performing and

Engaged Team

Adapting for an evolving workforce through digitally- delivered training and strong employee feedback loop

• Five Star University is our learning management platform that enables professional development, competency training, and upskilling for a rapidly evolving workforce.
• • Through Five Star University, we are able to deliver e-Learning trainings that associates can complete on their own time as well as live instructor-led trainings on a variety of topics, including compliance, anti-discrimination, active shooter prevention, people leadership skills, and more.
• We seek to continually enhance our goal setting process, performance evaluations, succession planning, and learning and development approaches. Since 2022, we have conducted 9-box talent calibrations with segments of our team to assess internal talent and identify gaps and development opportunities.

• We were pleased to be Certified by Great Place To Work® for the second time in 2024,

placing us in an elite group of global employers who achieved an outstanding culture

based on anonymous survey data collected from their own employees.

• These and other regular surveys measure employee satisfaction and provide valuable feedback to leadership, ensuring we can continue to strengthen and evolve our culture.

26.6		75%
recorded annual training		of employees say
hours per employee through		Five Star Bank is a
Five Star University1		great place to work2

Proud to be recognized in our

markets and beyond

1	Represents average total hours spent in e-Learning and instructor-led trainings conducted through Five Star University during 2023 per employee.	10
2	Based on results of Great Place to Work® survey completed in March 2024.