Financial Institutions, Inc. Resolves Auto Lending Dispute Smoothly

Author: Owen Jenkins Updated: 03-10-2025 04:25 PM

Settlement of Auto Lending Litigation

Financial Institutions, Inc. (NASDAQ: FISI), which is the parent company of Five Star Bank, has taken significant steps in resolving ongoing civil litigation associated with its auto loan notification process. The litigation, which has been active since 2017, primarily revolved around specific language used in repossession notices that were sent to borrowers from 2011 through 2021.

Details of the Settlement Agreement

On March 7, 2025, the company reached a settlement agreement related to the class action lawsuit, pending court approval. The financial impact of this settlement is significant, prompting the organization to record a litigation accrual of $23.0 million, translating to approximately $17.1 million post-tax. According to the company, this accrual will be reflected in the fourth quarter consolidated financial statements for 2024.

Anticipated Impact on Financial Performance

The management of Financial Institutions, Inc. has communicated that they do not foresee the need to accrue any additional amounts for this issue in 2025 or in future periods. Consequently, the company expects that this settlement will not necessitate any adjustments to its previously communicated guidance for the year 2025. This outlook is encouraging for stakeholders as the company navigates through this legal matter.

Investor Conference Call

In conjunction with these developments, Financial Institutions, Inc. is organizing an investor conference call scheduled for March 10, 2025, at 4:45 p.m. Eastern Time. Interested participants can join the call by dialing 1-833-470-1428 and entering access code 310636. Furthermore, a replay of the conference call will be made available for at least a week, accessible toll-free at 1-866-813-9403 using the access code 538758.

About Financial Institutions, Inc.

Financial Institutions, Inc. is a well-established financial holding company, boasting assets of approximately $6.1 billion as of the end of 2024. Through its subsidiary, Five Star Bank, the company provides a range of banking and wealth management services that cater to individuals, municipalities, and businesses across New York state. Their footprint extends through various banking locations and includes commercial lending services that reach into the Mid-Atlantic region. Additionally, Courier Capital, LLC, another subsidiary, offers tailored investment management, financial planning, and consulting services.

Company Contact Information

If you require additional information, please reach out to Kate Croft, the Director of Investor and External Relations, at (716) 817-5159 or via email at klcroft@five-starbank.com.

Frequently Asked Questions

What was the reason behind the litigation?

The litigation pertained to the language used in repossession notices sent to borrowers from 2011 to 2021.

How much money has been accrued for the settlement?

The company has recorded a litigation accrual of $23 million, which amounts to about $17.1 million after tax considerations.

Will this settlement affect future financial guidance?

No, Financial Institutions, Inc. does not anticipate any additional accruals tied to this litigation impacting their previously communicated financial guidance for 2025.

When will the investor conference call take place?

The investor conference call is scheduled for March 10, 2025, at 4:45 p.m. Eastern Time.

Who should I contact for more information?

For more details, you can contact Kate Croft, the Director of Investor and External Relations, at (716) 817-5159.

About The Author

Hi there I'm 38-year-old author and financial consultant Owen Jenkins. Having worked in the financial sector for more than ten years, I am well-versed in the subtleties and complexity that mold our financial environment. Following a degree in finance, I worked in a number of financial institutions honing my abilities in market analysis, financial planning, and investment strategies.

My love is teaching others about investing and personal finance. My goal in writing many books and articles has been to demystify financial ideas and give readers the information they need to make wise financial decisions. I write with a direct, useful style that emphasizes doable suggestions for daily living.

Along with writing, I lead webinars and seminars where I impart knowledge on how to successfully negotiate the financial world. I also write for financial journals and show up as a guest expert on financial news programs a lot. Whether they are new to investing or want to improve their approach, my mission is to enable people to take charge of their financial futures.

Beyond work, I like to hike, play the guitar, and spend time with my family. I think that balance is crucial and want to encourage people to strike a balance between their financial aspirations and their hobbies. I want to help people succeed and achieve financial security through my work, so having a good influence.

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