Financial Institutions to Acquire Insurance Agency; Terms Undisclosed

Financial Institutions, Inc.

, the parent company of Five Star Bank, today announced that it has entered into a definitive agreement to acquire Scott Danahy Naylon Co., Inc. ("SDN"), a full service insurance agency located in Amherst, NY, a suburb of Buffalo. SDN provides a broad range of insurance services to both personal and business clients. Upon closing of the acquisition, SDN will operate as a subsidiary of Financial Institutions, Inc. and an affiliate of Five Star Bank. "The acquisition of an insurance agency of this quality and magnitude is a strategically important first step to diversify our revenue base by increasing noninterest income. It also provides a scalable platform to support our future growth in insurance sales and meets our internal rate of return standards to add value for our shareholders," stated Martin K. Birmingham, president and chief executive officer of Five Star Bank. "We are extremely excited to be joining the Five Star family," said William H. Scott, Jr., president and Glenn W. Quackenbush, managing partner at SDN. "Combining resources with Five Star Bank enhances our ability to meet the needs of our clients by providing them access to a wide array of banking services. Working closely with our associates at Five Star Bank will allow us to add our risk management expertise and insurance products to their broad array of retail and commercial products," continued Scott and Quackenbush. SDN was founded in 1923 and serves over 6,000 clients in 44 states. SDN occupies a 16,000 square foot facility with 30 employees in Amherst, NY. The transaction is subject to the customary closing and licensing conditions and is expected to close early in the third quarter of 2014. About Financial Institutions, Inc. Financial Institutions, Inc. provides diversified financial services through its subsidiary, Five Star Bank. Five Star Bank provides a wide range of consumer and commercial banking services to individuals, municipalities and businesses through a network of over 50 offices and more than 60 ATMs throughout Western and Central New York State. Financial Institutions, Inc. and its subsidiary employ over 600 individuals. The Company's stock is listed on the Nasdaq Global Select Market under the symbol FISI and is a member of the NASDAQ OMX ABA Community Bank Index. Additional information is available at the Company's website: www.fiiwarsaw.com.