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<H5 align="left" style="page-break-before:always"><A HREF="#L42079tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>As filed with the Securities and Exchange Commission on March&nbsp;7, 2011</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 6pt"><B>Registration No. </B><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
<BR style="font-size: 3pt">
</DIV>



<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>FORM S-8</b></div>
<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><b>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>Financial Institutions, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><B>New York</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>16-0816610</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of <BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><B>220 Liberty Street</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><B>Warsaw, New York</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>14569</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top">(Address of Principal Executive Offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>Financial Institutions, Inc. 2009 Directors&#146; Stock Incentive Plan</B><BR>
(Full title of the plan)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Peter G. Humphrey<BR>
President and Chief Executive Officer<BR>
220 Liberty Street<BR>
Warsaw, New York 14569<BR>
(Name and address of agent for service)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">(585)&nbsp;786-1100<BR>
(Telephone number, including area code, of agent for service)</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">With a copy to:<BR>
James M. Jenkins, Esq.<BR>
Harter Secrest &#038; Emery LLP<BR>
1600 Bausch &#038; Lomb Place<BR>
Rochester, New York 14604<BR>
Tel: (585)&nbsp;232-6500<BR>
Fax: (585)&nbsp;232-2152</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of &#147;large accelerated
filer,&#148; &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule&nbsp;12b-2 of the Exchange Act.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="22%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Large accelerated filer <FONT style="font-family: Wingdings">&#111;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Accelerated filer <FONT style="font-family: Wingdings">&#254;</FONT></FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Non-accelerated filer</FONT> <FONT style="font-family: Wingdings">&#111;</FONT><br>
<FONT style="white-space: nowrap">(Do not check if a smaller reporting company)</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><FONT style="white-space: nowrap">Smaller reporting company <FONT style="font-family: Wingdings">&#111;</FONT></FONT></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CALCULATION OF REGISTRATION FEE</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD nowrap align="center"><B>Proposed</B></TD>

    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>Title of securities</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>offering price per</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>aggregate offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="center"><B>to be registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>registered (1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>share (2)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>price (2)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>registration fee</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>

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<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Common Stock, par
value $.01 per share</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">250,000</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">$19.02</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">$4,755,000</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="center" valign="bottom" style="border-top: 2px solid #000000">$553</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="15" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 1pt">&nbsp;</DIV>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to Rule&nbsp;416 under the Securities Act of 1933, as amended, there are also being
registered such additional shares of common stock as may become issuable pursuant to stock
splits, stock dividends, recapitalizations and similar transactions. In addition, this
registration statement registers the resale of shares of the Company&#146;s common stock by certain
selling shareholders named in the reoffer prospectus included in and filed with this
registration statement on Form S-8, for which no additional registration fee is required
pursuant to Rule&nbsp;457(h)(3) under the Securities Act of 1933, as amended.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated solely for the purposes of computing the registration fee pursuant to Rule 457(c)
under the Securities Act of 1933, as amended, and based on the average of the high and low
prices reported on the NASDAQ Global Select Market as of March&nbsp;3, 2011.</TD>
</TR>

</TABLE>


<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>EXPLANATORY NOTE</B></DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This registration statement is being filed to register 250,000 shares of common stock of
Financial Institutions, Inc. (the &#147;Company&#148;) available for grant under the Financial Institutions,
Inc. 2009 Directors&#146; Stock Incentive Plan (the&#147;DSIP &#148;). This registration statement also includes a
reoffer prospectus of restricted securities (as that term is defined in General Instruction C to
Form S-8) of the Company meeting the requirements of Part&nbsp;I of Form S-3. The reoffer prospectus
relates solely to reoffers and resales on a continuous or delayed basis in the future of up to an
aggregate of 15,200 shares of restricted stock that have been awarded to the selling shareholders
listed in the reoffer prospectus under the DSIP prior to the filing of this registration statement.
</DIV>

<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>







<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#L42079tocpage">Table of Contents</A></H5><P>


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART I</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The documents containing the information specified in Part&nbsp;I of Form S-8 have been or will be
delivered to participants in the DSIP as specified by Rule&nbsp;428(b)(1) promulgated by the Securities
and Exchange Commission under the Securities Act of 1933, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such documents are not being filed with the Securities and Exchange Commission but constitute
(along with the documents incorporated by reference into this registration statement pursuant to
Item&nbsp;3 of Part&nbsp;II hereof) a prospectus that meets the requirements of Section 10(a) of the
Securities Act of 1933, as amended.
</DIV>






<P align="center" style="font-size: 10pt"><!-- Folio -->ii<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#L42079tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Reoffer Prospectus</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><IMG src="l42079l4207900.gif" alt="(LOGO)">
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>220 Liberty Street<BR>
Warsaw, New York 14569<BR>
Telephone: (585)&nbsp;786-1100</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Common Stock, $0.01 par value per share</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>15,200 shares</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This reoffer prospectus relates to the disposition, from time to time, of up to 15,200 shares
of our common stock by the holders of such shares named in this reoffer prospectus, some of whom
may be deemed to be our &#147;affiliates.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares may be offered directly, through agents on behalf of the selling shareholders and
their transferees, or through underwriters or dealers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any of the proceeds from the sale of the shares. We have agreed to bear
the expenses in connection with the registration of the shares. The selling shareholders will bear
all expenses in connection with the sale of the shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders propose to sell the shares from time to time in transactions
occurring either on or off the NASDAQ Global Select Market at prevailing market prices or at
negotiated prices. Sales may be made through brokers or to dealers, who are expected to receive
customary commissions or discounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders and any agents or broker-dealers that participate with the selling
shareholders in the distribution of the shares may be considered &#147;underwriters&#148; within the meaning
of the Securities Act of 1933, as amended, and, in that event, any commissions received by them and
any profit on the resale of the shares may be considered underwriting commissions or discounts
under the Securities Act of 1933, as amended.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is listed on the NASDAQ Global Select Market under the symbol &#147;FISI.&#148; On
March&nbsp;3, 2011, the closing price of our common stock on the NASDAQ Global Select Market was $19.22
per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investing in our common stock involves a high degree of risk. Please see the section entitled
&#147;Risk Factors&#148; beginning on page 8 of this reoffer prospectus to read about risks you should
consider before buying our common stock.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this reoffer prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The date of this reoffer prospectus is March&nbsp;7, 2011.
</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="L42079tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">TABLE OF CONTENTS
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079101">Summary of this Offering</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079102">Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079103">Special Note Regarding Forward Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079104">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079105">Selling Shareholders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079106">Plan of Distribution</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079107">Legal Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079108">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079109">Documents Incorporated by Reference</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#L42079110">Additional Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l42079exv4w4.htm">EX-4.4</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l42079exv5w1.htm">EX-5.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="l42079exv23w2.htm">EX-23.2</A></FONT></TD></TR>
</TABLE>
</DIV>
<DIV align="left">
<!-- /TOC -->
</DIV>


<DIV align="left">
<A name="L42079101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SUMMARY OF THIS OFFERING</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="15%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="80%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Issuer:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Institutions, Inc.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Securities Offered:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The selling shareholders are offering up to 15,200
shares of our common stock that were granted under
the DSIP.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>NASDAQ Symbol:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&#147;FISI&#148;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top" nowrap><DIV style="margin-left:0px; text-indent:-0px"><B>Securities Outstanding:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">As of March&nbsp;1, 2011, 10,979,715 shares of our
common stock were issued and outstanding.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Use of Proceeds:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">We will not receive any proceeds from sales of our
common stock covered by this reoffer prospectus.
The selling shareholders will receive all proceeds
from sales of common stock covered by this reoffer
prospectus.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Offering Price:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The offering price for the shares of common stock
covered by this reoffer prospectus will be
determined by the prevailing market price for the
shares at the time of their sale or in negotiated
transactions.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Risk Factors:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">An investment in our common stock is highly
speculative. You should read the &#147;Risk Factors&#148;
section beginning on page 8 of this reoffer
prospectus (along with other matters referred to
and incorporated by reference in this reoffer
prospectus) to ensure that you understand the
risks associated with a purchase of our common stock.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Terms of Sale:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">The terms of sale for the shares of our common
stock covered by this reoffer prospectus will be
determined at the time of their sale.</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial Institutions, Inc. is a financial holding company organized in 1931 under the laws
of New York State (&#147;New York&#148; or &#147;NYS&#148;). Through its subsidiaries, including its wholly-owned, New
York State chartered banking subsidiary, Five Star Bank, Financial Institutions, Inc. provides
deposit, lending and other financial services to individuals and businesses in Western and Central
New York. All references to the parent company are to Financial Institutions, Inc. (&#147;FII&#148;).
Unless otherwise indicated or unless the context requires otherwise, all references in to &#147;the
Company,&#148; &#147;we,&#148; &#147;our&#148; or &#147;us&#148; means Financial Institutions, Inc. and its subsidiaries on a
consolidated basis. Five Star Bank is referred to as Five Star Bank, &#147;FSB&#148; or &#147;the Bank&#148;. The
parent company is a legal entity separate and distinct from its subsidiaries, assisting those
subsidiaries by providing financial resources and management. Our executive offices are located at
220 Liberty Street, Warsaw, New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We conduct business primarily through our banking subsidiary, Five Star Bank, which adopted
its current name in 2005 when we merged three of our bank subsidiaries, Wyoming County Bank,
National Bank of Geneva and Bath National Bank into our New York chartered bank subsidiary, First
Tier Bank &#038; Trust, which was renamed Five Star Bank. In addition, our business operations include
a wholly-owned broker-dealer subsidiary, Five Star Investment Services, Inc. (&#147;FSIS&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>MARKET AREAS AND COMPETITION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We provide a wide range of consumer and commercial banking and financial services to
individuals, municipalities and businesses through a network of over 50 offices and more than 70
ATMs in fourteen contiguous counties of Western and Central New York: Allegany, Cattaraugus,
Cayuga, Chautauqua, Chemung, Erie, Genesee, Livingston, Monroe, Ontario, Seneca, Steuben, Wyoming
and Yates Counties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our market area is economically diversified in that we serve both rural markets and the larger
more affluent markets of suburban Rochester and suburban Buffalo. Rochester and Buffalo are the
two largest metropolitan areas in New York outside of New York City, with combined metropolitan
area populations of over two million people. We anticipate increasing our presence in and around
these metropolitan statistical areas in the coming years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face significant competition in both making loans and attracting deposits, as Western and
Central New York have a high density of financial institutions. Our competition for loans comes
principally from commercial banks, savings banks, savings and loan associations, mortgage banking
companies, credit unions, insurance companies and other financial service companies. Our most
direct competition for deposits has historically come from commercial banks, savings banks and
credit unions. We face additional competition for deposits from non-depository competitors such as
the mutual fund industry, securities and brokerage firms and insurance companies. We generally
compete with other financial service providers on factors such as; level of customer service,
responsiveness to customer needs, availability and pricing of products, and geographic location.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>LENDING ACTIVITIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>General</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We offer a broad range of loans including commercial business and revolving lines of credit,
commercial mortgages, equipment loans, residential mortgage loans and home equity loans and lines
of credit, home improvement loans, automobile loans and personal loans. Newly originated and
refinanced fixed rate residential mortgage loans are either retained in our portfolio or sold to
the secondary market with servicing rights retained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We continually evaluate and update our lending policy. The key elements of our lending
philosophy include the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To ensure consistent underwriting, all employees must share a common view of
the risks inherent in lending activities as well as the standards to be applied in
underwriting and managing credit risk;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Pricing of credit products should be risk-based;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The loan portfolio must be diversified to limit the potential impact of
negative events; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Careful, timely exposure monitoring through dynamic use of our risk rating
system is required to provide early warning and assure proactive management of potential
problems.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Commercial Business and Commercial Mortgage Lending</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We originate commercial business loans in our primary market areas and underwrite them based
on the borrower&#146;s ability to service the loan from operating income. We offer a broad range of
commercial lending products, including term loans and lines of credit. Short and medium-term
commercial loans, primarily collateralized, are made available to businesses for working capital
(including inventory and receivables), business expansion (including acquisition of real estate,
expansion and improvements) and the purchase of equipment. Commercial business loans are offered
to the agricultural industry for short-term crop production, farm equipment and livestock
financing. As a general practice, where possible, a collateral lien is placed on any available
real estate, equipment or other assets owned by the borrower and a personal guarantee of the owner
is obtained. As of December&nbsp;31, 2010, $70.0&nbsp;million, or 33%, of the aggregate commercial business
loan portfolio were at fixed rates, while $141.0&nbsp;million, or 67%, were at variable rates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also offer commercial mortgage loans to finance the purchase of real property, which
generally consists of real estate with completed structures and, to a smaller extent, agricultural
real estate financing. Commercial mortgage loans are secured by first liens on the real estate and
are typically amortized over a 10 to 20&nbsp;year period. The underwriting analysis includes credit
verification, appraisals and a review of the borrower&#146;s financial condition and repayment capacity.
As of December&nbsp;31, 2010, $100.0&nbsp;million, or 28%, of the aggregate commercial mortgage portfolio
were at fixed rates, while $252.9&nbsp;million, or 72%, were at variable rates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We utilize government loan guarantee programs where available and appropriate. See
&#147;Government Guarantee Programs&#148; below.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Government Guarantee Programs</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We participate in government loan guarantee programs offered by the Small Business
Administration (&#147;SBA&#148;), U.S. Department of Agriculture, Rural Economic and Community Development
and Farm Service Agency, among others. As of December&nbsp;31, 2010, we had loans with an aggregate
principal balance of $55.1&nbsp;million that were covered by guarantees under these programs. The
guarantees typically only cover a certain percentage of these loans. By participating in these
programs, we are able to broaden our base of borrowers while minimizing credit risk.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Residential Mortgage Lending</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We originate fixed and variable rate one-to-four family residential mortgages collateralized
by owner-occupied properties located in its market areas. We offer a variety of real estate loan
products, which are generally amortized for periods up to 30&nbsp;years. Loans collateralized by
one-to-four family residential real estate generally have been originated in amounts of no more
than 80% of appraised value or have mortgage insurance. Mortgage title insurance and hazard
insurance are normally required. We sell certain one-to-four family residential mortgages to the
secondary mortgage market and typically retain the right to service the mortgages. To assure
maximum salability of the residential loan products for possible resale, we have formally adopted
the underwriting, appraisal, and servicing guidelines of the Federal Home Loan Mortgage Corporation
(&#147;FHLMC&#148;) as part of our standard loan policy. As of December&nbsp;31, 2010, the residential mortgage
servicing portfolio totaled $328.9&nbsp;million, the majority of which have been sold to FHLMC. As of
December&nbsp;31, 2010, $89.4&nbsp;million, or 69%, of residential mortgage retained in portfolio were at
fixed rates, while $40.2&nbsp;million, or 31%, were at variable rates. We do not engage in sub-prime or
other high-risk residential mortgage lending as a line-of-business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Consumer Lending</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We offer a variety of loan products to our consumer customers, including home equity loans and
lines of credit, automobile loans, secured installment loans and various other types of secured and
unsecured personal loans. At December&nbsp;31, 2010, outstanding consumer loan balances were
concentrated in indirect automobile loans and home equity products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We indirectly originate, through franchised new car dealers, indirect consumer loans. The
consumer indirect loan portfolio is primarily comprised of new and used automobile loans with terms
that typically range from 36 to 84&nbsp;months. We have expanded our relationships with franchised new
car dealers in Western, Central and, most recently, into the Capital District of New York, and have
selectively originated a mix of new and used automobile loans from those dealers. In the latter
part of 2010, we began efforts to expand our dealer network into Northern Pennsylvania and
anticipate indirectly originating loans there in the first half of 2011. As of December&nbsp;31, 2010,
the consumer indirect portfolio totaled $418.0&nbsp;million, nearly all of which were fixed rate
automobile loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also originate, independently of the indirect loans described above, consumer automobile
loans, recreational vehicle loans, boat loans, home improvement loans, closed-end home equity
loans, home equity lines of credit, personal loans (collateralized and uncollateralized) and
deposit account collateralized loans. The terms of these loans typically range from 12 to 180
months and vary based upon the nature of the collateral and the size of loan. The majority of the
consumer lending program is underwritten on a secured basis using the customer&#146;s home or the
financed automobile, mobile home, boat or recreational vehicle as collateral. As of December&nbsp;31,
2010, $97.2&nbsp;million, or 47%, of the home equity portfolio was at fixed rates, while $111.2&nbsp;million,
or 53%, was at variable rates. The other consumer portfolio totaled $26.1&nbsp;million as of December
31, 2010, all of which were fixed loans.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Credit Administration</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our loan policy establishes standardized underwriting guidelines, as well as the loan approval
process and the committee structures necessary to facilitate and ensure the highest possible loan
quality decision-making in a timely and businesslike manner. The policy establishes requirements
for extending credit based on the size, risk rating and type of credit involved. The policy also
sets limits on individual loan officer lending authority and various forms of joint lending
authority, while designating which loans are required to be approved at the committee level.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our credit objectives are as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Compete effectively and service the legitimate credit needs of our target
market;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Enhance our reputation for superior quality and timely delivery of products
and services;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Provide pricing that reflects the entire relationship and is commensurate
with the risk profiles of our borrowers;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Retain, develop and acquire profitable, multi-product, value added
relationships with high quality borrowers;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Focus on government guaranteed lending and establish a specialization in
this area to meet the needs of the small businesses in our communities; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Comply with the relevant laws and regulations.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our policy includes loan reviews, under the supervision of the Audit and Risk Oversight
committees of the Board of Directors and directed by the Chief Risk Officer, in order to render an
independent and objective evaluation of our asset quality and credit administration process.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Risk ratings are assigned to loans in the commercial business and commercial mortgage
portfolios. The risk ratings are specifically used as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Profile the risk and exposure in the loan portfolio and identify developing
trends and relative levels of risk;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Identify deteriorating credits; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Reflect the probability that a given customer may default on its
obligations.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through the loan approval process, loan administration and loan review program, management
seeks to continuously monitor our credit risk profile and assesses the overall quality of the loan
portfolio and adequacy of the allowance for loan losses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have several procedures in place to assist in maintaining the overall quality of our loan
portfolio. Delinquent loan reports are monitored by credit administration to identify adverse
levels and trends. Loans, including impaired loans, are generally classified as non-accruing if
they are past due as to maturity or payment of principal or interest for a period of more than 90
days, unless such loans are well-collateralized and in the process of collection. Loans that are
on a current payment status or past due less than 90&nbsp;days may also be classified as non-accruing if
repayment in full of principal and/or interest is uncertain.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Allowance for Loan Losses</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The allowance for loan losses is established through charges or credits to earnings in the
form of a provision for loan losses. The allowance reflects management&#146;s estimate of the amount of
probable loan losses in the portfolio, based on factors such as:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Specific allocations for individually analyzed credits;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Risk assessment process;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Historical net charge-off experience;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Evaluation of the loan portfolio with loan reviews;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Levels and trends in delinquent and non-accruing loans;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Trends in volume and terms;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Effects of changes in lending policy;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Experience, ability and depth of management;</TD>
</TR>




</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>National and local economic trends and conditions;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Concentrations of credit;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Interest rate environment;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Customer leverage;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Information (availability of timely financial information); and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Collateral values.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our methodology in the estimation of the allowance for loan losses includes the following
broad areas:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Impaired commercial business and commercial mortgage, generally in excess of
$50 thousand are reviewed individually and assigned a specific loss allowance, if
considered necessary, in accordance with U.S. generally accepted accounting principles
(&#147;GAAP&#148;).</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The remaining portfolios of commercial business and commercial mortgage are
segmented by risk rating into the following loan classification categories:
uncriticized or pass, special mention, substandard and doubtful. Uncriticized loans,
special mention loans, substandard loans and all doubtful loans not assigned a specific
loss allowance are assigned allowance allocations based on historical net loan
charge-off experience for each of the respective loan categories, supplemented with
additional reserve amounts, if considered necessary, based upon qualitative factors.
These qualitative factors include the levels and trends in delinquencies and
non-accruing loans; trends in volume and terms of loans; effects of changes in lending
policy; experience, ability, and depth of management; national and local economic
conditions; concentrations of credit, interest rate environment; customer leverage;
information (availability of timely financial information); and collateral values,
among others.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The retail loan portfolio is segmented into the following types of loans:
residential real estate, home equity (home equity loans and lines of credit), consumer
indirect and other consumer. Allowance allocations for the real estate related loan
portfolios (residential and home equity) are based on the average loss experience for
the previous eight quarters, supplemented with qualitative factors similar to the
elements described above. Allowance allocations for the consumer indirect and other
consumer portfolios are based on vintage analyses performed with historical loss
experience at 36&nbsp;months and 24&nbsp;months aging, respectively. The allocations on these
portfolios are also supplemented with qualitative factors.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management presents a quarterly review of the adequacy of the allowance for loan losses to our
Board of Directors based on the methodology described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS REOFFER
PROSPECTUS. NO ONE HAS BEEN AUTHORIZED TO PROVIDE YOU WITH DIFFERENT INFORMATION.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THESE SECURITIES ARE NOT BEING OFFERED IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS REOFFER PROSPECTUS IS ACCURATE AS OF ANY
DATE OTHER THAN THE DATE ON THE FRONT OF SUCH DOCUMENT<I>.</I>
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="L42079102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>You should carefully consider the risks described below before purchasing our common stock.
The risks and uncertainties described below are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may also impair our
business or cause the value of our common stock to drop. If any of the following risks actually
occur, our business could be adversely affected. In those cases, the trading price of our common
stock could decline, and you may lose the value of your investment in our securities.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Credit Risks</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><b>If we
experience greater credit losses than anticipated, earnings may be
adversely impacted.</b>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a lender, we are exposed to the risk that customers will be unable to repay their loans
according to their terms and that any collateral securing the payment of their loans may not be
sufficient to assure repayment. Credit losses are inherent in the business of making loans and
could have a material adverse impact on our results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We make various assumptions and judgments about the collectability of our loan portfolio,
including the creditworthiness of our borrowers and the value of the real estate and other assets
serving as collateral, and we provide an allowance for estimated loan losses based on a number of
factors. We believe that the allowance for loan losses is adequate. However, if our assumptions
or judgments are wrong, the allowance for loan losses may not be sufficient to cover the actual
credit losses. We may have to increase the allowance in the future in response to the request of
one of our primary banking regulators, to adjust for changing conditions and assumptions, or as a
result of any deterioration in the quality of our loan portfolio. The actual amount of future
provisions for credit losses may vary from the amount of past provisions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Geographic concentration may unfavorably impact our operations.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substantially all of our business and operations are concentrated in the Western and Central
New York region. As a result of this geographic concentration, our results depend largely on
economic conditions in these and surrounding areas. Deterioration in economic conditions in our
market could:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase loan delinquencies;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase problem assets and foreclosures;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase claims and lawsuits;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>decrease the demand for our products and services; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>decrease the value of collateral for loans, especially real estate, in turn reducing
customers&#146; borrowing power, the value of assets associated with non-performing loans
and collateral coverage.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Generally, we make loans to small to mid-sized businesses whose success depends on the
regional economy. These businesses generally have fewer financial resources in terms of capital or
borrowing capacity than larger entities. Adverse economic and business conditions in our market
areas could reduce our growth rate, affect our borrowers&#146; ability to repay their loans and,
consequently, adversely affect our business, financial condition and performance. For example, we
place substantial reliance on real estate as collateral for our loan portfolio. A sharp downturn
in real estate values in our market area could leave many of these loans inadequately
collateralized. If we are required to liquidate the collateral securing a loan to satisfy the
debt during a period of reduced real estate values, the impact on our results of operations
could be materially adverse.
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We depend on the accuracy and completeness of information about or from customers and
counterparties.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In deciding whether to extend credit or enter into other transactions, we may rely on
information furnished by or on behalf of customers and counterparties, including financial
statements, credit reports, and other financial information. We may also rely on representations of
those customers, counterparties, or other third parties, such as independent auditors, as to the
accuracy and completeness of that information. Reliance on inaccurate or misleading financial
statements, credit reports, or other financial information could cause us to enter into unfavorable
transactions, which could have a material adverse effect on our financial condition and results of
operations.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We are subject to environmental liability risk associated with our lending activities.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A significant portion of our loan portfolio is secured by real property. During the ordinary
course of business, we may foreclose on and take title to properties securing certain loans. In
doing so, there is a risk that hazardous or toxic substances could be found on these properties.
If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for
personal injury and property damage. Environmental laws may require us to incur substantial
expenses and may materially reduce the affected property&#146;s value or limit our ability to use or
sell the affected property. In addition, future laws or more stringent interpretations or
enforcement policies with respect to existing laws may increase our exposure to environmental
liability. Although we have policies and procedures to perform an environmental review before
initiating any foreclosure action on real property, these reviews may not be sufficient to detect
all potential environmental hazards. The remediation costs and any other financial liabilities
associated with an environmental hazard could have a material adverse effect on our financial
condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>REGULATORY/LEGAL/COMPLIANCE RISKS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We are highly regulated and may be adversely affected by changes in banking laws, regulations and
regulatory practices.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to extensive supervision, regulation and examination. This regulatory structure
gives the regulatory authorities extensive discretion in connection with their supervisory and
enforcement activities and examination policies to address not only compliance with applicable laws
and regulations (including laws and regulations governing consumer credit, and anti-money
laundering and anti-terrorism laws), but also capital adequacy, asset quality and risk, management
ability and performance, earnings, liquidity and various other factors. As part of this regulatory
structure, we are subject to policies and other guidance developed by the regulatory agencies with
respect to capital levels, the timing and amount of dividend payments, the classification of assets
and the establishment of adequate loan loss reserves for regulatory purposes. Under this structure
the regulatory agencies have broad discretion to impose restrictions and limitations on our
operations if they determine, among other things, that our operations are unsafe or unsound, fail
to comply with applicable law or are otherwise inconsistent with laws and regulations or with the
supervisory policies of these agencies.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This supervisory framework could materially impact the conduct, growth and profitability of
our operations. Any failure on our part to comply with current laws, regulations, other regulatory
requirements or safe and sound banking practices or concerns about our financial condition, or any
related regulatory sanctions or adverse actions against us, could increase our costs or restrict
our ability to expand our business and result in damage to our reputation.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Recently enacted financial reform legislation will, among other things, tighten capital standards,
create a new Consumer Financial Protection Bureau and result in new regulations that are expected
to increase our costs of operations.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer
Protection Act, which we refer to as the Dodd-Frank Act, into law. This new law will significantly
change the current bank regulatory structure and affect the lending, deposit, investment, trading
and operating activities of financial institutions and their holding companies. The Dodd-Frank Act
requires various federal agencies to adopt a broad range of new implementing rules and regulations,
and to prepare numerous studies and reports for Congress. The federal agencies are given
significant discretion in drafting the implementing rules and regulations, and consequently, many
of the details and much of the impact of the Dodd-Frank Act may not be known for many months or
years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Among the many requirements in the Dodd-Frank Act for new banking regulations is a requirement
for new capital regulations to be adopted within 18&nbsp;months. These regulations must be at least as
stringent as, and may call for higher levels of capital, than current regulations. Generally, trust
preferred securities will no longer be eligible as Tier 1 capital, but our currently outstanding
trust preferred securities will be grandfathered and our currently outstanding TARP preferred
securities will continue to qualify as Tier 1 capital.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain provisions of the Dodd-Frank Act are expected to have a near-term impact on us. For
example, one year after the date of its enactment, the Dodd-Frank Act eliminates the federal
prohibitions on paying interest on demand deposits, thus allowing businesses to have interest
bearing checking accounts. Depending on competitive responses, this significant change to existing
law could have an adverse impact on our interest expense.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Dodd-Frank Act also permanently increases the maximum amount of deposit insurance for
banks, savings institutions and credit unions to $250,000 per depositor, retroactive to January&nbsp;1,
2008, and non-interest bearing transaction accounts and interest on lawyers trust accounts have
unlimited deposit insurance through December&nbsp;31, 2013.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Dodd-Frank Act creates a new Bureau of Consumer Financial Protection with broad powers to
supervise and enforce consumer protection laws. The Bureau will have broad rule-making authority
for a wide range of consumer protection laws that apply to all banks, including the authority to
prohibit &#147;unfair, deceptive or abusive&#148; acts and practices.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many aspects of the Dodd-Frank Act are subject to rulemaking and will take effect over several
years, making it difficult to anticipate the overall financial impact on us. However, compliance
with this new law and its implementing regulations will result in additional operating costs that
could have a material adverse effect on our financial condition and results of operations.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>
Proposed changes in New York State banking regulations could
adversely affect us.</b></div>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
New York Governor Andrew Cuomo proposed merging the State Departments of Banking, Insurance and Consumer
Protection into a single Department of Financial Regulation, or DFR. The bill provides that the Superintendent of the
DFR may, beginning April 1, 2012, assess expenses in such proportion as he or she deems just and reasonable against banks
and insurers. The bill also establishes a special account called the
&#147;consumer protection account,&#148; which will consist of fees and penalties
 received by the department of state and DFR, as well as other monies
received in the form of penalties.
 These monies will be available to the
DFR to pay for costs related to its consumer and investor protection activities. If the consumer
 protection account is insufficient to cover those
costs, the balance would be recoverable through assessments against
the industry.</div>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The bill makes New York&#146;s &#147;wild card&#148; authority (that was set to expire September 10, 2011) permanent.
Under this authority, the Banking Board has the power to grant to New
York chartered banking organizations,
as well as licensed foreign bank branches and agencies, powers possessed by a counterpart federally-chartered banking institution.
</div>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If this bill is adopted as proposed, it could adversely affect us.
</div>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>As a participant in TARP, we are subject to certain restrictions on dividends, repurchases of
common stock and executive compensation.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to restrictions on dividends, repurchases of common stock, and executive
compensation as a TARP participant. Compliance with these restrictions and other restrictions may
increase our costs, impact our ability to retain executive officers and limit our ability to pursue
business opportunities. Additionally, any reduction of, or the elimination of, our common stock
dividend in the future could adversely affect the market price of our common stock. The current
restrictions, as well as any possible future restrictions associated with participation in TARP
could have a material adverse impact on our business, financial condition, or results of
operations.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>New or changing tax, accounting, and regulatory rules and interpretations could significantly
impact strategic initiatives, results of operations, cash flows, and financial condition.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial services industry is extensively regulated. Federal and state banking
regulations are designed primarily to protect the deposit insurance funds and consumers, not to
benefit a company&#146;s stockholders. These regulations may sometimes impose significant limitations
on operations. These regulations, along with the currently existing tax, accounting, securities,
insurance, and monetary laws, regulations, rules, standards, policies, and interpretations control
the methods by which financial institutions conduct business, implement strategic initiatives and
tax compliance, and govern financial reporting and disclosures. These laws, regulations, rules,
standards, policies, and interpretations are constantly evolving and may change significantly over
time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>OPERATIONAL RISKS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>If our security systems, or those of merchants, merchant acquirers or other third parties
containing information about customers, are compromised, we may be subject to liability and damage
to our reputation.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of our business, we collect, process and retain sensitive and confidential client and
customer information on our behalf and on behalf of other third parties. Customer data also may be
stored on systems of third-party service providers and merchants that may have inadequate security
systems. Third-party carriers regularly transport customer data, and may lose sensitive customer
information. Unauthorized access to our networks or any of our other information systems
potentially could jeopardize the security of confidential information stored in our computer
systems or transmitted by our customers or others. If our security systems or those of merchants,
processors or other third-party service providers are compromised such that this confidential
information is disclosed to unauthorized parties, we may be subject to liability. For example, in
the event of a security breach, we may incur losses related to fraudulent use of credit and debit
cards issued by us as well as the operational costs associated with reissuing cards. Although we
take preventive measures to address these factors, such measures are costly and may become more
costly in the future. Moreover, these measures may not protect us from liability, which may not be
adequately covered by insurance, or from damage to our reputation.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We rely on other companies to provide key components of our business infrastructure.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Third party vendors provide key components of our business infrastructure such as internet
connections, network access and core application processing. While we have selected these third
party vendors carefully, we do not control their actions. Any problems caused by these third
parties, including as a result of their not providing us their services for any reason or their
performing their services poorly, could adversely affect our ability to deliver products and
services to our customers or otherwise conduct our business efficiently and effectively. Replacing
these third party vendors could also entail significant delay and expense.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We may not be able to attract and retain skilled people.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success depends, in large part, on our ability to attract and retain skilled people.
Competition for the best people in most activities engaged in by us can be intense, and we may not
be able to hire sufficiently skilled people or to retain them. Further, the rural location of our
principal executive offices and many of our bank branches make it difficult for us to attract
skilled people to such locations. The unexpected loss of services of one or more of our key
personnel could have a material adverse impact on our business because of their skills, knowledge
of our markets, years of industry experience, and the difficulty of promptly finding qualified
replacement personnel.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The potential for business interruption exists throughout our organization.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Integral to our performance is the continued efficacy of our technical systems, operational
infrastructure, relationships with third parties and the vast array of associates and key
executives in our day-to-day and ongoing operations. Failure by any or all of these resources
subjects us to risks that may vary in size, scale and scope. This includes, but is not limited to,
operational or technical failures, ineffectiveness or exposure due to interruption in third party
support as expected, as well as the loss of key individuals or failure on the part of key
individuals to perform properly. Although management has established policies and procedures,
including implementation and testing of a comprehensive contingency plan to address such failures,
the occurrence of any such event could have a material adverse effect on our business, which, in
turn, could have a material adverse effect on our financial condition and results of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>EXTERNAL RISKS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We are subject to interest rate risk.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our earnings and cash flows are largely dependent upon our net interest income. Interest
rates are highly sensitive to many factors that are beyond our control, including general economic
conditions and policies of various governmental and regulatory agencies and, in particular, the
Federal Reserve. Changes in monetary policy, including changes in interest rates, could influence
not only the interest we receive on loans and investments and the amount of interest we pay on
deposits and borrowings, but such changes could also affect (i)&nbsp;our ability to originate loans and
obtain deposits; (ii)&nbsp;the fair value of our financial assets and liabilities; and (iii)&nbsp;the average
duration of our mortgage-backed securities portfolio and other interest-earning assets. If the
interest rates paid on deposits and other borrowings increase at a faster rate than the interest
rates received on loans and other investments, our net interest income, and therefore earnings,
could be adversely affected. Earnings could also be adversely affected if the interest rates
received on loans and other investments fall more quickly than the interest rates paid on deposits
and other borrowings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although management believes it has implemented effective asset and liability management
strategies to reduce the potential effects of changes in interest rates on our results of
operations, any substantial, unexpected, prolonged change in market interest rates could have a
material adverse effect on our financial condition and results of operations. Also, our interest
rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of
actual interest rate changes on our balance sheet.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our business may be adversely affected by conditions in the financial markets and economic
conditions generally.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From December&nbsp;2007 through June&nbsp;2009, the U.S. economy was in recession. Business activity
across a wide range of industries and regions in the U. S. was greatly reduced. Although economic
conditions have begun to improve, certain sectors, such as real estate, remain weak and
unemployment remains high. Local governments and many businesses are still in serious difficulty
due to lower consumer spending and reduced tax collections.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Market conditions also led to the failure or merger of several prominent financial
institutions and numerous regional and community-based financial institutions. These failures, as
well as projected future failures, have had a significant negative impact on the capitalization
level of the deposit insurance fund of the FDIC, which, in turn, has led to past increases in
deposit insurance premiums paid by financial institutions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our financial performance generally, and in particular the ability of borrowers to pay
interest on and repay principal of outstanding loans and the value of collateral securing those
loans, as well as demand for loans and other products and services we offer, is highly dependent
upon the business environment in the markets where we operate, in the State of New York and in the
United States as a whole. A favorable
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">business environment is generally characterized by, among other factors, economic growth,
efficient capital markets, low inflation, low unemployment, high business and investor confidence,
and strong business earnings. Unfavorable or uncertain economic and market conditions can be caused
by declines in economic growth, business activity or investor or business confidence; limitations
on the availability or increases in the cost of credit and capital; increases in inflation or
interest rates; high unemployment, natural disasters; or a combination of these or other factors.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approximately 20% of our investment securities portfolio at December&nbsp;31, 2010 is comprised of
municipal securities issued by or on behalf of New York and its political subdivisions, agencies or
instrumentalities, the interest on which is exempt from regular federal income tax. Risks
associated with investing in municipal securities include political, economic and regulatory
factors which may affect the issuers. The concerns facing the State of New York may lead
nationally recognized rating agencies to downgrade its debt obligations. It is uncertain how the
financial markets may react to any potential future ratings downgrade in New York&#146;s debt
obligations. However, the fallout from continued budgetary concerns and a possible ratings
downgrade could adversely affect the value of New York&#146;s obligations and those of its political
subdivisions, agencies and instrumentalities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Overall, during 2010, the business environment has been adverse for many households and
businesses in the United States and worldwide. While economic conditions in the State of New York,
the United States and worldwide have begun to improve, there can be no assurance that this
improvement will continue. Such conditions could adversely affect our financial condition and
results of operations.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our earnings are significantly affected by the fiscal and monetary policies of the federal
government and its agencies.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The policies of the Federal Reserve impact us significantly. The Federal Reserve regulates the
supply of money and credit in the United States. Its policies directly and indirectly influence the
rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also
affect the value of financial instruments we hold. Those policies determine to a significant extent
our cost of funds for lending and investing. Changes in those policies are beyond our control and
are difficult to predict. Federal Reserve policies can also affect our borrowers, potentially
increasing the risk that they may fail to repay their loans. For example, a tightening of the money
supply by the Federal Reserve could reduce the demand for a borrower&#146;s products and services. This
could adversely affect the borrower&#146;s earnings and ability to repay its loan, which could have a
material adverse effect on our financial condition and results of operation.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The soundness of other financial institutions could adversely affect us.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial services institutions are interrelated as a result of trading, clearing,
counterparty, or other relationships. We have exposure to many different industries and
counterparties, and we routinely execute transactions with counterparties in the financial services
industry, including commercial banks, brokers and dealers, investment banks, and other
institutional clients. Many of these transactions expose us to credit risk in the event of a
default by our counterparty or client. In addition, our credit risk may be exacerbated when the
collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the
full amount of the credit or derivative exposure due us. Any such losses could have a material
adverse effect on our financial condition and results of operations.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We operate in a highly competitive industry and market area.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face substantial competition in all areas of our operations from a variety of different
competitors, many of which are larger and may have more financial resources. Such competitors
primarily include national, regional and internet banks within the various markets in which we
operate. We also face competition from many other types of financial institutions, including,
without limitation, savings and loans,
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">credit unions, finance companies, brokerage firms, insurance companies and other financial
intermediaries. The financial services industry could become even more competitive as a result of
legislative, regulatory and technological changes and continued consolidation. Banks, securities
firms and insurance companies can merge under the umbrella of a financial holding company, which
can offer virtually any type of financial service, including banking, securities underwriting,
insurance (both agency and underwriting), and merchant banking. Also, technology has lowered
barriers to entry and made it possible for nonbanks to offer products and services traditionally
provided by banks, such as automatic transfer and automatic payment systems. Many of our
competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due
to their size, many competitors may be able to achieve economies of scale and, as a result, may
offer a broader range of products and services as well as better pricing for those products and
services than we can.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to compete successfully depends on a number of factors, including, among other
things:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ability to develop, maintain and build upon long-term customer relationships
based on top quality service, high ethical standards and safe, sound assets;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ability to expand our market position;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the scope, relevance and pricing of products and services offered to meet customer
needs and demands;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the rate at which we introduce new products and services relative to our
competitors;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>customer satisfaction with our level of service; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>industry and general economic trends.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Failure to perform in any of these areas could significantly weaken our competitive position,
which could adversely affect our growth and profitability, which, in turn, could have a material
adverse effect on our financial condition and results of operations.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our market value could result in an impairment of goodwill.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our goodwill is evaluated for impairment on an annual basis or when triggering events or
circumstances indicate impairment may exist. Significant and sustained declines in our stock price
and market capitalization, significant declines in our expected future cash flows, significant
adverse changes in the business climate or slower growth rates could result in impairment of
goodwill. At December&nbsp;31, 2010, we had goodwill of $37.4&nbsp;million, representing approximately 18%
of shareholders&#146; equity. If impairment of goodwill was determined to exist, we would be required
to write down our goodwill as a charge to earnings, which could have a material adverse impact on
our results of operations or financial condition.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>LIQUIDITY RISKS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Liquidity is essential to our businesses.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our liquidity could be impaired by an inability to access the capital markets or unforeseen
outflows of cash. This situation may arise due to circumstances that we may be unable to control,
such as a general market disruption or an operational problem that affects third parties or us.
Our efforts to monitor and manage liquidity risk may not be successful or sufficient to deal with
dramatic or unanticipated reductions in our liquidity. In such events, our cost of funds may
increase, thereby reducing our net interest revenue, or we may need to sell a portion of our
investment and/or loan portfolio, which, depending upon market conditions, could result in our
realizing a loss.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We may need to raise additional capital in the future and such capital may not be available when
needed or at all.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may need to raise additional capital in the future to provide sufficient capital resources
and liquidity to meet our commitments and business needs. Our ability to raise additional capital,
if needed, will depend on, among other things, conditions in the capital markets at that time,
which are outside of our control, and our financial performance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we are highly regulated, and our regulators could require us to raise additional
common equity in the future. Both we and our regulators perform a variety of analyses of our
assets, including the preparation of stress case scenarios, and as a result of those assessments we
could determine, or our regulators could require us, to raise additional capital.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot assure that such capital will be available on acceptable terms or at all. Any
occurrence that may limit our access to the capital markets, such as a decline in the confidence of
debt purchasers, depositors of the Bank or counterparties participating in the capital markets, or
a downgrade of our debt rating, may adversely affect our capital costs and ability to raise capital
and, in turn, our liquidity. An inability to raise additional capital on acceptable terms when
needed could have a material adverse impact on our business, financial condition, results of
operations or liquidity.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We rely on dividends from our subsidiaries for most of our revenue.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a separate and distinct legal entity from our subsidiaries. A substantial portion of
our revenue comes from dividends from our Bank subsidiary. These dividends are the principal
source of funds to pay dividends on our common and preferred stock, and to pay interest and
principal on our debt. Various federal and/or state laws and regulations limit the amount of
dividends that our Bank subsidiary and nonbank subsidiary may pay to us. Also, our right to
participate in a distribution of assets upon a subsidiary&#146;s liquidation or reorganization is
subject to the prior claims of the subsidiary&#146;s creditors. In the event our bank subsidiary is
unable to pay dividends to us, we may not be able to service debt, pay obligations, or pay
dividends on our common and preferred stock. The inability to receive dividends from our bank
subsidiary could have a material adverse effect on our business, financial condition, and results
of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>RISKS RELATED TO AN INVESTMENT IN OUR COMMON STOCK</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>The market price for our common stock varies, and you should purchase common stock for long-term
investment only.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although our common stock is currently traded on the NASDAQ Global Select, we cannot assure
you that there will, at any time in the future, be an active trading market for our common stock.
Even if there is an active trading market for our common stock, we cannot assure you that you will
be able to sell all of your shares of common stock at one time or at a favorable price, if at all.
As a result, you should purchase shares of common stock described herein only if you are capable
of, and seeking to, make a long-term investment in our common stock.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>There may be future sales or other dilution of our equity, which may adversely affect the market
price of our common stock.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are not restricted from issuing additional shares of common stock, including any securities
that are convertible into or exchangeable for, or that represent the right to receive, common
stock. We are currently authorized to issue up to 50,000,000 shares of common stock and up to
210,000 shares of preferred stock, par value $100 per share, which is designated into two classes,
Class&nbsp;A of which 10,000 shares are authorized, and Class&nbsp;B of which 200,000 shares are authorized.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2010, 10,937,506 shares of common stock and 183,259 shares of our preferred
stock were issued and outstanding including (i)&nbsp;7,503 shares of our fixed rate cumulative perpetual
Series&nbsp;A preferred stock, par value $100 per share, having a liquidation preference of $5,000 per
share, which we refer to as the TARP preferred stock, (ii)&nbsp;1,533 shares of our Series&nbsp;A 3%
cumulative preferred stock, which we refer to as the 3% preferred stock, and (iii)&nbsp;174,223 shares
of Series&nbsp;B-1 8.48% cumulative preferred stock, which we refer to as the 8.48% preferred stock. We
refer to our TARP preferred stock, our 3% preferred stock and our 8.48% preferred stock
collectively as the preferred stock. Our board of directors has authority, without action or vote
of the shareholders, to issue all or part of the authorized but unissued shares. These authorized
but unissued shares could be issued on terms or in circumstances that could dilute the interests of
the holders of our common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Letter Agreement, dated December&nbsp;23, 2008, and the Securities Purchase
Agreement &#151; Standard Terms attached thereto, which we refer to collectively as the Securities
Purchase Agreement, that we entered into with the U.S. Treasury, in connection with our
participation in TARP, the U.S. Treasury received a warrant to purchase up to 378,175 shares of our
common stock, which we refer to as the warrant, at an exercise price of $14.88 per share, and we
have provided the U.S. Treasury with registration rights covering the warrant and the underlying
shares of common stock. We may seek the approval of our regulators to repurchase the warrant with
the proceeds from any offering. The issuance of additional shares of common stock as a result of
exercise of the warrant or otherwise or the issuance of securities convertible or exercisable into
shares of common stock would dilute the ownership interest of existing holders of our common stock.
Although the U.S. Treasury has agreed to not vote any of the shares of common stock it receives
upon exercise of the warrant, a transferee of any portion of the warrant or of any shares of common
stock acquired upon exercise of the warrant is not bound by this restriction. The market price of
our common stock could decline as a result of any offering as well as other sales of a large block
of common stock in the market after an offering, or the perception that such sales could occur.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms of the warrant include an anti-dilution adjustment, which provides that (except in
certain permitted transactions, including registered offerings such as this one), if we issue
shares of common stock at a price that is less than 90% of the market price of such shares on the
last trading day preceding the date of the agreement to sell such shares, the number of shares of
common stock to be issued under the warrant would increase and the per share price of common stock
to be purchased pursuant to the warrant would decrease.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our shares of common stock are equity and are subordinate to our existing and future indebtedness
and our preferred stock, and are effectively subordinated to all the indebtedness and other
non-common equity claims against our subsidiaries.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our shares of common stock are equity interests in us and do not constitute indebtedness.
Accordingly, our common stock will rank junior to all of our indebtedness and to other non-equity
claims on us with respect to assets available to satisfy claims on us. Additionally, holders of our
common stock are subject to the prior dividend and liquidation rights of holders of our outstanding
preferred stock. The terms of our preferred stock currently prohibit us from paying dividends with
respect to our common stock unless all accrued and unpaid dividends for all completed dividend
periods with respect to the preferred stock have been paid with our TARP preferred stock and 3%
preferred stock receiving payments first.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, our right to participate in any distribution of assets of any of our subsidiaries
upon the subsidiary&#146;s liquidation or otherwise, and thus your ability as a holder of our common
stock to benefit indirectly from such distribution, will be subject to the prior claims of
creditors of that subsidiary and holders of any of that subsidiary&#146;s preferred stock, except to the
extent that any of our claims as a creditor of such subsidiary may be recognized. As a result, our
common stock will effectively be subordinated to all existing and future liabilities and
obligations of our subsidiaries.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>We may not pay dividends on our common stock.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders of our common stock are only entitled to receive such dividends as our board of
directors may declare out of funds legally available for such payments. Although we have
historically declared cash dividends on our common stock, we are not required to do so and may
reduce or eliminate our common stock dividend in the future. This could adversely affect the
market price of our common stock. Also, participation in TARP limits our ability to increase our
dividend or to repurchase our common stock, for so long as any securities issued under such program
remain outstanding.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Our certificate of incorporation, our bylaws, and certain banking laws may have an anti-takeover effect.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provisions of our certificate of incorporation, our bylaws, and federal and state banking
laws, including regulatory approval requirements, could make it more difficult for a third party to
acquire us, even if doing so would be perceived to be beneficial to our shareholders. The
combination of these provisions may discourage others from initiating a potential merger, takeover
or other change of control transaction, which, in turn, could adversely affect the market price of
our common stock.
</DIV>
<DIV align="left">
<A name="L42079103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain statements contained in this reoffer prospectus and in information incorporated by
reference into this reoffer prospectus that are not historical or current facts may constitute
forward-looking statements within the meaning of Section&nbsp;27A of the U.S. Securities Act of 1933, as
amended, which we refer to as the Securities Act, and Section&nbsp;21E of the U.S. Securities Exchange
Act of 1934, as amended, which we refer to as the Exchange Act, and are intended to be covered by
the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition,
the Company&#146;s management may make forward-looking statements orally to the media, securities
analysts, investors or others. These statements, which are based on certain assumptions and
describe our future plans, strategies, and expectations, can generally be identified by the use of
words such as &#147;optimism,&#148; &#147;look-forward,&#148; &#147;bright,&#148; &#147;believe,&#148; &#147;expect,&#148; &#147;anticipate,&#148; &#147;intend,&#148;
&#147;plan,&#148; &#147;estimate,&#148; &#147;potential,&#148; &#147;project,&#148; &#147;target&#148; or words of similar meaning, or future or
conditional verbs such as &#147;will,&#148; &#147;would,&#148; &#147;should,&#148; &#147;could&#148; or &#147;may.&#148; These forward-looking
statements include statements relating to our strategy, effectiveness of investment programs,
evaluations of future interest rate trends and liquidity, expectations as to growth in assets,
deposits and results of operations, future operations, market position, financial position, and
prospects, plans and objectives of management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward-looking statements are based on the current assumptions and beliefs of management and
are only expectations of future results and are subject to certain risks, uncertainties and
assumptions. Our actual results could differ materially from those projected in the forward-looking
statements as a result of, among other things, factors referenced herein under the section
captioned &#147;Risk Factors&#148; beginning on page 8.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forward-looking statements speak only as of the date they are made. Except as required by law,
we do not undertake to update forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements are made. Although we believe that our
expectations are reasonable, we can give no assurance that such expectations will prove to be
correct. Based upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual results may vary
materially from those described in any forward-looking statements.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We caution our readers not to place undue reliance on any forward-looking statements.
Forward-looking statements should not be viewed as predictions, and should not be the primary basis
upon which investors evaluate the Company.
</DIV>
<DIV align="left">
<A name="L42079104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proceeds from the sale of the shares by the selling shareholders will belong to the
selling shareholders. We will not receive any of the proceeds from the sale of the shares.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="L42079105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING SHAREHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The common stock to which this reoffer prospectus relates is being registered for reoffers and
resales by the selling shareholders. The selling shareholders may sell all, some or none of their
shares of common stock. The selling shareholders may offer their common stock for sale from time
to time as discussed under &#147;Plan of Distribution&#148; in this reoffer prospectus.
 In
addition to the selling shareholders listed in the table, Thomas P.
Connolly, a retired director, may use this reoffer  prospectus for
reoffers and resales of the 800 shares of common stock awarded to him
under the DSIP.</div>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides the names, the relationship with us within the past three years,
beneficial ownership of, and the number of shares of common stock which may be sold by, each
selling shareholder.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="18%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Shares</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
<TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Beneficially</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Amount to</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="4">Amount and Percentage </TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Relationship with us</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Owned </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">be Offered</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="4">of  Shares Beneficially</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Selling Shareholder  (1)</TD>
    <TD>&nbsp;</TD>
<TD nowrap align="center" style="border-bottom: 1px solid #000000"> within past  3  years</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">(2)(3)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">for Resale</TD>
    <TD style="border-bottom: 0px solid #000000">&nbsp;</TD>

<TD nowrap align="center" style="border-bottom: 1px solid #000000" colspan="4">Owned after Resale</TD>

</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;&nbsp;&nbsp;&nbsp;Number (4) </TD>
<TD>&nbsp;</TD>
<TD align="center" colspan="2">Percent (5)</TD>

</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Karl V. Anderson Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">11,063</TD>
    <TD align="left" nowrap>(6)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">9,463</TD>
<TD>&nbsp;</TD>
<TD align="right">*</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John E. Benjamin
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">18,263</TD>
    <TD align="left" nowrap>(7)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">16,663</TD>
<TD>&nbsp;</TD>
<TD align="right">*</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Barton P. Dambra
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">23,920</TD>
    <TD align="left" nowrap>(8)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">22,320</TD>
<TD>&nbsp;</TD>
<TD align="right">*</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Samuel M. Gullo
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">19,136</TD>
    <TD align="left" nowrap>(9)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">17,536</TD>
<TD>&nbsp;</TD>
<TD align="right">*</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Susan R. Holliday
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">19,887</TD>
    <TD align="right" nowrap>(10)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">18,287</TD>
<TD>&nbsp;</TD>
<TD align="right">*</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Erland E. Kailbourne
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">32,457</TD>
    <TD align="right" nowrap>(11)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">30,857</TD>
<TD>&nbsp;</TD>
<TD align="right">*</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert N. Latella
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">12,473</TD>
    <TD align="right" nowrap>(12)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">10,873</TD>
<TD>&nbsp;</TD>
<TD align="right">*</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James L. Robinson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">12,035</TD>
    <TD align="right" nowrap>(13)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">10,435</TD>
<TD>&nbsp;</TD>
<TD align="right">*</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">James H. Wyckoff
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">424,340</TD>
    <TD align="right" nowrap>(14)</TD>
    <TD align="right" valign="top">1,600</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">422,740</TD>
<TD>&nbsp;</TD>
<TD align="right">3.85</TD>
<TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Less than 1%</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>The address of each of the selling shareholders is c/o 220 Liberty Street, Warsaw, New York 14569.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Unless otherwise indicated in the other footnotes to this table, each selling shareholder has
sole voting and investment power with respect to all of the shares owned by such selling
shareholder.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown for each selling shareholder includes shares of restricted stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Assuming the sale of all shares registered for the account of the selling shareholders. The
selling shareholders may sell all, some or no portion of the common stock registered hereunder.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Based on 10,979,715 shares of common stock outstanding as of March&nbsp;1, 2011 except where the
selling shareholder has the right to receive shares within 60&nbsp;days of the date of this reoffer
prospectus which increases the number of shares beneficially owned by such selling shareholder
and the number of shares outstanding. Under the rules of the Securities and Exchange Commission,
&#147;beneficial ownership&#148; is deemed to include shares for which an individual, directly or
indirectly, has or shares voting or dispositive power, whether or not they are held for the
individual&#146;s benefit, and includes shares that may be acquired within 60&nbsp;days, including, but not
limited to, the right to acquire shares by the exercise of options. Shares that may be acquired
within 60&nbsp;days are referred to in the footnotes to this table as &#147;presently exercisable options.&#148;</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes presently exercisable options to purchase 6,133 shares.</TD>
</TR>


<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes presently exercisable options to purchase 10,133 shares.</TD>
</TR>


<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes 1,000 shares held by Mr. Dambra&#146;s spouse and presently exercisable
       options to purchase 11,133 shares.</TD>
</TR>


<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes presently exercisable options to purchase 11,133 shares.</TD>
</TR>


<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes presently exercisable options to purchase 9,333 shares.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes presently exercisable options to purchase 5,700 shares.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes presently exercisable options to purchase 6,481 shares.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(13)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes presently exercisable options to purchase 3,933 shares.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(14)</TD>
    <TD>&nbsp;</TD>
    <TD>The amount shown includes 66,995 shares held by Mr. Wyckoff&#146;s spouse and presently
       exercisable options to purchase 10,533 shares.
</TD>
</TR>


</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#L42079tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<DIV align="left">
<A name="L42079106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of our common stock covered by this reoffer prospectus are being registered on
behalf of the selling shareholders. We will receive no proceeds from this offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The decision to sell any of the shares of our common stock covered by this reoffer prospectus
is within the discretion of the holders thereof, subject generally to our policies affecting the
timing and manner of sale of our common stock by certain individuals. There can be no assurance
that any of the shares of our common stock covered by this reoffer prospectus will be sold by the
selling shareholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders may, from time to time, sell any or all of their shares of our common
stock on any stock exchange, market or trading facility on which the shares are traded. Our common
stock is currently quoted on the NASDAQ Global Select Market. They may also sell the shares in
private transactions in accordance with applicable law. These sales may be at fixed or negotiated
prices. The selling shareholders may use any one or more of the following methods when selling
shares:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchases by a broker-dealer as principal and resale by the broker-dealer for its
account;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>privately negotiated transactions;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>broker-dealers may agree with the selling shareholders to sell a specified number of
such shares at a stipulated price per share;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a combination of any such methods of sale; or</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other method permitted pursuant to applicable law.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders may also sell shares of our common stock under Rule&nbsp;144 under the
Securities Act of 1933, as amended, if available, rather than under this reoffer prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker-dealers engaged by the selling shareholders may arrange for other broker-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be &#147;underwriters&#148; within the meaning of the Securities Act of 1933, as
amended, in connection with such sales. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act
of 1933, as amended. None of the selling shareholders have informed
 us that they  have an agreement or understanding,
directly or indirectly, with any person to distribute our common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will pay certain fees and expenses incurred by us incident to the registration of the
shares of our common stock.
</DIV>
<DIV align="left">
<A name="L42079107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The legal validity of the securities will be passed upon for us by Harter Secrest &#038; Emery LLP.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="L42079108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements of Financial Institutions, Inc. and its subsidiaries as
of December&nbsp;31, 2010 and December&nbsp;31, 2009, and each of the years in the three-year period ended
December&nbsp;31, 2010, and management&#146;s assessments of the effectiveness of internal controls over
financial reporting as of December&nbsp;31, 2010 have been incorporated by reference herein in reliance
upon the reports of KPMG LLP, independent registered public
accounting firm, incorporated herein by reference, and upon the
authority of said firm as experts in accounting and auditing.
</DIV>


<DIV align="left">
<A name="L42079109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DOCUMENTS INCORPORATED BY REFERENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents, which we have filed with the Securities and Exchange Commission, are
incorporated into this reoffer prospectus by reference:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our annual report on Form 10-K for the year ended December&nbsp;31, 2010;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current reports on Form 8-K filed on February&nbsp;22, 2011 and February
23, 2011; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the description of our common stock contained in our Registration
Statement on Form 8-A filed on June&nbsp;23, 1999.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All other documents we subsequently file pursuant to Sections&nbsp;13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, prior to the termination of this offering shall be
deemed to be incorporated by reference into this reoffer prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statement contained in a document incorporated or deemed incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this registration statement to the
extent that a statement contained herein or in any subsequently filed document that also is, or is
deemed to be, incorporated herein by reference modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this reoffer prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information relating to the Company contained in this reoffer prospectus should be read
together with the information in the documents incorporated by reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon written or oral request, we will provide to each person at no cost, including any
beneficial owner, to whom a copy of this reoffer prospectus is delivered, a copy of any of the
information that has been incorporated by reference in this reoffer prospectus but has not been
delivered with it. Requests for any such information should be directed to us at: Financial
Institutions, Inc., 220 Liberty Street, Warsaw, New York 14569, Telephone: (585)&nbsp;786-1100.
</DIV>
<DIV align="left">
<A name="L42079110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>ADDITIONAL INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the information and reporting requirements of the Exchange Act under which
we file annual, quarterly and current reports, proxy statements and other information with the
Securities and Exchange Commission. You may read and copy, at prescribed rates, any documents we
have filed with the Securities and Exchange Commission at its Public Reference Room located at 100
F Street, N.E., Washington, DC 20549. You may obtain information on the operation of the Public
Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. We also file these documents with the
Securities and Exchange Commission electronically. You can access the electronic versions of these
filings on the Securities and Exchange Commission&#146;s Internet website found at http://www.sec.gov
 and on our Internet website
address at http://www.fiiwarsaw.com. You may also obtain free copies of the documents we have filed
with the Securities and Exchange Commission (other than exhibits to such documents unless we
specifically incorporate by reference an exhibit in this reoffer prospectus) by contacting:
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->21<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">Financial Institutions, Inc.<BR>
220 Liberty Street<BR>
Warsaw, New York 14569<BR>
Telephone: (585)&nbsp;786-1100
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This reoffer prospectus is part of a registration statement on Form S-8 that we have filed
with the Securities and Exchange Commission. Certain information in the registration statement has
been omitted from this reoffer prospectus in accordance with the rules and regulations of the
Securities and Exchange Commission. We have also filed exhibits and schedules with such
registration statement that are excluded from this reoffer prospectus. For further information
about us and the common stock offered by this reoffer prospectus, see the registration statement on
Form S-8 and its exhibits, which may be obtained as described above.
</DIV>






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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Incorporation of Documents by Reference.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents previously filed with the Securities and Exchange Commission by the
Company are incorporated by reference into this registration statement:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our annual report on Form 10-K for the year ended December&nbsp;31, 2010;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current reports on Form 8-K filed on February&nbsp;22, 2011 and February
23, 2011; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the description of our common stock contained in our Registration
Statement on Form 8-A filed on June&nbsp;23, 1999.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents subsequently filed by the Company pursuant to Sections&nbsp;13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended, after the date of this registration
statement, prior to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this registration statement and to be a part hereof from the
date of filing of such documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statement contained in a document incorporated or deemed to be incorporated herein by
reference herein shall be deemed to be modified or superseded for purposes of this registration
statement to the extent that a statement contained herein or in any other subsequently filed
document which also is, or is deemed to be, incorporated herein by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this registration statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Description of Securities.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. Interests of Named Experts and Counsel.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. Indemnification of Directors and Officers.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Sections&nbsp;721 through 725 of the Business Corporation Law of the State of New York (the
&#147;NYBCL&#148;), the Company has broad powers to indemnify its directors, officers and other employees.
These sections (i)&nbsp;provide that the statutory indemnification and advancement of expenses provision
of the NYBCL are not exclusive, provided that no indemnification may be made to or on behalf of any
director or officer if a judgment or other final adjudication adverse to the director or officer
establishes that his acts were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action is adjudicated, or that he personally gained in
fact a financial profit or other advantage to which he was not legally entitled, (ii)&nbsp;establish
procedures for indemnification and advancement of expenses that may be contained in the certificate
of incorporation or by-laws, or, when authorized by either of the foregoing, set forth in a
resolution of the shareholders or directors of an agreement providing for indemnification and
advancement of expenses, (iii)&nbsp;apply a single standard for statutory indemnification for
third-party and derivative suits by providing that indemnification is available if the director or
officer acted in good faith, for a purpose which he reasonably believed to be in the best interests
of the corporation, and, in criminal actions, had no reasonable cause to believe that his conduct
was unlawful, and (iv)&nbsp;permit the advancement of litigation expenses upon receipt of an undertaking to repay such advance if the director or
officer is ultimately determined not to be entitled to indemnification or to the extent the
expenses advanced exceed the indemnification to which the director or officer is entitled. Section
726 of the NYBCL permits the purchase of insurance to indemnify a corporation or its officers and
directors to the extent permitted.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
permitted by Section&nbsp;721 of the NYBCL, our Amended and Restated By-laws provide that we shall
indemnify our officers and directors, as such, to the fullest extent
permitted by applicable law, and that expenses reasonably incurred by any such officer or director
in connection with a threatened or actual action or proceeding shall be advanced or promptly
reimbursed by the Company in advance of the final disposition of such action or proceeding upon
receipt of an undertaking by or on behalf of such officer or director to repay such amount if and
to the extent that it is ultimately determined that such officer or director is not entitled to
indemnification.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Article&nbsp;SEVENTH of our  Restated Certificate of Incorporation,
  as amended provides
that no director of the Company shall be held personally liable to
the Company or its
shareholders for damages for any breach of duty in his or her capacity as a director unless a
judgment or other final adjudication adverse to him or her establishes that (i)&nbsp;his or her acts or
omissions were in bad faith or involved intentional misconduct or a knowing violation of law, (ii)
he or she personally gained in fact a financial profit or other
advantage to which he or she is not
legally entitled, or (iii)&nbsp;his or her acts violated Section&nbsp;719 of the NYBCL.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we have purchased insurance policies which provide coverage
for our directors and
officers in certain situations where we cannot directly indemnify such directors or officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar
as indemnification for liabilities arising under the Securities Act
of 1933, as amended may be permitted
to directors, officers or persons controlling the Company pursuant to the foregoing provisions, we
have been informed that in the opinion of the Securities Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended and is therefore unenforceable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7. Exemption from Registration Claimed.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of common stock covered by the reoffer prospectus included in this registration
statement were granted under the DSIP. The grants were exempt under Section&nbsp;4(2) the Securities
Act of 1933, as amended. The recipients of securities in each such transaction acquired the
securities for investment only and not with a view to or for sale in connection with any
distribution thereof. All recipients had adequate access, through their relationship with the
Company, to information about the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8. Exhibits.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See the Exhibit&nbsp;Index, which is incorporated herein by reference.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9. Undertakings.</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The undersigned registrant hereby undertakes:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended;</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to reflect in the prospectus any facts or
events arising after the effective date of this registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in this registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
&#147;Calculation of Registration Fee&#148; table in the effective registration
statement; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to include any material information with
respect to the plan of distribution not previously disclosed in this
registration statement or any material change to such information in
this registration statement.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left"><I>&nbsp;</I></TD>
    <TD width="1%"><I>&nbsp;</I></TD>
    <TD><I>provided, however, </I>that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if
this registration statement is on Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the Securities and Exchange Commission by the registrant
pursuant to Section&nbsp;13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement; and</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
<I>bona fide </I>offering thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant&#146;s annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan&#146;s annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in this registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial <I>bona fide </I>offering thereof.</TD>
</TR>




</TABLE>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="2%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.</TD>
</TR>




</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->II-4<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#L42079tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Warsaw, State of New
York, on March&nbsp;7, 2011.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>FINANCIAL INSTITUTIONS, INC.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Peter G. Humphrey
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Peter G. Humphrey&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">President and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>POWER OF ATTORNEY</B>
</DIV>



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Peter G. Humphrey or Karl F. Krebs, jointly and severally, his or her true and lawful
attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying and confirming all
that each of said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Signatures</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>
<TR><Td>&nbsp;</Td></TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Peter G. Humphrey
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, President and Chief Executive
Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Peter G. Humphrey
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal
Executive Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Karl F. Krebs
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and Chief
Financial Officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Karl F. Krebs
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal
Financial and Accounting Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Karl V. Anderson, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Karl V. Anderson, Jr.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ John E. Benjamin
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director, Chairman
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
John E. Benjamin
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Barton P. Dambra
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Barton P. Dambra
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#L42079tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Signatures</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>
<TR><Td>&nbsp;</Td></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Samuel M. Gullo
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Samuel M. Gullo
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Susan R. Holliday
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">   Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Susan R. Holliday
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Erland E. Kailbourne
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>Erland E. Kailbourne
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Robert N. Latella
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Robert N. Latella
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ James L. Robinson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
James L. Robinson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ James H. Wyckoff
</DIV></TD>
    <TD>&nbsp;</TD>

    <TD align="left" valign="top">Director</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;4, 2011</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
James H. Wyckoff
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#L42079tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX<BR>
TO<BR>
REGISTRATION STATEMENT ON FORM S-8</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR></TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Certificate of
Incorporation of the Company, as amended is incorporated
herein by reference to Exhibits&nbsp;3.1, 3.2 and 3.3 to our Annual Report on Form&nbsp;10-K for the year
ended December&nbsp;31, 2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated By-laws of the Company are incorporated herein by reference
to Exhibit&nbsp;3.4 to our Annual Report on Form&nbsp;10-K for the
year ended December&nbsp;31, 2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Warrant to Purchase Common Stock, dated December&nbsp;23, 2008 issued by the Company
to the United States Department of the Treasury is incorporated herein by
reference to Exhibit&nbsp;4.2 to our Current Report on Form&nbsp;8-K
filed on December&nbsp;24, 2008.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*4.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2009 Directors&#146; Stock Incentive Plan</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Harter Secrest &#038; Emery LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Harter Secrest &#038; Emery LLP (included in Exhibit&nbsp;5.1)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of KPMG LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (included in the
signature pages to the registration statement)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Exhibits filed with this registration statement.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->II-7<!-- /Folio -->
</DIV>



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sv8
Table of Contents
As filed with the Securities and Exchange Commission on March 7, 2011
Registration No.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Financial Institutions, Inc.
(Exact name of registrant as specified in its charter)
New York
16-0816610
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
220 Liberty Street
Warsaw, New York
14569
(Address of Principal Executive Offices)
(Zip Code)
Financial Institutions, Inc. 2009 Directors' Stock Incentive Plan
(Full title of the plan)
Peter G. Humphrey
President and Chief Executive Officer
220 Liberty Street
Warsaw, New York 14569
(Name and address of agent for service)
(585) 786-1100
(Telephone number, including area code, of agent for service)
With a copy to:
James M. Jenkins, Esq.
Harter Secrest & Emery LLP
1600 Bausch & Lomb Place
Rochester, New York 14604
Tel: (585) 232-6500
Fax: (585) 232-2152
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
þ
Non-accelerated filer
o
(Do not check if a smaller reporting company)
Smaller reporting company
o
CALCULATION OF REGISTRATION FEE
Proposed
Proposed
maximum
maximum
Title of securities
Amount to be
offering price per
aggregate offering
Amount of
to be registered
registered (1)
share (2)
price (2)
registration fee
Common Stock, par
value $.01 per share
250,000
$19.02
$4,755,000
$553
(1)
Pursuant to Rule 416 under the Securities Act of 1933, as amended, there are also being
registered such additional shares of common stock as may become issuable pursuant to stock
splits, stock dividends, recapitalizations and similar transactions. In addition, this
registration statement registers the resale of shares of the Company's common stock by certain
selling shareholders named in the reoffer prospectus included in and filed with this
registration statement on Form S-8, for which no additional registration fee is required
pursuant to Rule 457(h)(3) under the Securities Act of 1933, as amended.
(2)
Estimated solely for the purposes of computing the registration fee pursuant to Rule 457(c)
under the Securities Act of 1933, as amended, and based on the average of the high and low
prices reported on the NASDAQ Global Select Market as of March 3, 2011.
EXPLANATORY NOTE
This registration statement is being filed to register 250,000 shares of common stock of
Financial Institutions, Inc. (the "Company") available for grant under the Financial Institutions,
Inc. 2009 Directors' Stock Incentive Plan (the"DSIP "). This registration statement also includes a
reoffer prospectus of restricted securities (as that term is defined in General Instruction C to
Form S-8) of the Company meeting the requirements of Part I of Form S-3. The reoffer prospectus
relates solely to reoffers and resales on a continuous or delayed basis in the future of up to an
aggregate of 15,200 shares of restricted stock that have been awarded to the selling shareholders
listed in the reoffer prospectus under the DSIP prior to the filing of this registration statement.
Table of Contents
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I of Form S-8 have been or will be
delivered to participants in the DSIP as specified by Rule 428(b)(1) promulgated by the Securities
and Exchange Commission under the Securities Act of 1933, as amended.
Such documents are not being filed with the Securities and Exchange Commission but constitute
(along with the documents incorporated by reference into this registration statement pursuant to
Item 3 of Part II hereof) a prospectus that meets the requirements of Section 10(a) of the
Securities Act of 1933, as amended.
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Table of Contents
Reoffer Prospectus
220 Liberty Street
Warsaw, New York 14569
Telephone: (585) 786-1100
Common Stock, $0.01 par value per share
15,200 shares
This reoffer prospectus relates to the disposition, from time to time, of up to 15,200 shares
of our common stock by the holders of such shares named in this reoffer prospectus, some of whom
may be deemed to be our "affiliates."
The shares may be offered directly, through agents on behalf of the selling shareholders and
their transferees, or through underwriters or dealers.
We will not receive any of the proceeds from the sale of the shares. We have agreed to bear
the expenses in connection with the registration of the shares. The selling shareholders will bear
all expenses in connection with the sale of the shares.
The selling shareholders propose to sell the shares from time to time in transactions
occurring either on or off the NASDAQ Global Select Market at prevailing market prices or at
negotiated prices. Sales may be made through brokers or to dealers, who are expected to receive
customary commissions or discounts.
The selling shareholders and any agents or broker-dealers that participate with the selling
shareholders in the distribution of the shares may be considered "underwriters" within the meaning
of the Securities Act of 1933, as amended, and, in that event, any commissions received by them and
any profit on the resale of the shares may be considered underwriting commissions or discounts
under the Securities Act of 1933, as amended.
Our common stock is listed on the NASDAQ Global Select Market under the symbol "FISI." On
March 3, 2011, the closing price of our common stock on the NASDAQ Global Select Market was $19.22
per share.
Investing in our common stock involves a high degree of risk. Please see the section entitled
"Risk Factors" beginning on page 8 of this reoffer prospectus to read about risks you should
consider before buying our common stock.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this reoffer prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this reoffer prospectus is March 7, 2011.
TABLE OF CONTENTS
Summary of this Offering
2
Risk Factors
8
Special Note Regarding Forward Looking Statements
17
Use of Proceeds
18
Selling Shareholders
19
Plan of Distribution
20
Legal Matters
20
Experts
21
Documents Incorporated by Reference
21
Additional Information
21
EX-4.4
EX-5.1
EX-23.2
SUMMARY OF THIS OFFERING
Issuer:
Financial Institutions, Inc.
Securities Offered:
The selling shareholders are offering up to 15,200
shares of our common stock that were granted under
the DSIP.
NASDAQ Symbol:
"FISI"
Securities Outstanding:
As of March 1, 2011, 10,979,715 shares of our
common stock were issued and outstanding.
Use of Proceeds:
We will not receive any proceeds from sales of our
common stock covered by this reoffer prospectus.
The selling shareholders will receive all proceeds
from sales of common stock covered by this reoffer
prospectus.
Offering Price:
The offering price for the shares of common stock
covered by this reoffer prospectus will be
determined by the prevailing market price for the
shares at the time of their sale or in negotiated
transactions.
Risk Factors:
An investment in our common stock is highly
speculative. You should read the "Risk Factors"
section beginning on page 8 of this reoffer
prospectus (along with other matters referred to
and incorporated by reference in this reoffer
prospectus) to ensure that you understand the
risks associated with a purchase of our common stock.
Terms of Sale:
The terms of sale for the shares of our common
stock covered by this reoffer prospectus will be
determined at the time of their sale.
2
Table of Contents
Financial Institutions, Inc. is a financial holding company organized in 1931 under the laws
of New York State ("New York" or "NYS"). Through its subsidiaries, including its wholly-owned, New
York State chartered banking subsidiary, Five Star Bank, Financial Institutions, Inc. provides
deposit, lending and other financial services to individuals and businesses in Western and Central
New York. All references to the parent company are to Financial Institutions, Inc. ("FII").
Unless otherwise indicated or unless the context requires otherwise, all references in to "the
Company," "we," "our" or "us" means Financial Institutions, Inc. and its subsidiaries on a
consolidated basis. Five Star Bank is referred to as Five Star Bank, "FSB" or "the Bank". The
parent company is a legal entity separate and distinct from its subsidiaries, assisting those
subsidiaries by providing financial resources and management. Our executive offices are located at
220 Liberty Street, Warsaw, New York.
We conduct business primarily through our banking subsidiary, Five Star Bank, which adopted
its current name in 2005 when we merged three of our bank subsidiaries, Wyoming County Bank,
National Bank of Geneva and Bath National Bank into our New York chartered bank subsidiary, First
Tier Bank & Trust, which was renamed Five Star Bank. In addition, our business operations include
a wholly-owned broker-dealer subsidiary, Five Star Investment Services, Inc. ("FSIS").
MARKET AREAS AND COMPETITION
We provide a wide range of consumer and commercial banking and financial services to
individuals, municipalities and businesses through a network of over 50 offices and more than 70
ATMs in fourteen contiguous counties of Western and Central New York: Allegany, Cattaraugus,
Cayuga, Chautauqua, Chemung, Erie, Genesee, Livingston, Monroe, Ontario, Seneca, Steuben, Wyoming
and Yates Counties.
Our market area is economically diversified in that we serve both rural markets and the larger
more affluent markets of suburban Rochester and suburban Buffalo. Rochester and Buffalo are the
two largest metropolitan areas in New York outside of New York City, with combined metropolitan
area populations of over two million people. We anticipate increasing our presence in and around
these metropolitan statistical areas in the coming years.
We face significant competition in both making loans and attracting deposits, as Western and
Central New York have a high density of financial institutions. Our competition for loans comes
principally from commercial banks, savings banks, savings and loan associations, mortgage banking
companies, credit unions, insurance companies and other financial service companies. Our most
direct competition for deposits has historically come from commercial banks, savings banks and
credit unions. We face additional competition for deposits from non-depository competitors such as
the mutual fund industry, securities and brokerage firms and insurance companies. We generally
compete with other financial service providers on factors such as; level of customer service,
responsiveness to customer needs, availability and pricing of products, and geographic location.
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LENDING ACTIVITIES
General
We offer a broad range of loans including commercial business and revolving lines of credit,
commercial mortgages, equipment loans, residential mortgage loans and home equity loans and lines
of credit, home improvement loans, automobile loans and personal loans. Newly originated and
refinanced fixed rate residential mortgage loans are either retained in our portfolio or sold to
the secondary market with servicing rights retained.
We continually evaluate and update our lending policy. The key elements of our lending
philosophy include the following:
•
To ensure consistent underwriting, all employees must share a common view of
the risks inherent in lending activities as well as the standards to be applied in
underwriting and managing credit risk;
•
Pricing of credit products should be risk-based;
•
The loan portfolio must be diversified to limit the potential impact of
negative events; and
•
Careful, timely exposure monitoring through dynamic use of our risk rating
system is required to provide early warning and assure proactive management of potential
problems.
Commercial Business and Commercial Mortgage Lending
We originate commercial business loans in our primary market areas and underwrite them based
on the borrower's ability to service the loan from operating income. We offer a broad range of
commercial lending products, including term loans and lines of credit. Short and medium-term
commercial loans, primarily collateralized, are made available to businesses for working capital
(including inventory and receivables), business expansion (including acquisition of real estate,
expansion and improvements) and the purchase of equipment. Commercial business loans are offered
to the agricultural industry for short-term crop production, farm equipment and livestock
financing. As a general practice, where possible, a collateral lien is placed on any available
real estate, equipment or other assets owned by the borrower and a personal guarantee of the owner
is obtained. As of December 31, 2010, $70.0 million, or 33%, of the aggregate commercial business
loan portfolio were at fixed rates, while $141.0 million, or 67%, were at variable rates.
We also offer commercial mortgage loans to finance the purchase of real property, which
generally consists of real estate with completed structures and, to a smaller extent, agricultural
real estate financing. Commercial mortgage loans are secured by first liens on the real estate and
are typically amortized over a 10 to 20 year period. The underwriting analysis includes credit
verification, appraisals and a review of the borrower's financial condition and repayment capacity.
As of December 31, 2010, $100.0 million, or 28%, of the aggregate commercial mortgage portfolio
were at fixed rates, while $252.9 million, or 72%, were at variable rates.
We utilize government loan guarantee programs where available and appropriate. See
"Government Guarantee Programs" below.
Government Guarantee Programs
We participate in government loan guarantee programs offered by the Small Business
Administration ("SBA"), U.S. Department of Agriculture, Rural Economic and Community Development
and Farm Service Agency, among others. As of December 31, 2010, we had loans with an aggregate
principal balance of $55.1 million that were covered by guarantees under these programs. The
guarantees typically only cover a certain percentage of these loans. By participating in these
programs, we are able to broaden our base of borrowers while minimizing credit risk.
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Table of Contents
Residential Mortgage Lending
We originate fixed and variable rate one-to-four family residential mortgages collateralized
by owner-occupied properties located in its market areas. We offer a variety of real estate loan
products, which are generally amortized for periods up to 30 years. Loans collateralized by
one-to-four family residential real estate generally have been originated in amounts of no more
than 80% of appraised value or have mortgage insurance. Mortgage title insurance and hazard
insurance are normally required. We sell certain one-to-four family residential mortgages to the
secondary mortgage market and typically retain the right to service the mortgages. To assure
maximum salability of the residential loan products for possible resale, we have formally adopted
the underwriting, appraisal, and servicing guidelines of the Federal Home Loan Mortgage Corporation
("FHLMC") as part of our standard loan policy. As of December 31, 2010, the residential mortgage
servicing portfolio totaled $328.9 million, the majority of which have been sold to FHLMC. As of
December 31, 2010, $89.4 million, or 69%, of residential mortgage retained in portfolio were at
fixed rates, while $40.2 million, or 31%, were at variable rates. We do not engage in sub-prime or
other high-risk residential mortgage lending as a line-of-business.
Consumer Lending
We offer a variety of loan products to our consumer customers, including home equity loans and
lines of credit, automobile loans, secured installment loans and various other types of secured and
unsecured personal loans. At December 31, 2010, outstanding consumer loan balances were
concentrated in indirect automobile loans and home equity products.
We indirectly originate, through franchised new car dealers, indirect consumer loans. The
consumer indirect loan portfolio is primarily comprised of new and used automobile loans with terms
that typically range from 36 to 84 months. We have expanded our relationships with franchised new
car dealers in Western, Central and, most recently, into the Capital District of New York, and have
selectively originated a mix of new and used automobile loans from those dealers. In the latter
part of 2010, we began efforts to expand our dealer network into Northern Pennsylvania and
anticipate indirectly originating loans there in the first half of 2011. As of December 31, 2010,
the consumer indirect portfolio totaled $418.0 million, nearly all of which were fixed rate
automobile loans.
We also originate, independently of the indirect loans described above, consumer automobile
loans, recreational vehicle loans, boat loans, home improvement loans, closed-end home equity
loans, home equity lines of credit, personal loans (collateralized and uncollateralized) and
deposit account collateralized loans. The terms of these loans typically range from 12 to 180
months and vary based upon the nature of the collateral and the size of loan. The majority of the
consumer lending program is underwritten on a secured basis using the customer's home or the
financed automobile, mobile home, boat or recreational vehicle as collateral. As of December 31,
2010, $97.2 million, or 47%, of the home equity portfolio was at fixed rates, while $111.2 million,
or 53%, was at variable rates. The other consumer portfolio totaled $26.1 million as of December
31, 2010, all of which were fixed loans.
Credit Administration
Our loan policy establishes standardized underwriting guidelines, as well as the loan approval
process and the committee structures necessary to facilitate and ensure the highest possible loan
quality decision-making in a timely and businesslike manner. The policy establishes requirements
for extending credit based on the size, risk rating and type of credit involved. The policy also
sets limits on individual loan officer lending authority and various forms of joint lending
authority, while designating which loans are required to be approved at the committee level.
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Our credit objectives are as follows:
•
Compete effectively and service the legitimate credit needs of our target
market;
•
Enhance our reputation for superior quality and timely delivery of products
and services;
•
Provide pricing that reflects the entire relationship and is commensurate
with the risk profiles of our borrowers;
•
Retain, develop and acquire profitable, multi-product, value added
relationships with high quality borrowers;
•
Focus on government guaranteed lending and establish a specialization in
this area to meet the needs of the small businesses in our communities; and
•
Comply with the relevant laws and regulations.
Our policy includes loan reviews, under the supervision of the Audit and Risk Oversight
committees of the Board of Directors and directed by the Chief Risk Officer, in order to render an
independent and objective evaluation of our asset quality and credit administration process.
Risk ratings are assigned to loans in the commercial business and commercial mortgage
portfolios. The risk ratings are specifically used as follows:
•
Profile the risk and exposure in the loan portfolio and identify developing
trends and relative levels of risk;
•
Identify deteriorating credits; and
•
Reflect the probability that a given customer may default on its
obligations.
Through the loan approval process, loan administration and loan review program, management
seeks to continuously monitor our credit risk profile and assesses the overall quality of the loan
portfolio and adequacy of the allowance for loan losses.
We have several procedures in place to assist in maintaining the overall quality of our loan
portfolio. Delinquent loan reports are monitored by credit administration to identify adverse
levels and trends. Loans, including impaired loans, are generally classified as non-accruing if
they are past due as to maturity or payment of principal or interest for a period of more than 90
days, unless such loans are well-collateralized and in the process of collection. Loans that are
on a current payment status or past due less than 90 days may also be classified as non-accruing if
repayment in full of principal and/or interest is uncertain.
Allowance for Loan Losses
The allowance for loan losses is established through charges or credits to earnings in the
form of a provision for loan losses. The allowance reflects management's estimate of the amount of
probable loan losses in the portfolio, based on factors such as:
•
Specific allocations for individually analyzed credits;
•
Risk assessment process;
•
Historical net charge-off experience;
•
Evaluation of the loan portfolio with loan reviews;
•
Levels and trends in delinquent and non-accruing loans;
•
Trends in volume and terms;
•
Effects of changes in lending policy;
•
Experience, ability and depth of management;
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Table of Contents
•
National and local economic trends and conditions;
•
Concentrations of credit;
•
Interest rate environment;
•
Customer leverage;
•
Information (availability of timely financial information); and
•
Collateral values.
Our methodology in the estimation of the allowance for loan losses includes the following
broad areas:
1.
Impaired commercial business and commercial mortgage, generally in excess of
$50 thousand are reviewed individually and assigned a specific loss allowance, if
considered necessary, in accordance with U.S. generally accepted accounting principles
("GAAP").
2.
The remaining portfolios of commercial business and commercial mortgage are
segmented by risk rating into the following loan classification categories:
uncriticized or pass, special mention, substandard and doubtful. Uncriticized loans,
special mention loans, substandard loans and all doubtful loans not assigned a specific
loss allowance are assigned allowance allocations based on historical net loan
charge-off experience for each of the respective loan categories, supplemented with
additional reserve amounts, if considered necessary, based upon qualitative factors.
These qualitative factors include the levels and trends in delinquencies and
non-accruing loans; trends in volume and terms of loans; effects of changes in lending
policy; experience, ability, and depth of management; national and local economic
conditions; concentrations of credit, interest rate environment; customer leverage;
information (availability of timely financial information); and collateral values,
among others.
3.
The retail loan portfolio is segmented into the following types of loans:
residential real estate, home equity (home equity loans and lines of credit), consumer
indirect and other consumer. Allowance allocations for the real estate related loan
portfolios (residential and home equity) are based on the average loss experience for
the previous eight quarters, supplemented with qualitative factors similar to the
elements described above. Allowance allocations for the consumer indirect and other
consumer portfolios are based on vintage analyses performed with historical loss
experience at 36 months and 24 months aging, respectively. The allocations on these
portfolios are also supplemented with qualitative factors.
Management presents a quarterly review of the adequacy of the allowance for loan losses to our
Board of Directors based on the methodology described above.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS REOFFER
PROSPECTUS. NO ONE HAS BEEN AUTHORIZED TO PROVIDE YOU WITH DIFFERENT INFORMATION.
THESE SECURITIES ARE NOT BEING OFFERED IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS REOFFER PROSPECTUS IS ACCURATE AS OF ANY
DATE OTHER THAN THE DATE ON THE FRONT OF SUCH DOCUMENT
.
7
Table of Contents
RISK FACTORS
You should carefully consider the risks described below before purchasing our common stock.
The risks and uncertainties described below are not the only ones we face. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial may also impair our
business or cause the value of our common stock to drop. If any of the following risks actually
occur, our business could be adversely affected. In those cases, the trading price of our common
stock could decline, and you may lose the value of your investment in our securities.
Credit Risks
If we
experience greater credit losses than anticipated, earnings may be
adversely impacted.
As a lender, we are exposed to the risk that customers will be unable to repay their loans
according to their terms and that any collateral securing the payment of their loans may not be
sufficient to assure repayment. Credit losses are inherent in the business of making loans and
could have a material adverse impact on our results of operations.
We make various assumptions and judgments about the collectability of our loan portfolio,
including the creditworthiness of our borrowers and the value of the real estate and other assets
serving as collateral, and we provide an allowance for estimated loan losses based on a number of
factors. We believe that the allowance for loan losses is adequate. However, if our assumptions
or judgments are wrong, the allowance for loan losses may not be sufficient to cover the actual
credit losses. We may have to increase the allowance in the future in response to the request of
one of our primary banking regulators, to adjust for changing conditions and assumptions, or as a
result of any deterioration in the quality of our loan portfolio. The actual amount of future
provisions for credit losses may vary from the amount of past provisions.
Geographic concentration may unfavorably impact our operations.
Substantially all of our business and operations are concentrated in the Western and Central
New York region. As a result of this geographic concentration, our results depend largely on
economic conditions in these and surrounding areas. Deterioration in economic conditions in our
market could:
•
increase loan delinquencies;
•
increase problem assets and foreclosures;
•
increase claims and lawsuits;
•
decrease the demand for our products and services; and
•
decrease the value of collateral for loans, especially real estate, in turn reducing
customers' borrowing power, the value of assets associated with non-performing loans
and collateral coverage.
Generally, we make loans to small to mid-sized businesses whose success depends on the
regional economy. These businesses generally have fewer financial resources in terms of capital or
borrowing capacity than larger entities. Adverse economic and business conditions in our market
areas could reduce our growth rate, affect our borrowers' ability to repay their loans and,
consequently, adversely affect our business, financial condition and performance. For example, we
place substantial reliance on real estate as collateral for our loan portfolio. A sharp downturn
in real estate values in our market area could leave many of these loans inadequately
collateralized. If we are required to liquidate the collateral securing a loan to satisfy the
debt during a period of reduced real estate values, the impact on our results of operations
could be materially adverse.
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We depend on the accuracy and completeness of information about or from customers and
counterparties.
In deciding whether to extend credit or enter into other transactions, we may rely on
information furnished by or on behalf of customers and counterparties, including financial
statements, credit reports, and other financial information. We may also rely on representations of
those customers, counterparties, or other third parties, such as independent auditors, as to the
accuracy and completeness of that information. Reliance on inaccurate or misleading financial
statements, credit reports, or other financial information could cause us to enter into unfavorable
transactions, which could have a material adverse effect on our financial condition and results of
operations.
We are subject to environmental liability risk associated with our lending activities.
A significant portion of our loan portfolio is secured by real property. During the ordinary
course of business, we may foreclose on and take title to properties securing certain loans. In
doing so, there is a risk that hazardous or toxic substances could be found on these properties.
If hazardous or toxic substances are found, we may be liable for remediation costs, as well as for
personal injury and property damage. Environmental laws may require us to incur substantial
expenses and may materially reduce the affected property's value or limit our ability to use or
sell the affected property. In addition, future laws or more stringent interpretations or
enforcement policies with respect to existing laws may increase our exposure to environmental
liability. Although we have policies and procedures to perform an environmental review before
initiating any foreclosure action on real property, these reviews may not be sufficient to detect
all potential environmental hazards. The remediation costs and any other financial liabilities
associated with an environmental hazard could have a material adverse effect on our financial
condition and results of operations.
REGULATORY/LEGAL/COMPLIANCE RISKS
We are highly regulated and may be adversely affected by changes in banking laws, regulations and
regulatory practices.
We are subject to extensive supervision, regulation and examination. This regulatory structure
gives the regulatory authorities extensive discretion in connection with their supervisory and
enforcement activities and examination policies to address not only compliance with applicable laws
and regulations (including laws and regulations governing consumer credit, and anti-money
laundering and anti-terrorism laws), but also capital adequacy, asset quality and risk, management
ability and performance, earnings, liquidity and various other factors. As part of this regulatory
structure, we are subject to policies and other guidance developed by the regulatory agencies with
respect to capital levels, the timing and amount of dividend payments, the classification of assets
and the establishment of adequate loan loss reserves for regulatory purposes. Under this structure
the regulatory agencies have broad discretion to impose restrictions and limitations on our
operations if they determine, among other things, that our operations are unsafe or unsound, fail
to comply with applicable law or are otherwise inconsistent with laws and regulations or with the
supervisory policies of these agencies.
This supervisory framework could materially impact the conduct, growth and profitability of
our operations. Any failure on our part to comply with current laws, regulations, other regulatory
requirements or safe and sound banking practices or concerns about our financial condition, or any
related regulatory sanctions or adverse actions against us, could increase our costs or restrict
our ability to expand our business and result in damage to our reputation.
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Recently enacted financial reform legislation will, among other things, tighten capital standards,
create a new Consumer Financial Protection Bureau and result in new regulations that are expected
to increase our costs of operations.
On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer
Protection Act, which we refer to as the Dodd-Frank Act, into law. This new law will significantly
change the current bank regulatory structure and affect the lending, deposit, investment, trading
and operating activities of financial institutions and their holding companies. The Dodd-Frank Act
requires various federal agencies to adopt a broad range of new implementing rules and regulations,
and to prepare numerous studies and reports for Congress. The federal agencies are given
significant discretion in drafting the implementing rules and regulations, and consequently, many
of the details and much of the impact of the Dodd-Frank Act may not be known for many months or
years.
Among the many requirements in the Dodd-Frank Act for new banking regulations is a requirement
for new capital regulations to be adopted within 18 months. These regulations must be at least as
stringent as, and may call for higher levels of capital, than current regulations. Generally, trust
preferred securities will no longer be eligible as Tier 1 capital, but our currently outstanding
trust preferred securities will be grandfathered and our currently outstanding TARP preferred
securities will continue to qualify as Tier 1 capital.
Certain provisions of the Dodd-Frank Act are expected to have a near-term impact on us. For
example, one year after the date of its enactment, the Dodd-Frank Act eliminates the federal
prohibitions on paying interest on demand deposits, thus allowing businesses to have interest
bearing checking accounts. Depending on competitive responses, this significant change to existing
law could have an adverse impact on our interest expense.
The Dodd-Frank Act also permanently increases the maximum amount of deposit insurance for
banks, savings institutions and credit unions to $250,000 per depositor, retroactive to January 1,
2008, and non-interest bearing transaction accounts and interest on lawyers trust accounts have
unlimited deposit insurance through December 31, 2013.
The Dodd-Frank Act creates a new Bureau of Consumer Financial Protection with broad powers to
supervise and enforce consumer protection laws. The Bureau will have broad rule-making authority
for a wide range of consumer protection laws that apply to all banks, including the authority to
prohibit "unfair, deceptive or abusive" acts and practices.
Many aspects of the Dodd-Frank Act are subject to rulemaking and will take effect over several
years, making it difficult to anticipate the overall financial impact on us. However, compliance
with this new law and its implementing regulations will result in additional operating costs that
could have a material adverse effect on our financial condition and results of operations.
Proposed changes in New York State banking regulations could
adversely affect us.
New York Governor Andrew Cuomo proposed merging the State Departments of Banking, Insurance and Consumer
Protection into a single Department of Financial Regulation, or DFR. The bill provides that the Superintendent of the
DFR may, beginning April 1, 2012, assess expenses in such proportion as he or she deems just and reasonable against banks
and insurers. The bill also establishes a special account called the
"consumer protection account," which will consist of fees and penalties
 received by the department of state and DFR, as well as other monies
received in the form of penalties.
 These monies will be available to the
DFR to pay for costs related to its consumer and investor protection activities. If the consumer
 protection account is insufficient to cover those
costs, the balance would be recoverable through assessments against
the industry.
The bill makes New York's "wild card" authority (that was set to expire September 10, 2011) permanent.
Under this authority, the Banking Board has the power to grant to New
York chartered banking organizations,
as well as licensed foreign bank branches and agencies, powers possessed by a counterpart federally-chartered banking institution.
If this bill is adopted as proposed, it could adversely affect us.
As a participant in TARP, we are subject to certain restrictions on dividends, repurchases of
common stock and executive compensation.
We are subject to restrictions on dividends, repurchases of common stock, and executive
compensation as a TARP participant. Compliance with these restrictions and other restrictions may
increase our costs, impact our ability to retain executive officers and limit our ability to pursue
business opportunities. Additionally, any reduction of, or the elimination of, our common stock
dividend in the future could adversely affect the market price of our common stock. The current
restrictions, as well as any possible future restrictions associated with participation in TARP
could have a material adverse impact on our business, financial condition, or results of
operations.
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New or changing tax, accounting, and regulatory rules and interpretations could significantly
impact strategic initiatives, results of operations, cash flows, and financial condition.
The financial services industry is extensively regulated. Federal and state banking
regulations are designed primarily to protect the deposit insurance funds and consumers, not to
benefit a company's stockholders. These regulations may sometimes impose significant limitations
on operations. These regulations, along with the currently existing tax, accounting, securities,
insurance, and monetary laws, regulations, rules, standards, policies, and interpretations control
the methods by which financial institutions conduct business, implement strategic initiatives and
tax compliance, and govern financial reporting and disclosures. These laws, regulations, rules,
standards, policies, and interpretations are constantly evolving and may change significantly over
time.
OPERATIONAL RISKS
If our security systems, or those of merchants, merchant acquirers or other third parties
containing information about customers, are compromised, we may be subject to liability and damage
to our reputation.
As part of our business, we collect, process and retain sensitive and confidential client and
customer information on our behalf and on behalf of other third parties. Customer data also may be
stored on systems of third-party service providers and merchants that may have inadequate security
systems. Third-party carriers regularly transport customer data, and may lose sensitive customer
information. Unauthorized access to our networks or any of our other information systems
potentially could jeopardize the security of confidential information stored in our computer
systems or transmitted by our customers or others. If our security systems or those of merchants,
processors or other third-party service providers are compromised such that this confidential
information is disclosed to unauthorized parties, we may be subject to liability. For example, in
the event of a security breach, we may incur losses related to fraudulent use of credit and debit
cards issued by us as well as the operational costs associated with reissuing cards. Although we
take preventive measures to address these factors, such measures are costly and may become more
costly in the future. Moreover, these measures may not protect us from liability, which may not be
adequately covered by insurance, or from damage to our reputation.
We rely on other companies to provide key components of our business infrastructure.
Third party vendors provide key components of our business infrastructure such as internet
connections, network access and core application processing. While we have selected these third
party vendors carefully, we do not control their actions. Any problems caused by these third
parties, including as a result of their not providing us their services for any reason or their
performing their services poorly, could adversely affect our ability to deliver products and
services to our customers or otherwise conduct our business efficiently and effectively. Replacing
these third party vendors could also entail significant delay and expense.
We may not be able to attract and retain skilled people.
Our success depends, in large part, on our ability to attract and retain skilled people.
Competition for the best people in most activities engaged in by us can be intense, and we may not
be able to hire sufficiently skilled people or to retain them. Further, the rural location of our
principal executive offices and many of our bank branches make it difficult for us to attract
skilled people to such locations. The unexpected loss of services of one or more of our key
personnel could have a material adverse impact on our business because of their skills, knowledge
of our markets, years of industry experience, and the difficulty of promptly finding qualified
replacement personnel.
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The potential for business interruption exists throughout our organization.
Integral to our performance is the continued efficacy of our technical systems, operational
infrastructure, relationships with third parties and the vast array of associates and key
executives in our day-to-day and ongoing operations. Failure by any or all of these resources
subjects us to risks that may vary in size, scale and scope. This includes, but is not limited to,
operational or technical failures, ineffectiveness or exposure due to interruption in third party
support as expected, as well as the loss of key individuals or failure on the part of key
individuals to perform properly. Although management has established policies and procedures,
including implementation and testing of a comprehensive contingency plan to address such failures,
the occurrence of any such event could have a material adverse effect on our business, which, in
turn, could have a material adverse effect on our financial condition and results of operations.
EXTERNAL RISKS
We are subject to interest rate risk.
Our earnings and cash flows are largely dependent upon our net interest income. Interest
rates are highly sensitive to many factors that are beyond our control, including general economic
conditions and policies of various governmental and regulatory agencies and, in particular, the
Federal Reserve. Changes in monetary policy, including changes in interest rates, could influence
not only the interest we receive on loans and investments and the amount of interest we pay on
deposits and borrowings, but such changes could also affect (i) our ability to originate loans and
obtain deposits; (ii) the fair value of our financial assets and liabilities; and (iii) the average
duration of our mortgage-backed securities portfolio and other interest-earning assets. If the
interest rates paid on deposits and other borrowings increase at a faster rate than the interest
rates received on loans and other investments, our net interest income, and therefore earnings,
could be adversely affected. Earnings could also be adversely affected if the interest rates
received on loans and other investments fall more quickly than the interest rates paid on deposits
and other borrowings.
Although management believes it has implemented effective asset and liability management
strategies to reduce the potential effects of changes in interest rates on our results of
operations, any substantial, unexpected, prolonged change in market interest rates could have a
material adverse effect on our financial condition and results of operations. Also, our interest
rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of
actual interest rate changes on our balance sheet.
Our business may be adversely affected by conditions in the financial markets and economic
conditions generally.
From December 2007 through June 2009, the U.S. economy was in recession. Business activity
across a wide range of industries and regions in the U. S. was greatly reduced. Although economic
conditions have begun to improve, certain sectors, such as real estate, remain weak and
unemployment remains high. Local governments and many businesses are still in serious difficulty
due to lower consumer spending and reduced tax collections.
Market conditions also led to the failure or merger of several prominent financial
institutions and numerous regional and community-based financial institutions. These failures, as
well as projected future failures, have had a significant negative impact on the capitalization
level of the deposit insurance fund of the FDIC, which, in turn, has led to past increases in
deposit insurance premiums paid by financial institutions.
Our financial performance generally, and in particular the ability of borrowers to pay
interest on and repay principal of outstanding loans and the value of collateral securing those
loans, as well as demand for loans and other products and services we offer, is highly dependent
upon the business environment in the markets where we operate, in the State of New York and in the
United States as a whole. A favorable
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business environment is generally characterized by, among other factors, economic growth,
efficient capital markets, low inflation, low unemployment, high business and investor confidence,
and strong business earnings. Unfavorable or uncertain economic and market conditions can be caused
by declines in economic growth, business activity or investor or business confidence; limitations
on the availability or increases in the cost of credit and capital; increases in inflation or
interest rates; high unemployment, natural disasters; or a combination of these or other factors.
Approximately 20% of our investment securities portfolio at December 31, 2010 is comprised of
municipal securities issued by or on behalf of New York and its political subdivisions, agencies or
instrumentalities, the interest on which is exempt from regular federal income tax. Risks
associated with investing in municipal securities include political, economic and regulatory
factors which may affect the issuers. The concerns facing the State of New York may lead
nationally recognized rating agencies to downgrade its debt obligations. It is uncertain how the
financial markets may react to any potential future ratings downgrade in New York's debt
obligations. However, the fallout from continued budgetary concerns and a possible ratings
downgrade could adversely affect the value of New York's obligations and those of its political
subdivisions, agencies and instrumentalities.
Overall, during 2010, the business environment has been adverse for many households and
businesses in the United States and worldwide. While economic conditions in the State of New York,
the United States and worldwide have begun to improve, there can be no assurance that this
improvement will continue. Such conditions could adversely affect our financial condition and
results of operations.
Our earnings are significantly affected by the fiscal and monetary policies of the federal
government and its agencies.
The policies of the Federal Reserve impact us significantly. The Federal Reserve regulates the
supply of money and credit in the United States. Its policies directly and indirectly influence the
rate of interest earned on loans and paid on borrowings and interest-bearing deposits and can also
affect the value of financial instruments we hold. Those policies determine to a significant extent
our cost of funds for lending and investing. Changes in those policies are beyond our control and
are difficult to predict. Federal Reserve policies can also affect our borrowers, potentially
increasing the risk that they may fail to repay their loans. For example, a tightening of the money
supply by the Federal Reserve could reduce the demand for a borrower's products and services. This
could adversely affect the borrower's earnings and ability to repay its loan, which could have a
material adverse effect on our financial condition and results of operation.
The soundness of other financial institutions could adversely affect us.
Financial services institutions are interrelated as a result of trading, clearing,
counterparty, or other relationships. We have exposure to many different industries and
counterparties, and we routinely execute transactions with counterparties in the financial services
industry, including commercial banks, brokers and dealers, investment banks, and other
institutional clients. Many of these transactions expose us to credit risk in the event of a
default by our counterparty or client. In addition, our credit risk may be exacerbated when the
collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the
full amount of the credit or derivative exposure due us. Any such losses could have a material
adverse effect on our financial condition and results of operations.
We operate in a highly competitive industry and market area.
We face substantial competition in all areas of our operations from a variety of different
competitors, many of which are larger and may have more financial resources. Such competitors
primarily include national, regional and internet banks within the various markets in which we
operate. We also face competition from many other types of financial institutions, including,
without limitation, savings and loans,
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credit unions, finance companies, brokerage firms, insurance companies and other financial
intermediaries. The financial services industry could become even more competitive as a result of
legislative, regulatory and technological changes and continued consolidation. Banks, securities
firms and insurance companies can merge under the umbrella of a financial holding company, which
can offer virtually any type of financial service, including banking, securities underwriting,
insurance (both agency and underwriting), and merchant banking. Also, technology has lowered
barriers to entry and made it possible for nonbanks to offer products and services traditionally
provided by banks, such as automatic transfer and automatic payment systems. Many of our
competitors have fewer regulatory constraints and may have lower cost structures. Additionally, due
to their size, many competitors may be able to achieve economies of scale and, as a result, may
offer a broader range of products and services as well as better pricing for those products and
services than we can.
Our ability to compete successfully depends on a number of factors, including, among other
things:
•
the ability to develop, maintain and build upon long-term customer relationships
based on top quality service, high ethical standards and safe, sound assets;
•
the ability to expand our market position;
•
the scope, relevance and pricing of products and services offered to meet customer
needs and demands;
•
the rate at which we introduce new products and services relative to our
competitors;
•
customer satisfaction with our level of service; and
•
industry and general economic trends.
Failure to perform in any of these areas could significantly weaken our competitive position,
which could adversely affect our growth and profitability, which, in turn, could have a material
adverse effect on our financial condition and results of operations.
Our market value could result in an impairment of goodwill.
Our goodwill is evaluated for impairment on an annual basis or when triggering events or
circumstances indicate impairment may exist. Significant and sustained declines in our stock price
and market capitalization, significant declines in our expected future cash flows, significant
adverse changes in the business climate or slower growth rates could result in impairment of
goodwill. At December 31, 2010, we had goodwill of $37.4 million, representing approximately 18%
of shareholders' equity. If impairment of goodwill was determined to exist, we would be required
to write down our goodwill as a charge to earnings, which could have a material adverse impact on
our results of operations or financial condition.
LIQUIDITY RISKS
Liquidity is essential to our businesses.
Our liquidity could be impaired by an inability to access the capital markets or unforeseen
outflows of cash. This situation may arise due to circumstances that we may be unable to control,
such as a general market disruption or an operational problem that affects third parties or us.
Our efforts to monitor and manage liquidity risk may not be successful or sufficient to deal with
dramatic or unanticipated reductions in our liquidity. In such events, our cost of funds may
increase, thereby reducing our net interest revenue, or we may need to sell a portion of our
investment and/or loan portfolio, which, depending upon market conditions, could result in our
realizing a loss.
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We may need to raise additional capital in the future and such capital may not be available when
needed or at all.
We may need to raise additional capital in the future to provide sufficient capital resources
and liquidity to meet our commitments and business needs. Our ability to raise additional capital,
if needed, will depend on, among other things, conditions in the capital markets at that time,
which are outside of our control, and our financial performance.
In addition, we are highly regulated, and our regulators could require us to raise additional
common equity in the future. Both we and our regulators perform a variety of analyses of our
assets, including the preparation of stress case scenarios, and as a result of those assessments we
could determine, or our regulators could require us, to raise additional capital.
We cannot assure that such capital will be available on acceptable terms or at all. Any
occurrence that may limit our access to the capital markets, such as a decline in the confidence of
debt purchasers, depositors of the Bank or counterparties participating in the capital markets, or
a downgrade of our debt rating, may adversely affect our capital costs and ability to raise capital
and, in turn, our liquidity. An inability to raise additional capital on acceptable terms when
needed could have a material adverse impact on our business, financial condition, results of
operations or liquidity.
We rely on dividends from our subsidiaries for most of our revenue.
We are a separate and distinct legal entity from our subsidiaries. A substantial portion of
our revenue comes from dividends from our Bank subsidiary. These dividends are the principal
source of funds to pay dividends on our common and preferred stock, and to pay interest and
principal on our debt. Various federal and/or state laws and regulations limit the amount of
dividends that our Bank subsidiary and nonbank subsidiary may pay to us. Also, our right to
participate in a distribution of assets upon a subsidiary's liquidation or reorganization is
subject to the prior claims of the subsidiary's creditors. In the event our bank subsidiary is
unable to pay dividends to us, we may not be able to service debt, pay obligations, or pay
dividends on our common and preferred stock. The inability to receive dividends from our bank
subsidiary could have a material adverse effect on our business, financial condition, and results
of operations.
RISKS RELATED TO AN INVESTMENT IN OUR COMMON STOCK
The market price for our common stock varies, and you should purchase common stock for long-term
investment only.
Although our common stock is currently traded on the NASDAQ Global Select, we cannot assure
you that there will, at any time in the future, be an active trading market for our common stock.
Even if there is an active trading market for our common stock, we cannot assure you that you will
be able to sell all of your shares of common stock at one time or at a favorable price, if at all.
As a result, you should purchase shares of common stock described herein only if you are capable
of, and seeking to, make a long-term investment in our common stock.
There may be future sales or other dilution of our equity, which may adversely affect the market
price of our common stock.
We are not restricted from issuing additional shares of common stock, including any securities
that are convertible into or exchangeable for, or that represent the right to receive, common
stock. We are currently authorized to issue up to 50,000,000 shares of common stock and up to
210,000 shares of preferred stock, par value $100 per share, which is designated into two classes,
Class A of which 10,000 shares are authorized, and Class B of which 200,000 shares are authorized.
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As of December 31, 2010, 10,937,506 shares of common stock and 183,259 shares of our preferred
stock were issued and outstanding including (i) 7,503 shares of our fixed rate cumulative perpetual
Series A preferred stock, par value $100 per share, having a liquidation preference of $5,000 per
share, which we refer to as the TARP preferred stock, (ii) 1,533 shares of our Series A 3%
cumulative preferred stock, which we refer to as the 3% preferred stock, and (iii) 174,223 shares
of Series B-1 8.48% cumulative preferred stock, which we refer to as the 8.48% preferred stock. We
refer to our TARP preferred stock, our 3% preferred stock and our 8.48% preferred stock
collectively as the preferred stock. Our board of directors has authority, without action or vote
of the shareholders, to issue all or part of the authorized but unissued shares. These authorized
but unissued shares could be issued on terms or in circumstances that could dilute the interests of
the holders of our common stock.
Pursuant to the Letter Agreement, dated December 23, 2008, and the Securities Purchase
Agreement — Standard Terms attached thereto, which we refer to collectively as the Securities
Purchase Agreement, that we entered into with the U.S. Treasury, in connection with our
participation in TARP, the U.S. Treasury received a warrant to purchase up to 378,175 shares of our
common stock, which we refer to as the warrant, at an exercise price of $14.88 per share, and we
have provided the U.S. Treasury with registration rights covering the warrant and the underlying
shares of common stock. We may seek the approval of our regulators to repurchase the warrant with
the proceeds from any offering. The issuance of additional shares of common stock as a result of
exercise of the warrant or otherwise or the issuance of securities convertible or exercisable into
shares of common stock would dilute the ownership interest of existing holders of our common stock.
Although the U.S. Treasury has agreed to not vote any of the shares of common stock it receives
upon exercise of the warrant, a transferee of any portion of the warrant or of any shares of common
stock acquired upon exercise of the warrant is not bound by this restriction. The market price of
our common stock could decline as a result of any offering as well as other sales of a large block
of common stock in the market after an offering, or the perception that such sales could occur.
The terms of the warrant include an anti-dilution adjustment, which provides that (except in
certain permitted transactions, including registered offerings such as this one), if we issue
shares of common stock at a price that is less than 90% of the market price of such shares on the
last trading day preceding the date of the agreement to sell such shares, the number of shares of
common stock to be issued under the warrant would increase and the per share price of common stock
to be purchased pursuant to the warrant would decrease.
Our shares of common stock are equity and are subordinate to our existing and future indebtedness
and our preferred stock, and are effectively subordinated to all the indebtedness and other
non-common equity claims against our subsidiaries.
Our shares of common stock are equity interests in us and do not constitute indebtedness.
Accordingly, our common stock will rank junior to all of our indebtedness and to other non-equity
claims on us with respect to assets available to satisfy claims on us. Additionally, holders of our
common stock are subject to the prior dividend and liquidation rights of holders of our outstanding
preferred stock. The terms of our preferred stock currently prohibit us from paying dividends with
respect to our common stock unless all accrued and unpaid dividends for all completed dividend
periods with respect to the preferred stock have been paid with our TARP preferred stock and 3%
preferred stock receiving payments first.
In addition, our right to participate in any distribution of assets of any of our subsidiaries
upon the subsidiary's liquidation or otherwise, and thus your ability as a holder of our common
stock to benefit indirectly from such distribution, will be subject to the prior claims of
creditors of that subsidiary and holders of any of that subsidiary's preferred stock, except to the
extent that any of our claims as a creditor of such subsidiary may be recognized. As a result, our
common stock will effectively be subordinated to all existing and future liabilities and
obligations of our subsidiaries.
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We may not pay dividends on our common stock.
Holders of our common stock are only entitled to receive such dividends as our board of
directors may declare out of funds legally available for such payments. Although we have
historically declared cash dividends on our common stock, we are not required to do so and may
reduce or eliminate our common stock dividend in the future. This could adversely affect the
market price of our common stock. Also, participation in TARP limits our ability to increase our
dividend or to repurchase our common stock, for so long as any securities issued under such program
remain outstanding.
Our certificate of incorporation, our bylaws, and certain banking laws may have an anti-takeover effect.
Provisions of our certificate of incorporation, our bylaws, and federal and state banking
laws, including regulatory approval requirements, could make it more difficult for a third party to
acquire us, even if doing so would be perceived to be beneficial to our shareholders. The
combination of these provisions may discourage others from initiating a potential merger, takeover
or other change of control transaction, which, in turn, could adversely affect the market price of
our common stock.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements contained in this reoffer prospectus and in information incorporated by
reference into this reoffer prospectus that are not historical or current facts may constitute
forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as
amended, which we refer to as the Securities Act, and Section 21E of the U.S. Securities Exchange
Act of 1934, as amended, which we refer to as the Exchange Act, and are intended to be covered by
the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition,
the Company's management may make forward-looking statements orally to the media, securities
analysts, investors or others. These statements, which are based on certain assumptions and
describe our future plans, strategies, and expectations, can generally be identified by the use of
words such as "optimism," "look-forward," "bright," "believe," "expect," "anticipate," "intend,"
"plan," "estimate," "potential," "project," "target" or words of similar meaning, or future or
conditional verbs such as "will," "would," "should," "could" or "may." These forward-looking
statements include statements relating to our strategy, effectiveness of investment programs,
evaluations of future interest rate trends and liquidity, expectations as to growth in assets,
deposits and results of operations, future operations, market position, financial position, and
prospects, plans and objectives of management.
Forward-looking statements are based on the current assumptions and beliefs of management and
are only expectations of future results and are subject to certain risks, uncertainties and
assumptions. Our actual results could differ materially from those projected in the forward-looking
statements as a result of, among other things, factors referenced herein under the section
captioned "Risk Factors" beginning on page 8.
Forward-looking statements speak only as of the date they are made. Except as required by law,
we do not undertake to update forward-looking statements to reflect circumstances or events that
occur after the date the forward-looking statements are made. Although we believe that our
expectations are reasonable, we can give no assurance that such expectations will prove to be
correct. Based upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual results may vary
materially from those described in any forward-looking statements.
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We caution our readers not to place undue reliance on any forward-looking statements.
Forward-looking statements should not be viewed as predictions, and should not be the primary basis
upon which investors evaluate the Company.
USE OF PROCEEDS
The proceeds from the sale of the shares by the selling shareholders will belong to the
selling shareholders. We will not receive any of the proceeds from the sale of the shares.
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SELLING SHAREHOLDERS
The common stock to which this reoffer prospectus relates is being registered for reoffers and
resales by the selling shareholders. The selling shareholders may sell all, some or none of their
shares of common stock. The selling shareholders may offer their common stock for sale from time
to time as discussed under "Plan of Distribution" in this reoffer prospectus.
 In
addition to the selling shareholders listed in the table, Thomas P.
Connolly, a retired director, may use this reoffer  prospectus for
reoffers and resales of the 800 shares of common stock awarded to him
under the DSIP.
The following table provides the names, the relationship with us within the past three years,
beneficial ownership of, and the number of shares of common stock which may be sold by, each
selling shareholder.
Shares
Beneficially
Amount to
Amount and Percentage
Relationship with us
Owned
be Offered
of  Shares Beneficially
Selling Shareholder  (1)
within past  3  years
(2)(3)
for Resale
Owned after Resale
Number (4)
Percent (5)
Karl V. Anderson Jr.
Director
11,063
(6)
1,600
9,463
*
John E. Benjamin
Director
18,263
(7)
1,600
16,663
*
Barton P. Dambra
Director
23,920
(8)
1,600
22,320
*
Samuel M. Gullo
Director
19,136
(9)
1,600
17,536
*
Susan R. Holliday
Director
19,887
(10)
1,600
18,287
*
Erland E. Kailbourne
Director
32,457
(11)
1,600
30,857
*
Robert N. Latella
Director
12,473
(12)
1,600
10,873
*
James L. Robinson
Director
12,035
(13)
1,600
10,435
*
James H. Wyckoff
Director
424,340
(14)
1,600
422,740
3.85
%
*
Less than 1%
(1)
The address of each of the selling shareholders is c/o 220 Liberty Street, Warsaw, New York 14569.
(2)
Unless otherwise indicated in the other footnotes to this table, each selling shareholder has
sole voting and investment power with respect to all of the shares owned by such selling
shareholder.
(3)
The amount shown for each selling shareholder includes shares of restricted stock.
(4)
Assuming the sale of all shares registered for the account of the selling shareholders. The
selling shareholders may sell all, some or no portion of the common stock registered hereunder.
(5)
Based on 10,979,715 shares of common stock outstanding as of March 1, 2011 except where the
selling shareholder has the right to receive shares within 60 days of the date of this reoffer
prospectus which increases the number of shares beneficially owned by such selling shareholder
and the number of shares outstanding. Under the rules of the Securities and Exchange Commission,
"beneficial ownership" is deemed to include shares for which an individual, directly or
indirectly, has or shares voting or dispositive power, whether or not they are held for the
individual's benefit, and includes shares that may be acquired within 60 days, including, but not
limited to, the right to acquire shares by the exercise of options. Shares that may be acquired
within 60 days are referred to in the footnotes to this table as "presently exercisable options."
(6)
The amount shown includes presently exercisable options to purchase 6,133 shares.
(7)
The amount shown includes presently exercisable options to purchase 10,133 shares.
(8)
The amount shown includes 1,000 shares held by Mr. Dambra's spouse and presently exercisable
       options to purchase 11,133 shares.
(9)
The amount shown includes presently exercisable options to purchase 11,133 shares.
(10)
The amount shown includes presently exercisable options to purchase 9,333 shares.
(11)
The amount shown includes presently exercisable options to purchase 5,700 shares.
(12)
The amount shown includes presently exercisable options to purchase 6,481 shares.
(13)
The amount shown includes presently exercisable options to purchase 3,933 shares.
(14)
The amount shown includes 66,995 shares held by Mr. Wyckoff's spouse and presently
       exercisable options to purchase 10,533 shares.
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PLAN OF DISTRIBUTION
The shares of our common stock covered by this reoffer prospectus are being registered on
behalf of the selling shareholders. We will receive no proceeds from this offering.
The decision to sell any of the shares of our common stock covered by this reoffer prospectus
is within the discretion of the holders thereof, subject generally to our policies affecting the
timing and manner of sale of our common stock by certain individuals. There can be no assurance
that any of the shares of our common stock covered by this reoffer prospectus will be sold by the
selling shareholders.
The selling shareholders may, from time to time, sell any or all of their shares of our common
stock on any stock exchange, market or trading facility on which the shares are traded. Our common
stock is currently quoted on the NASDAQ Global Select Market. They may also sell the shares in
private transactions in accordance with applicable law. These sales may be at fixed or negotiated
prices. The selling shareholders may use any one or more of the following methods when selling
shares:
•
ordinary brokerage transactions and transactions in which the broker-dealer solicits
purchasers;
•
block trades in which the broker-dealer will attempt to sell the shares as agent but
may position and resell a portion of the block as principal to facilitate the
transaction;
•
purchases by a broker-dealer as principal and resale by the broker-dealer for its
account;
•
privately negotiated transactions;
•
broker-dealers may agree with the selling shareholders to sell a specified number of
such shares at a stipulated price per share;
•
a combination of any such methods of sale; or
•
any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares of our common stock under Rule 144 under the
Securities Act of 1933, as amended, if available, rather than under this reoffer prospectus.
Broker-dealers engaged by the selling shareholders may arrange for other broker-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated.
The selling shareholders and any broker-dealers or agents that are involved in selling the
shares may be deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended, in connection with such sales. In such event, any commissions received by such
broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act
of 1933, as amended. None of the selling shareholders have informed
 us that they  have an agreement or understanding,
directly or indirectly, with any person to distribute our common stock.
We will pay certain fees and expenses incurred by us incident to the registration of the
shares of our common stock.
LEGAL MATTERS
The legal validity of the securities will be passed upon for us by Harter Secrest & Emery LLP.
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EXPERTS
The consolidated financial statements of Financial Institutions, Inc. and its subsidiaries as
of December 31, 2010 and December 31, 2009, and each of the years in the three-year period ended
December 31, 2010, and management's assessments of the effectiveness of internal controls over
financial reporting as of December 31, 2010 have been incorporated by reference herein in reliance
upon the reports of KPMG LLP, independent registered public
accounting firm, incorporated herein by reference, and upon the
authority of said firm as experts in accounting and auditing.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, which we have filed with the Securities and Exchange Commission, are
incorporated into this reoffer prospectus by reference:
1.
our annual report on Form 10-K for the year ended December 31, 2010;
2.
our current reports on Form 8-K filed on February 22, 2011 and February
23, 2011; and
3.
the description of our common stock contained in our Registration
Statement on Form 8-A filed on June 23, 1999.
All other documents we subsequently file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, prior to the termination of this offering shall be
deemed to be incorporated by reference into this reoffer prospectus.
Any statement contained in a document incorporated or deemed incorporated herein by reference
shall be deemed to be modified or superseded for purposes of this registration statement to the
extent that a statement contained herein or in any subsequently filed document that also is, or is
deemed to be, incorporated herein by reference modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this reoffer prospectus.
The information relating to the Company contained in this reoffer prospectus should be read
together with the information in the documents incorporated by reference.
Upon written or oral request, we will provide to each person at no cost, including any
beneficial owner, to whom a copy of this reoffer prospectus is delivered, a copy of any of the
information that has been incorporated by reference in this reoffer prospectus but has not been
delivered with it. Requests for any such information should be directed to us at: Financial
Institutions, Inc., 220 Liberty Street, Warsaw, New York 14569, Telephone: (585) 786-1100.
ADDITIONAL INFORMATION
We are subject to the information and reporting requirements of the Exchange Act under which
we file annual, quarterly and current reports, proxy statements and other information with the
Securities and Exchange Commission. You may read and copy, at prescribed rates, any documents we
have filed with the Securities and Exchange Commission at its Public Reference Room located at 100
F Street, N.E., Washington, DC 20549. You may obtain information on the operation of the Public
Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. We also file these documents with the
Securities and Exchange Commission electronically. You can access the electronic versions of these
filings on the Securities and Exchange Commission's Internet website found at http://www.sec.gov
 and on our Internet website
address at http://www.fiiwarsaw.com. You may also obtain free copies of the documents we have filed
with the Securities and Exchange Commission (other than exhibits to such documents unless we
specifically incorporate by reference an exhibit in this reoffer prospectus) by contacting:
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Financial Institutions, Inc.
220 Liberty Street
Warsaw, New York 14569
Telephone: (585) 786-1100
This reoffer prospectus is part of a registration statement on Form S-8 that we have filed
with the Securities and Exchange Commission. Certain information in the registration statement has
been omitted from this reoffer prospectus in accordance with the rules and regulations of the
Securities and Exchange Commission. We have also filed exhibits and schedules with such
registration statement that are excluded from this reoffer prospectus. For further information
about us and the common stock offered by this reoffer prospectus, see the registration statement on
Form S-8 and its exhibits, which may be obtained as described above.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents previously filed with the Securities and Exchange Commission by the
Company are incorporated by reference into this registration statement:
1.
our annual report on Form 10-K for the year ended December 31, 2010;
2.
our current reports on Form 8-K filed on February 22, 2011 and February
23, 2011; and
3.
the description of our common stock contained in our Registration
Statement on Form 8-A filed on June 23, 1999.
All documents subsequently filed by the Company pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act of 1934, as amended, after the date of this registration
statement, prior to the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference into this registration statement and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated herein by
reference herein shall be deemed to be modified or superseded for purposes of this registration
statement to the extent that a statement contained herein or in any other subsequently filed
document which also is, or is deemed to be, incorporated herein by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this registration statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Under Sections 721 through 725 of the Business Corporation Law of the State of New York (the
"NYBCL"), the Company has broad powers to indemnify its directors, officers and other employees.
These sections (i) provide that the statutory indemnification and advancement of expenses provision
of the NYBCL are not exclusive, provided that no indemnification may be made to or on behalf of any
director or officer if a judgment or other final adjudication adverse to the director or officer
establishes that his acts were committed in bad faith or were the result of active and deliberate
dishonesty and were material to the cause of action is adjudicated, or that he personally gained in
fact a financial profit or other advantage to which he was not legally entitled, (ii) establish
procedures for indemnification and advancement of expenses that may be contained in the certificate
of incorporation or by-laws, or, when authorized by either of the foregoing, set forth in a
resolution of the shareholders or directors of an agreement providing for indemnification and
advancement of expenses, (iii) apply a single standard for statutory indemnification for
third-party and derivative suits by providing that indemnification is available if the director or
officer acted in good faith, for a purpose which he reasonably believed to be in the best interests
of the corporation, and, in criminal actions, had no reasonable cause to believe that his conduct
was unlawful, and (iv) permit the advancement of litigation expenses upon receipt of an undertaking to repay such advance if the director or
officer is ultimately determined not to be entitled to indemnification or to the extent the
expenses advanced exceed the indemnification to which the director or officer is entitled. Section
726 of the NYBCL permits the purchase of insurance to indemnify a corporation or its officers and
directors to the extent permitted.
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As
permitted by Section 721 of the NYBCL, our Amended and Restated By-laws provide that we shall
indemnify our officers and directors, as such, to the fullest extent
permitted by applicable law, and that expenses reasonably incurred by any such officer or director
in connection with a threatened or actual action or proceeding shall be advanced or promptly
reimbursed by the Company in advance of the final disposition of such action or proceeding upon
receipt of an undertaking by or on behalf of such officer or director to repay such amount if and
to the extent that it is ultimately determined that such officer or director is not entitled to
indemnification.
Article SEVENTH of our  Restated Certificate of Incorporation,
  as amended provides
that no director of the Company shall be held personally liable to
the Company or its
shareholders for damages for any breach of duty in his or her capacity as a director unless a
judgment or other final adjudication adverse to him or her establishes that (i) his or her acts or
omissions were in bad faith or involved intentional misconduct or a knowing violation of law, (ii)
he or she personally gained in fact a financial profit or other
advantage to which he or she is not
legally entitled, or (iii) his or her acts violated Section 719 of the NYBCL.
In
addition, we have purchased insurance policies which provide coverage
for our directors and
officers in certain situations where we cannot directly indemnify such directors or officers.
Insofar
as indemnification for liabilities arising under the Securities Act
of 1933, as amended may be permitted
to directors, officers or persons controlling the Company pursuant to the foregoing provisions, we
have been informed that in the opinion of the Securities Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act of 1933, as amended and is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
The shares of common stock covered by the reoffer prospectus included in this registration
statement were granted under the DSIP. The grants were exempt under Section 4(2) the Securities
Act of 1933, as amended. The recipients of securities in each such transaction acquired the
securities for investment only and not with a view to or for sale in connection with any
distribution thereof. All recipients had adequate access, through their relationship with the
Company, to information about the Company.
Item 8. Exhibits.
See the Exhibit Index, which is incorporated herein by reference.
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Item 9. Undertakings.
(a)
The undersigned registrant hereby undertakes:
(1)
to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i)
to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended;
(ii)
to reflect in the prospectus any facts or
events arising after the effective date of this registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in this registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii)
to include any material information with
respect to the plan of distribution not previously disclosed in this
registration statement or any material change to such information in
this registration statement.
provided, however,
that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if
this registration statement is on Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the Securities and Exchange Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement; and
(2)
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(3)
To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b)
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in this registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide
offering thereof.
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(c)
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been advised
that in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Warsaw, State of New
York, on March 7, 2011.
FINANCIAL INSTITUTIONS, INC.
/s/ Peter G. Humphrey
Peter G. Humphrey
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and
appoints Peter G. Humphrey or Karl F. Krebs, jointly and severally, his or her true and lawful
attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign any and all
amendments to this Registration Statement, and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying and confirming all
that each of said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates indicated.
Signatures
Title
Date
/s/ Peter G. Humphrey
Director, President and Chief Executive
Officer
March 4, 2011
Peter G. Humphrey
(Principal
Executive Officer)
/s/ Karl F. Krebs
Executive Vice President and Chief
Financial Officer
March 4, 2011
Karl F. Krebs
(Principal
Financial and Accounting Officer)
/s/ Karl V. Anderson, Jr.
Director
March 4, 2011
Karl V. Anderson, Jr.
/s/ John E. Benjamin
Director, Chairman
March 4, 2011
John E. Benjamin
/s/ Barton P. Dambra
Director
March 4, 2011
Barton P. Dambra
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Signatures
Title
Date
/s/ Samuel M. Gullo
Director
March 4, 2011
Samuel M. Gullo
/s/ Susan R. Holliday
Director
March 4, 2011
Susan R. Holliday
/s/ Erland E. Kailbourne
Director
March 4, 2011
Erland E. Kailbourne
/s/ Robert N. Latella
Director
March 4, 2011
Robert N. Latella
/s/ James L. Robinson
Director
March 4, 2011
James L. Robinson
/s/ James H. Wyckoff
Director
March 4, 2011
James H. Wyckoff
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EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM S-8
4.1
Restated Certificate of
Incorporation of the Company, as amended is incorporated
herein by reference to Exhibits 3.1, 3.2 and 3.3 to our Annual Report on Form 10-K for the year
ended December 31, 2008.
4.2
Amended and Restated By-laws of the Company are incorporated herein by reference
to Exhibit 3.4 to our Annual Report on Form 10-K for the
year ended December 31, 2008.
4.3
Warrant to Purchase Common Stock, dated December 23, 2008 issued by the Company
to the United States Department of the Treasury is incorporated herein by
reference to Exhibit 4.2 to our Current Report on Form 8-K
filed on December 24, 2008.
*4.4
2009 Directors' Stock Incentive Plan
*5.1
Opinion of Harter Secrest & Emery LLP
*23.1
Consent of Harter Secrest & Emery LLP (included in Exhibit 5.1)
*23.2
Consent of KPMG LLP
*24
Power of Attorney (included in the
signature pages to the registration statement)
*
Exhibits filed with this registration statement.
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