8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): August 27, 2012

Financial Institutions, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

New York	0-26481	16-0816610
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
220 Liberty Street, Warsaw, New York		14569
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 585-786-1100

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Retirement of Mr. Humphrey

On August 27, 2012, Mr. Peter G. Humphrey retired as President and Chief Executive Officer of Financial Institutions, Inc. (the “Company”). Mr. Humphrey will continue to serve in his capacity as a director of the Company.

In connection with his retirement, on August 29, 2012, the Company entered into a separation agreement with Mr. Humphrey (the “Separation Agreement”). Under the terms of the Separation Agreement, Mr. Humphrey is entitled to receive the following separation payments and benefits: (i) a lump-sum cash payment equal to $349,950, payable within 30 days of the Effective Date (as defined below); (ii) $1,000,000 payable in 24 equal monthly installments commencing on the Company’s first pay period after October 1, 2012; (iii) compensation and benefits pursuant to a Supplemental Executive Retirement Agreement (as described below); (iv) the immediate vesting of all outstanding stock options, which shall remain exercisable for 13 months following the Effective Date (as defined below); (v) the immediate vesting of 4,525 shares of restricted stock granted on February 15, 2012; (vi) following completion of the 2012 performance year, vesting of a pro-rated portion of the 7,721 shares of restricted  stock granted on February 17, 2012 based on his service during the performance period and the Company’s actual performance; and (vi) title to Mr. Humphrey’s company car. Under the expected terms of the Separation Agreement, Mr. Humphrey provided a general release of claims in favor of the Company and its affiliates and agreed not to compete with the Company within New York State and any other area outside of New York State in which the Company conducts business for a period of two years. Mr. Humphrey also agreed not to solicit the Company’s clients, customers, vendors or employees for a period of two years. Mr. Humphrey has the right to revoke the Separation Agreement within seven days of entering into the Separation Agreement and after this revocation period expires the Separation Agreement will become effective (the “Effective Date”).

In connection with the execution of the Separation Agreement, Mr. Humphrey entered into a supplemental executive retirement agreement with the Company (the “Retirement Agreement”). Pursuant to the Retirement Agreement, Mr. Humphrey will receive $1,500,000 payable over a ten year period in substantially equivalent payments commencing October 1, 2014 in accordance with the Company’s regular payroll procedures in effect from time to time. In the event of Mr. Humphrey’s death or disability he will be entitled to receive a lump-sum payment equal to any unpaid amounts under the Retirement Agreement. In the event of a change of control of the Company, Mr. Humphrey will also receive a lump sum payment equal to any unpaid amounts under the Retirement Agreement.

A copy of the Separation Agreement and Retirement Agreement are expected to be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012.

Appointment of Mr. Benjamin

Effective August 27, 2012, Mr. John E. Benjamin was appointed as Interim Chief Executive Officer of the Company. Mr. Benjamin will continue to serve in his position as Chairman of the Board of Directors. The Company has initiated a search to identify a permanent successor to Mr. Humphrey as Chief Executive Officer.

Mr. Benjamin, 70, has served as the Company’s Chairman of the Board of Directors since 2010 and previously served as Vice Chairman of the Board. Prior to joining the Company, Mr. Benjamin served as a Director of Bath National Bank until its merger with Five Star Bank, a wholly owned bank subsidiary of the Company (the “Bank”), in 2005. Additionally, he has been President of Three Rivers Development Corporation, a private economic development business in the greater Corning, New York area, since 1981.

Appointment of Mr. Latella

Effective August 27, 2012, Mr. Robert N. Latella was appointed as Vice Chairman of the Board of Directors to serve as the Board’s lead independent director while Mr. Benjamin serves as the Company’s interim Chief Executive Officer.

Appointment of Messrs. Harrison and Birmingham

Also effective August 27, 2012, Mr. Richard J. Harrison, 67, was appointed as Chief Operating Officer of the Company. Mr. Harrison previously served as the Bank’s Executive Vice President and Senior Retail Lending Administrator since 2009, and Senior Vice President and Senior Retail Lending Administrator of the Bank from 2003 through 2009. Prior to joining the Company, Mr. Harrison served as Executive Vice President and Chief Credit Officer at Savings Bank of the Finger Lakes from 2001 through 2003.

Finally, effective August 27, 2012, Mr. Martin K. Birmingham, 45, was appointed as President and Chief of Community Banking, which is a newly created position with the Company. Mr. Birmingham previously served as the Executive Vice President and Regional President/Commercial Banking Executive Officer since 2009, and as Senior Vice President and Regional President of the Bank from 2005 to 2009. Prior to joining the Company, Mr. Birmingham served as Senior Team Leader and Regional President of the Rochester Market at Bank of America (formerly Fleet Boston Financial) from 2000 to 2005.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release issued by Financial Institutions, Inc. on August 28, 2012.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Financial Institutions, Inc.
August 29, 2012	By:	/s/ John E. Benjamin
		Name: John E. Benjamin
		Title: Interim Chief Executive Officer

Exhibit Index

Exhibit No.	Description
99.1	Press Release issued by Financial Institutions, Inc. on August 28, 2012.

EX-99.1

News Release
Financial Institutions / Five Star Bank CEO Succession
Confidential – FINAL – Updated August 27, 2012

Note: For issue via BusinessWire (New York State circuit to meet disclosure obligations) at 7:30 a.m. EDT on August 28, as well as concurrent regional media distribution by McDougall Travers Collins.
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Financial Institutions, Inc. Announces Leadership Transition

WARSAW, N.Y., August 28, 2012 – Financial Institutions, Inc. (Nasdaq: FISI) announced today that Peter G. Humphrey has chosen to retire from his position as president and chief executive officer of Financial Institutions, Inc. and Five Star Bank, effective immediately.

John E. Benjamin, chairman of the Board of Directors, has assumed duties as interim CEO while the search for a permanent successor occurs. As part of the planned transition, Richard J. Harrison has been promoted to chief operating officer (COO) while Martin K. Birmingham has been named president and chief of Community Banking.

“Having served the institution for more than 35 years, I am stepping down to spend more time with my family and pursue other interests,” said Mr. Humphrey. “At the same time, I intend to remain on the Board of Directors and be involved in the regional and state business community, helping drive a competitive, sustainable business climate across Upstate New York.”

Mr. Humphrey has been instrumental in Five Star Bank’s growth over recent years, including the expansion of its retail branch network across Upstate New York. Last week, it transitioned more than 12,000 customers from HSBC Bank USA, N.A. retail branch locations in Albion, Elmira, Elmira Heights, and Horseheads. Earlier this year, Five Star Bank purchased and successfully converted four branches in Medina, Brockport, Batavia, and Waterloo from First Niagara Bank, N.A.

“With consistent growth and our recent successes, the Board of Directors agreed with Peter’s assessment that now was an optimal time for him to step down. In anticipation of this occurrence, the Board has been involved in CEO succession planning for the past two years to ensure a seamless transition in corporate leadership,” said Mr. Benjamin.

“We owe Peter a debt of gratitude for his stewardship of Five Star Bank, including his masterful navigation of the organization through TARP for the benefit of our shareholders, customers and the communities we serve.”

Mr. Benjamin is well-versed in the Bank’s operations, having been elected chairman of Financial Institutions in 2010 in addition to his nine years of service as a director. He has also acted as vice chairman and has chaired the executive nominating and governance committee. Mr. Benjamin enjoys a sterling reputation across the region, serving as president of Three Rivers Development Corporation, where he has led efforts to stimulate economic development in the Corning, N.Y. area for more than three decades.

Mr. Harrison was most recently executive vice president and chief of retail banking. He joined Financial Institutions in 2003 following executive vice president and chief credit officer roles at the Savings Bank of the Finger Lakes, as well as serving as president of United Auto Finance.

Mr. Birmingham was most recently Commercial Banking executive vice president and regional president (Northeast) of Five Star Bank. Before joining Financial Institutions in 2005, he served as Rochester regional market president for Bank of America Corporation.

“We believe that this transition will lay a foundation for the next stage of Five Star Bank’s success, building on a 150-year tradition of serving the needs of customers and our community,” noted Mr. Benjamin.

About Financial Institutions, Inc.
With over $2.6 billion in assets, Financial Institutions, Inc. provides diversified financial services through its subsidiaries, Five Star Bank and Five Star Investment Services, Inc. Five Star Bank provides a wide range of consumer and commercial banking services to individuals, municipalities and businesses through a network of over 50 offices and more than 70 ATMs in Western and Central New York State. Five Star Investment Services provides brokerage and insurance products and services within the same New York State markets. Financial Institutions, Inc. and its subsidiaries employ over 600 individuals. The Company’s stock is listed on the NASDAQ Global Select Market under the symbol FISI. Additional information is available at the Company’s website: www.fiiwarsaw.com.

Safe Harbor Statement
This press release may contain forward-looking statements as defined by federal securities laws. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Actual results could differ materially from current beliefs or projections. There are a number of important factors that could affect the Company’s forward-looking statements which include its ability to implement its strategic plan, its ability to redeploy investment assets into loan assets, the attitudes and preferences of its customers, the competitive environment, fluctuations in the fair value of securities in its investment portfolio, changes in the regulatory environment and general economic and credit market conditions nationally and regionally. For more information about these factors please see the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q on file with the SEC. All of these factors should be carefully reviewed, and readers should not place undue reliance on these forward-looking statements. Except as required by law, the Company undertakes no obligation to revise these statements following the date of this press release.

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Media Contacts:
Mike McDougall, APR, McDougall Travers Collins
585-789-1623 or mmcdougall@mcdougalltc.com

Sharon Linstedt, Travers Collins
716-464-4723 or slinstedt@traverscollins.com

Investor Contact:
Jordan Darrow, Darrow Associates, Inc.
631-367-1866 or jdarrow@darrowir.com