Kroll Bond Rating Agency affirmed the senior unsecured debt rating of BBB, subordinated debt rating of BBB- and short-term debt rating of K3 for Financial Institutions Inc.
The rating agency also affirmed the deposit and senior unsecured debt ratings of BBB+, subordinated debt rating of BBB and short-term deposit and debt ratings of K2 for its unit, Five Star Bank.
The outlook for all long-term ratings is stable.
In coming up with the ratings, Kroll took into account Financial Institutions' management team, which is implementing the company's strategy of focusing more on relationship banking in larger metro markets.
Kroll noted the company's favorable asset quality metrics, which continued to improve in 2019. Efforts to diversify its fee generation and loan portfolio also contributed to the improvement of its operating performance in 2019, with return on assets of 1.14% versus 0.95% for 2018, which is in line with its peer group.