THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Financial Institutions, Inc. (FISI)

3/30/2006 Proxy Information

Our directors, executive officers and many of our substantial shareholders and their affiliates are also customers. “Affiliates” include corporations, partnerships and other organizations in which they are officers or partners, or in which they and their immediate families have at least a 10% interest. During 2005, our subsidiary bank, Five Star Bank, made loans in the ordinary course of business to many of our directors, officers, principal shareholders and their affiliates. On December 31, 2005, the aggregate principal amount of loans to the FII directors, named executive officers and their affiliates was $1,452,568. Loans outstanding by Five Star Bank to certain officers, directors or companies in which they have 10% or more beneficial ownership (including officers and directors of FII as well as its subsidiaries) approximated $2,007,000 at December 31, 2005, of which $155,000 were identified as impaired and on nonaccrual status. Loans made by Five Star Bank to officers, directors or companies in which they have a 10% or more beneficial interest (including officers and directors of FII as well as its subsidiaries) were made in the ordinary course of business on substantially the same terms, including interest rate and collateral, as comparable transactions with other customers. Loans to directors, executive officers and substantial shareholders are subject to limitations contained in the Federal Reserve Act, which requires that such loans satisfy certain criteria. We expect to have such transactions or transactions on a similar basis with our directors, executive officers, principal shareholders and their associates in the future.

Peter G. Humphrey and James H. Wyckoff are first cousins.

During 2005 the Company engaged the firm of K&K West, Inc., of which director Erland E. Kailbourne was a consultant, to provide management consulting services. Payments made to K&K West, Inc. in 2005 totaled $18,237.