Financial Institutions, Inc. (NASDAQ:FISI) Q2 2023 Earnings Call Transcript

Jack Plants: Yeah. Matt, I think Marty hit the nail on the head there. This is a kind of a line of business for us. We have commercial expertise in-house that engages with these opportunities in our footprint. We underwrite the loans and the tax credits in-house. They’re not purchased. We have deep understanding of them and internal capacity policies around how much exposure we’re taking in that regard.

Matthew Breese: Are they mostly tied to housing? I recall in the past there were tax credit investments around the Northeast Mid-Atlantic that involved kind of the solar credits and I think one of them went sour. Are there ways you can prevent those sorts of unfortunate outcomes with what you’re doing?

Marty Birmingham: Yeah. So as Jack was saying these are opportunities where we are working directly with the sponsors, many times — they are operating in our markets. They are for projects that are well identified renewing if it’s a historic tax credit, renewing an urban building or a block or something of that nature. If it’s affordable housing it still could be renewing neighborhoods either rural suburban or urban but bringing affordable housing to — or supported housing to the market to bear. And it works out very well because housing stock is in those categories is limited and generally older and it gets these projects end up performing as expected.

Jack Plants: Yeah. Matt, we do not have any solar-focused tax credit investments.

Matthew Breese: Great. I’ll leave it there. Thank you for taking my questions.

Marty Birmingham: Thanks, Matt.

Operator: There are no further questions on the line. So I’ll now hand back to Martin Bermingham for any closing comments.

Marty Birmingham: Thank you very much for joining our call today. We look forward to talking to you again and conclude part of our third quarter discussion.

Operator: Thank you. This now concludes today’s conference call everybody. Thank you very much for joining. You may now disconnect your lines. Have a great rest of your day.