Employees of Five Star Bank’s parent company are the latest bank workers to cash in on the federal tax overhaul.
Financial Institutions will award one-time $500 bonuses to about 70 percent of its employees, citing the financial benefit generated by the new tax plan.
The bonuses will go to employees who are not covered by some of its incentive pay programs, the bank said.
Employees who receive the bonuses will also be eligible to participate in a new profit-sharing program based on Financial Institutions’ 2018 performance.
"Recent tax reform will reduce our federal income tax rate in 2018 and provide opportunities to strengthen relationships with our most valued partners: our employees, our customers and the communities in which we operate," said Martin K. Birmingham, Financial Institutions’ president and CEO.
Warsaw-based Financial Institutions joins several other banks serving the region that have cited the tax overhaul in awarding bonuses or raising wages.
The bank’s fourth-quarter profits increased 28 percent from a year ago, to $11.1 million. For all of 2017, the bank earned $33.5 million, up 5 percent from $32 million in 2016.
Financial Institutions last year raised $38.3 million in net proceeds from an at-the-market equity offering. Financial Institutions expects to use the money to support organic growth and other general purposes, including contributing capital to its Five Star Bank subsidiary.
Financial Institutions has said it wants to bulk up its presence in the Buffalo Niagara region, citing disruption caused by KeyBank’s deal for First Niagara Bank.