Tuesday, October 15, 2024
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Five Star Bank to begin “orderly wind down” of BaaS offerings

  • Parent Company: Financial Institutions, Inc. (FII), parent of Five Star Bank and Courier Capital, will commence an orderly wind down of BaaS operations.
  • Reason for Wind Down: FII’s executive management and board reviewed BaaS contributions to financial results, evolving regulatory expectations, and future investments in talent and technology, deciding to prioritize core community banking instead.
  • CEO Statement: CEO Martin Birmingham emphasized focusing on retail banking, commercial banking, and wealth management in existing geographic markets to benefit shareholders, customers, and communities.
  • Financial Impact: BaaS operations represented approximately $108 million in deposits (2% of total) and $31 million in loans (less than 1%), with an expected “immaterial” financial impact from the closure.
  • BaaS Partnerships: Five Star Bank has 12 BaaS partnerships—four live, four not yet testing, two in onboarding, and two already offboarding.
  • Completion Timeline: The bank plans to complete the BaaS wind down by 2025.
  • Employee Impact: All BaaS personnel will be retained and refocused on supporting core banking growth.

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