Chemung Financial Corporation Reports First Quarter 2024 Net Income of $7.1 million, or $1.48 per share
- Total loans exceeded $2.0 billion for the first time in the 's 190-year history.
- Fully taxable equivalent net interest margin expanded by four basis points to 2.73% in the first quarter of 2024.
- Non-performing loans to total loans decreased by 14 basis points to 0.39% as of March 31, 2024.
- Dividends declared during the first quarter of 2024 were $0.31 per share.
- Net interest income for the first quarter of 2024 was $18.1 million, showing an increase of $0.2 million from the prior quarter.
- Provision for credit losses decreased by $4.3 million during the current quarter, compared to the prior quarter.
- Non-interest income for the first quarter of 2024 was $5.7 million, a decrease of $0.2 million from the prior quarter.
- Income tax expense for the first quarter of 2024 was $2.0 million, an increase of $1.2 million from the prior quarter.
- Non-interest expense for the first quarter of 2024 was $16.7 million, a decrease of $0.1 million from the prior quarter.
- Asset quality improved, with non-performing loans decreasing to $7.8 million as of March 31, 2024, compared to $10.4 million as of December 31, 2023.
- None.
Insights
ELMIRA, N.Y., April 18, 2024 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (the “Corporation”) (Nasdaq: CHMG), the parent company of Chemung Canal Trust Company (the “Bank”), today reported net income of
“We have started out 2024 with another strong quarter of results from our core businesses,” said Anders M. Tomson, President and CEO of the Corporation. “Improving credit metrics and
First Quarter Highlights:
- Total loans exceeded
$2.0 billion for the first time in the Corporation's 190-year history, growing$30.9 million during the first quarter.1 - Fully taxable equivalent net interest margin expanded by four basis points during the first quarter of 2024 to
2.73% , from2.69% during the fourth quarter of 2023.2 - Non-performing loans to total loans decreased by 14 basis points to
0.39% as of March 31, 2024, from0.53% as of December 31, 2023.1 - Dividends declared during the first quarter 2024 were
$0.31 per share.
1 Balance sheet comparisons are calculated as of March 31, 2024 versus December 31, 2023.
2 See the GAAP to Non-GAAP reconciliations.
1st Quarter 2024 vs 4th Quarter 2023
Net Interest Income:
Net interest income for the first quarter of 2024 totaled
Interest income on loans, including fees, increased primarily due to a
Interest expense on deposits increased primarily due to an increase of 16 basis points in the average interest rate paid on interest-bearing deposits, and growth in average balances of customer and brokered deposits. Average balances of total customer interest-bearing deposits increased
The increase in interest expense on borrowed funds was due primarily to an increase in average balances of borrowed funds of
Fully taxable equivalent net interest margin was
Provision for Credit Losses:
Provision for credit losses decreased
Non-Interest Income:
Non-interest income for the first quarter of 2024 was
The decrease in service charges on deposit accounts was primarily attributable to a decrease in NSF activity in the current quarter, compared to the prior quarter. The decrease in interchange revenue on debit card transactions was primarily attributable to greater transactional volume in the prior quarter, compared to the current quarter. The decrease in the change in fair value of equity investments was primarily attributable to disbursements related to the Corporation's deferred compensation plan. The increase in other non-interest income was primarily attributable to the receipt of Mastercard incentives in the current quarter.
Non-Interest Expense:
Non-interest expense for the first quarter of 2024 was
The decrease in other non-interest expense in the current quarter, compared to the prior quarter, was primarily due to decreases in expenses across a majority of included expense categories, including non-loan charge offs and charitable contributions. Salaries and wages increased in the current quarter compared to the prior quarter primarily due to increases in expenses related to the Corporation's reward program and base wages. The increase in pension and other employee benefits was primarily due to an increase in payroll tax expense in the current quarter, compared to the prior quarter. The increase in marketing and advertising expense was primarily related to promotion of the Corporation's 190th anniversary checking account campaign, a new CD campaign, as well as resumed marketing and advertising efforts overall, compared to the prior quarter. The increase in other real estate owned expenses was primarily due to gains on the transfer of two properties to OREO in the prior period.
Income Tax Expense:
Income tax expense for the first quarter of 2024 was
1st Quarter 2024 vs 1st Quarter 2023
Net Interest Income:
Net interest income for the first quarter of 2024 totaled
The increase in interest expense on deposits was due primarily to a 141 basis points increase in the average interest rate paid on interest-bearing deposits, which included brokered deposits, and an increase of
The increase in interest expense on borrowed funds was primarily due to a 24 basis points increase in the average interest rate paid and a
Interest income on loans, including fees, increased primarily due to a
Interest and dividend income on taxable securities was comparable between the first quarters of 2023 and 2024. During this period, the average yield on taxable securities increased 17 basis points, due to an increase in interest rates on variable rate securities. This increase was offset by
Fully taxable equivalent net interest margin was
Provision for Credit Losses:
Provision for credit losses decreased
Non-Interest Income:
Non-interest income for the first quarter of 2024 was
Non-Interest Expense:
Non-interest expense for the first quarter of 2024 was
The increase in pension and other employee benefits for the current quarter was primarily attributable to an increase in employee healthcare expense, compared to the same period in the prior year. Salaries and wages increased in the current quarter, compared to the same period in the prior year, primarily due to increases in base wages, severance expense, and an increase in the market value of the Corporation's deferred compensation plan. The increase in data processing expense in the current quarter was primarily attributable to increases in software related expenses, compared to the same period in the prior year. Professional services increased in the current quarter, compared to the same period in the prior year, primarily due to outsourced services related to the realignment of certain back office functions, new strategic consulting arrangements, and fee increases. The decrease in other non-interest expense was primarily attributable to decreases across a majority of included expense categories in the current quarter, compared to the same period in the prior year.
Income Tax Expense:
Income tax expense of
Asset Quality
Non-performing loans totaled
Total loan delinquencies as of March 31, 2024 declined compared to December 31, 2023, primarily attributable to a decline in consumer loan delinquency rates during the period, consistent with the Corporation's past experience of seasonal fluctuations, particularly for auto loans. Commercial loan and residential mortgage delinquencies remained stable as of March 31, 2024, compared to December 31, 2023, and management continues to monitor the impacts that elevated interest rates may have on its borrower base. Annualized net charge-offs to total average loans for the first quarter of 2024 were
The allowance for credit losses was
Recalibration of the loss drivers resulted in a decline in the baseline loss rates which the model utilizes. Additionally, FOMC projections for the economic variables used in the model improved between December 31, 2023 and March 31, 2024. Projected year-end 2024 U.S. unemployment improved from
The allowance for credit losses was
2023.
Balance Sheet Activity
Total assets were
The increase in cash and cash equivalents was primarily due to increases of
The increase in loans, net of deferred origination fees and costs, was concentrated in the commercial loan portfolio, which increased
Total investment securities decreased primarily due to a decrease of
The increase in accrued interest receivable and other assets was primarily due to increases in interest rate swap assets of
Total liabilities were
Total deposits increased
The increase in advances and other debt can primarily be attributed to a
Total shareholders’ equity was
The total equity to total assets ratio was
1 See the GAAP to Non-GAAP reconciliations
Liquidity
The Corporation uses a variety of resources to manage its liquidity, and management believes it has the necessary liquidity to allow for flexibility in meeting its various business needs. These include short term investments, cash flow from lending and investing activities, core-deposit growth and non-core funding sources, such as time deposits of
As of March 31, 2024, uninsured deposits totaled
The Corporation considers brokered deposits to be an element of its deposit strategy, and anticipates it will continue utilizing brokered deposits as a secondary source of funding in support of growth. As of March 31, 2024, the Corporation has entered into brokered deposit arrangements with multiple brokers. As of March 31, 2024, brokered deposits carried terms between 2 and 48 months, with staggered maturities, totaling
Other Items
The market value of total assets under management or administration in our Wealth Management Group was
As previously announced on January 8, 2021, the Corporation announced that the Board of Directors approved a stock repurchase program. Under the repurchase program, the Corporation may repurchase up to 250,000 shares of its common stock, or approximately
About Chemung Financial Corporation
Chemung Financial Corporation is a
This press release may be found at: www.chemungcanal.com under Investor Relations.
Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and the Private Securities Litigation Reform Act of 1995. The Corporation intends its forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in this press release. All statements regarding the Corporation's expected financial position and operating results, the Corporation's business strategy, the Corporation's financial plans, forecasted demographic and economic trends relating to the Corporation's industry and similar matters are forward-looking statements. These statements can sometimes be identified by the Corporation's use of forward-looking words such as "may," "will," "anticipate," "estimate," "expect," or "intend." The Corporation cannot promise that its expectations in such forward-looking statements will turn out to be correct. The Corporation's actual results could be materially different from expectations because of various factors, including changes in economic conditions or interest rates, credit risk, inflation, cyber security risks, difficulties in managing the Corporation’s growth, competition, changes in law or the regulatory environment, and changes in general business and economic trends.
Information concerning these and other factors, including Risk Factors, can be found in the Corporation’s periodic filings with the Securities and Exchange Commission (“SEC”), including the 2023 Annual Report on Form 10-K. These filings are available publicly on the SEC's website at http://www.sec.gov, on the Corporation's website at http:// www.chemungcanal.com or upon request from the Corporate Secretary at (607) 737-3746. Except as otherwise required by law, the Corporation undertakes no obligation to publicly update or revise its forward-looking statements, whether as a result of new information, future events, or otherwise.
Chemung Financial Corporation | ||||||||||||||||
Consolidated Balance Sheets (Unaudited) | ||||||||||||||||
March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||
(in thousands) | 2024 | 2023 | 2023 | 2023 | 2023 | |||||||||||
ASSETS | ||||||||||||||||
Cash and due from financial institutions | $ | 22,984 | $ | 22,247 | $ | 52,563 | $ | 25,499 | $ | 25,109 | ||||||
Interest-earning deposits in other financial institutions | 71,878 | 14,600 | 23,017 | 28,727 | 9,532 | |||||||||||
Total cash and cash equivalents | 94,862 | 36,847 | 75,580 | 54,226 | 34,641 | |||||||||||
Equity investments | 3,093 | 3,046 | 2,811 | 2,841 | 2,949 | |||||||||||
Securities available for sale | 566,028 | 583,993 | 569,004 | 604,313 | 626,055 | |||||||||||
Securities held to maturity | 785 | 785 | 1,804 | 1,804 | 1,932 | |||||||||||
FHLB and FRB stock, at cost | 4,071 | 5,498 | 4,053 | 6,328 | 7,913 | |||||||||||
Total investment securities | 570,884 | 590,276 | 574,861 | 612,445 | 635,900 | |||||||||||
Commercial | 1,425,437 | 1,387,321 | 1,341,017 | 1,302,333 | 1,280,804 | |||||||||||
Mortgage | 277,246 | 277,992 | 281,361 | 285,084 | 285,944 | |||||||||||
Consumer | 300,927 | 307,351 | 308,310 | 306,489 | 306,953 | |||||||||||
Loans, net of deferred loan fees | 2,003,610 | 1,972,664 | 1,930,688 | 1,893,906 | 1,873,701 | |||||||||||
Allowance for credit losses | (20,471 | ) | (22,517 | ) | (20,252 | ) | (20,172 | ) | (20,075 | ) | ||||||
Loans, net | 1,983,139 | 1,950,147 | 1,910,436 | 1,873,734 | 1,853,626 | |||||||||||
Loans held for sale | 96 | — | — | 785 | — | |||||||||||
Premises and equipment, net | 14,183 | 14,571 | 15,036 | 15,496 | 15,867 | |||||||||||
Operating lease right-of-use assets | 6,018 | 5,648 | 5,850 | 6,050 | 6,250 | |||||||||||
Goodwill | 21,824 | 21,824 | 21,824 | 21,824 | 21,824 | |||||||||||
Accrued interest receivable and other assets | 90,791 | 88,170 | 101,436 | 87,272 | 83,126 | |||||||||||
Total assets | $ | 2,784,890 | $ | 2,710,529 | $ | 2,707,834 | $ | 2,674,673 | $ | 2,654,183 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||
Deposits: | ||||||||||||||||
Non-interest-bearing demand deposits | $ | 656,330 | $ | 653,166 | $ | 683,348 | $ | 671,643 | $ | 690,596 | ||||||
Interest-bearing demand deposits | 315,154 | 291,138 | 310,885 | 273,380 | 287,242 | |||||||||||
Money market accounts | 631,350 | 623,714 | 626,256 | 629,985 | 631,052 | |||||||||||
Savings deposits | 248,578 | 249,144 | 261,822 | 269,700 | 271,445 | |||||||||||
Time deposits | 629,360 | 612,265 | 591,188 | 545,486 | 452,094 | |||||||||||
Total deposits | 2,480,772 | 2,429,427 | 2,473,499 | 2,390,194 | 2,332,429 | |||||||||||
Advances and other debt | 52,979 | 34,970 | 3,120 | 53,949 | 93,328 | |||||||||||
Operating lease liabilities | 6,197 | 5,827 | 6,028 | 6,228 | 6,427 | |||||||||||
Accrued interest payable and other liabilities | 47,814 | 45,064 | 55,123 | 46,876 | 44,658 | |||||||||||
Total liabilities | 2,587,762 | 2,515,288 | 2,537,770 | 2,497,247 | 2,476,842 | |||||||||||
Shareholders' equity | ||||||||||||||||
Common stock | 53 | 53 | 53 | 53 | 53 | |||||||||||
Additional paid-in capital | 47,794 | 47,773 | 47,974 | 47,740 | 47,387 | |||||||||||
Retained earnings | 235,506 | 229,930 | 227,596 | 221,412 | 216,593 | |||||||||||
Treasury stock, at cost | (16,147 | ) | (16,502 | ) | (16,880 | ) | (17,033 | ) | (17,219 | ) | ||||||
Accumulated other comprehensive loss | (70,078 | ) | (66,013 | ) | (88,679 | ) | (74,746 | ) | (69,473 | ) | ||||||
Total shareholders' equity | 197,128 | 195,241 | 170,064 | 177,426 | 177,341 | |||||||||||
Total liabilities and shareholders' equity | $ | 2,784,890 | $ | 2,710,529 | $ | 2,707,834 | $ | 2,674,673 | $ | 2,654,183 | ||||||
Period-end shares outstanding | 4,768 | 4,754 | 4,738 | 4,732 | 4,726 |
Chemung Financial Corporation Consolidated Statements of Income (Unaudited) | ||||||||
Three Months Ended March 31, | Percent | |||||||
(in thousands, except per share data) | 2024 | 2023 | Change | |||||
Interest and dividend income: Loans, including fees | $ | 27,198 | $ | 22,289 | 22.0 | |||
Taxable securities | 3,557 | 3,583 | (0.7 | ) | ||||
Tax exempt securities | 258 | 261 | (1.1 | ) | ||||
Interest-earning deposits | 206 | 97 | 112.4 | |||||
Total interest and dividend income | 31,219 | 26,230 | 19.0 | |||||
Interest expense: Deposits | 12,145 | 5,387 | 125.5 | |||||
Borrowed funds | 985 | 896 | 9.9 | |||||
Total interest expense | 13,130 | 6,283 | 109.0 | |||||
Net interest income | 18,089 | 19,947 | (9.3 | ) | ||||
Provision (credit) for credit losses | (2,040 | ) | 277 | (836.5 | ) | |||
Net interest income after provision for credit losses | 20,129 | 19,670 | 2.3 | |||||
Non-interest income: Wealth management group fee income | 2,703 | 2,580 | 4.8 | |||||
Service charges on deposit accounts | 949 | 941 | 0.9 | |||||
Interchange revenue from debit card transactions | 1,063 | 1,133 | (6.2 | ) | ||||
Change in fair value of equity investments | 101 | 72 | 40.3 | |||||
Net gains on sales of loans held for sale | 32 | 5 | N/M | |||||
Income from bank owned life insurance | 9 | 10 | (10.0 | ) | ||||
Other | 800 | 682 | 17.3 | |||||
Total non-interest income | 5,657 | 5,423 | 4.3 | |||||
Non-interest expense: Salaries and wages | 7,016 | 6,783 | 3.4 | |||||
Pension and other employee benefits | 2,082 | 1,680 | 23.9 | |||||
Other components of net periodic pension and postretirement benefits | (232 | ) | (174 | ) | (33.3 | ) | ||
Net occupancy | 1,493 | 1,465 | 1.9 | |||||
Furniture and equipment | 398 | 418 | (4.8 | ) | ||||
Data processing | 2,573 | 2,381 | 8.1 | |||||
Professional services | 559 | 440 | 27.0 | |||||
Marketing and advertising | 345 | 332 | 3.9 | |||||
Other real estate owned expense | 49 | 38 | 28.9 | |||||
FDIC insurance | 577 | 497 | 16.1 | |||||
Loan expense | 255 | 232 | 9.9 | |||||
Other | 1,583 | 1,744 | (9.2 | ) | ||||
Total non-interest expense | 16,698 | 15,836 | 5.4 | |||||
Income before income tax expense | 9,088 | 9,257 | (1.8 | ) | ||||
Income tax expense | 2,038 | 1,987 | 2.6 | |||||
Net income | $ | 7,050 | $ | 7,270 | (3.0 | ) | ||
Basic and diluted earnings per share | $ | 1.48 | $ | 1.54 | ||||
Cash dividends declared per share | $ | 0.31 | $ | 0.31 | ||||
Average basic and diluted shares outstanding | 4,764 | 4,721 | ||||||
N/M - Not Meaningful |
Chemung Financial Corporation | As of or for the Three Months Ended | ||||||||||||||||||
Consolidated Financial Highlights (Unaudited) | March 31, | Dec. 31, | Sept. 30, | June 30, | March 31, | ||||||||||||||
(in thousands, except per share data) | 2024 | 2023 | 2023 | 2023 | 2023 | ||||||||||||||
RESULTS OF OPERATIONS | |||||||||||||||||||
Interest income | $ | 31,219 | $ | 30,033 | $ | 29,015 | $ | 27,796 | $ | 26,230 | |||||||||
Interest expense | 13,130 | 12,135 | 10,998 | 9,201 | 6,283 | ||||||||||||||
Net interest income | 18,089 | 17,898 | 18,017 | 18,595 | 19,947 | ||||||||||||||
Provision (credit) for credit losses (f) | (2,040 | ) | 2,300 | 449 | 236 | 277 | |||||||||||||
Net interest income after provision for credit losses | 20,129 | 15,598 | 17,568 | 18,359 | 19,670 | ||||||||||||||
Non-interest income | 5,657 | 5,871 | 7,808 | 5,447 | 5,423 | ||||||||||||||
Non-interest expense | 16,698 | 16,826 | 15,668 | 15,913 | 15,836 | ||||||||||||||
Income before income tax expense | 9,088 | 4,643 | 9,708 | 7,893 | 9,257 | ||||||||||||||
Income tax expense | 2,038 | 841 | 2,060 | 1,613 | 1,987 | ||||||||||||||
Net income | $ | 7,050 | $ | 3,802 | $ | 7,648 | $ | 6,280 | $ | 7,270 | |||||||||
Basic and diluted earnings per share | $ | 1.48 | $ | 0.80 | $ | 1.61 | $ | 1.33 | $ | 1.54 | |||||||||
Average basic and diluted shares outstanding | 4,764 | 4,743 | 4,736 | 4,729 | 4,721 | ||||||||||||||
PERFORMANCE RATIOS | |||||||||||||||||||
Return on average assets | 1.04 | % | 0.56 | % | 1.14 | % | 0.95 | % | 1.12 | % | |||||||||
Return on average equity | 14.48 | % | 8.63 | % | 16.89 | % | 13.97 | % | 16.97 | % | |||||||||
Return on average tangible equity (a) | 16.29 | % | 9.86 | % | 19.22 | % | 15.89 | % | 19.40 | % | |||||||||
Efficiency ratio (unadjusted) (e) | 70.32 | % | 70.79 | % | 60.67 | % | 66.19 | % | 62.42 | % | |||||||||
Efficiency ratio (adjusted) (a) | 70.07 | % | 70.42 | % | 66.55 | % | 65.94 | % | 62.18 | % | |||||||||
Non-interest expense to average assets | 2.47 | % | 2.48 | % | 2.33 | % | 2.41 | % | 2.44 | % | |||||||||
Loans to deposits | 80.77 | % | 81.20 | % | 78.05 | % | 79.24 | % | 80.33 | % | |||||||||
YIELDS / RATES - Fully Taxable Equivalent | |||||||||||||||||||
Yield on loans | 5.51 | % | 5.31 | % | 5.21 | % | 5.09 | % | 4.90 | % | |||||||||
Yield on investments | 2.35 | % | 2.24 | % | 2.22 | % | 2.22 | % | 2.18 | % | |||||||||
Yield on interest-earning assets | 4.70 | % | 4.50 | % | 4.40 | % | 4.29 | % | 4.12 | % | |||||||||
Cost of interest-bearing deposits | 2.75 | % | 2.59 | % | 2.44 | % | 2.01 | % | 1.34 | % | |||||||||
Cost of borrowings | 5.15 | % | 5.52 | % | 5.25 | % | 5.13 | % | 4.91 | % | |||||||||
Cost of interest-bearing liabilities | 2.85 | % | 2.68 | % | 2.47 | % | 2.11 | % | 1.49 | % | |||||||||
Interest rate spread | 1.85 | % | 1.82 | % | 1.93 | % | 2.18 | % | 2.63 | % | |||||||||
Net interest margin, fully taxable equivalent | 2.73 | % | 2.69 | % | 2.73 | % | 2.87 | % | 3.14 | % | |||||||||
CAPITAL | |||||||||||||||||||
Total equity to total assets at end of period | 7.08 | % | 7.20 | % | 6.28 | % | 6.63 | % | 6.68 | % | |||||||||
Tangible equity to tangible assets at end of period (a) | 6.34 | % | 6.45 | % | 5.52 | % | 5.87 | % | 5.91 | % | |||||||||
Book value per share | $ | 41.34 | $ | 41.07 | $ | 35.90 | $ | 37.49 | $ | 37.53 | |||||||||
Tangible book value per share (a) | 36.77 | 36.48 | 31.29 | 32.88 | 32.91 | ||||||||||||||
Period-end market value per share | 42.48 | 49.80 | 39.61 | 38.41 | 41.50 | ||||||||||||||
Dividends declared per share | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | ||||||||||||||
AVERAGE BALANCES | |||||||||||||||||||
Loans and loans held for sale (b) | $ | 1,989,185 | $ | 1,956,022 | $ | 1,909,100 | $ | 1,880,224 | $ | 1,849,310 | |||||||||
Interest-earning assets | 2,681,059 | 2,654,638 | 2,627,012 | 2,609,893 | 2,592,709 | ||||||||||||||
Total assets | 2,724,391 | 2,688,536 | 2,664,570 | 2,649,399 | 2,627,088 | ||||||||||||||
Deposits | 2,402,215 | 2,397,663 | 2,410,931 | 2,363,847 | 2,337,476 | ||||||||||||||
Total equity | 195,860 | 174,868 | 179,700 | 180,357 | 173,786 | ||||||||||||||
Tangible equity (a) | 174,036 | 153,044 | 157,876 | 158,533 | 151,962 | ||||||||||||||
ASSET QUALITY | |||||||||||||||||||
Net charge-offs (recoveries) | $ | 182 | $ | 171 | $ | 356 | $ | 146 | $ | 269 | |||||||||
Non-performing loans (c) | 7,835 | 10,411 | 6,826 | 7,304 | 7,731 | ||||||||||||||
Non-performing assets (d) | 8,394 | 10,738 | 7,055 | 7,471 | 10,738 | ||||||||||||||
Allowance for credit losses (f) | 20,471 | 22,517 | 20,252 | 20,172 | 20,075 | ||||||||||||||
Annualized net charge-offs (recoveries) to average loans | 0.04 | % | 0.03 | % | 0.07 | % | 0.03 | % | 0.06 | % | |||||||||
Non-performing loans to total loans | 0.39 | % | 0.53 | % | 0.35 | % | 0.39 | % | 0.41 | % | |||||||||
Non-performing assets to total assets | 0.30 | % | 0.40 | % | 0.26 | % | 0.28 | % | 0.30 | % | |||||||||
Allowance for credit losses to total loans (f) | 1.02 | % | 1.14 | % | 1.05 | % | 1.07 | % | 1.07 | % | |||||||||
Allowance for credit losses to non-performing loans (f) | 261.28 | % | 216.28 | % | 296.69 | % | 276.17 | % | 259.66 | % | |||||||||
(a) See the GAAP to Non-GAAP reconciliations.
(b) Loans and loans held for sale do not reflect the allowance for credit losses.
(c) Non-performing loans include non-accrual loans only.
(d) Non-performing assets include non-performing loans plus other real estate owned.
(e) Efficiency ratio (unadjusted) is non-interest expense divided by the total of net interest income plus non-interest income.
(f) Corporation adopted CECL January 1, 2023.
Chemung Financial Corporation
Average Consolidated Balance Sheets & Net Interest Income Analysis and Rate/Volume Analysis of Net Interest Income (Unaudited)
Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2024 vs. 2023 | |||||||||||||||||||||||||||
(in thousands) | Average Balance | Interest | Yield / Rate | Average Balance | Interest | Yield / Rate | Total Change | Due to Volume | Due to Rate | ||||||||||||||||||||
Interest-earning assets: | |||||||||||||||||||||||||||||
Commercial loans | $ | 1,406,950 | $ | 20,642 | 5.90 | % | $ | 1,261,054 | $ | 16,584 | 5.33 | % | $ | 4,058 | $ | 2,109 | $ | 1,949 | |||||||||||
Mortgage loans | 277,661 | 2,597 | 3.74 | % | 285,588 | 2,472 | 3.51 | % | 125 | (60 | ) | 185 | |||||||||||||||||
Consumer loans | 304,574 | 4,016 | 5.30 | % | 302,668 | 3,285 | 4.40 | % | 731 | 22 | 709 | ||||||||||||||||||
Taxable securities | 633,294 | 3,560 | 2.26 | % | 695,079 | 3,585 | 2.09 | % | (25 | ) | (321 | ) | 296 | ||||||||||||||||
Tax-exempt securities | 40,266 | 282 | 2.82 | % | 40,769 | 305 | 3.03 | % | (23 | ) | (3 | ) | (20 | ) | |||||||||||||||
Interest-earning deposits | 18,314 | 206 | 4.52 | % | 7,551 | 97 | 5.21 | % | 109 | 123 | (14 | ) | |||||||||||||||||
Total interest-earning assets | 2,681,059 | 31,303 | 4.70 | % | 2,592,709 | 26,328 | 4.12 | % | 4,975 | 1,870 | 3,105 | ||||||||||||||||||
Non-interest earnings assets: | |||||||||||||||||||||||||||||
Cash and due from banks | 25,255 | 25,084 | |||||||||||||||||||||||||||
Other assets | 40,665 | 29,393 | |||||||||||||||||||||||||||
Allowance for credit losses (3) | (22,588 | ) | (20,098 | ) | |||||||||||||||||||||||||
Total assets | $ | 2,724,391 | $ | 2,627,088 | |||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||||
Interest-bearing checking | $ | 307,895 | $ | 1,335 | 1.74 | % | $ | 291,090 | $ | 274 | 0.38 | % | $ | 1,061 | $ | 17 | $ | 1,044 | |||||||||||
Savings and money market | 865,113 | 4,266 | 1.98 | % | 906,947 | 1,648 | 0.74 | % | 2,618 | (80 | ) | 2,698 | |||||||||||||||||
Time deposits | 481,965 | 4,904 | 4.09 | % | 322,710 | 2,092 | 2.63 | % | 2,812 | 1,323 | 1,489 | ||||||||||||||||||
Brokered deposits | 121,405 | 1,640 | 5.43 | % | 113,074 | 1,374 | 4.93 | % | 266 | 112 | 154 | ||||||||||||||||||
FHLBNY overnight advances | 34,875 | 487 | 5.52 | % | 70,699 | 866 | 4.97 | % | (379 | ) | (470 | ) | 91 | ||||||||||||||||
FRB advances and other debt | 41,465 | 498 | 4.83 | % | 3,281 | 29 | 3.58 | % | 469 | 455 | 14 | ||||||||||||||||||
Total interest-bearing liabilities | 1,852,718 | 13,130 | 2.85 | % | 1,707,801 | 6,283 | 1.49 | % | 6,847 | 1,357 | 5,490 | ||||||||||||||||||
Non-interest-bearing liabilities: | |||||||||||||||||||||||||||||
Demand deposits | 625,837 | 703,655 | |||||||||||||||||||||||||||
Other liabilities | 49,976 | 41,846 | |||||||||||||||||||||||||||
Total liabilities | 2,528,531 | 2,453,302 | |||||||||||||||||||||||||||
Shareholders' equity | 195,860 | 173,786 | |||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,724,391 | $ | 2,627,088 | |||||||||||||||||||||||||
Fully taxable equivalent net interest income | 18,173 | 20,045 | $ | (1,872 | ) | $ | 513 | $ | (2,385 | ) | |||||||||||||||||||
Net interest rate spread (1) | 1.85 | % | 2.63 | % | |||||||||||||||||||||||||
Net interest margin, fully taxable equivalent (2) | 2.73 | % | 3.14 | % | |||||||||||||||||||||||||
Taxable equivalent adjustment | (84 | ) | (98 | ) | |||||||||||||||||||||||||
Net interest income | $ | 18,089 | $ | 19,947 |
(1) Net interest rate spread is the difference in the average yield on interest-earning assets less the average rate on interest-bearing liabilities.
(2) Net interest margin is the ratio of fully taxable equivalent net interest income divided by average interest-earning assets.
(3) The Corporation implemented CECL as of January 1, 2023.
Chemung Financial Corporation
GAAP to Non-GAAP Reconciliations (Unaudited)
The Corporation prepares its Consolidated Financial Statements in accordance with GAAP. See the Corporation’s unaudited consolidated balance sheets and statements of income contained within this press release. That presentation provides the reader with an understanding of the Corporation’s results that can be tracked consistently from period-to-period and enables a comparison of the Corporation’s performance with other companies’ GAAP financial statements.
In addition to analyzing the Corporation’s results on a reported basis, management uses certain non-GAAP financial measures, because it believes these non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Corporation and, therefore, facilitate a comparison of the Corporation with the performance of other companies. Non-GAAP financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies.
The SEC has adopted Regulation G, which applies to all public disclosures, including earnings releases, made by registered companies that contain “non-GAAP financial measures.” Under Regulation G, companies making public disclosures containing non- GAAP financial measures must also disclose, along with each non-GAAP financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure and a statement of the Corporation’s reasons for utilizing the non-GAAP financial measure as part of its financial disclosures. The SEC has exempted from the definition of “non-GAAP financial measures” certain commonly used financial measures that are not based on GAAP. When these exempted measures are included in public disclosures, supplemental information is not required. The following measures used in this Report, which are commonly utilized by financial institutions, have not been specifically exempted by the SEC and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules, although we are unable to state with certainty that the SEC would so regard them.
Fully Taxable Equivalent Net Interest Income and Net Interest Margin
Net interest income is commonly presented on a tax-equivalent basis. That is, to the extent that some component of the institution's net interest income, which is presented on a before-tax basis, is exempt from taxation (e.g., is received by the institution as a result of its holdings of state or municipal obligations), an amount equal to the tax benefit derived from that component is added to the actual before-tax net interest income total. This adjustment is considered helpful in comparing one financial institution's net interest income to that of other institutions or in analyzing any institution’s net interest income trend line over time, to correct any analytical distortion that might otherwise arise from the fact that financial institutions vary widely in the proportions of their portfolios that are invested in tax-exempt securities, and that even a single institution may significantly alter over time the proportion of its own portfolio that is invested in tax-exempt obligations. Moreover, net interest income is itself a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average interest-earning assets. For purposes of this measure as well, fully taxable equivalent net interest income is generally used by financial institutions, as opposed to actual net interest income, again to provide a better basis of comparison from institution to institution and to better demonstrate a single institution’s performance over time. The Corporation follows these practices.
As of or for the Three Months Ended | |||||||||||||||
(in thousands, except ratio data) | March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
NET INTEREST MARGIN - FULLY TAXABLE EQUIVALENT Net interest income (GAAP) | $ | 18,089 | $ | 17,898 | $ | 18,017 | $ | 18,595 | $ | 19,947 | |||||
Fully taxable equivalent adjustment | 84 | 87 | 87 | 92 | 98 | ||||||||||
Fully taxable equivalent net interest income (non-GAAP) | $ | 18,173 | $ | 17,985 | $ | 18,104 | $ | 18,687 | $ | 20,045 | |||||
Average interest-earning assets (GAAP) | $ | 2,681,059 | $ | 2,654,638 | $ | 2,627,012 | $ | 2,609,893 | $ | 2,592,709 | |||||
Net interest margin - fully taxable equivalent (non-GAAP) | 2.73 | % | 2.69 | % | 2.73 | % | 2.87 | % | 3.14 | % |
Efficiency Ratio
The unadjusted efficiency ratio is calculated as non-interest expense divided by total revenue (net interest income and non-interest income). The adjusted efficiency ratio is a non-GAAP financial measure which represents the Corporation’s ability to turn resources into revenue and is calculated as non-interest expense divided by total revenue (fully taxable equivalent net interest income and non- interest income), adjusted for one-time occurrences and amortization. This measure is meaningful to the Corporation, as well as investors and analysts, in assessing the Corporation’s productivity measured by the amount of revenue generated for each dollar spent.
As of or for the Three Months Ended | |||||||||||||||||||
(in thousands, except ratio data) | March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||||||
EFFICIENCY RATIO Net interest income (GAAP) | $ | 18,089 | $ | 17,898 | $ | 18,017 | $ | 18,595 | $ | 19,947 | |||||||||
Fully taxable equivalent adjustment | 84 | 87 | 87 | 92 | 98 | ||||||||||||||
Fully taxable equivalent net interest income (non-GAAP) | $ | 18,173 | $ | 17,985 | $ | 18,104 | $ | 18,687 | $ | 20,045 | |||||||||
Non-interest income (GAAP) | $ | 5,657 | $ | 5,871 | $ | 7,808 | $ | 5,447 | $ | 5,423 | |||||||||
Less: net (gains) losses on security transactions | — | 39 | — | — | — | ||||||||||||||
Less: recognition of employee retention tax credit | — | — | (2,370 | ) | — | — | |||||||||||||
Adjusted non-interest income (non-GAAP) | $ | 5,657 | $ | 5,910 | $ | 5,438 | $ | 5,447 | $ | 5,423 | |||||||||
Non-interest expense (GAAP) | $ | 16,698 | $ | 16,826 | $ | 15,668 | $ | 15,913 | $ | 15,836 | |||||||||
Less: amortization of intangible assets | — | — | — | — | — | ||||||||||||||
Adjusted non-interest expense (non-GAAP) | $ | 16,698 | $ | 16,826 | $ | 15,668 | $ | 15,913 | $ | 15,836 | |||||||||
Efficiency ratio (unadjusted) | 70.32 | % | 70.79 | % | 60.67 | % | 66.19 | % | 62.42 | % | |||||||||
Efficiency ratio (adjusted) | 70.07 | % | 70.42 | % | 66.55 | % | 65.94 | % | 62.18 | % | |||||||||
Tangible Equity and Tangible Assets (Period-End) |
Tangible equity, tangible assets, and tangible book value per share are each non-GAAP financial measures. Tangible equity represents the Corporation’s stockholders’ equity, less goodwill and intangible assets. Tangible assets represents the Corporation’s total assets, less goodwill and other intangible assets. Tangible book value per share represents the Corporation’s tangible equity divided by common shares at period-end. These measures are meaningful to the Corporation, as well as investors and analysts, in assessing the Corporation’s use of equity.
As of or for the Three Months Ended | |||||||||||||||
(in thousands, except per share and ratio data) | March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
TANGIBLE EQUITY AND TANGIBLE ASSETS (PERIOD END) Total shareholders' equity (GAAP) | $ | 197,128 | $ | 195,241 | $ | 170,064 | $ | 177,426 | $ | 177,341 | |||||
Less: intangible assets | (21,824 | ) | (21,824 | ) | (21,824 | ) | (21,824 | ) | (21,824 | ) | |||||
Tangible equity (non-GAAP) | $ | 175,304 | $ | 173,417 | $ | 148,240 | $ | 155,602 | $ | 155,517 | |||||
Total assets (GAAP) | $ | 2,784,890 | $ | 2,710,529 | $ | 2,707,834 | $ | 2,674,673 | $ | 2,654,183 | |||||
Less: intangible assets | (21,824 | ) | (21,824 | ) | (21,824 | ) | (21,824 | ) | (21,824 | ) | |||||
Tangible assets (non-GAAP) | $ | 2,763,066 | $ | 2,688,705 | $ | 2,686,010 | $ | 2,652,849 | $ | 2,632,359 | |||||
Total equity to total assets at end of period (GAAP) | 7.08 | % | 7.20 | % | 6.28 | % | 6.63 | % | 6.68 | % | |||||
Book value per share (GAAP) | $ | 41.34 | $ | 41.07 | $ | 35.90 | $ | 37.49 | $ | 37.53 | |||||
Tangible equity to tangible assets at end of period (non-GAAP) | 6.34 | % | 6.45 | % | 5.52 | % | 5.87 | % | 5.91 | % | |||||
Tangible book value per share (non-GAAP) | $ | 36.77 | $ | 36.48 | $ | 31.29 | $ | 32.88 | $ | 32.91 |
Tangible Equity (Average)
Average tangible equity and return on average tangible equity are each non-GAAP financial measures. Average tangible equity represents the Corporation’s average stockholders’ equity, less average goodwill and intangible assets for the period. Return on average tangible equity measures the Corporation’s earnings as a percentage of average tangible equity. These measures are meaningful to the Corporation, as well as investors and analysts, in assessing the Corporation’s use of equity.
As of or for the Three Months Ended | |||||||||||||||
(in thousands, except ratio data) | March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | ||||||||||
TANGIBLE EQUITY (AVERAGE) Total average shareholders' equity (GAAP) | $ | 195,860 | $ | 174,868 | $ | 179,700 | $ | 180,357 | $ | 173,786 | |||||
Less: average intangible assets | (21,824 | ) | (21,824 | ) | (21,824 | ) | (21,824 | ) | (21,824 | ) | |||||
Average tangible equity (non-GAAP) | $ | 174,036 | $ | 153,044 | $ | 157,876 | $ | 158,533 | $ | 151,962 | |||||
Return on average equity (GAAP) | 14.48 | % | 8.63 | % | 16.89 | % | 13.97 | % | 16.97 | % | |||||
Return on average tangible equity (non-GAAP) | 16.29 | % | 9.86 | % | 19.22 | % | 15.89 | % | 19.40 | % | |||||
Adjustments for Certain Items of Income or Expense |
In addition to disclosures of certain GAAP financial measures, including net income, EPS, ROA, and ROE, we may also provide comparative disclosures that adjust these GAAP financial measures for a particular period by removing from the calculation thereof the impact of certain transactions or other material items of income or expense occurring during the period, including certain nonrecurring items. The Corporation believes that the resulting non-GAAP financial measures may improve an understanding of its results of operations by separating out any such transactions or items that may have had a disproportionate positive or negative impact on the Corporation’s financial results during the particular period in question. In the Corporation’s presentation of any such non-GAAP (adjusted) financial measures not specifically discussed in the preceding paragraphs, the Corporation supplies the supplemental financial information and explanations required under Regulation G.
As of or for the Three Months Ended | ||||||||||||||||||||
(in thousands, except per share and ratio data) | March 31, 2024 | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | |||||||||||||||
NON-GAAP NET INCOME Reported net income (GAAP) | $ | 7,050 | $ | 3,802 | $ | 7,648 | $ | 6,280 | $ | 7,270 | ||||||||||
Net (gains) losses on security transactions (net of tax) | — | 29 | — | — | — | |||||||||||||||
Recognition of employee retention tax credit (net of tax) | — | — | (1,873 | ) | — | — | ||||||||||||||
Net income (non-GAAP) | $ | 7,050 | $ | 3,831 | $ | 5,775 | $ | 6,280 | $ | 7,270 | ||||||||||
Average basic and diluted shares outstanding | 4,764 | 4,743 | 4,736 | 4,729 | 4,721 | |||||||||||||||
Reported basic and diluted earnings per share (GAAP) | $ | 1.48 | $ | 0.80 | $ | 1.61 | $ | 1.33 | $ | 1.54 | ||||||||||
Reported return on average assets (GAAP) | 1.04 | % | 0.56 | % | 1.14 | % | 0.95 | % | 1.12 | % | ||||||||||
Reported return on average equity (GAAP) | 14.48 | % | 8.63 | % | 16.89 | % | 13.97 | % | 16.97 | % | ||||||||||
Basic and diluted earnings per share (non-GAAP) | $ | 1.48 | $ | 0.81 | $ | 1.21 | $ | 1.33 | $ | 1.54 | ||||||||||
Return on average assets (non-GAAP) | 1.04 | % | 0.57 | % | 0.86 | % | 0.95 | % | 1.12 | % | ||||||||||
Return on average equity (non-GAAP) | 14.48 | % | 8.69 | % | 12.75 | % | 13.97 | % | 16.97 | % |
For further information contact:
Dale M. McKim, III, EVP and CFO
dmckim@chemungcanal.com
Phone: 607-737-3714
Category: Financial
Source: Chemung Financial Corp
FAQ
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