Chemung Financial Corporation Reports Second Quarter 2023 Net Income of $6.3 million, or $1.33 per Share

ELMIRA, N.Y., July 20, 2023 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (the “Corporation”) (Nasdaq: CHMG), the parent company of Chemung Canal Trust Company (the “Bank”), today reported net income of $6.3 million, or $1.33 per share, for the second quarter of 2023, compared to $8.0 million, or $1.72 per share, for the second quarter of 2022, and $7.3 million, or $1.54 per share, for the first quarter of 2023.

“I’m pleased with the financial results for the second quarter,” said Anders M. Tomson, President and CEO of Chemung Financial Corporation. “Our focus on balance sheet management allowed us to drive meaningful loan growth, while managing deposit costs in a dynamic environment. Continued expense management efforts and strong credit metrics leave us well positioned to execute on our strategic goals in 2023,” added Tomson.

Second Quarter Highlights¹:

• Net interest income grew $1.0 million, or 5.4% in the quarter, when compared to the second quarter of 2022.
  
• Tangible common equity to tangible assets improved by 36 basis points to 5.87%. ^{1 2}
• Commercial loan growth approximated 8.7% on an annualized basis. ¹
• Non-performing loans to total loans decreased from 0.45% as of December 31, 2022 to 0.39% as of June 30, 2023.
  
• Dividends declared during the second quarter 2023 were $0.31 per share.

¹ Balance sheet comparisons are calculated as of June 30, 2023 versus December 31, 2022.
² Please refer to GAAP to Non-GAAP Reconciliations.

2nd Quarter 2023 vs 2nd Quarter 2022

Net Interest Income:

Net interest income for the second quarter of 2023 totaled $18.6 million compared to $17.6 million for the same period in the prior year, an increase of $1.0 million, or 5.4%, due primarily to increases of $8.4 million in interest income on loans, including fees, and $0.8 million in interest and dividend income on taxable securities, offset by increases of $7.7 million in interest expense on deposits, and $0.6 million in interest expense on borrowed funds.

The increase in interest income on loans, including fees was due primarily to a 119 basis points increase in the average yield on loans, primarily reflecting an increase in the interest rates in the commercial portfolio, when compared to the same period in the prior year, and a $292.4 million increase in average loan balances, representing increases across all loan categories, when compared to the same period in the prior year.

The increase in interest and dividend income on taxable securities when compared to the same period in the prior year, was due to a 61 basis points increase in the average yield on securities, due to an increase in average interest rates, despite a decrease of $71.8 million in the average balance of taxable securities, when compared to the same period in the prior year, primarily due to paydowns on certain securities held in the portfolio between the second quarter of 2022 and the second quarter of 2023.

The increase in interest expense on deposits was due primarily to a 180 basis points increase in average rates paid on interest-bearing deposits, which included brokered deposits, a shift in the deposit mix towards interest-bearing accounts, and a deposit campaign in the second quarter of 2023, when compared to the same period in the prior year. The increase in interest expense on borrowed funds was due primarily to an increase in interest rates and a $27.2 million increase in the average balance of overnight FHLBNY borrowings in the current quarter, when compared to the same period in the prior year.

Fully taxable equivalent net interest margin was 2.87% for the second quarter 2023, compared to 2.97% for the same period in the prior year. Average interest-earning assets increased $214.2 million for the three months ended June 30, 2023 compared to the same period in the prior year. The average yield on interest-earning assets increased 117 basis points to 4.29%, while the average cost of interest-bearing liabilities increased 187 basis points to 2.11%, for the three months ended June 30, 2023, when compared to the same period in the prior year, due to the rising interest rate environment, as well as a shift in the overall deposit mix to higher cost deposits when compared to the same period in the prior year.

Provision for credit losses increased $2.0 million for the second quarter of 2023, when compared to the second quarter of 2022. This was primarily due to the release of a $1.2 million portion of the COVID-19 specific reserve, the release of a specific reserve held on a sold commercial real estate loan, the upgrades of two large commercial credits, and the roll-off of a large commercial loan charge off from the historical loss factors, in the second quarter of 2022.

Non-Interest Income:

Non-interest income for the second quarter of 2023 was $5.4 million compared to $5.3 million for the same period in the prior year, an increase of $0.1 million, or 2.4%. The increase in the current quarter was due primarily to an increase of $0.1 million in the change in fair value of equity investments, due to an improvement in equity markets benefiting the Corporation's deferred compensation plan, during the current quarter, compared to the same period in the prior year. Remaining components of non-interest income were relatively consistent when compared to the same period in the prior year.

Non-Interest Expense:

Non-interest expense for the second quarter of 2023 was $15.9 million compared to $14.3 million for the same period in the prior year, an increase of $1.6 million, or 11.0%. The increase can be mostly attributed to increases of $0.6 million in salaries and wages, $0.3 million in FDIC insurance, $0.3 million in other non-interest expense, and $0.2 million in other components of net periodic pension benefits.

The increase in salaries and wages was primarily attributed to base salary increases and an increase in the market value of the assets held related to the Corporation's deferred compensation plan, when compared to the same period in the prior year. The increase in FDIC insurance was primarily due to an increase in the assessment rate effective January 1, 2023. The increase in other non-interest expense was primarily attributable to the recapture of $0.2 million of accrued expenses related to a telecom contract dispute in the second quarter of 2022. The increase in other components of net periodic pension cost (benefits) was primarily due to actuarial adjustments related to the Corporation's pension plans.

Income Tax Expense:

Income tax expense for the second quarter of 2023 was $1.6 million compared to $2.3 million in the second quarter of 2022. The effective tax rate for the current quarter decreased to 20.4% from 22.6% for the same period in the prior year.

2nd Quarter 2023 vs 1st Quarter 2023

Net Interest Income:

Net interest income for the second quarter of 2023 totaled $18.6 million compared to $19.9 million for the prior quarter, a decrease of $1.3 million, or 6.5%, due primarily to increases of $3.1 million in interest expense on deposits, offset by an increase of $1.5 million in interest income on loans, including fees, and a decrease of $0.2 million in interest expense on borrowed funds.

The increase in interest expense on deposits was due primarily to a 67 basis points increase in the average rate paid on interest-bearing deposits, which included brokered deposits, when compared to the prior quarter, a continued shift towards interest-bearing deposits as a percentage of total deposits, and intensifying competitive pressures across the industry to attract and retain deposits.

The increase in interest income on loans, including fees was due primarily to a $30.9 million increase in average loan balances, concentrated in the commercial loan portfolio, when compared to the prior quarter, and a 19 basis points increase in the average yield on loans, reflecting increases across all loan categories due to an increase in interest rates, when compared to the prior quarter. The decrease in interest expense on borrowed funds was due primarily to a $16.7 million decrease in the average balance of FHLBNY borrowings due to a shift towards comparatively lower cost brokered deposits, which was partially offset by a 26 basis points increase in average rates paid on overnight FHLBNY borrowings in the current quarter, when compared to the prior quarter.

Fully taxable equivalent net interest margin was 2.87% in the current quarter compared to 3.14% in the prior quarter. Average interest-earning assets increased $17.2 million in the current quarter when compared to the prior quarter. The average yield on interest-earning assets increased 17 basis points to 4.29%, compared to the prior quarter. The average cost of interest-bearing liabilities increased 62 basis points to 2.11%, for the three months ended June 30, 2023, compared to the prior quarter, due to the rising interest rate environment, and a shift in the deposit base towards higher cost interest-bearing deposits.

Non-Interest Income:

Non-interest income was $5.4 million for the second and first quarters of 2023. Increases of $0.1 million in interchange revenue from debit card transactions and other non-interest income were offset by a decrease of $0.2 million in the change in fair value of equity investments, predominantly due to a decrease in the market value of a particular asset held by the Corporation.

Non-Interest Expense:

Non-interest expense for the second quarter of 2023 was $15.9 million, compared to $15.8 million for the prior quarter, an increase of $0.1 million, or 0.5%. The increase can be primarily attributed to increases of $0.2 million in professional services, $0.1 million in pension and other employee benefits, and $0.1 million in data processing, offset primarily by decreases of $0.2 million in marketing and advertising and $0.2 million in other non-interest expense.

The increase in professional services was primarily attributed to the timing and breadth of services rendered, when compared to the prior quarter. The increase in pension and other employee benefits was primarily due to an increase in healthcare related costs, when compared to the prior quarter. The increase in data processing was attributable to expenditures relating to ongoing cybersecurity improvement initiatives and increased software expenses. The decrease in marketing and advertising was due to seasonal advertising initiatives during the first quarter, which were not replicated in the second quarter, and expenses relating to the expansion of the reach of digital ads in the first quarter. The decrease in other non-interest expense was due to a decrease in recruitment expenditures, along with smaller decreases across a range of other categories.

Income Tax Expense:

Income tax expense for the second quarter of 2023 was $1.6 million compared to $2.0 million for the prior quarter, a decrease of $0.4 million. The effective tax rate for the current quarter decreased to 20.4% from 21.5% in the prior quarter.

Asset Quality

Non-performing loans totaled $7.3 million at June 30, 2023, or 0.39% of total loans, compared to $8.2 million, or 0.45% of total loans at December 31, 2022. The improvement in non-performing loans to total loans was the result of both an increase in total loans, and a decrease in non-performing loans. The decrease in non-performing loans was primarily attributable to paydowns among commercial non-performing loans. Non-performing assets, which are comprised of non- performing loans and other real estate owned, were $7.5 million, or 0.28% of total assets, at June 30, 2023, compared to $8.4 million, or 0.32% of total assets, at December 31, 2022. The decrease in non-performing assets can be primarily attributed to the decrease in non-performing loans.

Management performs an ongoing assessment of the adequacy of the allowance for credit losses based on its current expected credit losses (CECL) methodology, which includes loans individually analyzed, as well as loans analyzed on a pooled basis. The Corporation's methodology seeks to estimate the lifetime losses in its loan portfolio by utilizing an expected discounted cash flow approach. Based on Federal Open Market Committee (FOMC) forecasted data points, the model is supplemented by qualitative considerations including relevant economic influences, portfolio concentrations, and other external factors. The Corporation adopted the CECL accounting standard on January 1, 2023.

The allowance for credit losses was $20.2 million at June 30, 2023 and $19.7 million at December 31, 2022, respectively. The allowance for credit losses on unfunded commitments, a component of other liabilities, was $1.0 million at June 30, 2023. The increase in the allowance for credit losses can mostly be attributed to the $0.4 million adjustment made upon adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), and additional provisioning related to increased loan volume. There were no adjustments to the qualitative factor considerations between January 1, 2023 and June 30, 2023. These increases were offset by decreased allowance requirements forecasted by the model due to more favorable economic projections, notably a decrease in the FOMC's forecasted U.S. unemployment rate for year-end 2023 from 4.6% to 4.1%. As of January 1, 2023, the Corporation recognized a $1.5 million one-time implementation adjustment, of which $1.1 million reflected the addition of an allowance for credit losses on unfunded commitments.

The allowance for credit losses was 276.17% of non-performing loans at June 30, 2023, and the ratio of the allowance for credit losses to loans was 1.07% at June 30, 2023. The allowance for loan losses to non-performing loans was 240.39% at December 31, 2022, and the ratio of the allowance for loan losses to total loans was 1.07% at December 31, 2022.

Balance Sheet Activity

Total assets were $2.675 billion at June 30, 2023 compared to $2.646 billion at December 31, 2022, an increase of $29.1 million, or 1.1%. The increase can be mostly attributed to increases of $64.5 million in loans, net of deferred origination fees and costs, offset by decreases of $28.3 million in securities available for sale, at estimated fair value, $1.9 million in FRB and FHLB stock, at cost, $1.6 million in total cash and cash equivalents, and an increase of $0.5 million in allowance for credit losses.

The increase in loans, net of deferred loan fees, was concentrated in the commercial loan portfolio, which increased $53.1 million. Consumer loans were buoyed by continued demand for indirect auto lending, which increased $8.7 million. Consumer loans other than indirect auto increased $3.3 million, while residential mortgages decreased by $0.6 million, due to lower demand and certain residential mortgage loans being sold into the secondary market. The decrease in securities available for sale was primarily due to $30.6 million in paydowns and maturities, offset by an increase in the fair value of the portfolio of $0.7 million. The decrease in FRB and FHLB stock, at cost was attributable to lower holding requirements on FHLB stock due to lower FHLBNY overnight borrowing activity. The decrease in cash and cash equivalents was primarily due to changes in deposits and loan production. The increase in the allowance for credit losses can mostly be attributed to the adoption of CECL and additional provisioning related to increased loan volume.

Total liabilities were $2.497 billion at June 30, 2023 compared to $2.479 billion at December 31, 2022, an increase of $18.1 million, or 0.7%. The increase in total liabilities can primarily be attributed to increases of $63.0 million in deposits, offset by a decrease of $45.1 million in overnight advances.

The increase in deposits was due primarily to increases of $112.0 million in brokered deposits, $31.1 million in time deposits, and $1.8 million in interest bearing DDAs, offset by decreases of $61.8 million in non-interest bearing DDAs, $10.8 million in money market accounts, and $9.3 million in savings accounts. Total deposits were comprised of 28.1% non- interest bearing deposits and 71.9% interest bearing deposits as of June 30, 2023, and were comprised of 31.5% non- interest bearing deposits and 68.5% interest bearing deposits as of December 31, 2022. The aggregate amount of the Corporation's outstanding uninsured deposits (net of deposits pledged to secure municipal deposits), was 20.6% and 23.5% of total deposits, as of June 30, 2023 and December 31, 2022, respectively. The decrease in advances and other debt was due to a $45.1 million decrease in overnight FHLBNY borrowings, as brokered deposits replaced overnight borrowings as a primary tool utilized to fund asset growth.

Total shareholders’ equity was $177.4 million at June 30, 2023, compared to $166.4 million at December 31, 2022, an increase of $11.0 million, or 6.6%, primarily due to an increase of $9.6 million in retained earnings, and a decrease of $0.5 million in accumulated other comprehensive loss. The increase in retained earnings was due primarily to net income of $13.6 million, offset by $1.5 million in dividends declared, and a $1.5 million one-time adjustment due to the implementation CECL. The decrease in accumulated other comprehensive loss was primarily due to an increase in the fair market value of the securities portfolio during the period.

The total equity to total assets ratio was 6.63% at June 30, 2023, compared to 6.29% at December 31, 2022. The tangible equity to tangible assets ratio was 5.87% at June 30, 2023 compared to 5.51% at December 31, 2022⁽¹⁾. Book value per share increased to $37.49 at June 30, 2023 from $35.32 at December 31, 2022. As of June 30, 2023, the Bank’s capital ratios were in excess of those required to be considered well-capitalized under the regulatory framework for prompt corrective action.

Liquidity

Management believes that the Corporation has the necessary liquidity to provide flexibility in meeting its various business needs. The Corporation uses a variety of resources to manage its liquidity. 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 $250,000 or more, brokered deposits, and FHLBNY advances. As of June 30, 2023, the Corporation's cash and cash equivalents balance was $54.2 million. The Corporation also maintains an investment portfolio of securities available for sale, comprised primarily of US Government treasury securities, Small Business Administration loan pools, mortgage-backed securities, and municipal bonds. Although this portfolio generates interest income for the Corporation, it also serves as an available source of liquidity and capital if the need should arise. As of June 30, 2023, the Corporation's investment in securities available for sale was $604.3 million, $298.2 million of which was not pledged as collateral. Additionally, as of June 30, 2023, the Bank's overnight advance line capacity at the Federal Home Loan Bank of New York was $244.7 million, of which $50.8 million was utilized. As of June 30, 2023, the Bank's unused borrowing capacity at the Federal Home Loan Bank of New York was $193.9 million. Additional funding was available to the Corporation through the Bank Term Funding Program (BTFP) and Discount Window Lending provided by the Federal Reserve. The Corporation did not utilize these funding sources during the first or second quarters of 2023. Uninsured deposits totaled $483.1 million as of June 30, 2023 and $548.0 million as of December 31, 2023. Due to their nature, the Corporation considers uninsured deposits to be less sticky than insured deposits, and closely monitors their level when considering liquidity management strategic decisions.

The Corporation also considers brokered deposits to be an element of its deposit strategy. As of June 30, 2023, the Corporation has entered into brokered deposit arrangements with 4-week, 13-week, and 26-week terms totaling $185.5 million.

The table below summarizes the Corporation’s additional funding resources by type as of the dates indicated (in thousands):

ADDITIONAL FUNDING RESOURCES
	June 30, 2023			December 31, 2022
Federal Home Loan Bank of New York	$	193,944		$	99,761
Correspondent bank lines		60,000			68,000
Brokered deposits available per policy limit		81,975			174,465
Unpledged investment securities, at fair value		298,227			420,671
Total Additional Funding Resources	$	634,146		$	762,897

Other Items

The market value of total assets under management or administration in our Wealth Management Group was $2.166 billion at June 30, 2023, including $363.3 million of assets under management or administration for the Corporation, compared to $2.053 billion at December 31, 2022, including $346.5 million of assets under management or administration for the Corporation, an increase of $113.0 million, or 5.5%, due primarily to broad improvements in financial markets.

As previously announced on January 8, 2021, the Corporation announced that the Board of Directors approved a new stock repurchase program. Under the repurchase program, the Corporation may repurchase up to 250,000 shares of its common stock, or approximately 5% of its then outstanding shares. The repurchase program permits shares to be repurchased in open market or privately negotiated transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. As of June 30, 2023, a total of 49,184 shares of common stock at a total cost of $2.0 million were repurchased by the Corporation under its share repurchase program. No shares were repurchased in the second quarter of 2023. The weighted average cost was $40.42 per share repurchased. Remaining buyback authority under the share repurchase program was 200,816 shares at June 30, 2023.

(1) See the GAAP to Non-GAAP reconciliations.

About Chemung Financial Corporation

Chemung Financial Corporation is a $2.7 billion financial services holding company headquartered in Elmira, New York and operates 31 retail offices through its principal subsidiary, Chemung Canal Trust Company, a full service community bank with trust powers. Established in 1833, Chemung Canal Trust Company is the oldest locally-owned and managed community bank in New York State. Chemung Financial Corporation is also the parent of CFS Group, Inc., a financial services subsidiary offering non-traditional services including mutual funds, annuities, brokerage services, tax preparation services and insurance, and Chemung Risk Management, Inc., a captive insurance company based in the State of Nevada.

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 2022 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)
			June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
(in thousands)			2023			2023			2022			2022			2022
ASSETS
Cash and due from financial institutions		$	25,499		$	25,109		$	29,309		$	32,262		$	24,371
Interest-earning deposits in other financial institutions			28,727			9,532			26,560			10,161			5,397
Total cash and cash equivalents			54,226			34,641			55,869			42,423			29,768
Equity investments			2,841			2,949			2,830			2,677			2,750
Securities available for sale			604,313			626,055			632,589			640,352			692,995
Securities held to maturity			1,804			1,932			2,424			3,210			2,943
FHLB and FRB stock, at cost			6,328			7,913			8,197			3,872			5,897
Total investment securities			612,445			635,900			643,210			647,434			701,835
Commercial			1,302,333			1,280,804			1,249,206			1,203,609			1,124,701
Mortgage			285,084			285,944			285,672			283,128			276,847
Consumer			306,489			306,953			294,570			256,018			216,014
Loans, net of deferred loan fees			1,893,906			1,873,701			1,829,448			1,742,755			1,617,562
Allowance for credit losses			(20,172	)		(20,075	)		(19,659	)		(18,631	)		(17,485	)
Loans, net			1,873,734			1,853,626			1,809,789			1,724,124			1,600,077
Loans held for sale			785			—			—			—			—
Premises and equipment, net			15,496			15,867			16,113			16,581			16,812
Operating lease right-of-use assets			6,050			6,250			6,449			6,646			6,841
Goodwill			21,824			21,824			21,824			21,824			21,824
Accrued interest receivable and other assets			87,272			83,126			89,469			89,713			70,004
Total assets		$	2,674,673		$	2,654,183		$	2,645,553		$	2,551,422		$	2,449,911
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing demand deposits		$	671,643		$	690,596		$	733,329		$	747,972		$	704,996
Interest-bearing demand deposits			273,379			287,242			271,645			287,172			267,554
Money market accounts			629,986			631,052			640,840			664,616			641,008
Savings deposits			269,700			271,445			279,029			282,916			285,593
Time deposits			545,486			452,094			402,384			349,864			283,640
Total deposits			2,390,194			2,332,429			2,327,227			2,332,540			2,182,791
Advances and other debt			53,949			93,328			99,137			4,104			49,331
Operating lease liabilities			6,228			6,427			6,620			6,810			6,998
Accrued interest payable and other liabilities			46,876			44,658			46,181			52,450			36,101
Total liabilities			2,497,247			2,476,842			2,479,165			2,395,904			2,275,221
Shareholders' equity
Common stock			53			53			53			53			53
Additional-paid-in capital			47,740			47,387			47,331			47,487			47,196
Retained earnings			221,412			216,593			211,859			205,874			200,870
Treasury stock, at cost			(17,033	)		(17,219	)		(17,598	)		(18,015	)		(18,084	)
Accumulated other comprehensive loss			(74,746	)		(69,473	)		(75,257	)		(79,881	)		(55,345	)
Total shareholders' equity			177,426			177,341			166,388			155,518			174,690
Total liabilities and shareholders' equity		$	2,674,673		$	2,654,183		$	2,645,553		$	2,551,422		$	2,449,911
Period-end shares outstanding			4,732			4,726			4,711			4,693			4,691

Chemung Financial Corporation
Consolidated Statements of Income (Unaudited)
	Three Months Ended									Six Months Ended
	June 30,						Percent			June 30,						Percent
(in thousands, except per share data)		2023			2022		Change				2023			2022		Change
Interest and dividend income:
Loans, including fees	$	23,791		$	15,390		54.6			$	46,080		$	29,871		54.3
Taxable securities		3,630			2,863		26.8				7,213			5,551		29.9
Tax exempt securities		259			268		(3.4	)			520			538		(3.3	)
Interest-earning deposits		116			17		582.4				213			36		491.7
Total interest and dividend income		27,796			18,538		49.9				54,026			35,996		50.1
Interest expense:
Deposits		8,469			769		1,001.3				13,856			1,517		813.4
Borrowed funds		732			128		471.9				1,628			161		911.2
Total interest expense		9,201			897		925.8				15,484			1,678		822.8
Net interest income		18,595			17,641		5.4				38,542			34,318		12.3
Provision for credit losses		236			(1,744	)	113.5				513			(2,889	)	117.8
Net interest income after provision for credit losses		18,359			19,385		(5.3	)			38,029			37,207		2.2
Non-interest income:
Wealth management group fee income		2,603			2,628		(1.0	)			5,183			5,385		(3.8	)
Service charges on deposit accounts		959			936		2.5				1,900			1,800		5.6
Interchange revenue from debit card transactions		1,194			1,206		(1.0	)			2,327			2,336		(0.4	)
Change in fair value of equity investments		(103	)		(242	)	57.4				(31	)		(355	)	91.3
Net gains on sales of loans held for sale		18			25		(28.0	)			23			99		(76.8	)
Net gains (losses) on sales of other real estate owned		14			46		(69.6	)			14			46		(69.6	)
Income from bank owned life insurance		11			11		0.0				21			22		(4.5	)
Other		751			709		5.9				1,433			1,649		(13.1	)
Total non-interest income		5,447			5,319		2.4				10,870			10,982		(1.0	)
Non-interest expense:
Salaries and wages		6,704			6,056		10.7				13,487			12,279		9.8
Pension and other employee benefits		1,808			1,937		(6.7	)			3,488			3,655		(4.6	)
Other components of net periodic pension and postretirement benefits		(174	)		(403	)	56.8				(348	)		(811	)	57.1
Net occupancy		1,440			1,369		5.2				2,905			2,796		3.9
Furniture and equipment		461			410		12.4				879			847		3.8
Data processing		2,473			2,468		0.2				4,854			4,655		4.3
Professional services		602			664		(9.3	)			1,042			1,185		(12.1	)
Amortization of intangible assets		—			4		(100.0	)			—			15		(100.0	)
Marketing and advertising		170			184		(7.6	)			502			460		9.1
Other real estate owned expense		1			8		(87.5	)			39			(29	)	234.5
FDIC insurance		586			284		106.3				1,083			598		81.1
Loan expense		308			176		75.0				540			391		38.1
Other		1,534			1,185		29.5				3,278			2,969		10.4
Total non-interest expense		15,913			14,342		11.0				31,749			29,010		9.4
Income before income tax expense		7,893			10,362		(23.8	)			17,150			19,179		(10.6	)
Income tax expense		1,613			2,338		(31.0	)			3,600			4,288		(16.0	)
Net income	$	6,280		$	8,024		(21.7	)		$	13,550		$	14,891		(9.0	)
Basic and diluted earnings per share	$	1.33		$	1.72					$	2.87		$	3.18
Cash dividends declared per share	$	0.31		$	0.31					$	0.62		$	0.62
Average basic and diluted shares outstanding		4,729			4,690						4,725			4,690
N/M - Not Meaningful

Chemung Financial Corporation		As of or for the Three Months Ended										As of or for the Six Months Ended
Consolidated Financial Highlights (Unaudited)		June 30,		March 31,		Dec. 31,		Sept. 30,		June 30,		June 30,			June 30,
(in thousands, except per share data)		2023		2023		2022		2022		2022		2023			2022
RESULTS OF OPERATIONS
Interest income		$	27,796	$	26,230	$	24,480	$	20,999	$	18,538	$	54,026		$	35,996
Interest expense		9,201		6,283		3,609		2,009		897		15,484			1,678
Net interest income		18,595		19,947		20,871		18,990		17,641		38,542			34,318
Provision (credit) for credit losses (g)		236		277		1,080		1,255		(1,744)		513			(2,889)
Net interest income after provision for credit losses		18,359		19,670		19,791		17,735		19,385		38,029			37,207
Non-interest income		5,447		5,423		5,418		5,036		5,319		10,870			10,982
Non-interest expense		15,913		15,836		15,693		14,577		14,342		31,749			29,010
Income before income tax expense		7,893		9,257		9,516		8,194		10,362		17,150			19,179
Income tax expense		1,613		1,987		2,077		1,741		2,338		3,600			4,288
Net income		$	6,280	$	7,270	$	7,439	$	6,453	$	8,024	$	13,550		$	14,891
Basic and diluted earnings per share		$	1.33	$	1.54	$	1.58	$	1.37	$	1.72	$	2.87		$	3.18
Average basic and diluted shares outstanding		4,729		4,721		4,698		4,692		4,690		4,725			4,690
PERFORMANCE RATIOS
Return on average assets		0.95%		1.12%		1.15%		1.02%		1.32%		1.03%			1.23%
Return on average equity		13.97%		16.97%		18.36%		14.17%		18.06%		15.43%			15.73%
Return on average tangible equity (a)		15.89%		19.40%		21.25%		16.12%		20.58%		17.60%			17.77%
Efficiency ratio (unadjusted) (f)		66.19%		62.42%		59.69%		60.67%		62.47%		64.25%			64.04%
Efficiency ratio (adjusted) (a) (b)		65.94%		62.18%		59.44%		60.40%		62.17%		64.01%			63.72%
Non-interest expense to average assets		2.41%		2.44%		2.42%		2.30%		2.35%		2.42%			2.39%
Loans to deposits		79.24%		80.33%		78.61%		74.71%		74.11%		79.24%			74.11%
YIELDS / RATES - Fully Taxable Equivalent
Yield on loans		5.09%		4.90%		4.57%		4.19%		3.90%		4.99%			3.87%
Yield on investments		2.22%		2.18%		2.09%		1.72%		1.60%		2.20%			1.53%
Yield on interest-earning assets		4.29%		4.12%		3.82%		3.41%		3.12%		4.20%			3.06%
Cost of interest-bearing deposits		2.01%		1.34%		0.93%		0.47%		0.21%		1.68%			0.21%
Cost of borrowings		5.13%		4.91%		4.30%		2.56%		1.70%		3.60%			1.83%
Cost of interest-bearing liabilities		2.11%		1.49%		0.88%		0.51%		0.24%		1.81%			0.23%
Interest rate spread		2.18%		2.63%		2.94%		2.90%		2.88%		2.39%			2.83%
Net interest margin, fully taxable equivalent		2.87%		3.14%		3.26%		3.08%		2.97%		3.00%			2.92%
CAPITAL
Total equity to total assets at end of period		6.63%		6.68%		6.29%		6.10%		7.13%		6.63%			7.13%
Tangible equity to tangible assets at end of period (a)		5.87%		5.91%		5.51%		5.29%		6.30%		5.87%			6.30%
Book value per share		$	37.49	$	37.53	$	35.32	$	33.14	$	37.24	$	37.49		$	37.24
Tangible book value per share (a)		32.88		32.91		30.69		28.49		32.59		32.88			32.59
Period-end market value per share		38.41		41.50		45.87		41.87		47.00		38.41			47.00
Dividends declared per share		0.31		0.31		0.31		0.31		0.31		0.62			0.62
AVERAGE BALANCES
Loans and loans held for sale (c)		$	1,880,224	$	1,849,310	$	1,787,103	$	1,675,859	$	1,587,777	$	1,864,853		$	1,560,264
Interest earning assets		2,609,893		2,592,709		2,550,834		2,457,218		2,395,704		2,601,349			2,383,557
Total assets		2,649,399		2,627,088		2,574,639		2,511,301		2,446,763		2,643,964			2,449,339
Deposits		2,363,847		2,337,476		2,347,719		2,257,394		2,203,231		2,350,734			2,207,314
Total equity		180,357		173,786		160,740		180,644		178,207		177,089			190,841
Tangible equity (a)		158,533		151,962		138,916		158,820		156,382		155,265			169,012
ASSET QUALITY
Net charge-offs (recoveries)		$	145	$	269	$	52	$	109	$	699	$	414		$	651
Non-performing loans (d)		7,304		7,731		8,178		8,310		7,374		7,304			7,374
Non-performing assets (e)		7,471		7,927		8,373		8,503		7,665		7,471			7,665
Allowance for credit losses (g)		20,172		20,075		19,659		18,631		17,485		20,172			17,485
Annualized net charge-offs (recoveries) to average loans		0.03%		0.06%		0.01%		0.03%		0.18%		0.04%			0.08%
Non-performing loans to total loans		0.39%		0.41%		0.45%		0.48%		0.46%		0.39%			0.46%
Non-performing assets to total assets		0.28%		0.30%		0.32%		0.33%		0.31%		0.28%			0.31%
Allowance for credit losses to total loans (g)		1.07%		1.07%		1.07%		1.07%		1.08%		1.07%			1.08%
Allowance for credit losses to non-performing loans (g)		276.17%		259.66%		240.39%		224.21%		237.12%		276.17%			237.12%
(a)  See the GAAP to Non-GAAP reconciliations.
(b)  Efficiency ratio (adjusted) is non-interest expense less amortization of intangible assets divided by the total of fully taxable equivalent net interest income plus non-interest income less net gains or losses on securities transactions.
(c)  Loans and loans held for sale do not reflect the allowance for credit losses.
(d)  Non-performing loans include non-accrual loans only.
(e)  Non-performing assets include non-performing loans plus other real estate owned.
(f)   Efficiency ratio (unadjusted) is non-interest expense divided by the total of net interest income plus non-interest income.
(g)  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 June 30, 2023										Three Months Ended June 30, 2022									Three Months Ended  June 30, 2023 vs. 2022
(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	$	1,288,113		$	17,791			5.54	%		$	1,111,854		$	11,244		4.06	%		$	6,547			$	1,984			$	4,563
Mortgage loans	284,916			2,509				3.53	%		270,112			2,256			3.35	%		253				128				125
Consumer loans	307,195			3,545				4.63	%		205,811			1,927			3.76	%		1,618				1,101				517
Taxable securities	680,020			3,633				2.14	%		751,784			2,866			1.53	%		767				(294		)		1,061
Tax-exempt securities	40,541			294				2.91	%		42,222			330			3.13	%		(36		)		(13		)		(23		)
Interest-earning deposits	9,108			116				5.11	%		13,921			18			0.52	%		98				(8		)		106
Total interest earning assets	2,609,893			27,888				4.29	%		2,395,704			18,641			3.12	%		9,247				2,898				6,349
Non-interest earnings assets:
Cash and due from banks	25,168										23,702
Other assets	34,478										47,471
Allowance for credit losses (3)	(20,140		)								(20,114		)
Total assets	$	2,649,399									$	2,446,763
Interest-bearing liabilities:
Interest-bearing checking	$	286,573		$	723			1.01	%		$	273,723		$	51		0.07	%		$	672			$	2			$	670
Savings and money market	902,741			3,050				1.36	%		962,502			242			0.10	%		2,808				(16		)		2,824
Time deposits	346,953			2,679				3.10	%		240,979			465			0.77	%		2,214				281				1,933
Brokered deposits	156,196			2,017				5.18	%		2,178			11			2.09	%		2,006				1,965				41
FHLBNY overnight advances	53,965			703				5.23	%		26,780			97			1.45	%		606				170				436
Long-term capital leases	3,213			29				3.62	%		3,485			31			3.57	%		(2		)		(2		)		0
Total interest-bearing liabilities	1,749,641			9,201				2.11	%		1,509,646			897			0.24	%		8,304				2,400				5,904
Non-interest-bearing liabilities:
Demand deposits	671,384										723,849
Other liabilities	48,017										35,061
Total liabilities	2,469,042										2,268,556
Shareholders' equity	180,357										178,207
Total liabilities and shareholders' equity	$	2,649,399									$	2,446,763
Fully taxable equivalent net interest income				18,687										17,744						$	943			$	499			$	445
Net interest rate spread (1)								2.18	%								2.88	%
Net interest margin, fully taxable equivalent (2)								2.87	%								2.97	%
Taxable equivalent adjustment				(92		)								(103		)
Net interest income				$	18,595									$	17,641
(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
Average Consolidated Balance Sheets & Net Interest Income Analysis and Rate/Volume Analysis of Net Interest Income (Unaudited)
	Six Months Ended								Six Months Ended						Six Months Ended
	June 30, 2023								June 30, 2022						June 30, 2023			vs.			December 31, 2021
(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	$	1,274,658		$	34,376		5.44 %		$	1,092,240	$	21,791	4.02 %		$	12,585		$	4,040		$	8,545
Mortgage loans	285,251			4,981			3.52 %		266,105		4,409		3.34 %		572			327			245
Consumer loans	304,944			6,830			4.52 %		201,919		3,743		3.74 %		3,087			2,191			896
Taxable securities	687,508			7,218			2.12 %		755,127		5,556		1.48 %		1,662			(537)			2,199
Tax-exempt securities	40,654			599			2.97 %		42,328		663		3.16 %		(64)			(25)			(39)
Interest-earning deposits	8,334			213			5.15 %		25,838		36		0.28 %		177			(40)			217
Total interest earning assets	2,601,349			54,217			4.20 %		2,383,557		36,198		3.06 %		18,019			5,956			12,063
Non-interest earnings assets:
Cash and due from banks	25,126								24,220
Other assets	37,608								62,230
Allowance for credit losses (3)	(20,119)								(20,668)
Total assets	$	2,643,964							$	2,449,339
Interest-bearing liabilities:
Interest-bearing checking	$	288,819		$	996		0.70 %		$	283,521	$	107	0.08 %		$	889		$	2		$	887
Savings and money market	904,832			4,699			1.05 %		958,919		454		0.10 %		4,245			(28)			4,273
Time deposits	334,662			4,771			2.87 %		241,239		945		0.79 %		3,826			491			3,335
Brokered deposits	134,991			3,390			5.06 %		1,095		11		2.09 %		3,379			3,340			39
FHLBNY overnight advances	62,286			1,570			5.08 %		14,205		99		1.40 %		1,471			828			643
Capital leases	3,247			58			3.60 %		3,517		62		3.57 %		(4)			(5)			1
Total interest-bearing liabilities	1,728,837			15,484			1.81 %		1,502,496		1,678		0.23 %		13,806			4,628			9,178
Non-interest-bearing liabilities:
Demand deposits	687,430								722,540
Other liabilities	50,608								33,462
Total liabilities	2,466,875								2,258,498
Shareholders' equity	177,089								190,841
Total liabilities and shareholders' equity	$	2,643,964							$	2,449,339
Fully taxable equivalent net interest income				38,733							34,520				$	4,213		$	1,328		$	2,885
Net interest rate spread (1)							2.39 %						2.83 %
Net interest margin, fully taxable equivalent (2)							3.00 %						2.92 %
Taxable equivalent adjustment				(191)							(202)
Net interest income				$	38,542						$	34,318
(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
	As of or for the Three Months Ended																				Six Months Ended
	June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
(in thousands, except ratio data)	2023				2023				2022				2022				2022				2023				2022
NET INTEREST MARGIN - FULLY TAXABLE EQUIVALENT
Net interest income (GAAP)	$	18,595			$	19,947			$	20,871			$	18,990			$	17,641			$	38,542			$	34,318
Fully taxable equivalent adjustment	92				98				112				112				103				191				202
Fully taxable equivalent net interest income (non-GAAP)	$	18,687			$	20,045			$	20,983			$	19,102			$	17,744			$	38,733			$	34,520
Average interest-earning assets (GAAP)	$	2,609,893			$	2,592,709			$	2,550,834			$	2,457,218			$	2,395,704			$	2,601,349			$	2,383,557
Net interest margin - fully taxable equivalent (non-GAAP)	2.87		%		3.14		%		3.26		%		3.08		%		2.97		%		3.00		%		2.92		%

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
	As of or for the Three Months Ended																				Six Months Ended
	June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
(in thousands, except ratio data)	2023				2023				2022				2022				2022				2023				2022
EFFICIENCY RATIO
Net interest income (GAAP)	$	18,595			$	19,947			$	20,871			$	18,990			$	17,641			$	38,542			$	34,318
Fully taxable equivalent adjustment	92				98				112				112				103				191				202
Fully taxable equivalent net interest income (non-GAAP)	$	18,687			$	20,045			$	20,983			$	19,102			$	17,744			$	38,733			$	34,520
Non-interest income (GAAP)	$	5,447			$	5,423			$	5,418			$	5,036			$	5,319			$	10,870			$	10,982
Less:  net (gains) losses on security transactions	—				—				—				—				—				—				—
Adjusted non-interest income (non-GAAP)	$	5,447			$	5,423			$	5,418			$	5,036			$	5,319			$	10,870			$	10,982
Non-interest expense (GAAP)	$	15,913			$	15,836			$	15,693			$	14,577			$	14,342			$	31,749			$	29,010
Less:  amortization of intangible assets	—				—				—				—				(4		)		—				(15		)
Adjusted non-interest expense (non-GAAP)	$	15,913			$	15,836			$	15,693			$	14,577			$	14,338			$	31,749			$	28,995
Efficiency ratio (unadjusted)	66.19		%		62.42		%		59.69		%		60.67		%		62.47		%		64.25		%		64.04		%
Efficiency ratio (adjusted)	65.94		%		62.18		%		59.44		%		60.40		%		62.17		%		64.01		%		63.72		%

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
	As of or for the Three Months Ended																				Six Months Ended
	June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
(in thousands, except per share and ratio data)	2023				2023				2022				2022				2022				2023				2022
TANGIBLE EQUITY AND TANGIBLE ASSETS
(PERIOD END)
Total shareholders' equity (GAAP)	$	177,426			$	177,341			$	166,388			$	155,518			$	174,690			$	177,426			$	174,690
Less:  intangible assets	(21,824		)		(21,824		)		(21,824		)		(21,824		)		(21,824		)		(21,824		)		(21,824		)
Tangible equity (non-GAAP)	$	155,602			$	155,517			$	144,564			$	133,694			$	152,866			$	155,602			$	152,866
Total assets (GAAP)	$	2,674,673			$	2,654,183			$	2,645,553			$	2,551,418			$	2,449,911			$	2,674,673			$	2,449,911
Less:  intangible assets	(21,824		)		(21,824		)		(21,824		)		(21,824		)		(21,824		)		(21,824		)		(21,824		)
Tangible assets (non-GAAP)	$	2,652,849			$	2,632,359			$	2,623,729			$	2,529,594			$	2,428,087			$	2,652,849			$	2,428,087
Total equity to total assets at end of period (GAAP)	6.63		%		6.68		%		6.29		%		6.10		%		7.13		%		6.63		%		7.13		%
Book value per share (GAAP)	$	37.49			$	37.53			$	35.32			$	33.14			$	37.24			$	37.49			$	37.24
Tangible equity to tangible assets at
end of period (non-GAAP)	5.87		%		5.91		%		5.51		%		5.29		%		6.30		%		5.87		%		6.30		%
Tangible book value per share (non-GAAP)	$	32.88			$	32.91			$	30.69			$	28.49			$	32.59			$	32.88			$	32.59

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
	As of or for the Three Months Ended																				Six Months Ended
	June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
(in thousands, except ratio data)	2023				2023				2022				2022				2022				2023				2022
TANGIBLE EQUITY (AVERAGE)
Total average shareholders' equity (GAAP)	$	180,357			$	173,786			$	160,740			$	180,644			$	178,207			$	177,089			$	190,841
Less:  average intangible assets	(21,824		)		(21,824		)		(21,824		)		(21,824		)		(21,825		)		(21,824		)		(21,830		)
Average tangible equity (non-GAAP)	$	158,533			$	151,962			$	138,916			$	158,820			$	156,382			$	155,265			$	169,011
Return on average equity (GAAP)	13.97		%		16.97		%		18.36		%		14.17		%		18.06		%		15.43		%		15.73		%
Return on average tangible equity (non-GAAP)	15.89		%		19.40		%		21.25		%		16.12		%		20.58		%		17.60		%		17.77		%

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
	As of or for the Three Months Ended																				Six Months Ended
	June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				June 30,				June 30,
(in thousands, except per share and ratio data)	2023				2023				2022				2022				2022				2023				2022
NON-GAAP NET INCOME
Reported net income (GAAP)	$	6,280			$	7,270			$	7,439			$	6,453			$	8,024			$	13,550			$	14,891
Net (gains) losses on security transactions (net of tax)	—				—				—				—				—				—				—
Net income (non-GAAP)	$	6,280			$	7,270			$	7,439			$	6,453			$	8,024			$	13,550			$	14,891
Average basic and diluted shares outstanding	4,729				4,721				4,698				4,692				4,690				4,725				4,690
Reported basic and diluted earnings per share (GAAP)	$	1.33			$	1.54			$	1.58			$	1.37			$	1.72			$	2.87			$	3.18
Reported return on average assets (GAAP)	0.95		%		1.12		%		1.15		%		1.02		%		1.32		%		1.03		%		1.23		%
Reported return on average equity (GAAP)	13.97		%		16.97		%		18.36		%		14.17		%		18.06		%		15.43		%		15.73		%
Basic and diluted earnings per share (non-GAAP)	$	1.33			$	1.54			$	1.58			$	1.37			$	1.72			$	2.87			$	3.18
Return on average assets (non-GAAP)	0.95		%		1.12		%		1.15		%		1.02		%		1.32		%		1.03		%		1.23		%
Return on average equity (non-GAAP)	13.97		%		16.97		%		18.36		%		14.17		%		18.06		%		15.43		%		15.73		%

Category: Financial

Source: Chemung Financial Corp

For further information contact:
Dale M. McKim, III, EVP and CFO
dmckim@chemungcanal.com
Phone: 607-737-3714