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Chemung Financial Corporation Reports Third Quarter 2024 Net Income of $5.7 million, or $1.19 per share

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Chemung Financial (CHMG) reported net income of $5.7 million, or $1.19 per share, for the third quarter of 2024. This compares to $5.0 million ($1.05 per share) in Q2 2024 and $7.6 million ($1.61 per share) in Q3 2023. Key highlights include:

- Opening of a new branch in Williamsville, New York
- Improvement in tangible equity to tangible assets ratio by 66 basis points to 7.22%
- Increase in net interest income to $18.4 million, up 3.4% from Q2 2024
- Non-interest income rose to $5.9 million, a 5.4% increase from Q2 2024
- Non-interest expense increased to $16.5 million, up 1.9% from Q2 2024

The company saw improvements in interest income on loans and deposits, partially offset by higher interest expenses. Asset quality remained stable with non-performing loans at 0.52% of total loans.

Chemung Financial (CHMG) ha riportato un utile netto di 5,7 milioni di dollari, ovvero 1,19 dollari per azione, per il terzo trimestre del 2024. Questo confronto è fatto con i 5,0 milioni di dollari (1,05 dollari per azione) del Q2 2024 e i 7,6 milioni di dollari (1,61 dollari per azione) del Q3 2023. I principali punti salienti includono:

- Apertura di una nuova filiale a Williamsville, New York
- Miglioramento del rapporto patrimonio tangibile rispetto agli asset tangibili di 66 punti base al 7,22%
- Aumento del reddito netto da interessi a 18,4 milioni di dollari, in aumento del 3,4% rispetto al Q2 2024
- Il reddito non da interessi è salito a 5,9 milioni di dollari, con un incremento del 5,4% rispetto al Q2 2024
- La spesa non da interessi è aumentata a 16,5 milioni di dollari, in crescita dell'1,9% rispetto al Q2 2024

L'azienda ha registrato miglioramenti nel reddito da interessi su prestiti e depositi, parzialmente compensati da costi di interesse più elevati. La qualità degli asset è rimasta stabile con prestiti non performanti al 0,52% dei prestiti totali.

Chemung Financial (CHMG) reportó un ingreso neto de 5,7 millones de dólares, o 1,19 dólares por acción, para el tercer trimestre de 2024. Esto es comparado con 5,0 millones de dólares (1,05 dólares por acción) en el Q2 2024 y 7,6 millones de dólares (1,61 dólares por acción) en el Q3 2023. Los puntos destacados incluyen:

- Apertura de una nueva sucursal en Williamsville, Nueva York
- Mejora en la relación de capital tangible a activos tangibles en 66 puntos básicos al 7,22%
- Aumento en el ingreso neto por intereses a 18,4 millones de dólares, un incremento del 3,4% respecto al Q2 2024
- El ingreso no por intereses subió a 5,9 millones de dólares, un aumento del 5,4% respecto al Q2 2024
- Los gastos no por intereses aumentaron a 16,5 millones de dólares, subiendo un 1,9% respecto al Q2 2024

La compañía vio mejoras en los ingresos por intereses en préstamos y depósitos, parcialmente compensadas por mayores gastos por intereses. La calidad de los activos se mantuvo estable, con préstamos no productivos en el 0,52% del total de préstamos.

Chemung Financial (CHMG)은 2024년 3분기에 570만 달러의 순이익, 즉 주당 1.19달러를 보고했습니다. 이는 2024년 2분기의 500만 달러(주당 1.05달러) 및 2023년 3분기의 760만 달러(주당 1.61달러)와 비교됩니다. 주요 하이라이트는 다음과 같습니다:

- 뉴욕 윌리엄스빌에 새 지점 개설
- 실질 자산 대비 실질 자본 비율이 66bp 개선되어 7.22% 도달
- 순이자 수익이 1840만 달러로 3.4% 증가, Q2 2024 대비
- 비이자 수익이 590만 달러로 5.4% 증가, Q2 2024 대비
- 비이자 비용이 1650만 달러로 1.9% 증가, Q2 2024 대비

회사는 대출 및 예금에 대한 이자 수익 개선을 보였으나, 높은 이자 비용으로 인해 일부 상쇄되었습니다. 자산 품질은 총 대출의 0.52%에 해당하는 부실 대출로 안정적인 상태를 유지했습니다.

Chemung Financial (CHMG) a annoncé un revenu net de 5,7 millions de dollars, soit 1,19 dollar par action, pour le troisième trimestre de 2024. Cela se compare à 5,0 millions de dollars (1,05 dollar par action) au Q2 2024 et 7,6 millions de dollars (1,61 dollar par action) au Q3 2023. Les points clés comprennent :

- Ouverture d'une nouvelle agence à Williamsville, New York
- Amélioration du ratio des capitaux tangibles aux actifs tangibles de 66 points de base à 7,22%
- Augmentation du revenu net d'intérêts à 18,4 millions de dollars, en hausse de 3,4% par rapport au Q2 2024
- Le revenu non d'intérêts a augmenté à 5,9 millions de dollars, soit une augmentation de 5,4% par rapport au Q2 2024
- Les dépenses non d'intérêts ont augmenté à 16,5 millions de dollars, soit une hausse de 1,9% par rapport au Q2 2024

La société a constaté des améliorations des revenus d'intérêts sur les prêts et les dépôts, partiellement compensées par des charges d'intérêts plus élevées. La qualité des actifs est restée stable, avec des prêts non performants représentant 0,52% des prêts totaux.

Chemung Financial (CHMG) berichtete von einem Nettoergebnis von 5,7 Millionen Dollar, oder 1,19 Dollar pro Aktie, für das dritte Quartal 2024. Dies steht im Vergleich zu 5,0 Millionen Dollar (1,05 Dollar pro Aktie) im Q2 2024 und 7,6 Millionen Dollar (1,61 Dollar pro Aktie) im Q3 2023. Wichtige Highlights sind:

- Eröffnung einer neuen Filiale in Williamsville, New York
- Verbesserung des Verhältnisses von tangible Equities zu tangible Assets um 66 Basispunkte auf 7,22%
- Anstieg der Nettozinseinnahmen auf 18,4 Millionen Dollar, ein Anstieg von 3,4% im Vergleich zu Q2 2024
- Non-Interest-Einnahmen stiegen auf 5,9 Millionen Dollar, ein Anstieg von 5,4% gegenüber Q2 2024
- Non-Interest-Aufwendungen erhöhten sich auf 16,5 Millionen Dollar, ein Anstieg von 1,9% im Vergleich zu Q2 2024

Das Unternehmen verzeichnete Verbesserungen bei den Zinseinnahmen aus Krediten und Einlagen, die teilweise durch höhere Zinsaufwendungen ausgeglichen wurden. Die Asset-Qualität blieb stabil, mit notleidenden Krediten in Höhe von 0,52% der Gesamtkredite.

Positive
  • Net income increased to $5.7 million in Q3 2024, up from $5.0 million in Q2 2024
  • Net interest income rose 3.4% quarter-over-quarter to $18.4 million
  • Non-interest income increased 5.4% quarter-over-quarter to $5.9 million
  • Tangible equity to tangible assets ratio improved by 66 basis points to 7.22%
  • Opened a new full-service branch in Williamsville, New York
Negative
  • Net income decreased year-over-year from $7.6 million in Q3 2023 to $5.7 million in Q3 2024
  • Non-interest expense increased 1.9% quarter-over-quarter to $16.5 million
  • Interest expense on deposits and borrowed funds increased compared to the previous year
  • Total loan delinquencies increased compared to December 31, 2023

Insights

Chemung Financial 's Q3 2024 results show a solid performance with net income increasing to $5.7 million ($1.19 per share) from $5.0 million in Q2 2024. Key highlights include:

  • Net interest income rose 3.4% quarter-over-quarter to $18.4 million, driven by higher loan yields and increased interest-earning deposits.
  • Non-interest income grew 5.4% to $5.9 million, boosted by wealth management fees and improved equity investment values.
  • The bank's balance sheet appears well-positioned for a potential rate-cutting cycle, with higher-yielding loans driving interest income while funding costs moderate.
  • Asset quality remains stable with non-performing loans at 0.52% of total loans, slightly down from year-end 2023.

The expansion into Western New York with a new branch in Williamsville demonstrates growth initiatives. However, investors should note the 24.4% year-over-year decrease in non-interest income, primarily due to the absence of the employee retention tax credit recognized in Q3 2023. Overall, CHMG shows resilience in a challenging rate environment, maintaining profitability and asset quality.

Chemung Financial's Q3 results reflect adept management in a complex banking environment. The 66 basis point improvement in tangible equity to tangible assets ratio to 7.22% is particularly noteworthy, indicating strengthened capital positioning. This improvement, coupled with a mere three basis point increase in cost of interest-bearing liabilities, suggests effective balance sheet management amidst rising rates.

The bank's strategic focus on higher-yielding commercial loans is paying off, with an 11 basis point increase in average yield quarter-over-quarter. The $14.3 million growth in average commercial loan balances also signals continued demand in this sector. However, the decrease in consumer and residential mortgage balances warrants attention, as it may impact future growth prospects.

The shift towards higher-cost deposits, particularly time deposits, is a trend to watch. While it's boosting interest income, it could pressure margins if not managed carefully. The bank's ability to maintain a stable net interest margin of 2.72% in this environment is commendable, but ongoing vigilance will be important as the industry navigates potential rate cuts.

ELMIRA, N.Y., Oct. 22, 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 $5.7 million, or $1.19 per share, for the third quarter of 2024, compared to $5.0 million, or $1.05 per share, for the second quarter of 2024, and $7.6 million, or $1.61 per share, for the third quarter of 2023.

“Our balance sheet is well positioned as we enter into this rate cutting cycle. We are seeing the benefit of higher yielding loans driving interest income, while funding costs continue to moderate,” said Anders M. Tomson, President and CEO of Chemung Financial Corporation. “Strong non-interest income production and a stable credit environment were a welcome addition to an already strong quarter,” Tomson added.

"As we begin operations in our new Williamsville, New York location, we are eager to continue fostering an environment committed to our mission of community-oriented banking, both in Western New York and throughout the Bank's footprint," concluded Tomson.

Third Quarter Highlights:

  • The Corporation opened a full-service branch and regional banking center at 5529 Main Street in Williamsville, New York under the Canal Bank, a division of Chemung Canal Trust Company, name on October 11, 2024.
  • Tangible equity to tangible assets improved by 66 basis points to 7.22% as of September 30, 2024, compared to prior quarter-end, and 77 basis points compared to December 31, 2023.1
  • Cost of interest-bearing liabilities increased by three basis points during the third quarter of 2024, compared to a nine basis points increase during the second quarter of 2024.
  • Dividends declared during the third quarter 2024 were $0.31 per share.

1 See the GAAP to Non-GAAP reconciliations.

3rd Quarter 2024 vs 2nd Quarter 2024

Net Interest Income:

Net interest income for the third quarter of 2024 totaled $18.4 million compared to $17.8 million for the prior quarter, an increase of $0.6 million, or 3.4%, driven primarily by increases of $1.1 million in interest income on loans, including fees and $0.1 million in interest income on interest-earning deposits, offset primarily by increases of $0.3 million in interest expense on deposits and $0.1 million in interest expense on borrowed funds, and a decrease of $0.2 million in interest income on taxable securities.

Interest income on loans, including fees, increased primarily due to an increase of 11 basis points in the average yield on commercial loans, compared to the prior quarter. The increase in the average yield on commercial loans was primarily attributable to higher yielding commercial real estate originations during 2024, and the recognition of $0.2 million in interest income on the payoff of a nonaccrual commercial real estate loan. Average balances of commercial loans increased $14.3 million, compared to the prior quarter. Average yields on residential mortgages and consumer loans increased 21 and 15 basis points, respectively, compared to the prior quarter, while average balances of residential mortgages and consumer loans decreased by $0.1 million and $3.8 million, respectively. The increase in interest income on interest-earning deposits was due to an increase of $5.7 million in the average balances of interest- earning deposits, compared to the prior quarter.

Interest expense on deposits increased primarily due to growth in the average balances of customer time deposits of $25.5 million and an increase of five basis points in the average interest rate paid on customer time deposits, compared to the prior quarter. Customer time deposits comprised 23.0% of average total deposits for the three months ended September 30, 2024, compared to 21.9% for the three months ended June 30, 2024. Average balances of brokered deposits decreased $35.3 million, compared to the prior quarter, while the average interest rate paid on brokered deposits was flat quarter over quarter. Average balances of savings and money market deposits increased $10.1 million and average interest rates paid on savings and money market deposits increased nine basis points, compared to the prior quarter. Average balances of total interest-bearing deposits increased $6.1 million and the average interest rate paid on total interest-bearing deposits increased two basis points, compared to the prior quarter. The increase in the average balances and average cost of customer time deposits was primarily due to the continuation of CD campaigns in the current quarter. The increase in the average balances and average cost of savings and money market deposits was primarily due to a shift in the composition of deposits towards higher rate money market accounts and additional seasonal municipal deposits.

The increase in interest expense on borrowed funds was due primarily to an increase in the average cost of total borrowings of four basis points, and an increase in the average balances of borrowed funds of $3.2 million in the current quarter, compared to the prior quarter. The average cost of total borrowings for the current quarter was 5.08%, compared to 5.04% in the prior quarter. Included in average balances of borrowed funds was $30.0 million in FHLB term advances that matured in September 2024. The decrease in interest income on taxable securities was primarily due to lower average balances of SBA pooled loan securities and additional amortization expense on SBA pooled loan securities, both due to paydown activity.

Fully taxable equivalent net interest margin was 2.72% in the current quarter, compared to 2.66% in the prior quarter. Expansion of net interest margin in the current quarter was primarily attributable to an increase of nine basis points in the average yield of total interest-earning assets to 4.78%, offset by an increase of three basis points in the average cost of interest-bearing liabilities to 2.97%, compared to the prior quarter.

Provision for Credit Losses:

Provision for credit losses decreased $0.3 million in the current quarter, compared to the prior quarter. Provisioning in the current quarter was primarily attributable to unfavorable changes in economic forecasts and lower modeled prepayment speeds used in the Bank's CECL model, as well as lower growth-related provisioning in the current quarter, compared to the prior quarter. Provisioning in the prior quarter included a $0.2 million specific allocation on a commercial and industrial loan.

Non-Interest Income:

Non-interest income for the third quarter of 2024 was $5.9 million, compared to $5.6 million for the prior quarter, an increase of $0.3 million, or 5.4%. The increase was driven primarily by increases of $0.1 million in each of wealth management group fee income, service charges on deposit accounts, change in fair value of equity investments, and gains on sales of loans held for sale.

The increase in wealth management group fee income was primarily attributable to increases in fee rates effective July 1, 2024. The increase in service charges on deposit accounts was primarily attributable to an increase in overdraft transaction volume, compared to the prior quarter. The increase in the change in fair value of equity investments was primarily attributable to an increase in the market value of assets held for the Corporation's deferred compensation plan, and the increase in gains on sales of loans held for sale was primarily attributable to an increase in the volume of loans sold to the secondary market during the current period, due to an increase in total residential loan originations in the current period.

Non-Interest Expense:

Non-interest expense for the third quarter of 2024 was $16.5 million, compared to $16.2 million for the prior quarter, an increase of $0.3 million, or 1.9%. The increase was driven primarily by increases of $0.3 million each in salaries and wages and data processing expenses, and $0.2 million in other non-interest expense, partially offset by a decrease of $0.5 million in pension and other employee benefits.

The increase in salaries and wages compared to the prior quarter was primarily attributable to additional staffing for the Corporation's newly established Western New York regional banking center, and expense related to an increase in the market value of assets held for the Corporation's deferred compensation plan. The increase in data processing expense was primarily attributable to the timing of various vendor credits and rebates, and an increase in card procurement expense. The increase in other non-interest expense was primarily attributable to an increase supplies and postage expense, and an increase in charitable contributions. The decrease in pension and other employee benefits was primarily attributable to lower healthcare related expenses in the current quarter, compared to the prior quarter.

Income Tax Expense:

Income tax expense for the third quarter of 2024 was $1.5 million, compared to $1.3 million for the prior quarter, an increase of $0.2 million. The effective tax rate for the current quarter increased to 20.9% from 20.3% in the prior quarter. The increase in income tax expense was primarily attributable to an increase in pretax income.

3rd Quarter 2024 vs 3rd Quarter 2023

Net Interest Income:

Net interest income for the third quarter of 2024 totaled $18.4 million compared to $18.0 million for the same period in the prior year, an increase of $0.4 million, or 2.2%, driven primarily by increases of $3.6 million in interest income on loans, including fees and $0.3 million in interest income on interest-earning deposits, partially offset by increases of $2.3 million in interest expense on deposits and $0.7 million in interest expense on borrowed funds, and a decrease of $0.5 million in interest income on taxable securities.

Interest income on loans, including fees, increased primarily due to a $134.3 million increase in the average balances of commercial loans and an increase of 36 basis points in the average yield on commercial loans, compared to the same period in the prior year. The increase in average balances of commercial loans consisted of year over year growth in both commercial and industrial and commercial real estate balances, while the increase in the average yield was primarily due to higher origination yields in 2024. Average balances of residential mortgage loans decreased $9.2 million compared to the same period in the prior year due to an increase in sales of new originations to the secondary market, while the average yield on residential mortgage loans increased 36 basis points compared to the same period in the prior year. Average consumer loan balances decreased $13.9 million compared to the same period in the prior year, primarily due to lower indirect auto loan origination activity during the third quarter of 2024 compared to the prior year period, while the average yield on consumer loans increased 60 basis points, primarily due to runoff of older vintage indirect auto loans, replaced by higher yielding new originations. Interest income on interest-earning deposits increased primarily due to a $21.2 million increase in the average balances of interest-earning deposits, compared to the same period in the prior year.

Interest expense on deposits increased primarily due to a 44 basis points increase in the average interest rate paid on total interest-bearing deposits, which included brokered deposits, and an increase of $175.6 million in the average balance of customer interest-bearing deposits. Both the increase in the average interest rate paid and the average balances of customer interest-bearing deposits were primarily attributable to CD campaigns throughout 2024, as well as a general shift in the deposit mix towards higher cost accounts. The average balances of brokered deposits decreased $123.7 million, while the average interest rate paid on brokered deposits increased nine basis points, compared to the same period in the prior year. Average balances of brokered deposits decreased primarily due to the utilization of the Bank Term Funding Program (BTFP) and FHLBNY term advances in the current quarter, which were not utilized in the same period in the prior year, as well as lower growth in loan balances during the current quarter, compared to the same period in the prior year.

The increase in interest expense on borrowed funds was primarily attributable to a $54.8 million increase in the average balances of borrowed funds, partially offset by a decrease of 17 basis points in the average interest rate paid on borrowed funds. Changes in the composition of borrowed funds reflected the Corporation's shift to the lower cost BTFP, as well as FHLBNY term advances, partially replacing FHLBNY overnight advances in the current quarter, compared to the same period in the prior year. The average balances of FHLBNY overnight advances decreased $17.3 million, while the average interest rate paid on FHLBNY overnight advances decreased 47 basis points, compared to the same period in the prior year. The decrease in interest income on taxable securities was primarily attributable to net paydowns and maturities of available for sale securities between the third quarter of 2023 and the third quarter of 2024 of $54.8 million, and an increase in amortization expense on SBA pooled loan securities, due to paydown activity.

Fully taxable equivalent net interest margin was 2.72% for the third quarter of 2024, compared to 2.73% for the same period in the prior year. The average cost of interest-bearing liabilities increased 50 basis points to 2.97%, and the average balances of interest-bearing liabilities increased $106.7 million, compared to the same period in the prior year. The average yield on interest-earning assets increased 38 basis points to 4.78%, and the average balances of interest- earning assets increased $73.0 million, compared to the same period in the prior year.

Provision for Credit Losses:

Provision for credit losses increased $0.1 million for the third quarter of 2024, compared to the same period in the prior year. The increase was primarily attributable to unfavorable changes in FOMC forecasts in the third quarter of 2024, compared to favorable changes to forecasts in the third quarter of 2023, as well as a decline in modeled prepayment speeds. This increase was partially offset by a decrease of $0.3 million in net charge offs in the third quarter of 2024, compared to the third quarter of 2023.

Non-Interest Income:

Non-interest income for the third quarter of 2024 was $5.9 million compared to $7.8 million for the same period in the prior year, a decrease of $1.9 million, or 24.4%. The decrease was primarily driven by a decrease of $2.5 million in other non-interest income, partially offset by increases of $0.5 million in wealth management group fee income and $0.2 million in the change in fair value of equity investments. The decrease in other non-interest income was primarily attributable to the recognition of the employee retention tax credit (ERTC) in the third quarter of 2023. The increase in wealth management group fee income was primarily attributable to an increase in the market value of total assets under management or administration and fee rate increases effective in the third quarter of 2024, while the increase in the change in fair value of equity investments was primarily attributable to an increase in the value of assets held for the Corporation's deferred compensation plan.

Non-Interest Expense:

Non-interest expense for the third quarter of 2024 was $16.5 million compared to $15.7 million for the same period in the prior year, an increase of $0.8 million, or 5.1%. The increase was primarily driven by increases of $0.6 million in salaries and wages and $0.3 million in other non-interest expense, partially offset by a decrease of $0.4 million in pension and other employee benefits.

The increase in salaries and wages was primarily attributable to an increase in salaries, including additional staffing for the Corporation's newly opened Western New York regional banking center, as well as an increase in the market value of the assets held for the Corporation's deferred compensation plan. The increase in other non-interest expense was primarily attributable to increases in supplies and postage expense, and losses recognized on the sale of repossessed vehicles in the current quarter, compared to the same period in the prior year. The decrease in pension and other employee benefits was primarily attributable to a decrease in healthcare related expenses in the current quarter, compared to the same period in the prior year.

Income Tax Expense:

Income tax expense for the third quarter of 2024 was $1.5 million compared to $2.1 million for the third quarter of 2023, a decrease of $0.5 million. The effective tax rate for the current quarter was 20.9%, compared to 21.2% for the same period in the prior year. The decrease in income tax expense was primarily attributable to additional income tax expense recognized in the third quarter of 2023 due to filing amended tax returns in relation to the ERTC.

Asset Quality

Non-performing loans totaled $10.5 million as of September 30, 2024, or 0.52% of total loans, compared to $10.4 million, or 0.53% of total loans as of December 31, 2023. The slight increase in non-performing loans was primarily attributable to $3.9 million in commercial loan balances added to nonaccrual during the year, offset by $3.8 million in paydowns and payoffs of existing nonaccrual commercial loan balances during the year. Non-performing assets, which are comprised of non-performing loans, other real estate owned, and repossessed vehicles, were $11.1 million, or 0.40% of total assets as of September 30, 2024, compared to $10.7 million, or 0.40% of total assets as of December 31, 2023. Other real estate owned was $0.5 million and repossessed vehicles was $0.1 million as of September 30, 2024.

Total loan delinquencies as of September 30, 2024 increased compared to December 31, 2023, primarily attributable to increases in residential mortgage and consumer loan delinquency rates during the period. The majority of past due residential mortgage balances were past due between 30-59 days. Commercial loan delinquency rates declined as of September 30, 2024, compared to December 31, 2023. Annualized net charge-offs to total average loans for the third quarter of 2024 were 0.02%, compared to 0.06% for the second quarter of 2024, and 0.04% for the nine months ended September 30, 2024, compared to 0.05% for the nine months ended September 30, 2023. Annualized consumer net charge-offs for the nine months ended September 30, 2024 were 0.31% of average consumer loan balances and 0.18% of average consumer loan balances for the third quarter of 2024, primarily concentrated in indirect auto loans, while commercial loans and residential mortgage loans each had net recovery rates for the nine months ended September 30, 2024 and the third quarter of 2024.

The allowance for credit losses was $21.4 million as of September 30, 2024 and $22.5 million as of December 31, 2023. The allowance for credit losses on unfunded commitments, a component of other liabilities, was $0.8 million as of September 30, 2024 and $0.9 million as of December 31, 2023. The decrease in the allowance for credit losses was primarily attributable to the annual review and update to the loss drivers which the Bank's CECL model is based upon. Recalibration of loss drivers resulted in a decline in the baseline loss rates which the model utilizes, and were applied beginning in the first quarter of 2024. Partially offsetting these declines were comparatively weaker FOMC projections for economic variables used in the model as of September 30, 2024 compared to as of December 31, 2023, in addition to declines in prepayment speeds between December 31, 2023 and September 30, 2024, and loan growth during 2024.

The allowance for credit losses was 203.33% of non-performing loans as of September 30, 2024 and 216.28% as of December 31, 2023. The allowance for credit losses to total loans was 1.06% as of September 30, 2024 and 1.14% as of December 31, 2023. Provision for credit losses as a percentage of period-end loan balances was 0.03% for the third quarter of 2024.

Balance Sheet Activity

Total assets were $2.774 billion as of September 30, 2024 compared to $2.711 billion as of December 31, 2023, an increase of $63.7 million, or 2.3%. The increase was primarily attributable to increases of $56.3 million in loans, net of deferred origination fees and costs, and $43.6 million in cash and cash equivalents, partially offset by decreases of $30.9 million in total investment securities and $6.9 million in accrued interest receivable and other assets.

The increase in loans, net of deferred origination fees and costs, was concentrated in the commercial loan portfolio, which increased by $76.9 million, or 5.5%, compared to prior year-end. Growth in commercial loans during the current period consisted of growth in both commercial and industrial and commercial real estate balances. Consumer loans decreased by $16.7 million, or 5.4%, primarily driven by lower indirect auto loan origination activity during the current period, and a relatively fast turnover rate in the portfolio. Residential mortgages decreased by $3.9 million, or 1.4%, as the Corporation continued to elect to sell a portion of originations into the secondary market.

The increase in cash and cash equivalents was primarily due to $50.0 million in advances from the Federal Reserve's BTFP, $41.8 million in paydowns and maturities of available for sale securities, and an increase of $21.7 million in total deposits, primarily offset by an increase of $56.3 million in loans, net of deferred origination fees and costs, and a decrease of $31.9 million in FHLB overnight advances, compared to prior year-end.

Total investment securities decreased primarily due to a decrease of $29.4 million in securities available for sale, compared to prior year-end. Net paydowns and maturities on securities available for sale for the current period totaled $41.8 million, primarily attributable to paydowns on mortgage-backed securities and SBA pooled-loan securities. The market value of securities available for sale increased by $14.7 million, due to favorable changes in interest rates during the current period. The decrease in accrued interest receivable and other assets was primarily due to decreases in interest rate swap assets of $4.2 million, due to a decrease in the market value of swaps, and $3.9 million in deferred tax assets, due to improvements in the market value of the available for sale securities portfolio.

Total liabilities were $2.554 billion as of September 30, 2024 compared to $2.515 billion as of December 31, 2023, an increase of $38.3 million, or 1.5%. The increase in total liabilities was primarily attributable to increases of $18.8 million in advances and other debt and of $21.7 million in deposits, partially offset by a decrease of $2.2 million in accrued interest payable and other liabilities.

Total deposits increased by $21.7 million or 0.9%, compared to prior year-end, primarily driven by increases of $102.8 million in customer time deposits, or 21.9%, and $58.2 million in interest bearing demand deposits, or 20.0%. Partially offsetting these increases were decreases of $103.3 million in brokered deposits, or 72.3%, and $37.0 million in non- interest bearing demand deposits, or 5.7%. Additionally, money market deposits increased by $7.2 million, or 1.1% and savings deposits decreased by $6.2 million, or 2.5%. Non-interest bearing deposits comprised 25.1% and 26.9% of total deposits as of September 30, 2024 and December 31, 2023, respectively.

The increase in advances and other debt was primarily attributable to a $50.0 million advance from the Federal Reserve's BTFP, and an increase of $0.7 million in finance lease obligations, offset by a decrease of $31.9 million in FHLBNY overnight advances. The decrease in accrued interest payable and other liabilities was primarily due to a decrease in interest rate swap liabilities of $4.8 million, primarily due to a decrease in the market value of swaps, partially offset by increases in interest payable on borrowed funds of $1.7 million and interest payable on deposits of $1.2 million.

Total shareholders’ equity was $220.7 million as of September 30, 2024, compared to $195.2 million as of December 31, 2023, an increase of $25.4 million, or 13.0%, primarily driven by an increase of $13.3 million in retained earnings and a decrease of $10.9 million in accumulated other comprehensive loss. The increase in retained earnings was primarily due to net income of $17.8 million, offset by dividends declared of $4.4 million during the nine months ended September 30, 2024. The decrease in accumulated other comprehensive loss was primarily attributable to the favorable impact of interest rates on available for sale securities during the current period.

The total equity to total assets ratio was 7.95% as of September 30, 2024, compared to 7.20% as of December 31, 2023, and the tangible equity to tangible assets ratio was 7.22% as of September 30, 2024, compared to 6.45% as of December 31, 2023.1 Book value per share increased to $46.22 as of September 30, 2024 from $41.07 as of December 31, 2023. As of September 30, 2024, the Bank’s capital ratios were in excess of those required to be considered well- capitalized under the regulatory framework for prompt corrective action.

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 operational and strategic 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 $250,000 or greater, brokered deposits, FHLBNY advances, and Federal Reserve Bank Term Funding Program (BTFP) advances. No new borrowings could be made under the BTFP after March 11, 2024. Borrowings may be used on a short-term basis for liquidity purposes or on a long-term basis to fund asset growth. As of September 30, 2024, the Corporation's cash and cash equivalents balance was $80.4 million. The Corporation also maintains an investment portfolio of securities available for sale, comprised primarily of US Government treasury securities, SBA 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 September 30, 2024, the Corporation's investment in securities available for sale was $554.6 million, $256.1 million of which was not pledged as collateral. Additionally, the Bank's total advance line capacity at the Federal Home Loan Bank of New York was $224.2 million as of September 30, 2024, all of which was available as of September 30, 2024. In January 2024, the Corporation utilized the BTFP with an advance of $50.0 million, which the Corporation paid off in October 2024, without prepayment penalty.

As of September 30, 2024, uninsured deposits totaled $708.9 million, or 28.9% of total deposits, including $216.2 million of municipal deposits that were collateralized by pledged assets, when appropriate. As of December 31, 2023, uninsured deposits totaled $655.7 million, or 27.0% of total deposits, including $153.2 million of municipal deposits that were collateralized by pledged assets. Due to their fluidity, the Corporation closely monitors uninsured deposit levels when considering liquidity management strategies.

The Corporation considers brokered deposits to be an element of its deposit strategy, and anticipates it may continue utilizing brokered deposits as a secondary source of funding in support of growth. As of September 30, 2024, the Corporation had entered into brokered deposit arrangements with multiple brokers. As of September 30, 2024, brokered deposits carried terms between 2 and 48 months, totaling $39.5 million. Excluding brokered deposits, total deposits increased $125.0 million compared to December 31, 2023, due primarily to ongoing CD campaigns and seasonal inflows associated with municipal deposits.

Other Items

The market value of total assets under management or administration in our Wealth Management Group was $2.316 billion as of September 30, 2024, including $367.8 million of assets under management or administration for the Corporation, compared to $2.242 billion as of December 31, 2023, including $381.3 million of assets under management or administration for the Corporation, an increase of $73.2 million, or 3.3%, due primarily to market improvements during 2024.

As previously announced on January 8, 2021, the Corporation's 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 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 September 30, 2024, 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 third quarter of 2024. The weighted average cost was $40.42 per share repurchased. Remaining buyback authority under the share repurchase program was 200,816 shares as of September 30, 2024.

The Bank opened a full-service branch and regional banking center at 5529 Main Street in Williamsville, New York on October 11, 2024 under the Canal Bank, a division of Chemung Canal Trust Company, name. The Bank has received regulatory approval to convert its previous branch location in Clarence, New York into an administrative office in support of the Bank's Western New York operations.

About Chemung Financial Corporation

Chemung Financial Corporation is a $2.8 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.

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)      
  Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
(in thousands) 2024 2024 2024 2023 2023
ASSETS          
Cash and due from financial institutions $36,247  $23,184  $22,984  $22,247  $52,563 
Interest-earning deposits in other financial institutions  44,193   47,033   71,878   14,600   23,017 
Total cash and cash equivalents  80,440   70,217   94,862   36,847   75,580 
                     
Equity investments  3,244   3,090   3,093   3,046   2,811 
                     
Securities available for sale  554,575   550,927   566,028   583,993   569,004 
Securities held to maturity  657   657   785   785   1,804 
FHLB and FRB stock, at cost  4,189   5,506   4,071   5,498   4,053 
Total investment securities  559,421   557,090   570,884   590,276   574,861 
                     
Commercial  1,464,205   1,445,258   1,425,437   1,387,321   1,341,017 
Mortgage  274,099   271,620   277,246   277,992   281,361 
Consumer  290,650   294,594   300,927   307,351   308,310 
Loans, net of deferred loan fees  2,028,954   2,011,472   2,003,610   1,972,664   1,930,688 
Allowance for credit losses  (21,441)  (21,031)  (20,471)  (22,517)  (20,252)
Loans, net  2,007,513   1,990,441   1,983,139   1,950,147   1,910,436 
                     
Loans held for sale     381   96       
Premises and equipment, net  14,915   14,731   14,183   14,571   15,036 
Operating lease right-of-use assets  5,637   5,827   6,018   5,648   5,850 
Goodwill  21,824   21,824   21,824   21,824   21,824 
Accrued interest receivable and other assets  81,221   92,212   90,791   88,170   101,436 
Total assets $2,774,215  $2,755,813  $2,784,890  $2,710,529  $2,707,834 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Deposits:          
Non-interest-bearing demand deposits $616,126  $619,192  $656,330  $653,166  $683,348 
Interest-bearing demand deposits  349,383   328,370   315,154   291,138   310,885 
Money market accounts  630,870   613,131   631,350   623,714   626,256 
Savings deposits  242,911   248,528   248,578   249,144   261,822 
Time deposits  611,831   606,700   629,360   612,265   591,188 
Total deposits  2,451,121   2,415,921   2,480,772   2,429,427   2,473,499 
                     
Advances and other debt  53,757   83,835   52,979   34,970   3,120 
Operating lease liabilities  5,820   6,009   6,197   5,827   6,028 
Accrued interest payable and other liabilities  42,863   48,826   47,814   45,064   55,123 
Total liabilities  2,553,561   2,554,591   2,587,762   2,515,288   2,537,770 
          
Shareholders' equity         
Common stock 53   53   53   53   53 
Additional paid-in capital 48,457   48,102   47,794   47,773   47,974 
Retained earnings 243,266   239,021   235,506   229,930   227,596 
Treasury stock, at cost (15,987)  (16,043)  (16,147)  (16,502)  (16,880)
Accumulated other comprehensive loss (55,135)  (69,911)  (70,078)  (66,013)  (88,679)
Total shareholders' equity 220,654   201,222   197,128   195,241   170,064 
Total liabilities and shareholders' equity$2,774,215  $2,755,813  $2,784,890  $2,710,529  $2,707,834 
           
Period-end shares outstanding4,774 4,772 4,768 4,754 4,738 

 

             
Chemung Financial Corporation    
Consolidated Statements of Income (Unaudited)    
  Three Months Ended
September 30,
 Percent   Nine Months Ended
September 30,
 Percent 
(in thousands, except per share data)  2024   2023  Change   2024   2023  Change 
Interest and dividend income:                      
Loans, including fees $28,611  $25,033  14.3  $83,323  $71,113  17.2 
Taxable securities  3,060   3,537  (13.5)  9,868   10,750  (8.2)
Tax exempt securities  250   258  (3.1)  762   778  (2.1)
Interest-earning deposits  441   187  135.8   1,014   400  153.5 
Total interest and dividend income  32,362   29,015  11.5   94,967   83,041  14.4 
                       
Interest expense:                      
Deposits  13,005   10,721  21.3   37,861   24,577  54.1 
Borrowed funds  969   277  249.8   2,868   1,905  50.6 
Total interest expense  13,974   10,998  27.1   40,729   26,482  53.8 
                       
Net interest income  18,388   18,017  2.1   54,238   56,559  (4.1)
Provision (credit) for credit losses  564   449  25.6   (597)  962  (162.1)
Net interest income after provision for credit losses  17,824   17,568  1.5   54,835   55,597  (1.4)
                       
Non-interest income:                      
Wealth management group fee income  2,991   2,533  18.1   8,554   7,716  10.9 
Service charges on deposit accounts  1,016   1,018  (0.2)  2,929   2,918  0.4 
Interchange revenue from debit card transactions  1,123   1,141  (1.6)  3,327   3,468  (4.1)
Change in fair value of equity investments  118   (68) 273.5   233   (99) 335.4 
Net gains on sales of loans held for sale  91   67  35.8   162   90  80.0 
Net gains (losses) on sales of other real estate owned  (19)    N/M   (22)  14  N/M 
Income from bank owned life insurance  10   11  (9.1)  29   32  (9.4)
Other  589   3,106  (81.0)  1,962   4,539  (56.8)
Total non-interest income  5,919   7,808  (24.2)  17,174   18,678  (8.1)
                       
Non-interest expense:                      
Salaries and wages  7,168   6,542  9.6   21,007   20,029  4.9 
Pension and other employee benefits  1,627   1,979  (17.8)  5,787   5,467  5.9 
Other components of net periodic pension and postretirement benefits  (227)  (174) (30.5)  (691)  (522) (32.4)
Net occupancy  1,422   1,337  6.4   4,360   4,242  2.8 
Furniture and equipment  402   353  13.9   1,197   1,232  (2.8)
Data processing  2,567   2,480  3.5   7,437   7,334  1.4 
Professional services  522   554  (5.8)  1,639   1,596  2.7 
Marketing and advertising  210   218  (3.7)  943   720  31.0 
Other real estate owned expense  55   10  N/M   116   49  136.7 
FDIC insurance  524   525  (0.2)  1,617   1,608  0.6 
Loan expense  353   249  41.8   808   789  2.4 
Other  1,887   1,595  18.3   5,207   4,873  6.9 
Total non-interest expense  16,510   15,668  5.4   49,427   47,417  4.2 
                       
Income before income tax expense  7,233   9,708  (25.5)  22,582   26,858  (15.9)
Income tax expense  1,513   2,060  (26.6)  4,825   5,660  (14.8)
Net income $5,720  $7,648  (25.2) $17,757  $21,198  (16.2)
                       
Basic and diluted earnings per share $1.19  $1.61     $3.72  $4.48    
Cash dividends declared per share $0.31  $0.31     $0.93  $0.93    
Average basic and diluted shares outstanding  4,773   4,736      4,769   4,729    
             
             
N/M - Not Meaningful            


Chemung Financial Corporation As of or for the Three Months Ended As of or for the
Nine Months Ended
Consolidated Financial Highlights (Unaudited) Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Sept. 30, Sept. 30,
(in thousands, except per share data)  2024   2024   2024   2023   2023   2024   2023 
RESULTS OF OPERATIONS              
Interest income $32,362  $31,386  $31,219  $30,033  $29,015  $94,967  $83,041 
Interest expense  13,974   13,625   13,130   12,135   10,998   40,729   26,482 
Net interest income  18,388   17,761   18,089   17,898   18,017   54,238   56,559 
Provision (credit) for credit losses  564   879   (2,040)  2,300   449   (597)  962 
Net interest income after provision for credit losses  17,824   16,882   20,129   15,598   17,568   54,835   55,597 
Non-interest income  5,919   5,598   5,657   5,871   7,808   17,174   18,678 
Non-interest expense  16,510   16,219   16,698   16,826   15,668   49,427   47,417 
Income before income tax expense  7,233   6,261   9,088   4,643   9,708   22,582   26,858 
Income tax expense  1,513   1,274   2,038   841   2,060   4,825   5,660 
Net income $5,720  $4,987  $7,050  $3,802  $7,648  $17,757  $21,198 
               
Basic and diluted earnings per share $1.19  $1.05  $1.48  $0.80  $1.61  $3.72  $4.48 
Average basic and diluted shares outstanding  4,773   4,770   4,764   4,743   4,736   4,769   4,729 
               
PERFORMANCE RATIOS              
Return on average assets  0.83%  0.73%  1.04%  0.56%  1.14%  0.87%  1.07%
Return on average equity  10.81%  10.27%  14.48%  8.63%  16.89%  11.82%  15.93%
Return on average tangible equity (a)  12.07%  11.56%  16.29%  9.86%  19.22%  13.27%  18.15%
Efficiency ratio (unadjusted) (e)  67.92%  69.43%  70.32%  70.79%  60.67%  69.21%  63.02%
Efficiency ratio (adjusted) (a)  67.69%  69.19%  70.07%  70.42%  66.55%  68.97%  64.83%
Non-interest expense to average assets  2.39%  2.38%  2.47%  2.48%  2.33%  2.41%  2.39%
Loans to deposits  82.78%  83.26%  80.77%  81.20%  78.05%  82.78%  78.05%
               
YIELDS / RATES - Fully Taxable Equivalent              
Yield on loans  5.65%  5.52%  5.51%  5.31%  5.21%  5.56%  5.07%
Yield on investments  2.21%  2.27%  2.35%  2.24%  2.22%  2.28%  2.21%
Yield on interest-earning assets  4.78%  4.69%  4.70%  4.50%  4.40%  4.72%  4.27%
Cost of interest-bearing deposits  2.88%  2.86%  2.75%  2.59%  2.44%  2.83%  1.94%
Cost of borrowings  5.08%  5.04%  5.15%  5.52%  5.25%  5.09%  5.04%
Cost of interest-bearing liabilities  2.97%  2.94%  2.85%  2.68%  2.47%  2.92%  2.03%
Interest rate spread  1.81%  1.75%  1.85%  1.82%  1.93%  1.80%  2.24%
Net interest margin, fully taxable equivalent  2.72%  2.66%  2.73%  2.69%  2.73%  2.70%  2.91%
               
CAPITAL              
Total equity to total assets at end of period  7.95%  7.30%  7.08%  7.20%  6.28%  7.95%  6.28%
Tangible equity to tangible assets at end of period (a)  7.22%  6.56%  6.34%  6.45%  5.52%  7.22%  5.52%
Book value per share $46.22  $42.17  $41.34  $41.07  $35.90  $46.22  $35.90 
Tangible book value per share (a)  41.65   37.59   36.77   36.48   31.29   41.65   31.29 
Period-end market value per share  48.02   48.00   42.48   49.80   39.61   48.02   39.61 
Dividends declared per share  0.31   0.31   0.31   0.31   0.31   0.93   0.93 
               
AVERAGE BALANCES              
Loans and loans held for sale (b) $2,020,280  $2,009,823  $1,989,185  $1,956,022  $1,909,100  $2,006,479  $1,879,765 
Interest-earning assets  2,699,968   2,699,402   2,681,059   2,654,638   2,627,012   2,693,499   2,609,999 
Total assets  2,751,392   2,740,967   2,724,391   2,688,536   2,664,570   2,738,962   2,650,908 
Deposits  2,410,735   2,419,169   2,402,215   2,397,663   2,410,931   2,410,706   2,371,021 
Total equity  210,421   195,375   195,860   174,868   179,700   200,588   177,969 
Tangible equity (a)  188,597   173,551   174,036   153,044   157,876   178,764   156,145 
               
ASSET QUALITY              
Net charge-offs $79  $306  $182  $171  $356  $566  $771 
Non-performing loans (c)  10,545   8,195   7,835   10,411   6,826   10,545   6,826 
Non-performing assets (d)  11,134   8,872   8,394   10,737   7,055   11,134   7,055 
Allowance for credit losses  21,441   21,031   20,471   22,517   20,252   21,441   20,252 
Annualized net charge-offs to average loans  0.02%  0.06%  0.04%  0.03%  0.07%  0.04%  0.05%
Non-performing loans to total loans  0.52%  0.41%  0.39%  0.53%  0.35%  0.52%  0.35%
Non-performing assets to total assets  0.40%  0.32%  0.30%  0.40%  0.26%  0.40%  0.26%
Allowance for credit losses to total loans  1.06%  1.05%  1.02%  1.14%  1.05%  1.06%  1.05%
Allowance for credit losses to non-performing loans  203.33%  256.63%  261.28%  216.28%  296.69%  203.33%  296.69%
               
(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 and repossessed vehicles.
(e) Efficiency ratio (unadjusted) is non-interest expense divided by the total of net interest income plus non-interest income.
               


Chemung Financial Corporation                 
Average Consolidated Balance Sheets & Net Interest Income Analysis and Rate/Volume Analysis of Net Interest Income (Unaudited)
 Three Months Ended
September 30, 2024
 Three Months Ended
September 30, 2023
 Three Months Ended
September 30, 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$1,453,418  $21,854  5.98% $1,319,110  $18,672  5.62% $3,182  $1,953  $1,229 
Mortgage loans 273,374   2,713  3.97%  282,578   2,572  3.61%  141   (92)  233 
Consumer loans 293,488   4,102  5.56%  307,412   3,843  4.96%  259   (183)  442 
Taxable securities 605,631   3,063  2.01%  663,240   3,540  2.12%  (477)  (299)  (178)
Tax-exempt securities 38,537   272  2.81%  40,380   288  2.83%  (16)  (14)  (2)
Interest-earning deposits 35,520   441  4.94%  14,292   187  5.19%  254   263   (9)
Total interest-earning assets 2,699,968   32,445  4.78%  2,627,012   29,102  4.40%  3,343   1,628   1,715 
                  
Non interest-earning assets:                 
Cash and due from banks 25,086       26,272           
Other assets 47,571       31,496           
Allowance for credit losses (3) (21,233)      (20,210)          
Total assets$2,751,392      $2,664,570           
                  
Interest-bearing liabilities:                 
Interest-bearing checking$311,406  $1,445  1.85% $281,106  $963  1.36% $482  $111  $371 
Savings and money market 864,541   4,607  2.12%  890,109   3,945  1.76%  662   (117)  779 
Time deposits 554,605   6,056  4.34%  383,786   3,269  3.38%  2,787   1,701   1,086 
Brokered deposits 65,913   897  5.41%  189,628   2,543  5.32%  (1,646)  (1,688)  42 
FHLBNY overnight advances 541   7  5.06%  17,879   249  5.53%  (242)  (223)  (19)
FRB advances and other debt 75,305   962  5.08%  3,144   29  3.66%  933   918   15 
Total interest-bearing liabilities 1,872,311   13,974  2.97%  1,765,652   10,998  2.47%  2,976   702   2,274 
                  
Non interest-bearing liabilities:                 
Demand deposits 614,270       666,302           
Other liabilities 54,390       52,916           
Total liabilities 2,540,971       2,484,870           
Shareholders' equity 210,421       179,700           
Total liabilities and shareholders' equity$2,751,392      $2,664,570           
                  
Fully taxable equivalent net interest income   18,471       18,104    $367  $926  $(559)
Net interest rate spread (1)    1.81%     1.93%      
Net interest margin, fully taxable equivalent (2)    2.72%     2.73%      
Taxable equivalent adjustment   (83)      (87)        
Net interest income  $18,388      $18,017         
                  
(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)
 Nine Months Ended
September 30, 2024
 Nine Months Ended
September 30, 2023
 Nine Months Ended
September 30, 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$1,433,224  $63,501  5.92% $1,289,638  $53,047  5.50% $10,454  $6,201  $4,253 
Mortgage loans 274,834   7,879  3.82%  284,351   7,553  3.55%  326   (253)  579 
Consumer loans 298,421   12,114  5.42%  305,776   10,673  4.67%  1,441   (261)  1,702 
Taxable securities 619,657   9,877  2.13%  679,330   10,758  2.12%  (881)  (933)  52 
Tax-exempt securities 39,453   830  2.81%  40,562   887  2.92%  (57)  (24)  (33)
Interest-earning deposits 27,910   1,014  4.85%  10,342   400  5.17%  614   641   (27)
Total interest-earning assets 2,693,499   95,215  4.72%  2,609,999   83,318  4.27%  11,897   5,371   6,526 
                          
Non interest-earning assets:                         
Cash and due from banks 25,131        25,512           
Other assets 41,807        35,547           
Allowance for credit losses (3) (21,475)       (20,150)          
Total assets$2,738,962       $2,650,908           
                   
Interest-bearing liabilities:                                 
Interest-bearing checking$308,318  $4,170  1.81% $286,220  $1,959  0.92% $2,211  $164  $2,047 
Savings and money market 861,382   13,190  2.05%  899,871   8,645  1.28%  4,545   (389)  4,934 
Time deposits 521,997   16,603  4.25%  350,846   8,041  3.06%  8,562   4,764   3,798 
Brokered deposits 96,056   3,898  5.42%  153,774   5,932  5.16%  (2,034)  (2,322)  288 
FHLBNY overnight advances 15,359   646  5.53%  47,321   1,819  5.14%  (1,173)  (1,304)  131 
FRB advances and other debt 59,584   2,222  4.98%  3,212   86  3.58%  2,136   2,089   47 
Total interest-bearing liabilities 1,862,696   40,729  2.92%  1,741,244   26,482  2.03%  14,247   3,002   11,245 
                   
Non interest-bearing liabilities:                      
Demand deposits 622,953        680,310           
Other liabilities 52,725        51,385           
Total liabilities 2,538,374        2,472,939           
Shareholders' equity 200,588        177,969           
Total liabilities and shareholders' equity$2,738,962       $2,650,908           
                              
Fully taxable equivalent net interest income   54,486        56,836     $(2,350) $2,369  $(4,719)
Net interest rate spread (1)    1.80%     2.24%     
Net interest margin, fully taxable equivalent (2)
      2.70%       2.91%     
Taxable equivalent adjustment   (248)       (277)        
Net interest income  $54,238       $56,559         
 
(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 Nine Months Ended
  Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Sept. 30, Sept. 30,
(in thousands, except ratio data)  2024   2024   2024   2023   2023   2024   2023 
NET INTEREST MARGIN - FULLY TAXABLE EQUIVALENT              
Net interest income (GAAP) $18,388  $17,761  $18,089  $17,898  $18,017  $54,238  $56,559 
Fully taxable equivalent adjustment  83   81   84   87   87   248   277 
Fully taxable equivalent net interest income (non-GAAP) $18,471  $17,842  $18,173  $17,985  $18,104  $54,486  $56,836 
               
Average interest-earning assets (GAAP) $2,699,968  $2,699,402  $2,681,059  $2,654,638  $2,627,012  $2,693,499  $2,609,999 
               
Net interest margin - fully taxable equivalent (non-GAAP)  2.72%  2.66%  2.73%  2.69%  2.73%  2.70%  2.91%
               

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 Nine Months Ended
  Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Sept. 30, Sept. 30,
(in thousands, except ratio data)  2024   2024   2024   2023   2023   2024   2023 
EFFICIENCY RATIO              
Net interest income (GAAP) $18,388  $17,761  $18,089  $17,898  $18,017  $54,238  $56,559 
Fully taxable equivalent adjustment  83   81   84   87   87   248   277 
Fully taxable equivalent net interest income (non-GAAP) $18,471  $17,842  $18,173  $17,985  $18,104  $54,486  $56,836 
               
Non-interest income (GAAP) $5,919  $5,598  $5,657  $5,871  $7,808  $17,174  $18,678 
Less: net (gains) losses on security transactions           39          
Less: recognition of employee retention tax credit              (2,370)     (2,370)
Adjusted non-interest income (non-GAAP) $5,919  $5,598  $5,657  $5,910  $5,438  $17,174  $16,308 
               
Non-interest expense (GAAP) $16,510  $16,219  $16,698  $16,826  $15,668  $49,427  $47,417 
               
Efficiency ratio (unadjusted)  67.92%  69.43%  70.32%  70.79%  60.67%  69.21%  63.02%
Efficiency ratio (adjusted)  67.69%  69.19%  70.07%  70.42%  66.55%  68.97%  64.83%
               

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
  As of or for the Three Months Ended Nine Months Ended
  Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Sept. 30, Sept. 30,
(in thousands, except per share and ratio data)  2024   2024   2024   2023   2023   2024   2023 
TANGIBLE EQUITY AND TANGIBLE ASSETS              
(PERIOD END)              
Total shareholders' equity (GAAP) $220,654  $201,222  $197,128  $195,241  $170,064  $220,654  $170,064 
Less: intangible assets  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)
Tangible equity (non-GAAP) $198,830  $179,398  $175,304  $173,417  $148,240  $198,830  $148,240 
               
Total assets (GAAP) $2,774,215  $2,755,813  $2,784,890  $2,710,529  $2,707,834  $2,774,215  $2,707,834 
Less: intangible assets  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)
Tangible assets (non-GAAP) $2,752,391  $2,733,989  $2,763,066  $2,688,705  $2,686,010  $2,752,391  $2,686,010 
               
Total equity to total assets at end of period (GAAP)  7.95%  7.30%  7.08%  7.20%  6.28%  7.95%  6.28%
Book value per share (GAAP) $46.22  $42.17  $41.34  $41.07  $35.90  $46.22  $35.90 
               
Tangible equity to tangible assets at end of period (non-GAAP)  7.22%  6.56%  6.34%  6.45%  5.52%  7.22%  5.52%
Tangible book value per share (non-GAAP) $41.65  $37.59  $36.77  $36.48  $31.29  $41.65  $31.29 
               

 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 Nine Months Ended
  Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Sept. 30, Sept. 30,
(in thousands, except ratio data)  2024   2024   2024   2023   2023   2024   2023 
TANGIBLE EQUITY (AVERAGE)              
Total average shareholders' equity (GAAP) $210,421  $195,375  $195,860  $174,868  $179,700  $200,588  $177,969 
Less: average intangible assets  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)  (21,824)
Average tangible equity (non-GAAP) $188,597  $173,551  $174,036  $153,044  $157,876  $178,764  $156,145 
               
Return on average equity (GAAP)  10.81%  10.27%  14.48%  8.63%  16.89%  11.82%  15.93%
Return on average tangible equity (non-GAAP)  12.07%  11.56%  16.29%  9.86%  19.22%  13.27%  18.15%
               

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 Nine Months Ended
  Sept. 30, June 30, March 31, Dec. 31, Sept. 30, Sept. 30, Sept. 30,
(in thousands, except per share and ratio data)  2024   2024   2024   2023   2023   2024   2023 
NON-GAAP NET INCOME              
Reported net income (GAAP) $5,720  $4,987  $7,050  $3,802  $7,648  $17,757  $21,198 
Net (gains) losses on security transactions (net of tax)           29          
Recognition of employee retention tax credit (net of tax)              (1,873)     (1,873)
Net income (non-GAAP) $5,720  $4,987  $7,050  $3,831  $5,775  $17,757  $19,325 
               
Average basic and diluted shares outstanding  4,773   4,770   4,764   4,743   4,736   4,769   4,729 
               
Reported basic and diluted earnings per share (GAAP) $1.19  $1.05  $1.48  $0.80  $1.61  $3.72  $4.48 
Reported return on average assets (GAAP)  0.83%  0.73%  1.04%  0.56%  1.14%  0.87%  1.07%
Reported return on average equity (GAAP)  10.81%  10.27%  14.48%  8.63%  16.89%  11.82%  15.93%
               
Basic and diluted earnings per share (non-GAAP) $1.19  $1.05  $1.48  $0.81  $1.21  $3.72  $4.08 
Return on average assets (non-GAAP)  0.83%  0.73%  1.04%  0.57%  0.86%  0.87%  0.97%
Return on average equity (non-GAAP)  10.81%  10.27%  14.48%  8.69%  12.75%  11.82%  14.52%
               

Category: Financial

Source: Chemung Financial Corp

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


FAQ

What was Chemung Financial 's (CHMG) net income for Q3 2024?

Chemung Financial reported net income of $5.7 million, or $1.19 per share, for the third quarter of 2024.

How did CHMG's Q3 2024 results compare to the previous quarter and the same quarter last year?

CHMG's Q3 2024 net income of $5.7 million was higher than Q2 2024's $5.0 million, but lower than Q3 2023's $7.6 million.

What was the tangible equity to tangible assets ratio for CHMG in Q3 2024?

The tangible equity to tangible assets ratio improved by 66 basis points to 7.22% as of September 30, 2024.

Did CHMG open any new branches in Q3 2024?

Yes, CHMG opened a full-service branch and regional banking center in Williamsville, New York on October 11, 2024.

What was CHMG's net interest income for Q3 2024?

CHMG's net interest income for the third quarter of 2024 totaled $18.4 million, an increase of 3.4% from the previous quarter.

Chemung Financial Corp

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