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Chemung Financial Corporation Reports Second Quarter 2022 Net Income of $8.0 million, or $1.72 per Share

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Chemung Financial Corp
Chemung Financial Corp

ELMIRA, N.Y., July 21, 2022 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (the “Corporation”) (Nasdaq: CHMG), the parent company of Chemung Canal Trust Company (the “Bank”), today reported net income of $8.0 million, or $1.72 per share, for the second quarter of 2022, compared to $6.8 million, or $1.45 per share, for the second quarter of 2021.

“Chemung Financial Corporation had another record quarter with earnings of $8.0 million, or $1.72 per share,” stated Anders M. Tomson, President and CEO. “Our results for the second quarter were driven by a meaningful increase in net interest income, supported by strong organic loan growth pared with rising interest rates. The continued improvement in the credit quality of our loan portfolios also contributed to a significant reduction in our allowance for loan losses for the quarter," Tomson added.

Second Quarter Highlights1:

  • Second quarter earnings per share grew to $1.72 per share from the prior quarter ended March 31, 2022, of $1.46 per share, representing the highest earnings per share recorded in the Corporation's 188-year history.

  • Loans1, excluding PPP, grew $136.5 million, or 9.46%.

  • Year to date net interest margin increased to 2.92% for the six months ended June 30, 2022, an eleven basis points increase when compared to the same period in the prior year. Net interest income grew $2.5 million, or 7.7% in the six month period ending June 30, 2022, when compared to the same period in the prior year, primarily due to an increase in mortgage loan average balances and an increase in the average yield on commercial loans.

  • Net interest margin increased ten basis points in the second quarter of 2022 to 2.97% when compared to the prior quarter. Net interest income grew $1.0 million, or 5.8% in the second quarter of 2022 when compared to the prior quarter, primarily due to a 6.3% increase in interest income on loans, including fees when compared to first quarter, generated by increases in the average balances and average yields of the loan portfolio.

  • Dividends declared during the second quarter 2022 were $0.31 per share.

1 Balance sheet comparisons are calculated as of June 30, 2022 versus December 31, 2021.

2nd Quarter 2022 vs 2nd Quarter 2021

Net Interest Income:

Net interest income for the second quarter of 2022 totaled $17.6 million compared to $16.1 million for the same period in the prior year, an increase of $1.5 million, or 9.7%, due primarily to increases of $0.9 million in interest and dividend income on taxable securities, and $0.7 million in interest income on loans, including fees, and a decrease of $0.1 million in interest expense on deposits, offset by an increase of $0.1 million in interest expense on borrowed funds.

The increase in interest and dividend income on taxable securities was due primarily to an increase in average invested balances of $122.0 million, and an increase in the average yield due to an increase in average interest rates. The increase in interest income on loans, including fees was due primarily to an increase in average balances on mortgage loans and an increase in the commercial loan portfolio average yield due to an increase in average interest rates. The decrease in interest expense on deposits was due primarily to a decrease in the average balances on time deposits. The increase in interest expense on borrowed funds was due primarily to an increase in overnight borrowing in the current quarter, when compared to the same period in the prior year.

Fully taxable equivalent net interest margin was 2.97% for the second quarter 2022, compared to 2.76% for the same period in the prior year. Average interest-earning assets increased $42.8 million for the three months ended June 30, 2022 compared to the same period in the prior year. The average yield on interest-earning assets increased 22 basis points to 3.12%, and the average cost of interest-bearing liabilities increased one basis point to 0.24%, for the three months ended June 30, 2022, compared to the same period in the prior year.

Non-Interest Income:

Non-interest income for the second quarter of 2022 was $5.3 million compared to $6.5 million for the same period in the prior year, a decrease of $1.2 million, or 18.1%. The decrease in the current quarter was due primarily to decreases of $0.5 million in other non-interest income, $0.3 million in change in fair value of equity investments, $0.3 million in net gains on sales of loans held for sale, and $0.2 million in wealth management group fee income, offset by an increase of $0.2 million in service charges on deposit accounts.

The decrease in other non-interest income was primarily attributable to a $0.5 million one-time refund of real estate and sales tax in the same period of the prior year, and the timing of the receipt of Mastercard incentives when compared to the same period in the prior year. The decrease in fair value of equity investments in the current quarter was due to a decrease in the market value of the assets held. The decrease in net gains on sales of loans held for sale was primarily attributable to a decrease in residential mortgage loans sold into the secondary market as a result of the increase in market interest rates when compared to the same period in the prior year. The decrease in wealth management group income was primarily due to a decrease in the market value of assets. The increase in service charges on deposit accounts in the current quarter was primarily attributable to an increase in NSF and overdraft fees when compared to the same period in the prior year.

Non-Interest Expense:

Non-interest expense for the second quarter of 2022 was $14.3 million compared to $13.9 million for the same period in the prior year, an increase of $0.4 million, or 3.5%. The increase can be mostly attributed to increases of $0.5 million in pension and other employee benefits and $0.4 million in data processing expenses, offset by a decreases of $0.1 million in net occupancy expenses and $0.1 million marketing and advertising expenses.

Pension and other employee benefits increased primarily due to an increase in employee healthcare costs when compared to the same quarter in the prior year. Data processing expenses increased primarily due to expenses related to the Corporation's Tap-to-Pay program supporting contactless transactions, and the timing of invoices. Net occupancy expenses decreased primarily due to decreases in depreciation expense related to the sale of properties, when compared to the same period in the prior year. Marketing and advertising expenses decreased primarily due to the timing of initiatives.

Income Tax Expense:

Income tax expense for the second quarter of 2022 was $2.3 million compared to $2.1 million for the same period in the prior year, an increase of $0.2 million. The effective tax rate for the current quarter decreased to 22.6% compared to 23.4% for the same period in the prior year. The increase in income tax expense was primarily due to an increase in pretax income.

2nd Quarter 2022 vs 1st Quarter 2022

Net Interest Income:

Net interest income for the second quarter of 2022 totaled $17.6 million compared to $16.7 million for the prior quarter, an increase of $0.9 million, or 5.8%, due primarily to increases of $0.9 million in interest income on loans, including fees, and $0.2 million in interest and dividend income on taxable securities, offset by an increase of $0.1 million in interest expense on borrowed funds.

The increase in interest income on loans, including fees, can be primarily attributed to a $55.3 million increase in average invested loan balances and a 6 basis points increase in the average yield on loans due to an increase in interest rates, when compared to the prior quarter. The Corporation recorded $0.6 million of PPP fees in the second quarter of 2022, of which $0.6 million primarily represented accelerated recognition of fees related to SBA loan forgiveness of $14.9 million in loan balances. In the first quarter of 2022, $1.1 million of PPP fees were recorded, of which $1.0 million represented accelerated recognition of fees related to SBA loan forgiveness of $25.3 million in loan balances. The increase in interest and dividend income on taxable securities can be primarily attributed to a nine basis points increase in the average yield on taxable securities in the second quarter of 2022 as compared to the prior quarter. The increase in total interest expense can be primarily attributed to an increase in overnight FHLBNY borrowing.

Fully taxable equivalent net interest margin was 2.97% in the current quarter compared to 2.87% in the prior quarter. Average interest-earning assets increased $24.4 million in the current quarter compared to the prior quarter. The average yield on interest-earning assets increased twelve basis points to 3.12% and the average cost of interest-bearing liabilities increased three basis points to 0.24%, for the three months ended June 30, 2022, compared to the prior quarter.

Non-Interest Income:

Non-interest income for the second quarter of 2022 was $5.3 million compared to $5.7 million for the prior quarter, a decrease of $0.4 million, or 6.1%. The decrease was mostly attributed to decreases of $0.2 million in other non-interest income, $0.1 million in the change in fair value of equity investments, and $0.1 million in wealth management group fee income, offset by increases of $0.1 million in interchange revenue from debit card transactions, and $0.1 million in service charges on deposit accounts. The decrease in other non-interest income can be primarily attributed to a decrease of $0.1 million in swap fee income and the timing of the receipt of Mastercard incentives, when compared to the prior quarter.

Non-Interest Expense:

Non-interest expense for the second quarter of 2022 was $14.3 million compared to $14.7 million for the prior quarter, a decrease of $0.4 million, or 2.2%. The decrease can be mostly attributed to decreases of $0.6 million in other non-interest expense, and $0.2 million in salaries and wages, offset by increases of $0.3 million in data processing expenses, and $0.2 million in pension and other employee benefits.

The decrease in other non-interest expense can be primarily attributed to decreased spending across most expense categories when compared to the prior quarter, the recapture of $0.2 million of accrued expenditures related to the resolution of a telecommunication contract in the current quarter, and a $0.1 million reserve for additional restitution regarding previously disclosed consumer compliance matters established in the previous quarter. The decrease in salaries and wages can be primarily attributed to a decrease in the market value of the Corporation's deferred compensation plan in the second quarter of 2022. The increase in data processing expense can be primarily attributed to the timing of invoices, when compared to the first quarter. The increase in pension and other employee benefits can be primarily attributed to an increase in employee healthcare costs, when compared to the prior quarter.

Income Tax Expense:

Income tax expense for the second quarter of 2022 was $2.3 million compared to $2.0 million for the prior quarter, an increase of $0.3 million in income tax expense. The effective tax rate for the current quarter increased to 22.6% compared to 22.1% in the prior quarter.

Asset Quality

Non-performing loans totaled $7.4 million at June 30, 2022, or 0.46% of total loans, compared to $8.1 million, or 0.54% of total loans at December 31, 2021. Non-performing assets, which are comprised of non-performing loans and other real estate owned, were $7.7 million, or 0.31% of total assets, at June 30, 2022, compared to $8.2 million, or 0.34% of total assets, at December 31, 2021. The decrease in non-performing loans can mostly be attributed to payments received on non-performing loans across all loan portfolios. 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 loan losses based upon a number of factors including an analysis of historical loss factors, collateral evaluations, recent charge-off experience, credit quality of the loan portfolio, current economic conditions and loan growth. Management continues to evaluate the potential impact of the COVID-19 pandemic as it relates to the loan portfolio. As part of this analysis, management identified what it believes to be higher risk loans through a detailed analysis of industry codes. During 2020, management increased certain allowance qualitative factors based on its assessment of the impact of the current pandemic on local, national, and global economic conditions, as well as the perceived risks inherent in specific industries and credit characteristics.

The allowance for loan losses was $17.5 million at June 30, 2022 and $21.0 million at December 31, 2021, respectively. The allowance for loan losses was 237.12% of non-performing loans at June 30, 2022 compared to 259.17% at December 31, 2021. The ratio of the allowance for loan losses to total loans was 1.08% at June 30, 2022 compared to 1.38% at December 31, 2021. The ratio of the allowance for loan losses to total loans excluding PPP loans was 1.08% at June 30, 2022, compared to 1.43% at December 31, 2021. The Corporation continues to closely monitor the loan portfolio for effects related to the COVID-19 pandemic. Changes in governmental policies and economic pressures during the pandemic placed stress on certain industries while other industries initially anticipated to be highly impacted by the pandemic demonstrated resilience. Based upon management review of these factors the Corporation released $1.2 million of the pandemic related portion of the allowance during the first quarter of 2022. To date the Corporation has released $3.1 million and utilized $0.5 million of the pandemic related provision, and $1.2 million remains as part of the allowance as of June 30, 2022. As of June 30, 2022, no loan forbearances due to COVID-19 remain.

Balance Sheet Activity

Total assets were $2.450 billion at June 30, 2022 compared to $2.418 billion at December 31, 2021, an increase of $31.4 million, or 1.3%. The increase can be mostly attributed to increases of $99.3 million in loans, net of deferred origination fees and costs, $26.1 million in accrued interest receivable and other assets, $2.8 million in total cash and cash equivalents, and a decrease of $3.5 million in allowance for loan losses, offset by a decrease of $99.0 million in securities available for sale, at estimated fair value.

The increase in loans, net of deferred loan fees, can mostly be attributed to increases of $64.9 million in commercial loans, $17.5 million in residential mortgage loans, and $17.0 million in consumer loans. Paydowns due to SBA forgiveness of PPP loans decreased the total loan portfolio by $40.2 million as of June 30, 2022, when compared to December 31, 2021. The increase in accrued interest receivable and other assets was primarily due to increases of $16.8 million in the deferred tax asset and $8.4 million in the interest rate swap asset. The increase in cash and cash equivalents was primarily due to changes in deposits, securities, and loans. The decrease in securities available for sale can be mostly attributed to $53.4 million in paydowns and a decrease in the fair value of the portfolio of $66.2 million due to increases in interest rates, offset by purchases of $22.7 million.

The decrease in the allowance for loan losses can mostly be attributed to the $1.2 million release of COVID-19 related portion of the allowance in the first quarter of 2022, the $1.5 million release of a specific reserve related to the sale of a large commercial real estate credit, positive impacts of $0.8 million related to upgrades of two large commercial credits, and a $1.0 million decrease in the historical loss factor due to the roll-off of a commercial real estate owner occupied property previously charged off in the second quarter of 2020. These decreases in the allowance were offset by $1.4 million of additional provision related to increased loan growth.

Total liabilities were $2.275 billion at June 30, 2022 compared to $2.207 billion at December 31, 2021, an increase of $68.2 million, or 3.1%. The increase in total liabilities can primarily be attributed to increases of $27.4 million, or 1.3% in deposits, and $10.1 million in accrued interest payable and other liabilities, and $31.2 million in advances and other debt.

The increase in deposits was due primarily to increases of $16.3 million in public deposits, $47.5 million of one-way brokered deposits, and $11.6 million in consumer deposits, offset by a decrease of $48.0 million in commercial deposits. The increase in accrued interest payable and other liabilities was primarily attributed to an increase of $8.2 million in the interest rate swap liability. The increase in advances and other debt can be attributed to an increase in overnight FHLBNY borrowing.

Total shareholders’ equity was $174.7 million at June 30, 2022, compared to $211.5 million at December 31, 2021, a decrease of $36.8 million, or 17.4%, primarily due to a $48.8 million decrease in accumulated other income (loss), offset by an increase of $12.0 million in retained earnings. The decrease in accumulated other comprehensive income (loss) can mostly be attributed to a decrease in the fair market value of the securities portfolio due to the increase in interest rates. The increase in retained earnings was due primarily to net income of $14.9 million, offset by $2.9 million in dividends declared.

The total equity to total assets ratio was 7.13% at June 30, 2022, compared to 8.74% at December 31, 2021. The tangible equity to tangible assets ratio was 6.30% at June 30, 2022 compared to 7.91% at December 31, 2021. Book value per share decreased to $37.24 at June 30, 2022 from $45.09 at December 31, 2021. As of June 30, 2022, 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's liquidity position is strong. The Corporation uses a variety of resources to meet its liquidity 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 $100,000 or more, brokered deposits, FHLBNY advances, and other borrowings. As of June 30, 2022, the Corporation's cash and cash equivalents balance was $29.8 million. The Corporation also maintains an investment portfolio of securities available for sale, comprised primarily of 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, 2022, the Corporation's investment in securities available for sale was $693.0 million, $499.3 million of which was not pledged as collateral. Additionally, the Bank's unused borrowing capacity at the Federal Home Loan Bank of New York was $151.4 million, as of June 30, 2022. As of June 30, 2022, the Corporation entered into one-way brokered deposit arrangements with 4-week and 13-week terms totaling $47.5 million.

Other Items

The market value of total assets under management or administration in our Wealth Management Group was $1.992 billion at June 30, 2022, including $318.4 million of assets under management or administration for the Corporation, compared to $2.325 billion at December 31, 2021, including $344.2 million of assets under management or administration for the Corporation, a decrease of $332.6 million, or 14.31%, due to a general decline in market value.

As previously announced on January 8, 2021, the Corporation announced that the Board of Directors approved a new stock repurchase program. Under the new 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 and Exchange Commission. As of June 30, 2022, 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 2022. 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, 2022.

About Chemung Financial Corporation

Chemung Financial Corporation is a $2.4 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, COVID-19, 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 2021 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.

For further information contact:
Karl F. Krebs, EVP and CFO
kkrebs@chemungcanal.com
Phone: 607-737-3714

Chemung Financial Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Balance Sheets (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

March 31,

Dec. 31,

Sept. 30,

June 30,

(in thousands)

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

 

2021

 

ASSETS

 

 

 

 

 

 

Cash and due from financial institutions

 

$

24,371

 

$

21,757

 

$

17,365

 

$

28,859

 

$

27,439

 

Interest-earning deposits in other financial institutions

 

 

5,397

 

 

43,726

 

 

9,616

 

 

32,838

 

 

29,358

 

Total cash and cash equivalents

 

 

29,768

 

 

65,483

 

 

26,981

 

 

61,697

 

 

56,797

 

Equity investments

 

 

2,750

 

 

2,949

 

 

2,964

 

 

2,933

 

 

2,856

 

Securities available for sale

 

 

692,995

 

 

746,343

 

 

792,026

 

 

761,531

 

 

687,594

 

Securities held to maturity

 

 

2,943

 

 

3,576

 

 

3,790

 

 

3,183

 

 

2,981

 

FHLB and FRB stocks, at cost

 

 

5,897

 

 

3,576

 

 

4,218

 

 

3,562

 

 

3,562

 

Total investment securities

 

 

701,835

 

 

753,495

 

 

800,034

 

 

768,276

 

 

694,137

 

Commercial

 

 

1,124,701

 

 

1,102,304

 

 

1,059,848

 

 

1,060,230

 

 

1,105,520

 

Mortgage

 

 

276,847

 

 

264,816

 

 

259,334

 

 

253,991

 

 

246,667

 

Consumer

 

 

216,014

 

 

199,405

 

 

199,067

 

 

202,447

 

 

205,812

 

Loans, net of deferred loan fees

 

 

1,617,562

 

 

1,566,525

 

 

1,518,249

 

 

1,516,668

 

 

1,557,999

 

Allowance for loan losses

 

 

(17,485

)

 

(19,928

)

 

(21,025

)

 

(20,940

)

 

(20,676

)

Loans, net

 

 

1,600,077

 

 

1,546,597

 

 

1,497,224

 

 

1,495,728

 

 

1,537,323

 

Loans held for sale

 

 

 

 

345

 

 

396

 

 

224

 

 

 

Premises and equipment, net

 

 

16,812

 

 

17,260

 

 

17,969

 

 

18,370

 

 

19,094

 

Operating lease right-of-use assets

 

 

6,841

 

 

7,035

 

 

7,234

 

 

7,084

 

 

7,274

 

Goodwill

 

 

21,824

 

 

21,824

 

 

21,824

 

 

21,824

 

 

21,824

 

Other intangible assets, net

 

 

 

 

4

 

 

15

 

 

26

 

 

68

 

Accrued interest receivable and other assets

 

 

70,004

 

 

59,903

 

 

43,834

 

 

41,494

 

 

41,339

 

Total assets

 

$

2,449,911

 

$

2,474,895

 

$

2,418,475

 

$

2,417,656

 

$

2,380,712

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Non-interest-bearing demand deposits

 

$

704,996

 

$

726,699

 

$

739,607

 

$

725,181

 

$

674,205

 

Interest-bearing demand deposits

 

 

267,554

 

 

284,689

 

 

284,721

 

 

282,036

 

 

276,250

 

Money market accounts

 

 

641,008

 

 

699,506

 

 

654,553

 

 

661,049

 

 

669,953

 

Savings deposits

 

 

285,593

 

 

283,369

 

 

280,195

 

 

275,137

 

 

276,496

 

Time deposits

 

 

283,640

 

 

255,329

 

 

196,357

 

 

230,419

 

 

241,283

 

Total deposits

 

 

2,182,791

 

 

2,249,592

 

 

2,155,433

 

 

2,173,822

 

 

2,138,187

 

Advances and other debt

 

 

49,331

 

 

3,527

 

 

18,164

 

 

3,659

 

 

3,724

 

Operating lease liabilities

 

 

6,998

 

 

7,186

 

 

7,378

 

 

7,227

 

 

7,409

 

Accrued interest payable and other liabilities

 

 

36,101

 

 

29,080

 

 

26,045

 

 

26,809

 

 

27,415

 

Total liabilities

 

 

2,275,221

 

 

2,289,385

 

 

2,207,020

 

 

2,211,517

 

 

2,176,735

 

Shareholders' equity

 

 

 

 

 

 

Common stock

 

 

53

 

 

53

 

 

53

 

 

53

 

 

53

 

Additional-paid-in capital

 

 

47,196

 

 

46,880

 

 

46,901

 

 

47,203

 

 

47,081

 

Retained earnings

 

 

200,870

 

 

194,295

 

 

188,877

 

 

183,873

 

 

178,673

 

Treasury stock, at cost

 

 

(18,084

)

 

(18,113

)

 

(17,846

)

 

(17,924

)

 

(17,972

)

Accumulated other comprehensive income (loss)

 

 

(55,345

)

 

(37,605

)

 

(6,530

)

 

(7,066

)

 

(3,858

)

Total shareholders' equity

 

 

174,690

 

 

185,510

 

 

211,455

 

 

206,139

 

 

203,977

 

Total liabilities and shareholders' equity

 

$

2,449,911

 

$

2,474,895

 

$

2,418,475

 

$

2,417,656

 

$

2,380,712

 

Period-end shares outstanding

 

 

4,691

 

 

4,689

 

 

4,689

 

 

4,679

 

 

4,677

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Chemung Financial Corporation
Consolidated Statements of Income (Unaudited)

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

Percent

 

Six Months Ended
June 30,

 

Percent

(in thousands, except per share data)

 

 

2022

 

 

 

2021

 

 

Change

 

 

2022

 

 

 

2021

 

 

Change

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

15,390

 

 

$

14,692

 

 

4.8

 

 

$

29,871

 

 

$

29,309

 

 

1.9

 

Taxable securities

 

 

2,863

 

 

 

1,951

 

 

46.7

 

 

 

5,551

 

 

 

3,753

 

 

47.9

 

Tax exempt securities

 

 

268

 

 

 

266

 

 

0.8

 

 

 

538

 

 

 

527

 

 

2.1

 

Interest-earning deposits

 

 

17

 

 

 

36

 

 

(52.8

)

 

 

36

 

 

 

96

 

 

(62.5

)

Total interest and dividend income

 

 

18,538

 

 

 

16,945

 

 

9.4

 

 

 

35,996

 

 

 

33,685

 

 

6.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

769

 

 

 

832

 

 

(7.6

)

 

 

1,517

 

 

 

1,753

 

 

(13.5

)

Borrowed funds

 

 

128

 

 

 

34

 

 

276.5

 

 

 

161

 

 

 

67

 

 

140.3

 

Total interest expense

 

 

897

 

 

 

866

 

 

3.6

 

 

 

1,678

 

 

 

1,820

 

 

(7.8

)


Net interest income

 

 


17,641

 

 

 


16,079

 

 


9.7

 

 

 


34,318

 

 

 


31,865

 

 


7.7

 

Provision for loan losses

 

 

(1,744

)

 

 

(150

)

 

1,062.7

 

 

 

(2,889

)

 

 

(409

)

 

606.4

 

Net interest income after provision for loan losses

 

 

19,385

 

 

 

16,229

 

 

19.4

 

 

 

37,207

 

 

 

32,274

 

 

15.3

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth management group fee income

 

 

2,628

 

 

 

2,803

 

 

(6.2

)

 

 

5,385

 

 

 

5,481

 

 

(1.8

)

Service charges on deposit accounts

 

 

936

 

 

 

732

 

 

27.9

 

 

 

1,800

 

 

 

1,449

 

 

24.2

 

Interchange revenue from debit card transactions

 

 

1,206

 

 

 

1,262

 

 

(4.4

)

 

 

2,336

 

 

 

2,385

 

 

(2.1

)

Change in fair value of equity investments

 

 

(242

)

 

 

102

 

 

(337.3

)

 

 

(355

)

 

 

188

 

 

N/M

 

Net gains on sales of loans held for sale

 

 

25

 

 

 

342

 

 

(92.7

)

 

 

99

 

 

 

642

 

 

(84.6

)

Net gains (losses) on sales of other real estate owned

 

 

46

 

 

 

 

 

N/M

 

 

 

46

 

 

 

(18

)

 

(355.6

)

Income from bank owned life insurance

 

 

11

 

 

 

12

 

 

(8.3

)

 

 

22

 

 

 

27

 

 

(18.5

)

Other

 

 

709

 

 

 

1,239

 

 

(42.8

)

 

 

1,649

 

 

 

1,959

 

 

(15.8

)

Total non-interest income

 

 

5,319

 

 

 

6,492

 

 

(18.1

)

 

 

10,982

 

 

 

12,113

 

 

(9.3

)

Non-interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and wages

 

 

6,056

 

 

 

6,037

 

 

0.3

 

 

 

12,279

 

 

 

11,799

 

 

4.1

 

Pension and other employee benefits

 

 

1,937

 

 

 

1,480

 

 

30.9

 

 

 

3,655

 

 

 

2,939

 

 

24.4

 

Other components of net periodic pension and postretirement benefits

 

 

(403

)

 

 

(391

)

 

3.1

 

 

 

(811

)

 

 

(782

)

 

3.7

 

Net occupancy

 

 

1,369

 

 

 

1,491

 

 

(8.2

)

 

 

2,796

 

 

 

3,014

 

 

(7.2

)

Furniture and equipment

 

 

410

 

 

 

410

 

 

 

 

 

847

 

 

 

776

 

 

9.1

 

Data processing

 

 

2,468

 

 

 

2,048

 

 

20.5

 

 

 

4,655

 

 

 

4,051

 

 

14.9

 

Professional services

 

 

664

 

 

 

535

 

 

24.1

 

 

 

1,185

 

 

 

989

 

 

19.8

 

Amortization of intangible assets

 

 

4

 

 

 

89

 

 

(95.5

)

 

 

15

 

 

 

190

 

 

(92.1

)

Marketing and advertising

 

 

184

 

 

 

284

 

 

(35.2

)

 

 

460

 

 

 

410

 

 

12.2

 

Other real estate owned expense

 

 

8

 

 

 

5

 

 

60.0

 

 

 

(29

)

 

 

17

 

 

(270.6

)

FDIC insurance

 

 

284

 

 

 

329

 

 

(13.7

)

 

 

598

 

 

 

719

 

 

(16.8

)

Loan expense

 

 

176

 

 

 

290

 

 

(39.3

)

 

 

391

 

 

 

524

 

 

(25.4

)

Other

 

 

1,185

 

 

 

1,244

 

 

(4.7

)

 

 

2,969

 

 

 

2,558

 

 

16.1

 

Total non-interest expense

 

 

14,342

 

 

 

13,851

 

 

3.5

 

 

 

29,010

 

 

 

27,204

 

 

6.6

 

Income before income tax expense

 

 

10,362

 

 

 

8,870

 

 

16.8

 

 

 

19,179

 

 

 

17,183

 

 

11.6

 

Income tax expense

 

 

2,338

 

 

 

2,075

 

 

12.7

 

 

 

4,288

 

 

 

3,858

 

 

11.1

 

Net income

 

$

8,024

 

 

$

6,795

 

 

18.1

 

 

$

14,891

 

 

$

13,325

 

 

11.8

 

Basic and diluted earnings per share

 

$

1.72

 

 

$

1.45

 

 

 

 

$

3.18

 

 

$

2.84

 

 

 

Cash dividends declared per share

 

 

0.31

 

 

 

0.31

 

 

 

 

 

0.62

 

 

 

0.57

 

 

 

Average basic and diluted shares outstanding

 

 

4,690

 

 

 

4,680

 

 

 

 

 

4,690

 

 

 

4,686

 

 

 

 

 

 

 

 

 

 

 

 

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)
(in thousands, except per share data)

 

June 30,
2022

Mar. 31,
2022

Dec. 31,
2021

Sept. 30,
2021

June 30,
2021

June 30,
2022

June 30,
2021

RESULTS OF OPERATIONS
Interest income

 


$


       18,538

 


$


       17,458

 


$


       17,690

 


$


       17,633

 


$


       16,945

 


$


     35,996

 


$


     33,685

 

Interest expense

 

 

897

 

 

781

 

 

798

 

 

801

 

 

866

 

 

1,678

 

 

1,820

 

Net interest income

 

 

17,641

 

 

16,677

 

 

16,892

 

 

16,832

 

 

16,079

 

 

34,318

 

 

31,865

 

Provision (credit) for loan losses

 

 

(1,744

)

 

(1,145

)

 

70

 

 

356

 

 

(150

)

 

(2,889

)

 

(409

)

Net interest income after provision for loan losses

 

 

19,385

 

 

17,822

 

 

16,822

 

 

16,476

 

 

16,229

 

 

37,207

 

 

32,274

 

Non-interest income

 

 

5,319

 

 

5,663

 

 

5,787

 

 

5,970

 

 

6,492

 

 

10,982

 

 

12,113

 

Non-interest expense

 

 

14,342

 

 

14,668

 

 

14,378

 

 

14,100

 

 

13,851

 

 

29,010

 

 

27,204

 

Income before income tax expense

 

 

10,362

 

 

8,817

 

 

8,231

 

 

8,346

 

 

8,870

 

 

19,179

 

 

17,183

 

Income tax expense

 

 

2,338

 

 

1,950

 

 

1,777

 

 

1,700

 

 

2,075

 

 

4,288

 

 

3,858

 

Net income

$

8,024

 

$

6,867

 

$

6,454

 

$

6,646

 

$

6,795

 

$

14,891

 

$

13,325

 


Basic and diluted earnings per share

$

1.72

 

$

1.46

 

$

1.38

 

$

1.42

 

$

1.45

 

$

3.18

 

$

2.84

 

Average basic and diluted shares outstanding

 

4,690

 

 

4,689

 

 

4,682

 

 

4,678

 

 

4,680

 

 

4,690

 

 

4,686

 

PERFORMANCE RATIOS

 

 

 

 

 

 

 

Return on average assets

 

1.32

%

 

1.14

%

 

1.04

%

 

1.09

%

 

1.11

%

 

1.23

%

 

1.12

%

Return on average equity

 

18.06

%

 

13.68

%

 

12.30

%

 

12.68

%

 

13.58

%

 

15.73

%

 

13.41

%

Return on average tangible equity (a)

 

20.58

%

 

15.32

%

 

13.74

%

 

14.16

%

 

15.25

%

 

17.77

%

 

15.07

%

Efficiency ratio (unadjusted) (f)

 

62.47

%

 

65.66

%

 

63.40

%

 

61.84

%

 

61.37

%

 

64.04

%

 

61.86

%

Efficiency ratio (adjusted) (a) (b)

 

62.17

%

 

65.32

%

 

63.11

%

 

61.40

%

 

60.72

%

 

63.72

%

 

61.17

%

Non-interest expense to average assets

 

2.35

%

 

2.43

%

 

2.32

%

 

2.30

%

 

2.27

%

 

2.39

%

 

2.28

%

Loans to deposits

 

74.11

%

 

69.64

%

 

70.44

%

 

69.77

%

 

72.87

%

 

74.11

%

 

72.87

%

YIELDS / RATES - Fully Taxable Equivalent

 

 

 

 

 

 

 

Yield on loans

 

3.90

%

 

3.84

%

 

3.90

%

 

3.84

%

 

3.72

%

 

3.87

%

 

3.77

%

Yield on investments

 

1.60

%

 

1.47

%

 

1.35

%

 

1.49

%

 

1.21

%

 

1.53

%

 

1.24

%

Yield on interest-earning assets

 

3.12

%

 

3.00

%

 

2.99

%

 

3.02

%

 

2.90

%

 

3.06

%

 

2.97

%

Cost of interest-bearing deposits

 

0.21

%

 

0.20

%

 

0.21

%

 

0.21

%

 

0.22

%

 

0.21

%

 

0.24

%

Cost of borrowings

 

1.70

%

 

2.65

%

 

2.16

%

 

3.56

%

 

3.64

%

 

1.83

%

 

3.58

%

Cost of interest-bearing liabilities

 

0.24

%

 

0.21

%

 

0.22

%

 

0.22

%

 

0.23

%

 

0.23

%

 

0.25

%

Interest rate spread

 

2.88

%

 

2.79

%

 

2.77

%

 

2.80

%

 

2.67

%

 

2.83

%

 

2.72

%

Net interest margin, fully taxable equivalent

 

2.97

%

 

2.87

%

 

2.85

%

 

2.88

%

 

2.76

%

 

2.92

%

 

2.81

%

CAPITAL

 

 

 

 

 

 

 

Total equity to total assets at end of period

 

7.13

%

 

7.50

%

 

8.74

%

 

8.53

%

 

8.57

%

 

7.13

%

 

8.57

%

Tangible equity to tangible assets at end of period (a)

 

6.30

%

 

6.67

%

 

7.91

%

 

7.69

%

 

7.72

%

 

6.30

%

 

7.72

%

Book value per share

$

37.24

 

$

39.56

 

$

45.09

 

$

44.00

 

$

43.57

 

$

37.24

 

$

43.57

 

Tangible book value per share (a)

 

32.59

 

 

34.91

 

 

40.44

 

 

39.34

 

 

38.90

 

 

32.59

 

 

38.90

 

Period-end market value per share

 

47.00

 

 

46.69

 

 

46.45

 

 

45.30

 

 

44.31

 

 

47.00

 

 

44.31

 

Dividends declared per share

 

0.31

 

 

0.31

 

 

0.31

 

 

0.31

 

 

0.31

 

 

0.62

 

 

0.57

 

AVERAGE BALANCES
Loans and loans held for sale (c)


$


1,587,777

 


$


1,532,445

 


$


1,520,478

 


$


1,519,264

 


$


1,585,902

 


$


1,560,264

 


$


1,571,714

 

Interest earning assets

 

2,395,704

 

 

2,371,275

 

 

2,364,578

 

 

2,327,817

 

 

2,352,908

 

 

2,383,557

 

 

2,302,402

 

Total assets

 

2,446,763

 

 

2,451,944

 

 

2,454,294

 

 

2,427,107

 

 

2,447,587

 

 

2,449,339

 

 

2,402,823

 

Deposits

 

2,203,231

 

 

2,211,442

 

 

2,205,632

 

 

2,181,517

 

 

2,210,413

 

 

2,207,314

 

 

2,164,445

 

Total equity

 

178,207

 

 

203,613

 

 

208,147

 

 

208,023

 

 

200,627

 

 

190,841

 

 

200,332

 

Tangible equity (a)

 

156,382

 

 

181,778

 

 

186,302

 

 

186,155

 

 

178,681

 

 

169,011

 

 

178,337

 

ASSET QUALITY
Net charge-offs (recoveries)


$


        699

 


$


        (48


)


$


        (15


)


$


        92

 


$


        83

 


$


        651

 


$


        (161


)

Non-performing loans (d)

 

7,374

 

 

7,703

 

 

8,114

 

 

8,373

 

 

8,583

 

 

7,374

 

 

8,583

 

Non-performing assets (e)

 

7,665

 

 

7,956

 

 

8,226

 

 

8,544

 

 

8,707

 

 

7,665

 

 

8,707

 

Allowance for loan losses

 

17,485

 

 

19,928

 

 

21,025

 

 

20,940

 

 

20,676

 

 

17,485

 

 

20,676

 

Annualized net charge-offs (recoveries) to average loans

 

0.18

%

 

(0.01

%)

 

(0.01

%)

 

0.02

%

 

0.02

%

 

0.08

%

 

(0.02

%)

Non-performing loans to total loans

 

0.46

%

 

0.49

%

 

0.54

%

 

0.56

%

 

0.55

%

 

0.46

%

 

0.55

%

Non-performing assets to total assets

 

0.31

%

 

0.32

%

 

0.34

%

 

0.35

%

 

0.37

%

 

0.31

%