CHMG Chemung Financial Corporation

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 outstanding	4,774				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 CFOdmckim@chemungcanal.com Phone: 607-737-3714