ELMIRA, N.Y., July 18, 2024 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (the "Corporation") (NASDAQ:CHMG), the parent company of Chemung Canal Trust Company (the "Bank"), today reported net income of $5.0 million, or $1.05 per share, for the second quarter of 2024, compared to $7.1 million, or $1.48 per share, for the first quarter of 2024, and $6.3 million, or $1.33 per share, for the second quarter of 2023. "Commercial credit pipelines remain robust, especially in our Capital District and Western New York markets," said Anders M. Tomson, President and CEO of the Corporation. "Funding costs continue to remain challenging, impacting net interest income expansion commensurate with our loan growth," Tomson added. "We continue to remain focused on expense management, especially with the rationalization of our branch footprint. We recently announced that the Bank will be opening its second office in Erie County as well as consolidating its Ithaca Station office with the existing Elmira Road office," said Tomson. Second Quarter Highlights: The Corporation's efficiency ratio improved by 88 basis points to 69.19% for the second quarter of 2024, compared to the prior quarter, and 123 basis points from the fourth quarter of 2023. 1 Tangible equity to tangible assets improved by 22 basis points to 6.56% as of June 30, 2024, compared to prior quarter-end, and 11 basis points compared to December 31, 2023. 1 The Corporation announced the establishment of Canal Bank, a division of Chemung Canal Trust Company, and a new regional banking center in Williamsville, New York. Dividends declared during the second quarter 2024 were $0.31 per share. 1 See the GAAP to Non-GAAP reconciliations. 2nd Quarter 2024 vs 1st Quarter 2024 Net Interest Income: Net interest income for the second quarter of 2024 totaled $17.8 million compared to $18.1 million for the prior quarter, a decrease of $0.3 million, or 1.7%, driven primarily by an increase of $0.6 million in interest expense on deposits and a decrease of $0.3 million in interest income on taxable securities, offset by increases of $0.3 million in interest income on loans, including fees and $0.2 million in interest income on interest-earning deposits, and a decrease of $0.1 million in interest expense on borrowed funds. Interest expense on deposits increased primarily due to growth in the average balances of customer time deposits and an increase of 11 basis points in the average interest rate paid on total interest-bearing deposits, compared to the prior quarter. Average balances of total interest-bearing deposits increased $14.0 million, which was comprised of an increase of $34.2 million in customer interest-bearing deposits and a decrease of $20.2 million in brokered deposits. Average balances of customer time deposits increased $47.1 million and the average cost of customer time deposits increased 20 basis points compared to the prior quarter, while the average cost of brokered deposits decreased two basis points. Customer time deposits comprised 21.9% of average total deposits for the three months ended June 30, 2024, compared to 20.1% for the three months ended March 31, 2024. 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 decrease in interest income on taxable securities was primarily due to lower average balances of mortgage-backed and SBA pooled loan securities and additional amortization expense on SBA pooled loan securities, both due to paydown activity. Interest income on loans, including fees, increased primarily due to a $32.1 million increase in average commercial loan balances, compared to the prior quarter. Average balances of consumer and residential mortgage loans decreased by $7.3 million and $4.2 million respectively, while average yields of consumer and residential mortgages increased 11 and two basis points respectively, compared to the prior quarter. Demand for commercial originations remained strong, while demand for residential mortgages remained weaker due to market conditions. The Corporation continued to elect to sell a larger portion of its residential mortgage originations into the secondary market. The increase in interest income on interest-earning deposits was due to an increase of $11.5 million in average balances compared to the prior quarter. The decrease in interest expense on borrowed funds was due primarily to a decrease in the average cost of total borrowings of 11 basis points, and a decrease in average balances of borrowed funds of $3.7 million in the current quarter, compared to the prior quarter. The average cost of total borrowings for the current quarter was 5.04%, compared to 5.15% in the prior quarter, primarily due to the Corporation's utilization of the lower cost Bank Term Funding Program (BTFP) for the entirety of the second quarter, partially replacing higher cost FHLBNY borrowings. Fully taxable equivalent net interest margin was 2.66% in the current quarter, compared to 2.73% in the prior quarter. Contraction in net interest margin in the current quarter was partially attributable to $0.3 million in interest income recognized on the payoff of a nonaccrual commercial loan in the prior quarter, additional amortization expense on SBA pooled loan securities in the current quarter, and an increase of nine basis points in the average cost of interest-bearing liabilities in the current quarter, to 2.94%. Average balances of interest-earning assets increased $18.3 million in the current quarter, compared to the prior quarter, while the average yield on interest-earning assets decreased one basis point, compared to the prior quarter, to 4.69%. Provision for Credit Losses: Provision for credit losses increased $2.9 million in the current quarter compared to the prior quarter. Provisioning in the current quarter was primarily attributable to loan growth in the commercial portfolio, declining prepayment assumptions used in the Bank's CECL model, and a $0.2 million specific allocation on a commercial and industrial loan. Also contributing to the increase in the current quarter was the annual review and update of the loss drivers used in the Bank's CECL model during the prior quarter, which resulted in a reduction in the allowance for credit losses and a provision release of $2.0 million in the prior quarter. Non-Interest Income: Non-interest income for the second quarter of 2024 was $5.6 million, compared to $5.7 million for the prior quarter, a decrease of $0.1 million, or 1.8%. The decrease was driven primarily by decreases of $0.2 million in other non-interest income and $0.1 million in the change in fair value of equity investments, offset by an increase of $0.2 million in wealth management group fee income. The decrease in other non-interest income was primarily attributable to the receipt of vendor incentives in the prior quarter. The decrease in the change in fair value of equity investments was primarily attributable to a smaller increase in the market value of assets held for the Corporation's deferred compensation plan during the current quarter, compared to the prior quarter. The increase in wealth management group fee income was primarily due an increase in tax preparation service fee income in the current quarter. Non-Interest Expense: Non-interest expense for the second quarter of 2024 was $16.2 million, compared to $16.7 million for the prior quarter, a decrease of $0.5 million, or 3.0%. The decrease was driven primarily by decreases of $0.3 million in data processing and $0.2 million in salaries and wages. The decrease in data processing was primarily due to a decrease in third party core processor expenses in the current quarter, compared to the prior quarter. The decrease in salaries and wages was primarily attributable to a smaller increase in the market value of assets held for the Corporation's deferred compensation plan and the recognition of expenses in the prior quarter related to the realignment of certain back office functions. Income Tax Expense: Income tax expense for the second quarter of 2024 was $1.3 million, compared to $2.0 million for the prior quarter, a decrease of $0.7 million. The effective tax rate for the current quarter decreased to 20.3% from 22.4% in the prior quarter. The decrease in income tax expense was primarily attributable to a decrease in pretax income. 2nd Quarter 2024 vs 2nd Quarter 2023 Net Interest Income: Net interest income for the second quarter of 2024 totaled $17.8 million compared to $18.6 million for the same period in the prior year, a decrease of $0.8 million, or 4.3%, driven primarily by increases of $4.2 million in interest expense on deposits and $0.2 million in interest expense on borrowed funds, offset by an increase of $3.7 million in interest income on loans, including fees. Interest expense on deposits increased primarily due to a 85 basis points increase in the average interest rate paid on interest-bearing deposits, which included brokered deposits, and an increase of $152.9 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 continued focus on CD campaigns throughout the second half of 2023 and first half of 2024, as well as a general shift in the deposit mix towards higher cost accounts. The average balances of brokered deposits decreased $55.0 million, while the average interest rate paid on brokered deposits increased 23 basis points, compared to the same period in the prior year. Average balances of brokered deposits decreased primarily due to the utilization of the BTFP and FHLBNY term advances in the current quarter, which were not utilized in the same period in the prior year. The increase in interest expense on borrowed funds was primarily due to a $15.5 million increase in the average balances of borrowed funds, partially offset by a decrease of nine basis points in the average interest rate paid on borrowed funds. Changes in the composition of borrowed funds reflects the Corporation's shift to the lower cost BTFP, as well as FHLBNY term advances, partially replacing FHLBNY overnight advances in the current quarter. The average balances of FHLBNY overnight advances decreased $43.1 million, while the average interest rate paid on FHLBNY overnight advances increased 29 basis points, compared to the same period in the prior year. Interest income on loans, including fees, increased primarily due to a $151.0 million increase in average commercial loan balances and an increase of 33 basis points in the average yield on commercial loans, compared to the same period in the prior year. Commercial loan growth was primarily concentrated in the Albany region of New York, with additional growth in Western New York. Average consumer loan balances decreased $9.9 million, primarily due to lower indirect auto loan origination activity in the first half of 2024, compared to the prior year, while the average yield on consumer loans increased 78 basis points, primarily due to runoff of older vintage indirect auto loans and interest rate increases on variable rate home equity loans. Average balances of residential mortgage loans decreased $11.4 million compared to the same period in the prior year, due to lower origination activity and an increase in sales of new originations into the secondary market, while the average yield on residential mortgage loans increased 23 basis points compared to the same period in the prior year. Fully taxable equivalent net interest margin was 2.66% for the second quarter 2024, compared to 2.87% for the same period in the prior year. The Corporation exhibited a greater level of liability sensitivity in the second half of 2023 and first half of 2024, compared to the greater asset sensitivity experienced at the beginning of the current rising interest rate environment. The average cost of interest-bearing liabilities increased 83 basis points to 2.94%, for the second quarter of 2024, and average balances of interest-bearing liabilities increased $113.3 million, while the average yield on interest-earning assets increased 40 basis points to 4.69% and average balances of interest-earning assets increased $89.5 million. Growth in average balances of interest-bearing liabilities exceeded growth in average balances of interest-earning assets by $23.8 million between the second quarters of 2023 and 2024 due to a shift in the overall deposit mix to higher cost account types, particularly to time deposits. Provision for Credit Losses: Provision for credit losses increased $0.6 million in the second quarter of 2024, compared to the same period in the prior year. The increase was primarily attributable to more favorable changes to FOMC forecasts between the first and second quarters of 2023, compared to the changes between the first and second quarters of 2024, a decline in modeled prepayment speeds in the current period, and a $0.2 million specific allocation on a commercial and industrial loan in the current period. Net charge offs increased $0.2 million in the current period, compared to the same period in the prior year. Non-Interest Income: Non-interest income for the second quarter of 2024 was $5.6 million compared to $5.4 million for the same period in the prior year, an increase of $0.2 million, or 3.7%. The increase was primarily driven by increases of $0.3 million in wealth management group fee income and $0.1 million in the change in fair value of equity investments, partially offset by a decrease of $0.2 million in other non-interest income. The increase in wealth management group fee income was primarily attributable to an increase of 9.8% in assets under management, compared to the same period in the prior year. The increase in the change in fair value of equity investments was primarily due to a decline in the market value of a particular asset held by the Corporation during the same period in the prior year. The decrease in other non-interest income was primarily due to a decrease in swap fee income during the current period, compared to the same period in the prior year, and a decrease in other small items of non-interest income. Non-Interest Expense: Non-interest expense for the second quarter of 2024 was $16.2 million compared to $15.9 million for the same period in the prior year, an increase of $0.3 million, or 1.9%. The increase was primarily driven by increases of $0.3 million in pension and other employee benefits, $0.2 million in marketing and advertising, $0.2 million in other non-interest expense, and $0.1 million in salaries and wages, partially offset by decreases of $0.2 million in data processing and $0.1 million in loan expenses. The increase in pension and other employee benefits for the current quarter was primarily attributable to an increase in employee healthcare expenses, compared to the same period in the prior year. Marketing and advertising increased during the current quarter compared to the same period in the prior year primarily due to a deposit account promotion relating to the Bank's 190th anniversary, increased advertising activity in the current year period, and consulting engagements. Other non-interest expense increased primarily due to an increase in expenses related to community relations and other miscellaneous expense. Salaries and wages increased primarily due to base salary increases and an increase in the market value of assets held for the Corporation's deferred compensation plan. The decrease in data processing for the current period compared to the same period in the prior year was primarily due to a decrease in core processing expenses. The decrease in loan expenses was partially attributable to lower collection-related fees and overall lower origination activity. Income Tax Expense: Income tax expense for the second quarter of 2024 was $1.3 million compared to $1.6 million for the second quarter of 2023, a decrease of $0.3 million. The effective tax rate for the current quarter was 20.3%, compared to 20.4% for the same period in the prior year. The decrease in income tax expense was primarily attributable to a decrease in pretax income. Asset Quality Non-performing loans totaled $8.2 million as of June 30, 2024, or 0.41% of total loans, compared to $10.4 million, or 0.53% of total loans as of December 31, 2023. The decrease in non-performing loans was primarily attributable to the payoff of a nonaccrual commercial real estate loan totaling $1.9 million, as well as $0.6 million in paydown activity on other nonaccrual commercial loans, $1.2 million in paydown activity on nonaccrual consumer and residential mortgage loans, and $0.5 million in net consumer loan charge offs, partially offset by $2.4 million in newly designated nonaccrual loans. Non-performing assets, which are comprised of non-performing loans, other real estate owned, and repossessed vehicles, were $8.9 million, or 0.32% of total assets, as of June 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 June 30, 2024. The decrease in non-performing assets can be attributed to the decrease in non-performing loans. Total loan delinquencies as of June 30, 2024 declined compared to December 31, 2023, primarily attributable to declines in commercial and consumer loan delinquency rates during the period, partially offset by an increase in residential mortgage delinquency rates. Management continues to monitor the impact that elevated interest rates may have on its borrowers. Annualized net charge-offs to total average loans for the second quarter of 2024 were 0.06%, compared to 0.04% for the first quarter of 2024, and 0.05% for the year ended December 31, 2023. Annualized consumer net charge-offs for the six months ended June 30, 2024 were 0.38% of average consumer loan balances and 0.46% of average consumer loan balances for the second quarter of 2024, primarily concentrated in indirect auto loans, while commercial loans and residential mortgage loans each had net recovery rates for the six months ended June 30, 2024 and the second quarter of 2024. The allowance for credit losses was $21.0 million as of June 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 June 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 the loss drivers resulted in a decline in the baseline loss rates which the model utilizes. FOMC projections for the economic variables used in the model were relatively unchanged between December 31, 2023 and June 30, 2024. Declines in prepayment speeds between December 31, 2023 and June 30, 2024 increased modeled reserve requirements, particularly for residential mortgage loans, as did an increase in loan balances between December 31, 2023 and June 30, 2024. The allowance for credit losses was 256.63% of non-performing loans as of June 30, 2024 and 216.28% as of December 31, 2023. The allowance for credit losses to total loans was 1.05% as of June 30, 2024 and 1.14% as of December 31, 2023. Provision for credit losses as a percentage of period-end loan balances was 0.04% for the second quarter of 2024. Balance Sheet Activity Total assets were $2.756 billion as of June 30, 2024 compared to $2.711 billion as of December 31, 2023, an increase of $45.3 million, or 1.7%. The increase can mostly be attributed to increases of $38.8 million in loans, net of deferred origination fees and costs, $33.4 million in cash and cash equivalents, $4.0 million in accrued interest receivable and other assets, and a decrease of $1.5 million in the allowance for credit losses, offset by a decrease of $33.2 million in total investment securities. The increase in loans, net of deferred origination fees and costs, was concentrated in the commercial loan portfolio, which increased by $57.9 million, or 4.2%, compared to prior year-end. Commercial loan growth during the current period was concentrated in the Albany region of New York. Consumer loans decreased by $12.8 million, or 4.2%, primarily driven by weaker origination activity in indirect auto loans during the current six month period, compared to the prior two years, and the relatively fast turnover rate of the portfolio. Residential mortgages decreased by $6.4 million, or 2.3%, as the Corporation continued to sell a greater proportion of originations into the secondary market and market conditions kept demand for originations subdued. The increase in cash and cash equivalents was primarily due to $50.0 million in advances from the Federal Reserve BTFP and $26.8 million in paydowns and maturities of securities, primarily offset by an increase of $38.8 million in loans, net of deferred origination fees and costs and a decrease of $13.5 million in total deposits, compared to prior year-end. The increase in accrued interest receivable and other assets was primarily due to increases in interest rate swap assets of $1.5 million, due to an increase in the market value of swaps, and $1.5 million in deferred tax assets. Total investment securities decreased primarily due to a decrease of $33.1 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 $26.7 million, primarily attributable to paydowns on mortgage-backed securities and SBA pooled-loan securities. The market value of securities available for sale declined by $5.3 million, due to unfavorable changes in interest rates during the first half of the year. Total liabilities were $2.555 billion as of June 30, 2024 compared to $2.515 billion as of December 31, 2023, an increase of $39.3 million, or 1.6%. The increase in total liabilities can primarily be attributed to increases of $48.9 million in advances and other debt and $3.8 million in accrued interest payable and other liabilities, partially offset by a decrease of $13.5 million in deposits. Total deposits decreased by $13.5 million or 0.6%, compared to prior year-end, primarily due to decreases of $34.0 million, or 5.2% in non-interest bearing demand deposits and $10.6 million, or 1.7% in money market deposits. Total time deposits decreased $5.6 million, or 0.9%, driven by a decrease of $73.3 million in brokered deposits and offset by an increase of $67.7 million in customer time deposits. Additionally, savings deposits decreased by $0.6 million. These decreases were partially offset by an increase of $37.2 million in interest bearing demand deposits, or 12.8%. Non- interest bearing deposits comprised 25.6% and 26.9% of total deposits as of June 30, 2024 and December 31, 2023 respectively. The increase in advances and other debt can primarily be attributed to a $50.0 million advance from the Federal Reserve, as the Corporation took advantage of lower interest rates offered by the BTFP, and a $30.0 million FHLBNY short term advance, offset by a decrease of $31.9 million in FHLBNY overnight advances. The increase in accrued interest payable and other liabilities was primarily due to increases in interest payable on borrowed funds of $1.2 million and interest payable on deposits of $0.9 million, as well as an increase in interest rate swap liabilities of $0.8 million, primarily due to an increase in the market value of swaps. Total shareholders' equity was $201.2 million as of June 30, 2024, compared to $195.2 million as of December 31, 2023, an increase of $6.0 million, or 3.1%, primarily driven by an increase of $9.1 million in retained earnings, offset by an increase of $3.9 million in accumulated other comprehensive loss. The increase in retained earnings was due primarily to net income of $12.0 million, offset by dividends declared of $2.9 million, and the increase in accumulated other comprehensive loss was primarily attributable to the unfavorable impact of interest rates on available for sale securities during the first half of 2024. The total equity to total assets ratio was 7.30% as of June 30, 2024, compared to 7.20% as of December 31, 2023, and the tangible equity to tangible assets ratio was 6.56% as of June 30, 2024, compared to 6.45% as of December 31, 20231. Book value per share increased to $42.17 as of June 30, 2024 from $41.07 as of December 31, 2023. As of June 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 business needs. These include short-term investments, cash flow from lending and investing activities, core-deposit growth and non-core funding sources, such as time deposits of $250,000 or greater, brokered deposits, FHLBNY advances, and FRB Bank Term Funding Program (BTFP) advances. No new borrowings could be made under the BTFP after March 11, 2024. As of June 30, 2024, the Corporation's cash and cash equivalents balance was $70.2 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 June 30, 2024, the Corporation's investment in securities available for sale was $550.9 million, $206.4 million of which was not pledged as collateral. Additionally, as of June 30, 2024, the Bank's total advance line capacity at the Federal Home Loan Bank of New York was $221.4 million. The Bank utilized $30.0 million of this capacity and had $191.4 million in additional available capacity as of June 30, 2024. Borrowings may be used on a short-term basis for liquidity purposes or on a long-term basis to fund asset growth. In January 2024, the Corporation utilized the BTFP with an advance of $50.0 million, maturing in January 2025, however BTFP advances may be prepaid at any time without prepayment penalty. As of June 30, 2024, uninsured deposits totaled $635.2 million, or 26.3% of total deposits, including $188.8 million of municipal deposits that were collateralized by pledged assets. 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 June 30, 2024, the Corporation had entered into brokered deposit arrangements with multiple brokers. As of June 30, 2024, brokered deposits carried terms between 3 and 48 months, with staggered maturities, totaling $69.5 million. Excluding brokered deposits, total deposits increased $59.8 million compared to December 31, 2023. Other Items The market value of total assets under management or administration in our Wealth Management Group was $2.377 billion as of June 30, 2024, including $412.1 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 $134.9 million, or 6.0%, due primarily to relatively strong equity markets 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 June 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 second 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 June 30, 2024. 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)     June 30,   March 31,   Dec. 31,   Sept. 30,   June 30, (in thousands)     2024       2024       2023       2023       2023   ASSETS                     Cash and due from financial institutions   $      23,184     $      22,984     $      22,247     $      52,563     $      25,499   Interest-earning deposits in other financial institutions     47,033       71,878       14,600       23,017       28,727   Total cash and cash equivalents     70,217       94,862       36,847       75,580       54,226                                             Equity investments     3,090       3,093       3,046       2,811       2,841                                             Securities available for sale     550,927       566,028       583,993       569,004       604,313   Securities held to maturity     657       785       785       1,804       1,804   FHLB and FRB stock, at cost     5,506       4,071       5,498       4,053       6,328   Total investment securities     557,090       570,884       590,276       574,861       612,445                                             Commercial     1,445,258       1,425,437       1,387,321       1,341,017       1,302,333   Mortgage     271,620       277,246       277,992       281,361       285,084   Consumer     294,594       300,927       307,351       308,310       306,489   Loans, net of deferred loan fees     2,011,472       2,003,610       1,972,664       1,930,688       1,893,906   Allowance for credit losses     (21,031 )     (20,471 )     (22,517 )     (20,252 )     (20,172 ) Loans, net     1,990,441       1,983,139       1,950,147       1,910,436       1,873,734                                             Loans held for sale     381       96       —       —       785   Premises and equipment, net     14,731       14,183       14,571       15,036       15,496   Operating lease right-of-use assets     5,827       6,018       5,648       5,850       6,050   Goodwill     21,824       21,824       21,824       21,824       21,824   Accrued interest receivable and other assets     92,212       90,791       88,170       101,436       87,272   Total assets   $ 2,755,813     $ 2,784,890     $ 2,710,529     $ 2,707,834     $ 2,674,673     LIABILITIES AND SHAREHOLDERS' EQUITY                     Deposits:                     Non-interest-bearing demand deposits   $ 619,192     $ 656,330     $ 653,166     $ 683,348     $ 671,643   Interest-bearing demand deposits     328,370       315,154       291,138       310,885       273,380   Money market accounts     613,131       631,350       623,714       626,256       629,985   Savings deposits     248,528       248,578       249,144       261,822       269,700   Time deposits     606,700       629,360       612,265       591,188       545,486   Total deposits     2,415,921       2,480,772       2,429,427       2,473,499       2,390,194                                             Advances and other debt     83,835       52,979       34,970       3,120       53,949   Operating lease liabilities     6,009       6,197       5,827       6,028       6,228   Accrued interest payable and other liabilities     48,826       47,814       45,064       55,123       46,876   Total liabilities     2,554,591       2,587,762       2,515,288       2,537,770       2,497,247     Shareholders' equity                   Common stock   53       53       53       53       53   Additional paid-in capital   48,102       47,794       47,773       47,974       47,740   Retained earnings   239,021       235,506       229,930       227,596       221,412   Treasury stock, at cost   (16,043 )     (16,147 )     (16,502 )     (16,880 )     (17,033 ) Accumulated other comprehensive loss   (69,911 )     (70,078 )     (66,013 )     (88,679 )     (74,746 ) Total shareholders' equity   201,222       197,128       195,241       170,064       177,426   Total liabilities and shareholders' equity $ 2,755,813     $ 2,784,890     $ 2,710,529     $ 2,707,834     $ 2,674,673     Period-end shares outstanding   4,772     4,768     4,754     4,738     4,732     Chemung Financial CorporationConsolidated Statements of Income (Unaudited)        Three Months EndedJune 30,   Percent     Six Months EndedJune 30,   Percent (in thousands, except per share data)   2024     2023   Change     2024     2023   Change Interest and dividend income: Loans, including fees $   27,514   $   23,791    15.6     $   54,712   $   46,080   18.7   Taxable securities   3,251     3,630   (10.4 )     6,808     7,213   (5.6 ) Tax exempt securities   254     259   (1.9 )     512     520   (1.5 ) Interest-earning deposits   367     116   216.4       573     213   169.0   Total interest and dividend income   31,386     27,796   12.9       62,605     54,026   15.9                                       Interest expense: Deposits   12,711     8,469   50.1       24,856     13,856   79.4   Borrowed funds   914     732   24.9       1,899     1,628   16.6   Total interest expense   13,625     9,201   48.1       26,755     15,484   72.8     Net interest income     17,761       18,595     (4.5 )       35,850       38,542     (7.0 ) Provision (credit) for credit losses   879     236   272.5       (1,161 )   513   (326.3 ) Net interest income after provision for credit losses   16,882     18,359   (8.0 )     37,011     38,029   (2.7 )                                     Non-interest income: Wealth management group fee income   2,860     2,603   9.9       5,563     5,183   7.3   Service charges on deposit accounts   964     959   0.5       1,913     1,900   0.7   Interchange revenue from debit card transactions   1,141     1,194   (4.4 )     2,204     2,327   (5.3 ) Change in fair value of equity investments   14     (103 ) 113.6       115     (31 ) 471.0   Net gains on sales of loans held for sale   39     18   116.7       71     23   208.7   Net gains (losses) on sales of other real estate owned   (3 )   14   (121.4 )     (3 )   14   (121.4 ) Income from bank owned life insurance   10     11   (9.1 )     19     21   (9.5 ) Other   573     751   (23.7 )     1,373     1,433   (4.2 ) Total non-interest income   5,598     5,447   2.8       11,255     10,870   3.5                                       Non-interest expense: Salaries and wages    6,823     6,704    1.8        13,839      13,487    2.6   Pension and other employee benefits   2,078     1,808   14.9       4,160     3,488   19.3   Other components of net periodic pension and postretirement benefits   (232 )   (174 ) (33.3 )     (464 )   (348 ) (33.3 ) Net occupancy   1,445     1,440   0.3       2,938     2,905   1.1   Furniture and equipment   397     461   (13.9 )     795     879   (9.6 ) Data processing   2,297     2,473   (7.1 )     4,870     4,854   0.3   Professional services   558     602   (7.3 )     1,117     1,042   7.2   Marketing and advertising   388     170   128.2       733     502   46.0   Other real estate owned expense   12     1   N/M     61     39   56.4   FDIC insurance   516