Workflow
Chemung Financial (CHMG)
icon
Search documents
Chemung Financial (CHMG) Q3 Earnings and Revenues Lag Estimates
ZACKS· 2025-10-21 23:21
Chemung Financial (CHMG) came out with quarterly earnings of $1.62 per share, missing the Zacks Consensus Estimate of $1.68 per share. This compares to earnings of $1.19 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -3.57%. A quarter ago, it was expected that this financial holding company would post earnings of $1.31 per share when it actually produced earnings of $1.31, delivering no surprise.Over the last four quarters, t ...
Chemung Financial (CHMG) - 2025 Q3 - Quarterly Results
2025-10-21 20:10
EXHIBIT 99.1 Chemung Financial Corporation Reports Third Quarter 2025 Net Income of $7.8 million, or $1.62 per share ELMIRA, N.Y., Oct. 21, 2025 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (the "Corporation") (Nasdaq: CHMG), the parent company of Chemung Canal Trust Company (the "Bank"), today reported net income of $7.8 million, or $1.62 per share, for the third quarter of 2025, compared to a net loss of $6.5 million, or $1.35 per share, for the second quarter of 2025, and net income of $5.7 million, ...
Chemung Financial Corporation Reports Third Quarter 2025 Net Income of $7.8 million, or $1.62 per share
Globenewswire· 2025-10-21 20:05
ELMIRA, N.Y., Oct. 21, 2025 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (the “Corporation”) (Nasdaq: CHMG), the parent company of Chemung Canal Trust Company (the “Bank”), today reported net income of $7.8 million, or $1.62 per share, for the third quarter of 2025, compared to a net loss of $6.5 million, or $1.35 per share, for the second quarter of 2025, and net income of $5.7 million, or $1.19 per share, for the third quarter of 2024. “Third quarter results demonstrate the importance of the Corporat ...
Chemung Financial Corporation's Capital Utilization Analysis
Financial Modeling Prep· 2025-09-14 00:00
Core Insights - Chemung Financial Corporation is a regional bank holding company based in New York, offering various financial services including commercial and consumer banking, wealth management, and insurance services [1] - The company faces competition from peers like C&F Financial Corporation and Enterprise Bancorp, which exhibit different efficiencies in capital utilization [1] Financial Performance - Chemung Financial's Return on Invested Capital (ROIC) is -0.52%, while its Weighted Average Cost of Capital (WACC) is 15.17%, leading to a ROIC to WACC ratio of -0.034, indicating insufficient returns to cover capital costs [2] - In comparison, Central Valley Community Bancorp and American National Bankshares Inc. have negative ROIC to WACC ratios of -0.761 and -0.009, respectively, while Investar Holding Corporation shows a high ROIC of 203.48% against a WACC of 23.00%, resulting in a ROIC to WACC ratio of 8.846, demonstrating exceptional efficiency [3][4] Industry Comparison - The analysis indicates that Chemung Financial Corporation is underperforming in capital utilization, while Investar Holding Corporation exemplifies superior efficiency [5] - The comparative analysis highlights varying efficiencies in capital utilization across the banking sector, emphasizing the importance of evaluating ROIC and WACC to assess a company's ability to generate returns relative to its cost of capital [4][5]
4 Stocks to Watch That Declared Dividend Hikes Amid Rate-Cut Uncertainty
ZACKS· 2025-08-21 13:26
Market Overview - Volatility has returned to Wall Street, with major indexes experiencing losses due to concerns over the economy's health and uncertainty regarding a potential interest rate cut by the Federal Reserve in September [1][3][6] - The S&P 500 recorded its fourth consecutive day of losses, while the Nasdaq closed lower for the second day, following a weak jobs report and higher-than-expected wholesale inflation data [3][6] Inflation and Economic Indicators - The producer price index (PPI) rose by 0.9% in July, significantly above the consensus estimate of 0.3%, indicating rising inflation pressures [4][5] - Core PPI, which excludes food and energy prices, also increased by 0.9% month-over-month in July [4] Dividend-Paying Stocks - In light of market volatility, investors may consider dividend-paying stocks for steady income and capital protection [2] - Notable dividend-paying stocks include: - **Chemung Financial Corporation (CHMG)**: Dividend of $0.34 per share, 2.52% yield, 26% payout ratio [8][10] - **M&T Bank Corporation (MTB)**: Dividend of $1.50 per share, 2.84% yield, 34% payout ratio [11][10] - **Martin Marietta Materials, Inc. (MLM)**: Dividend of $0.83 per share, 0.52% yield, 18% payout ratio [13][10] - **United Community Banks, Inc. (UCB)**: Dividend of $0.25 per share, 3.07% yield, 39% payout ratio [15][10]
3 Banks Stocks With Dividend Hikes in the Past Week to Watch
ZACKS· 2025-08-20 15:56
Market Overview - The U.S. markets started 2025 strong but have faced significant volatility due to tariff pressures and geopolitical uncertainty [1] - Expectations for a September FOMC rate cut have increased amid signs of a cooling labor market and inflationary effects from trade policies [1] Performance of Indices - The S&P 500 has retreated while the Dow Jones Industrial Average has moved higher, indicating volatile performance across indices [2] Investment Opportunities - Dividend-paying stocks are highlighted as a potential source of stability and income during market fluctuations [2] - Companies with resilient business models and a history of profitability can provide steady cash flows through dividends, serving as a defensive anchor for portfolios [2] Bank Stocks to Watch - Chemung Financial Corporation (CHMG), United Community Bank (UCB), and M&T Bank (MTB) have recently announced dividend hikes, enhancing shareholder value [3][9] - These bank stocks have rallied over 10% in the past year [3] Chemung Financial Corporation (CHMG) - As of June 30, 2025, Chemung Financial had $2.9 billion in assets [6] - The company announced a quarterly cash dividend of 34 cents per share, a 6.3% increase from the previous payout, payable on October 1, 2025 [6][9] - Chemung Financial has increased its dividend three times in the past five years, with an annualized growth rate of 3.09% [7] - The dividend yield is 2.52% with a payout ratio of 26% [7] - The Zacks Consensus Estimate for 2025 sales indicates a year-over-year rise of 16.4%, while earnings are expected to increase by 18.9% [11] United Community Bank (UCB) - As of June 30, 2025, UCB had $28.1 billion in assets [12] - The bank announced a quarterly cash dividend of 25 cents per share, a 4.2% increase from the prior payout, payable on October 3, 2025 [13][9] - UCB has increased its dividend seven times in the past five years, with an annualized growth rate of 6.51% [13] - The dividend yield is 3.07% with a payout ratio of 39% [13] - The Zacks Consensus Estimate for 2025 sales reflects a rise of 7.4%, while earnings are expected to grow by 14.8% [17] M&T Bank (MTB) - As of June 30, 2025, M&T Bank had $211.6 billion in assets [17] - The bank announced a quarterly cash dividend of $1.50 per share, an 11% increase from the previous payout, payable on September 30, 2025 [18][9] - M&T Bank has increased its dividend four times in the past five years, with an annualized growth rate of 5.36% [18] - The dividend yield is 2.84% with a payout ratio of 34% [18] - The Zacks Consensus Estimate for 2025 sales suggests a year-over-year growth of 3.6%, while earnings are expected to increase by 11.1% [21]
Chemung Financial (CHMG) - 2025 Q2 - Quarterly Report
2025-08-07 16:13
[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) Overview of the company's quarterly report filing details and status [Registrant Information](index=1&type=section&id=Registrant%20Information) Identifies Chemung Financial Corporation as the Q2 2025 Form 10-Q registrant, detailing identification and stock listing - Registrant: CHEMUNG FINANCIAL CORPORATION[2](index=2&type=chunk) - Filing Type: Quarterly Report (Form 10-Q) for the period ended June 30, 2025[2](index=2&type=chunk) Registrant Details | Detail | Value | | :--- | :--- | | State of Incorporation | New York | | I.R.S. Employer Identification No. | 16-1237038 | | Trading Symbol | CHMG | | Exchange | The Nasdaq Stock Market LLC | [Filing Status and Shares Outstanding](index=2&type=section&id=Filing%20Status%20and%20Shares%20Outstanding) Details SEC filing compliance, accelerated filer status, and common stock shares outstanding as of August 1, 2025 - The registrant is an 'Accelerated filer' and a 'Smaller reporting company'[4](index=4&type=chunk) - As of August 1, 2025, **4,790,939 shares** of Common Stock, $0.01 par value, were outstanding[4](index=4&type=chunk) [Index](index=3&type=section&id=INDEX) Provides a navigational guide to the report's contents [Glossary of Abbreviations and Terms](index=4&type=section&id=GLOSSARY%20OF%20ABBREVIATIONS%20AND%20TERMS) Defines key abbreviations and financial terms used throughout the report for clarity [Abbreviations](index=4&type=section&id=Abbreviations) Lists and defines common abbreviations used in financial statements and management's discussion - The glossary defines common abbreviations used in the financial statements and MD&A[7](index=7&type=chunk) Common Abbreviations | Abbreviation | Definition | | :--- | :--- | | ACL | Allowance for credit losses | | AFS | Available for sale securities | | CECL | Current expected credit loss | | EPS | Earnings per share | | GAAP | U.S. Generally Accepted Accounting Principles | | WMG | Wealth Management Group | [Terms](index=5&type=section&id=Terms) Defines key financial and operational terms, including Allowance for Credit Losses and Risk-Weighted Assets - Key terms are defined to clarify financial and operational concepts within the report[7](index=7&type=chunk) - Allowance for credit losses: Contra asset account estimating the lifetime amount the Corporation anticipates will be unrecoverable from assets with credit risk in conformity with CECL requirements[9](index=9&type=chunk) - Risk-Weighted Assets (RWA): Used to calculate regulatory capital ratios, consisting of on and off-balance sheet exposures weighted by factors representing their risk and potential for default[10](index=10&type=chunk) [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents unaudited consolidated financial statements and management's discussion for the interim period [Item 1: Financial Statements – Unaudited](index=6&type=section&id=Item%201%3A%20Financial%20Statements%20%E2%80%93%20Unaudited) Presents unaudited consolidated financial statements and detailed notes for the interim period ended June 30, 2025 [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Snapshot of the Corporation's financial position, detailing assets, liabilities, and equity as of June 30, 2025 Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | $2,852,488 | $2,776,147 | $76,341 | 2.7% | | Total liabilities | $2,617,522 | $2,560,838 | $56,684 | 2.2% | | Total shareholders' equity | $234,966 | $215,309 | $19,657 | 9.1% | | Cash and cash equivalents | $320,051 | $47,035 | $273,016 | 580.5% | | Securities available for sale | $287,335 | $531,442 | $(244,107) | (45.9)% | | Loans, net | $2,109,749 | $2,050,031 | $59,718 | 2.9% | | Total deposits | $2,468,962 | $2,396,883 | $72,079 | 3.0% | | Subordinated debt, net | $44,146 | $0 | $44,146 | N/A | - Total assets increased by **$76.3 million (2.7%)** from December 31, 2024, to June 30, 2025, driven by a significant increase in cash and cash equivalents and growth in loans, partially offset by a decrease in available-for-sale securities[12](index=12&type=chunk) - Shareholders' equity saw a notable increase of **$19.7 million (9.1%)**, primarily due to a decrease in accumulated other comprehensive loss[12](index=12&type=chunk) [Consolidated Statements of Income (Loss)](index=8&type=section&id=Consolidated%20Statements%20of%20Income%20%28Loss%29) Details the Corporation's revenues, expenses, and net income (loss) for the three and six months ended June 30, 2025 Consolidated Statements of Income (Loss) Highlights (in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total interest and dividend income | $33,034 | $31,386 | $64,732 | $62,605 | | Total interest expense | $12,226 | $13,625 | $24,107 | $26,755 | | Net interest income | $20,808 | $17,761 | $40,625 | $35,850 | | Provision (credit) for credit losses | $1,145 | $879 | $2,237 | $(1,161) | | Total non-interest income (loss) | $(10,705) | $5,598 | $(4,816) | $11,255 | | Total non-interest expense | $17,769 | $16,219 | $34,696 | $32,917 | | Net income (loss) | $(6,452) | $4,987 | $(429) | $12,037 | | Basic and diluted earnings (loss) per share | $(1.35) | $1.05 | $(0.09) | $2.53 | - The Corporation reported a net loss of **$6.5 million** for Q2 2025, a significant decline from a net income of $5.0 million in Q2 2024, primarily due to a **$17.5 million net loss on security transactions**[14](index=14&type=chunk) - Net interest income increased by **$3.0 million (17.2%)** for Q2 2025 compared to Q2 2024, driven by higher interest income from loans and deposits, and lower interest expense on deposits[14](index=14&type=chunk) [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Presents total comprehensive income, including net income and other comprehensive income, for the interim periods Consolidated Statements of Comprehensive Income Highlights (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(6,452) | $4,987 | $(429) | $12,037 | | Net unrealized gains (losses) on securities available for sale | $19,102 | $218 | $30,132 | $(5,295) | | Total other comprehensive income (loss) | $14,214 | $167 | $22,360 | $(3,898) | | Comprehensive income | $7,762 | $5,154 | $21,931 | $8,139 | - Comprehensive income for Q2 2025 was **$7.8 million**, an increase from $5.2 million in Q2 2024, primarily due to significant net unrealized gains on available-for-sale securities, which offset the net loss[16](index=16&type=chunk) - For the six months ended June 30, 2025, comprehensive income was **$21.9 million**, a substantial increase from $8.1 million in the prior year, driven by large net unrealized gains on available-for-sale securities[16](index=16&type=chunk) [Consolidated Statements of Shareholders' Equity](index=10&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Details changes in shareholders' equity, including net income, dividends, and other comprehensive income for interim periods Shareholders' Equity Changes (in thousands) | Item | June 30, 2025 | March 31, 2025 | Change ($) | | :--- | :--- | :--- | | Total Shareholders' Equity | $234,966 | $228,306 | $6,660 | | Retained Earnings | $244,211 | $252,195 | $(7,984) | | Accumulated Other Comprehensive Loss | $(42,705) | $(56,919) | $14,214 | Key Activities (Three Months Ended June 30, 2025) * Net loss: $(6,452) thousand * Other comprehensive income: $14,214 thousand * Cash dividends declared: $(1,532) thousand ($0.32 per share) * Repurchase of common stock: $(5) thousand (97 shares) - Total shareholders' equity increased by **$6.7 million** from March 31, 2025, to June 30, 2025, primarily due to a significant reduction in accumulated other comprehensive loss, despite a net loss for the quarter[19](index=19&type=chunk) - For the six months ended June 30, 2025, total shareholders' equity increased by **$19.7 million** from January 1, 2025, largely driven by other comprehensive income of **$22.4 million**[22](index=22&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the interim periods Consolidated Statements of Cash Flows Highlights (in thousands) | Activity Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,926 | $14,422 | | Net cash provided by (used in) investing activities | $197,068 | $(13,634) | | Net cash provided by financing activities | $59,022 | $32,582 | | Net increase in cash and cash equivalents | $273,016 | $33,370 | | Cash and cash equivalents, end of period | $320,051 | $70,217 | - Net cash provided by investing activities significantly increased to **$197.1 million** for the six months ended June 30, 2025, compared to a net use of $13.6 million in the prior year, primarily due to proceeds from sales of available-for-sale securities[25](index=25&type=chunk) - Cash and cash equivalents at the end of the period surged to **$320.1 million**, up from $70.2 million in the prior year, reflecting strong cash generation from investing and financing activities[25](index=25&type=chunk) [NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=15&type=section&id=NOTE%201%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines primary business activities and accounting principles applied in preparing financial statements - The Corporation provides banking, financing, fiduciary, and other financial services through its subsidiaries, the Bank and CFS[31](index=31&type=chunk) - Financial statements are prepared in conformity with GAAP for interim financial information and SEC reporting requirements[32](index=32&type=chunk) - ASU 2023-07 (Segment Reporting) was adopted for the annual period ended December 31, 2024, and interim periods beginning March 31, 2025, enhancing segment expense and CODM disclosures[35](index=35&type=chunk) - ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) are pending adoption, expected to impact future income tax and expense disclosures[36](index=36&type=chunk)[37](index=37&type=chunk) [NOTE 2 EARNINGS PER COMMON SHARE](index=16&type=section&id=NOTE%202%20EARNINGS%20PER%20COMMON%20SHARE) Explains basic earnings per common share calculation and notes the absence of dilutive securities - Basic earnings per share is calculated using the two-class method, considering unvested share-based payment awards as participating securities[38](index=38&type=chunk) Basic Earnings (Loss) Per Common Share (in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) available to common shareholders | $(6,356) | $4,922 | $(423) | $11,879 | | Weighted average number of shares outstanding used in basic EPS calculation | 4,736,389 | 4,707,469 | 4,733,645 | 4,704,386 | | Basic earnings (loss) per common share | $(1.35) | $1.05 | $(0.09) | $2.53 | - There were no dilutive securities issuable or outstanding for the periods presented[38](index=38&type=chunk) [NOTE 3 SECURITIES](index=16&type=section&id=NOTE%203%20SECURITIES) Details composition and fair value of the securities portfolio, including AFS securities and unrealized gains/losses Securities Available for Sale (AFS) - Estimated Fair Value (in thousands) | Security Type | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Mortgage-backed securities, residential | $254,552 | $365,934 | $(111,382) | (30.4)% | | Obligations of states and political subdivisions | $10,977 | $35,505 | $(24,528) | (69.1)% | | Corporate bonds and notes | $21,806 | $22,016 | $(210) | (1.0)% | | U.S. Treasury notes and bonds | $0 | $56,906 | $(56,906) | (100.0)% | | SBA loan pools | $0 | $51,081 | $(51,081) | (100.0)% | | **Total AFS** | **$287,335** | **$531,442** | **$(244,107)** | **(45.9)%** | - During Q2 2025, the Corporation sold **$244.8 million** in AFS securities, realizing a pre-tax loss of **$17.5 million**, including the entire U.S. Treasury and SBA loan pool portfolios[41](index=41&type=chunk) AFS Securities with Unrealized Losses (June 30, 2025, in thousands) | Security Type | Fair Value | Unrealized Losses | | :--- | :--- | :--- | | Mortgage-backed securities, residential | $249,558 | $52,113 | | Obligations of states and political subdivisions | $10,977 | $667 | | Corporate bonds and notes | $19,807 | $2,944 | | **Total** | **$280,342** | **$55,724** | - The majority of unrealized losses in AFS securities (**93.5%**) are in mortgage-backed securities, attributed to interest rate changes, not credit quality, with no allowance for credit losses recorded[46](index=46&type=chunk)[47](index=47&type=chunk) [NOTE 4 LOANS AND ALLOWANCE FOR CREDIT LOSSES](index=19&type=section&id=NOTE%204%20LOANS%20AND%20ALLOWANCE%20FOR%20CREDIT%20LOSSES) Breakdown of loan portfolio, changes in allowance for credit losses, and trends in nonaccrual and past due loans Loan Portfolio Composition (in thousands) | Loan Type | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Commercial and industrial | $294,474 | $299,521 | $(5,047) | (1.7)% | | Commercial mortgages (Construction, Owner/Non-owner occupied) | $1,297,525 | $1,217,004 | $80,521 | 6.6% | | Residential mortgages | $278,221 | $274,979 | $3,242 | 1.2% | | Consumer loans (Home equity, Indirect, Direct) | $262,194 | $279,915 | $(17,721) | (6.3)% | | **Total loans, net of deferred loan fees and costs** | **$2,132,414** | **$2,071,419** | **$60,995** | **2.9%** | | Allowance for credit losses | $(22,665) | $(21,388) | $(1,277) | 6.0% | | **Loans, net** | **$2,109,749** | **$2,050,031** | **$59,718** | **2.9%** | - Total loans increased by **$61.0 million (2.9%)** from December 31, 2024, to June 30, 2025, primarily driven by growth in commercial mortgages[49](index=49&type=chunk) Allowance for Credit Losses (ACL) Activity (in thousands) | Item | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Beginning balance | $22,522 | $21,388 | | Net recoveries (charge-offs) | $(992) | $(1,254) | | Provision (credit) | $1,135 | $2,531 | | **Ending balance** | **$22,665** | **$22,665** | - The provision for credit losses increased to **$1.1 million** for Q2 2025 (from $0.9 million in Q2 2024) and to **$2.2 million** for the six months ended June 30, 2025 (from a credit of $1.2 million in H1 2024), reflecting stronger loan growth and changes in economic projections[53](index=53&type=chunk)[54](index=54&type=chunk) Nonaccrual Loans and Past Due Status (in thousands) | Loan Type | Nonaccrual Loans (June 30, 2025) | Nonaccrual Loans (Dec 31, 2024) | Total Past Due (June 30, 2025) | Total Past Due (Dec 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | Commercial and industrial | $879 | $1,534 | $213 | $1,043 | | Commercial mortgages | $3,767 | $4,959 | $2,758 | $4,290 | | Residential mortgages | $1,837 | $1,372 | $2,485 | $2,887 | | Consumer loans | $1,754 | $1,089 | $3,413 | $3,671 | | **Total** | **$8,237** | **$8,954** | **$8,869** | **$11,891** | - Nonaccrual loans decreased to **$8.2 million** as of June 30, 2025, from $9.0 million at December 31, 2024, primarily due to payoffs and charge-offs of commercial loans[66](index=66&type=chunk) [NOTE 5 FAIR VALUE](index=35&type=section&id=NOTE%205%20FAIR%20VALUE) Explains methodologies and categorization of fair value measurements for financial assets and liabilities - Fair value measurements are categorized into Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[82](index=82&type=chunk)[83](index=83&type=chunk) - Available for sale securities are primarily valued using Level 2 inputs (matrix pricing), while equity investments use Level 1 (quoted market prices)[84](index=84&type=chunk)[85](index=85&type=chunk) - Collateral-dependent loans and Other Real Estate Owned (OREO) are typically valued using Level 3 inputs, based on real estate appraisals with significant adjustments[86](index=86&type=chunk)[87](index=87&type=chunk) - During Q2 2025, the Corporation transferred **$16.0 million** of corporate subordinated debt issuances from Level 3 to Level 2 due to improved observable market data[94](index=94&type=chunk) Fair Value Measurement of Financial Assets (June 30, 2025, in thousands) | Financial Asset | Fair Value | Level 1 | Level 2 | Level 3 | | :--- | :--- | :--- | :--- | :--- | | Total available for sale securities | $287,335 | $0 | $281,455 | $5,880 | | Equity investments, at fair value | $2,910 | $2,910 | $0 | $0 | | Derivative assets | $18,727 | $0 | $18,727 | $0 | | Collateral-dependent loans (non-recurring) | $2,021 | $0 | $0 | $2,021 | | Other real estate owned (non-recurring) | $56 | $0 | $0 | $56 | [NOTE 6 LEASES](index=41&type=section&id=NOTE%206%20LEASES) Details operating and finance lease agreements, including terms, discount rates, and future payment obligations - The Corporation leases certain branch properties under long-term operating lease agreements, expiring through 2033, with a weighted average remaining lease term of **6.40 years** and a discount rate of **3.53%**[101](index=101&type=chunk) Operating Lease Liabilities - Undiscounted Cash Flows (in thousands) | Year | Amount | | :--- | :--- | | 2025 | $476 | | 2026 | $965 | | 2027 | $977 | | 2028 | $845 | | 2029 | $827 | | 2030 and thereafter | $1,862 | | **Total minimum lease payments** | **$5,952** | | Less: amount representing interest | $(633) | | **Present value of net minimum lease payments** | **$5,319** | - Finance leases for certain buildings have a weighted average remaining lease term of **11.04 years** with a discount rate of **4.04%**[103](index=103&type=chunk) - Related party transactions include a branch lease from a Board member, with rent and CAM expenses totaling **$28 thousand** for Q2 2025 and **$55 thousand** for H1 2025[105](index=105&type=chunk) [NOTE 7 GOODWILL AND INTANGIBLE ASSETS](index=42&type=section&id=NOTE%207%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Reports stable goodwill and intangible assets, noting no amortization expense or impairment charges for the periods - Goodwill remained stable at **$21.8 million** for both June 30, 2025, and December 31, 2024[106](index=106&type=chunk) - No amortization expense was incurred for goodwill and intangible assets during the three and six months ended June 30, 2025 and 2024[106](index=106&type=chunk) - Goodwill impairment testing is performed annually as of December 31, with no impairment charges incurred as of the last test on December 31, 2024[107](index=107&type=chunk) [NOTE 8 COMMITMENTS AND CONTINGENCIES](index=42&type=section&id=NOTE%208%20COMMITMENTS%20AND%20CONTINGENCIES) Outlines off-balance sheet financial instruments and assesses potential impact of pending legal proceedings - The Corporation is party to off-balance sheet financial instruments including commitments under standby letters of credit, unused lines of credit, and commitments to fund new loans[108](index=108&type=chunk) Off-Balance Sheet Commitments (in thousands) | Commitment Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commitments to make loans | $65,753 | $79,526 | | Unused lines of credit | $390,286 | $360,356 | | Standby letters of credit | $18,526 | $19,180 | - An allowance for credit losses on unfunded commitments was **$0.5 million** as of June 30, 2025, and $0.8 million as of December 31, 2024[111](index=111&type=chunk) - The Corporation believes it is not a party to any pending legal, arbitration, or regulatory proceedings that could have a material adverse impact on its financial results or liquidity as of June 30, 2025[112](index=112&type=chunk) [NOTE 9 BORROWED FUNDS](index=43&type=section&id=NOTE%209%20BORROWED%20FUNDS) Details composition of borrowed funds, including FHLBNY advances, subordinated notes, and associated collateral Borrowed Funds Outstanding (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | FHLBNY fixed rate term advances | $55,000 | $0 | | FHLBNY overnight advances | $0 | $109,110 | | Subordinated notes, net | $44,146 | $0 | | **Total borrowed funds** | **$99,146** | **$109,110** | - On June 10, 2025, the Corporation issued **$45.0 million** of 7.75% fixed-to-floating rate subordinated notes due June 15, 2035, with net proceeds of **$44.1 million**[114](index=114&type=chunk) - FHLBNY advances were collateralized by **$248.0 million** of residential mortgage and home equity loans as of June 30, 2025, with an unused borrowing capacity of **$115.2 million**[113](index=113&type=chunk) [NOTE 10 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)](index=44&type=section&id=NOTE%2010%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME%20%28LOSS%29) Explains components of accumulated other comprehensive income (loss), including unrealized gains/losses and benefit plan adjustments - Accumulated other comprehensive income (loss) represents net unrealized holding gains or losses on AFS securities and the funded status of defined benefit pension and other benefit plans, net of tax[115](index=115&type=chunk) Changes in Accumulated Other Comprehensive Income (Loss) (in thousands) | Component | Balance at April 1, 2025 | Net Current Period OCI (Loss) | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | | Unrealized Gains and Losses on Securities Available for Sale | $(55,199) | $14,208 | $(40,991) | | Defined Benefit and Other Benefit Plans | $(1,720) | $6 | $(1,714) | | **Total** | **$(56,919)** | **$14,214** | **$(42,705)** | - A significant reclassification adjustment of **$13.2 million** (net of tax) from unrealized losses on AFS securities was recognized into net income for the three and six months ended June 30, 2025, due to security sales[117](index=117&type=chunk)[118](index=118&type=chunk) [NOTE 11 REVENUE FROM CONTRACTS WITH CUSTOMERS](index=46&type=section&id=NOTE%2011%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Details non-interest income streams from customer contracts, including WMG fees and service charges - All revenue from contracts with customers under ASC 606 is recognized within non-interest income[119](index=119&type=chunk) Non-Interest Income by Revenue Stream (in thousands) | Revenue Stream | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | WMG fee income | $2,993 | $5,860 | | Service charges on deposit accounts | $1,114 | $2,234 | | Interchange revenue from debit card transactions | $1,110 | $2,147 | | CFS fee and commission income | $270 | $493 | | Net (losses) on security transactions (not ASC 606) | $(17,498) | $(17,498) | | Other (includes non-ASC 606 items) | $1,606 | $1,960 | | **Total non-interest income (loss)** | **$(10,705)** | **$(4,816)** | - WMG fee income increased by **4.7%** for Q2 2025 and **5.3%** for H1 2025, driven by fee rate increases and positive financial market changes[210](index=210&type=chunk)[216](index=216&type=chunk) - Service charges on deposit accounts increased by **15.6%** for Q2 2025 and **16.8%** for H1 2025, primarily due to fee rate increases implemented in H2 2024[209](index=209&type=chunk)[215](index=215&type=chunk) [NOTE 12 COMPONENTS OF QUARTERLY AND YEAR TO DATE NET PERIODIC BENEFIT COSTS](index=49&type=section&id=NOTE%2012%20COMPONENTS%20OF%20QUARTERLY%20AND%20YEAR%20TO%20DATE%20NET%20PERIODIC%20BENEFIT%20COSTS) Presents net periodic benefit costs for qualified pension, supplemental pension, and postretirement plans Net Periodic Benefit Costs (in thousands) | Plan Type | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Qualified Pension Plan | $(133) | $(266) | | Supplemental Pension Plan | $14 | $28 | | Postretirement Plan, Medical and Life | $6 | $12 | | **Total Net Periodic Benefit Costs** | **$(113)** | **$(226)** | - The Qualified Pension Plan generated a net periodic benefit for the Corporation, while Supplemental Pension and Postretirement Plans incurred costs[133](index=133&type=chunk) [NOTE 13 SEGMENT REPORTING](index=49&type=section&id=NOTE%2013%20SEGMENT%20REPORTING) Identifies operating segments, Core Banking and Wealth Management Group, and their respective financial performance - The Corporation operates through two primary business segments: Core Banking and Wealth Management Group (WMG)[134](index=134&type=chunk) - The Executive Management Team (EMT) acts as the Chief Operating Decision Maker (CODM), evaluating segment financial performance based on net income[135](index=135&type=chunk) Segment Net Income (Loss) (in thousands) | Segment | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Core Banking | $(7,045) | $(1,664) | | WMG | $802 | $1,547 | | Holding Company and CFS | $(209) | $(312) | | **Consolidated Totals** | **$(6,452)** | **$(429)** | - Core Banking reported a net loss for both periods, while WMG consistently generated net income[138](index=138&type=chunk)[139](index=139&type=chunk) [NOTE 14 STOCK COMPENSATION](index=52&type=section&id=NOTE%2014%20STOCK%20COMPENSATION) Details stock-based compensation plans, including the 2025 Equity Incentive Plan, expenses, and unrecognized costs - Shareholders approved the 2025 Equity Incentive Plan on June 3, 2025, allowing for grants of stock-based awards to officers, employees, and directors, with a maximum of **160,000 shares**[141](index=141&type=chunk)[142](index=142&type=chunk) - Total stock compensation expense was **$0.3 million** for each of the three-month periods and **$0.6 million** for each of the six-month periods ended June 30, 2025 and 2024[143](index=143&type=chunk) Restricted Stock Activity (Shares) | Item | Nonvested at April 1, 2025 | Granted (Q2 2025) | Vested (Q2 2025) | Nonvested at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Shares | 71,436 | 1,284 | (273) | 72,447 | | Weighted-Average Grant Date Fair Value | $48.29 | $46.75 | $43.83 | $48.28 | | Item | Nonvested at January 1, 2025 | Granted (H1 2025) | Vested (H1 2025) | Nonvested at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Shares | 49,703 | 35,156 | (12,412) | 72,447 | | Weighted-Average Grant Date Fair Value | $46.67 | $50.45 | $47.98 | $48.28 | - As of June 30, 2025, **$2.8 million** of total unrecognized compensation cost remains, expected to be recognized over a weighted-average period of **3.29 years**[144](index=144&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=54&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of financial condition and results, covering strategic actions, critical estimates, and key performance drivers [Introduction](index=54&type=section&id=Introduction) Overview of MD&A scope, Corporation's business, and factors influencing forward-looking statements - The MD&A provides a comparative discussion of the Corporation's financial performance for the three and six months ended June 30, 2025, and 2024[146](index=146&type=chunk) - The Corporation, through its Bank and CFS subsidiaries, offers a wide range of financial services, with the Bank's income primarily from loans, investment securities, and wealth management fees[148](index=148&type=chunk) - Forward-looking statements are subject to risks such as economic conditions, interest rates, credit risk, inflation, and regulatory changes[149](index=149&type=chunk) [Summary of Strategic Actions](index=55&type=section&id=Summary%20of%20Strategic%20Actions) Details key strategic initiatives, including subordinated debt issuance, capital contributions, and securities sales - The Corporation issued **$45.0 million** in 7.75% fixed-to-floating rate subordinated notes due June 2035, with net proceeds of **$44.1 million**, to strengthen regulatory capital and support loan growth[152](index=152&type=chunk) - The Bank received a **$37.0 million** capital contribution from the proceeds, enhancing its common equity tier 1 capital[152](index=152&type=chunk) Regulatory Capital Ratios (Bank) - June 30, 2025 vs. March 31, 2025 | Ratio | June 30, 2025 | March 31, 2025 | Change (bps) | | :--- | :--- | :--- | :--- | | Tier 1 capital to risk-weighted assets | 13.49% | 12.11% | 138 | | Total capital to risk-weighted assets | 14.58% | 13.19% | 139 | | CRE concentration ratio | 373.63% | 401.60% | (27.97)% | Regulatory Capital Ratios (Corporation) - June 30, 2025 vs. March 31, 2025 | Ratio | June 30, 2025 | March 31, 2025 | Change (bps) | | :--- | :--- | :--- | :--- | | Tier 1 capital to risk-weighted assets | 12.00% | 12.37% | (37) | | Total capital to risk-weighted assets | 15.16% | 13.45% | 171 | | CRE concentration ratio | 359.09% | 393.81% | (34.72)% | - The Corporation sold **$244.8 million** (book value) of available-for-sale securities, resulting in a **$17.5 million** pre-tax loss, to pay off $155.0 million in wholesale funding liabilities and fund future loan growth[154](index=154&type=chunk) - A previous branch property was sold in April 2025 for **$1.3 million**, recognizing a **$0.6 million** gain[156](index=156&type=chunk) - The capital loss from the REIT's security sales resulted in a **$2.7 million** deferred tax asset, which management expects to realize through future capital gains[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) [Critical Accounting Estimates](index=57&type=section&id=Critical%20Accounting%20Estimates) Discusses Allowance for Credit Losses (ACL) as a critical estimate, detailing its determination and sensitivity - The Allowance for Credit Losses (ACL) is a critical accounting estimate due to the inherent uncertainty in estimating lifetime credit losses and its material impact on financial results[162](index=162&type=chunk) - The ACL is determined through quantitative and qualitative analysis, considering past events, current conditions, and reasonable forecasts, with quarterly evaluations[162](index=162&type=chunk)[163](index=163&type=chunk) Allowance for Credit Losses (in thousands) | Date | Total ACL | | :--- | :--- | | June 30, 2025 | $22,700 | | December 31, 2024 | $21,400 | - A significant portion of the ACL (**76.1%** at June 30, 2025) is allocated to the commercial portfolio, requiring high scrutiny[165](index=165&type=chunk) - Sensitivity analysis indicates that a **100 basis point increase** in U.S. civilian unemployment and a **50 basis point decrease** in U.S. GDP growth would increase the total calculated ACL by **$0.8 million (3.6%)** to **$23.5 million**[166](index=166&type=chunk) [Consolidated Results of Operations](index=61&type=section&id=Consolidated%20Results%20of%20Operations) Analyzes financial performance, including net income, net interest income, non-interest income/expense, and tax impacts Consolidated Results of Operations (in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(6,452) | $4,987 | $(429) | $12,037 | | Basic and diluted EPS | $(1.35) | $1.05 | $(0.09) | $2.53 | | Net interest income | $20,808 | $17,761 | $40,625 | $35,850 | | Non-interest income (loss) | $(10,705) | $5,598 | $(4,816) | $11,255 | | Non-interest expense | $17,769 | $16,219 | $34,696 | $32,917 | | Provision (credit) for credit losses | $1,145 | $879 | $2,237 | $(1,161) | | Income tax expense (benefit) | $(2,359) | $1,274 | $(695) | $3,312 | - The Corporation reported a net loss of **$6.5 million** for Q2 2025 and **$0.4 million** for H1 2025, primarily due to a **$17.5 million net loss on securities transactions**[177](index=177&type=chunk) - Adjusted for nonrecurring items (securities sale loss and branch property gain), net income for Q2 2025 was **$6.3 million ($1.31 EPS)** and for H1 2025 was **$12.3 million ($2.57 EPS)**[178](index=178&type=chunk) - Net interest income increased by **$3.0 million (17.2%)** for Q2 2025 and **$4.8 million (13.3%)** for H1 2025, driven by higher loan and deposit interest income and lower deposit interest expense[179](index=179&type=chunk)[187](index=187&type=chunk) - Fully taxable equivalent net interest margin increased to **3.05%** for Q2 2025 (from 2.66% in Q2 2024) and to **3.00%** for H1 2025 (from 2.69% in H1 2024)[186](index=186&type=chunk)[193](index=193&type=chunk) - Non-interest expense increased by **$1.6 million (9.6%)** for Q2 2025 and **$1.8 million (5.4%)** for H1 2025, mainly due to higher compensation (salaries and wages) and data processing expenses[217](index=217&type=chunk)[221](index=221&type=chunk) - Income tax expense was a benefit of **$2.4 million** for Q2 2025 and **$0.7 million** for H1 2025, primarily due to the **$17.5 million net loss on securities sales**[224](index=224&type=chunk)[225](index=225&type=chunk) [Financial Condition](index=75&type=section&id=Financial%20Condition) Reviews the balance sheet, highlighting changes in assets, liabilities, equity, and their key drivers Selected Financial Information (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | $2,852,488 | $2,776,147 | $76,341 | 2.7% | | Total deposits | $2,468,962 | $2,396,883 | $72,079 | 3.0% | | Loans, net of deferred loan fees | $2,132,414 | $2,071,419 | $60,995 | 2.9% | | Total investment securities, FHLB and FRB stock | $298,228 | $544,602 | $(246,374) | (45.2)% | | Total shareholders' equity | $234,966 | $215,309 | $19,657 | 9.1% | - Total assets increased by **$76.3 million (2.7%)**, driven by a **$273.0 million** increase in cash and cash equivalents, largely from securities sales proceeds[226](index=226&type=chunk)[227](index=227&type=chunk) - Investment securities decreased by **$246.4 million (45.2%)** due to strategic sales of available-for-sale securities[228](index=228&type=chunk) - Loans, net of deferred loan fees, increased by **$61.0 million (2.9%)**, primarily from commercial mortgage growth, offset by decreases in indirect consumer and commercial and industrial loans[229](index=229&type=chunk)[242](index=242&type=chunk) - The allowance for credit losses increased by **$1.3 million (6.0%)** to **$22.7 million**, influenced by annual model updates, loan growth, and changes in economic forecasts[230](index=230&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - Deposits increased by **$72.1 million (3.0%)**, mainly from money market and interest-bearing demand deposits, partially due to seasonal municipal inflows[232](index=232&type=chunk)[269](index=269&type=chunk) - Subordinated debt increased by **$44.1 million** due to the issuance of new notes in June 2025[234](index=234&type=chunk) - Shareholders' equity increased by **$19.7 million (9.1%)**, primarily from a decrease in accumulated other comprehensive loss[236](index=236&type=chunk) [Liquidity](index=88&type=section&id=Liquidity) Describes liquidity management strategies, including cash positions, available securities, borrowing capacity, and deposit composition - The Corporation manages liquidity to meet cash flow requirements through short-term investments, lending/investing activities, core-deposit growth, and non-core funding sources[279](index=279&type=chunk) - Cash and cash equivalents totaled **$320.1 million** as of June 30, 2025, largely from securities sales proceeds[281](index=281&type=chunk) - Available-for-sale securities of **$287.3 million** (with $74.2 million unpledged) serve as a liquidity source[281](index=281&type=chunk) - The Bank had **$115.2 million** in unused borrowing capacity at the FHLBNY as of June 30, 2025[282](index=282&type=chunk) - Uninsured deposits were **$694.3 million (28.1% of total deposits)** as of June 30, 2025, with $187.4 million collateralized[283](index=283&type=chunk) - Brokered deposits of **$100.0 million** as of June 30, 2025, matured and were paid in July 2025[284](index=284&type=chunk) [Consolidated Cash Flows Analysis](index=89&type=section&id=Consolidated%20Cash%20Flows%20Analysis) Analyzes sources and uses of cash from operating, investing, and financing activities for the six months ended June 30, 2025 Consolidated Summary of Cash Flows (in thousands) | Activity Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,926 | $14,422 | | Net cash provided (used) in investing activities | $197,068 | $(13,634) | | Net cash provided by financing activities | $59,022 | $32,582 | | **Net increase in cash and cash equivalents** | **$273,016** | **$33,370** | - Cash provided by investing activities significantly increased in H1 2025 due to proceeds from available-for-sale securities sales[288](index=288&type=chunk) - Cash provided by financing activities in H1 2025 was driven by FHLBNY advances, subordinated debt issuance, and a net increase in deposits[289](index=289&type=chunk) [Capital Resources](index=89&type=section&id=Capital%20Resources) Discusses regulatory capital compliance, capital ratios, and available capital for dividends and share repurchases - The Bank is subject to regulatory capital requirements under Basel III rules and prompt corrective action regulations, maintaining capital ratios in excess of 'well-capitalized' thresholds[290](index=290&type=chunk)[292](index=292&type=chunk)[293](index=293&type=chunk) Bank Capital Ratios (June 30, 2025) | Capital Ratio | Actual Ratio | Minimum for Adequacy | Minimum for Well Capitalized | | :--- | :--- | :--- | :--- | | Total Capital (to RWA) | 14.58% | 8.00% | 10.00% | | Tier 1 Capital (to RWA) | 13.49% | 6.00% | 8.00% | | Common Equity Tier 1 Capital (to RWA) | 13.49% | 4.50% | 6.50% | | Tier 1 Capital (to Average Assets) | 10.07% | 4.00% | 5.00% | - The Corporation's Tier 2 capital includes **$44.1 million** of subordinated notes, with **$37.0 million** contributed to the Bank as common equity Tier 1 capital[294](index=294&type=chunk) - As of June 30, 2025, the Bank could declare approximately **$37.4 million** in dividends without prior regulatory approval[297](index=297&type=chunk) - The Corporation has remaining buyback authority for **200,816 shares** under its stock repurchase program as of June 30, 2025[278](index=278&type=chunk) [Explanation and Reconciliation of the Corporation's Use of Non-GAAP Measures](index=92&type=section&id=Explanation%20and%20Reconciliation%20of%20the%20Corporation%27s%20Use%20of%20Non-GAAP%20Measures) Explains and reconciles non-GAAP financial measures for insights into operational performance and trends - The Corporation uses non-GAAP financial measures to provide investors with insights into underlying operational performance and trends, facilitating comparisons with other companies[300](index=300&type=chunk) - Fully taxable equivalent net interest income and net interest margin are non-GAAP measures used to adjust for tax-exempt income, allowing for better comparability[302](index=302&type=chunk) Net Interest Margin - Fully Taxable Equivalent (non-GAAP) | Period | Net Interest Margin (GAAP) | Fully Taxable Equivalent Adjustment | Net Interest Margin (non-GAAP) | | :--- | :--- | :--- | :--- | | Q2 2025 | 2.92% | 0.13% | 3.05% | | Q2 2024 | 2.58% | 0.08% | 2.66% | | H1 2025 | 2.95% | 0.05% | 3.00% | | H1 2024 | 2.64% | 0.05% | 2.69% | - The adjusted efficiency ratio (non-GAAP) excludes one-time occurrences and amortization of intangible assets to better assess productivity[304](index=304&type=chunk) Efficiency Ratio (non-GAAP) | Period | Efficiency Ratio (unadjusted) | Efficiency Ratio (adjusted) | | :--- | :--- | :--- | | Q2 2025 | 175.88% | 65.69% | | Q2 2024 | 69.43% | 69.19% | | H1 2025 | 96.89% | 65.67% | | H1 2024 | 69.88% | 69.64% | - Tangible equity, tangible assets, and tangible book value per share are non-GAAP measures that exclude goodwill and other intangible assets, providing insights into the Corporation's use of equity[306](index=306&type=chunk)[308](index=308&type=chunk) Non-GAAP Net Income (Loss) (in thousands) | Period | Reported Net Income (Loss) (GAAP) | Net (Gains) Losses on Securities Transactions (net of tax) | Net (Gain) Loss on Sale of Branch Property (net of tax) | Non-GAAP Net Income | | :--- | :--- | :--- | :--- | :--- | | Q2 2025 | $(6,452) | $13,237 | $(463) | $6,322 | | H1 2025 | $(429) | $13,237 | $(463) | $12,345 | [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=96&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discloses market risk exposures, primarily interest rate and credit risk, and management's mitigation strategies [Interest Rate Risk](index=96&type=section&id=Interest%20Rate%20Risk) Discusses interest rate exposure and its potential impact on net interest income and equity value - Interest rate risk is the most significant market risk, impacting net interest income and equity value due to changes in interest rates[312](index=312&type=chunk)[313](index=313&type=chunk) - The Asset-Liability Committee (ALCO) sets policy guidelines and monitors interest rate risk exposure[314](index=314&type=chunk) Impact of Interest Rate Changes on Net Interest Income (over 12 months) | Change in Interest Rates | Percentage Increase (Decrease) | | :--- | :--- | | 200 basis points decrease | (0.94)% | | 100 basis points decrease | 0.02% | | 100 basis points increase | 4.51% | | 200 basis points increase | 8.97% | Impact of Interest Rate Changes on Present Value of Corporation's Equity | Change in Interest Rates | Percentage Increase (Decrease) | | :--- | :--- | | 200 basis points decrease | 0.22% | | 100 basis points decrease | 1.05% | | 100 basis points increase | 2.49% | | 200 basis points increase | 4.89% | [Credit Risk](index=97&type=section&id=Credit%20Risk) Describes credit risk management through policies, loan review, and portfolio diversification - Credit risk is managed through written policies, loan review, collection procedures, an adequate allowance for credit losses, and ongoing training[318](index=318&type=chunk) - Loan portfolio diversification is maintained across commercial loans, 1-4 family mortgages, and consumer loans[318](index=318&type=chunk) - The Board's Loan Committee and the Senior Loan Committee oversee loan policy and approvals, ensuring adherence to risk guidelines[319](index=319&type=chunk) [Item 4: Controls and Procedures](index=98&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures, with no material changes to internal control over financial reporting - The Corporation's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[321](index=321&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[321](index=321&type=chunk) - Disclosure controls are designed to ensure timely and accurate reporting of information required under the Exchange Act[322](index=322&type=chunk) [PART II. OTHER INFORMATION](index=89&type=section&id=PART%20II.%20OTHER%20INFORMATION) Disclosures on legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1: Legal Proceedings](index=89&type=section&id=Item%201%3A%20Legal%20Proceedings) Details a lawsuit against Pioneer Bank for a defaulted $4.2 million commercial credit facility, with no other material legal impacts - The Corporation filed a lawsuit against Pioneer Bank for breach of participation agreement, fraud, and negligent misrepresentation related to a **$4.2 million** defaulted commercial credit facility[324](index=324&type=chunk) - A recovery of **$0.5 million** was received in April 2020, with **$3.7 million** and accumulated expenses still being pursued[324](index=324&type=chunk) - No other pending legal, arbitration, or regulatory proceedings are expected to have a material adverse impact on financial results or liquidity as of June 30, 2025[325](index=325&type=chunk) [Item 1A: Risk Factors](index=89&type=section&id=Item%201A%3A%20Risk%20Factors) Reports no material changes to previously disclosed risk factors, acknowledging potential for new or immaterial risks - No material changes to the risk factors from the 2024 Annual Report on Form 10-K were identified[326](index=326&type=chunk) - The Corporation acknowledges the potential for additional unknown or currently immaterial risks to adversely affect its business[326](index=326&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=89&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock repurchases in Q2 2025, with 200,816 shares remaining under the repurchase program - No shares were repurchased under the stock repurchase program during the quarter ended June 30, 2025[327](index=327&type=chunk) - As of June 30, 2025, **200,816 shares** remained available for repurchase under the program[327](index=327&type=chunk) - The stock repurchase program, approved on January 8, 2021, authorizes the repurchase of up to **250,000 shares** of common stock[327](index=327&type=chunk) [Item 3: Defaults Upon Senior Securities](index=89&type=section&id=Item%203%3A%20Defaults%20Upon%20Senior%20Securities) This section is not applicable to the Corporation for the current reporting period - This section is marked as 'Not applicable'[328](index=328&type=chunk) [Item 4: Mine Safety Disclosures](index=89&type=section&id=Item%204%3A%20Mine%20Safety%20Disclosures) This section is not applicable to the Corporation for the current reporting period - This section is marked as 'Not applicable'[329](index=329&type=chunk) [Item 5: Other Information](index=89&type=section&id=Item%205%3A%20Other%20Information) No Rule 10b5-1 trading arrangements adopted or terminated by directors or officers during Q2 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025[330](index=330&type=chunk) [Item 6: Exhibits](index=90&type=section&id=Item%206%3A%20Exhibits) Lists all exhibits filed with the Form 10-Q, including organizational documents, officer certifications, and XBRL files - The exhibit list includes organizational documents, officer certifications, and XBRL taxonomy files[331](index=331&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer are filed herewith[331](index=331&type=chunk) [SIGNATURES](index=91&type=section&id=SIGNATURES) Contains required signatures of authorized officers, certifying accuracy and completeness of the Form 10-Q filing [EXHIBIT INDEX](index=102&type=section&id=EXHIBIT%20INDEX) Provides a comprehensive list of all exhibits accompanying the Form 10-Q, detailing descriptions and filing status
Chemung Financial (CHMG)'s Technical Outlook is Bright After Key Golden Cross
ZACKS· 2025-07-21 14:56
Group 1 - Chemung Financial Corp (CHMG) has reached a key level of support, with its 50-day simple moving average crossing above its 200-day simple moving average, indicating a "golden cross" [1] - A golden cross is a technical chart pattern that can signify a potential bullish breakout, formed when a short-term moving average crosses above a longer-term moving average [2] - The golden cross pattern consists of three stages: a downtrend that bottoms out, a crossover of moving averages, and an upward price trend [3] Group 2 - Over the past four weeks, CHMG has gained 12%, and it currently holds a 1 (Strong Buy) rating on the Zacks Rank, suggesting potential for further breakout [4] - There has been a positive shift in CHMG's earnings expectations, with one upward change in estimates over the past 60 days, reinforcing the bullish outlook [4][5]
Chemung Financial (CHMG) - 2025 Q2 - Quarterly Results
2025-07-17 21:12
```markdown [Q2 2025 Results and Strategic Overview](index=1&type=section&id=Second%20Quarter%20Highlights) Chemung Financial Corporation reported a **$6.5 million net loss** for Q2 2025 due to a strategic balance sheet repositioning Q2 2025 Key Financial Results | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Income (Loss) | ($6.5 million) | $6.0 million | $5.0 million | | Diluted EPS | ($1.35) | $1.26 | $1.05 | - The Corporation executed a balance sheet repositioning by issuing **subordinated debt** and selling a significant portion of its **securities portfolio**. The CEO stated these actions strengthen **regulatory capital**, improve **commercial real estate concentration ratios**, and enhance flexibility for funding **loan growth**[2](index=2&type=chunk) Q2 2025 Strategic and Non-GAAP Highlights | Highlight | Value/Metric | | :--- | :--- | | Subordinated Notes Issued | $45.0 million | | Securities Sold (Book Value) | $245.5 million | | Realized Pre-tax Loss on Sale | $17.5 million | | Non-GAAP Net Income | $6.3 million | | Non-GAAP EPS | $1.31 | | Net Interest Margin | 3.05% (+9 bps QoQ) | | Dividends Declared per Share | $0.32 | [Quarter-over-Quarter Financial Analysis (Q2 2025 vs. Q1 2025)](index=1&type=section&id=2nd%20Quarter%202025%20vs%201st%20Quarter%202025) Net interest income increased by **$1.0 million**, but a **$17.5 million** securities loss led to a non-interest loss [Net Interest Income (QoQ)](index=1&type=section&id=Net%20Interest%20Income) Net interest income rose by **$1.0 million** to **$20.8 million**, driven by higher loan income and expanded **3.05%** net interest margin - **Net interest income increased by $1.0 million (5.0%)** to **$20.8 million**, driven by higher interest income on loans and interest-earning deposits, partially offset by lower income from taxable securities and higher expense on borrowed funds[6](index=6&type=chunk) - The increase in loan interest income was due to a **$30.8 million** rise in average loan balances, mainly in commercial real estate, and a **12 basis point** increase in the average yield on total loans[7](index=7&type=chunk) - Fully taxable equivalent net interest margin was **3.05%**, up from **2.96%** in Q1 2025. The average yield on interest-earning assets increased by **11 basis points** to **4.83%**, while the cost of funds rose by only **2 basis points** to **1.94%**[14](index=14&type=chunk) [Provision for Credit Losses (QoQ)](index=2&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses was **$1.1 million**, consistent with prior quarter, due to loan growth and economic forecasts - The provision for credit losses was **$1.1 million**, in line with the prior quarter. This was largely driven by **commercial loan growth** and changes in **macroeconomic forecasts** (increased unemployment, decline in GDP growth)[15](index=15&type=chunk) [Non-Interest Income (QoQ)](index=2&type=section&id=Non-Interest%20Income) The Corporation recorded a **$10.7 million** non-interest loss, driven by a **$17.5 million** pre-tax loss on securities - A pre-tax loss of **$17.5 million** on the sale of available-for-sale securities resulted in an overall negative non-interest income of **$10.7 million** for the quarter[16](index=16&type=chunk) - The securities sale was a **strategic move** to pay off more expensive **wholesale funding** and fund **future loan growth**. The securities sold had a weighted average book yield of approximately **2.1%**[17](index=17&type=chunk) - The Corporation also recognized a **$0.6 million** gain on the sale of a branch property in Ithaca, New York[18](index=18&type=chunk) [Non-Interest Expense (QoQ)](index=3&type=section&id=Non-Interest%20Expense) Non-interest expense increased by **$0.9 million** to **$17.8 million**, primarily due to higher salaries and professional costs - **Non-interest expense increased by $0.9 million (5.3%)** to **$17.8 million**, driven by increases in salaries and wages (**$0.4 million**), pension and other employee benefits (**$0.2 million**), and professional services (**$0.2 million**)[19](index=19&type=chunk) - The increase in salaries was due to a **higher number of full-time equivalent employees**, including new staff in the Western New York division, and adjustments related to the **deferred compensation plan**[20](index=20&type=chunk) [Income Tax Expense (QoQ)](index=3&type=section&id=Income%20Tax%20Expense) A tax benefit of **$2.4 million** was recorded, a **$4.1 million** decrease from prior quarter, due to securities loss - The Corporation recorded a tax benefit of **$2.4 million**, compared to a tax expense of **$1.7 million** in Q1 2025. The change was primarily due to the **net loss on the sale of available-for-sale securities**[21](index=21&type=chunk) [Year-over-Year Financial Analysis (Q2 2025 vs. Q2 2024)](index=3&type=section&id=2nd%20Quarter%202025%20vs%202nd%20Quarter%202024) Net interest income grew by **$3.0 million** to **$20.8 million**, driven by loan growth and decreased deposit expense [Net Interest Income (YoY)](index=3&type=section&id=Net%20Interest%20Income) Net interest income increased by **$3.0 million** to **$20.8 million**, driven by higher loan income and lower deposit expense - **Net interest income increased by $3.0 million (16.9%) YoY**, driven by higher interest income on loans (**$1.9 million**) and interest-earning deposits (**$0.5 million**), and a decrease in interest expense on deposits (**$1.6 million**)[22](index=22&type=chunk) - Average total loan balances grew by **$98.7 million**, concentrated in commercial loans. The average yield on total loans increased by **9 basis points**[23](index=23&type=chunk) - The total average cost of interest-bearing deposits decreased by **41 basis points**, from **2.86%** in Q2 2024 to **2.45%** in Q2 2025[27](index=27&type=chunk) - Fully taxable equivalent net interest margin was **3.05%**, up from **2.66%** in Q2 2024. The total cost of funds decreased by **26 basis points** to **1.94%**[29](index=29&type=chunk) [Provision for Credit Losses (YoY)](index=4&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses was **$1.1 million**, an increase of **$0.2 million** from prior year, due to loan growth - The provision for credit losses increased by **$0.2 million** to **$1.1 million** compared to Q2 2024. This was due to **stronger loan growth** (**$34.8 million**) and **more negative economic forecasts** (unemployment and GDP) in the current period[30](index=30&type=chunk) [Non-Interest Income (YoY)](index=4&type=section&id=Non-Interest%20Income) A non-interest loss of **$10.7 million** was recorded, primarily due to the **$17.5 million** pre-tax loss on securities - A pre-tax loss of **$17.5 million** on securities sales resulted in a total non-interest loss of **$10.7 million**, compared to a **$5.6 million** income in Q2 2024. Recurring non-interest income increased by **$0.6 million**[31](index=31&type=chunk) - The increase in recurring income was driven by **fee schedule increases** for service charges and **wealth management**, which were implemented in the second half of 2024[32](index=32&type=chunk) [Non-Interest Expense (YoY)](index=4&type=section&id=Non-Interest%20Expense) Non-interest expense rose by **$1.6 million** to **$17.8 million**, driven by higher salaries and data processing - **Non-interest expense increased by $1.6 million (9.9%) YoY**, driven by higher salaries and wages (**$0.8 million**), data processing (**$0.3 million**), and professional services (**$0.2 million**)[33](index=33&type=chunk) - The increase in salaries was due to **merit-based increases** and **additional staffing**. The rise in data processing was related to **core service provider expenses** and **Canal Bank operations**[34](index=34&type=chunk) [Income Tax Expense (YoY)](index=4&type=section&id=Income%20Tax%20Expense) The Corporation recorded a tax benefit of **$2.4 million**, a **$3.7 million** decrease from Q2 2024, due to securities loss - A tax benefit of **$2.4 million** was recorded, compared to a tax expense of **$1.3 million** in Q2 2024. The decrease was primarily due to the **net loss on the sale of securities**[35](index=35&type=chunk) [Asset Quality](index=4&type=section&id=Asset%20Quality) Asset quality improved as of June 30, 2025, with non-performing loans decreasing to **$8.2 million** and allowance increasing Asset Quality Indicators | Metric | June 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Non-performing loans | $8.2 million | $9.0 million | | NPLs to Total Loans | 0.39% | 0.43% | | Non-performing assets | $8.4 million | $9.6 million | | NPAs to Total Assets | 0.30% | 0.35% | - Annualized net charge-offs to total average loans were **0.19%** for Q2 2025, an increase from **0.05%** in Q1 2025, largely due to a **$0.7 million** charge-off on a previously reserved unsecured **commercial and industrial loan**[38](index=38&type=chunk) Allowance for Credit Losses | Metric | June 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Allowance for credit losses on loans | $22.7 million | $21.4 million | | Allowance to Total Loans | 1.06% | 1.03% | | Allowance to Non-performing Loans | 275.16% | 238.87% | [Balance Sheet Activity](index=5&type=section&id=Balance%20Sheet%20Activity) Total assets increased by **$76.3 million** to **$2.85 billion**, driven by cash and loan growth, liabilities grew - **Total assets increased by $76.3 million (2.7%)** to **$2.852 billion** since year-end 2024. The increase was driven by a **$273.0 million** rise in cash and cash equivalents and **$61.0 million** in net **loan growth**, offset by a **$244.1 million** decrease in securities available for sale[40](index=40&type=chunk) - **Total liabilities increased by $56.7 million (2.2%)** to **$2.618 billion**. This was driven by a **$72.1 million** increase in total deposits and **$44.1 million** in new **subordinated debt**, partially offset by a **$54.3 million** decrease in advances and other debt[45](index=45&type=chunk) - **Total shareholders' equity increased by $19.7 million (9.2%)** to **$235.0 million**. The increase was primarily due to a **$22.4 million** decrease in **accumulated other comprehensive loss**, largely from the **reclassification of losses** from the **securities sale**[49](index=49&type=chunk) Capital Ratios and Book Value | Metric | June 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Total equity to total assets | 8.24% | 7.76% | | Tangible equity to tangible assets | 7.53% | 7.02% | | Book value per share | $48.85 | $45.13 | | Tangible book value per share | $44.31 | $40.55 | [Liquidity](index=6&type=section&id=Liquidity) The Corporation maintains strong liquidity with **$320.1 million** in cash, ample resources, and is reducing wholesale funding - The Corporation maintains strong liquidity with cash and cash equivalents of **$320.1 million** as of June 30, 2025, largely from the proceeds of the **securities sale**[51](index=51&type=chunk) - As of June 30, 2025, the Bank had **$115.2 million** in available borrowing capacity at the **Federal Home Loan Bank of New York**[52](index=52&type=chunk) - Uninsured deposits totaled **$694.3 million**, or **28.1%** of total deposits, as of June 30, 2025. This includes **$187.4 million** of **municipal deposits** collateralized by **pledged assets**[53](index=53&type=chunk) - As part of its strategic repositioning, the Corporation paid off **$100.0 million** in **brokered deposits** that matured in early July 2025, reducing its reliance on **wholesale funding sources**[54](index=54&type=chunk) [Other Items](index=7&type=section&id=Other%20Items) Wealth Management Group's assets under management grew by **4.5%** to **$2.313 billion**, and a branch was sold for a **$0.6 million** gain - Total assets under management in the Wealth Management Group increased by **$101.0 million (4.5%)** to **$2.313 billion** as of June 30, 2025, compared to year-end 2024[55](index=55&type=chunk) - In April 2025, the Corporation sold a previous branch property in Ithaca, New York, resulting in a **pre-tax gain** of **$0.6 million**[56](index=56&type=chunk) - As of June 30, 2025, the Corporation had **200,816 shares** remaining under its **stock repurchase program**. No shares were repurchased during the second quarter of 2025[57](index=57&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) This section presents unaudited consolidated financial statements, including Balance Sheets, Statements of Income, and Net Interest Income Analysis Consolidated Balance Sheets (Unaudited) | (in thousands of dollars) | June 30, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Total cash and cash equivalents | $320,051 | $47,035 | | Total investment securities | $294,841 | $541,367 | | Loans, net | $2,109,749 | $2,050,031 | | **Total assets** | **$2,852,488** | **$2,776,147** | | **LIABILITIES AND SHAREHOLDERS' EQUITY** | | | | Total deposits | $2,468,962 | $2,396,883 | | Subordinated debt, net | $44,146 | $— | | **Total liabilities** | **$2,617,522** | **$2,560,838** | | **Total shareholders' equity** | **$234,966** | **$215,309** | Consolidated Statements of Income (Unaudited) - Three Months Ended June 30 | (in thousands of dollars, except per share data) | 2025 | 2024 | | :--- | :--- | :--- | | Net interest income | $20,808 | $17,761 | | Provision for credit losses | $1,145 | $879 | | Non-interest income | ($10,705) | $5,598 | | Non-interest expense | $17,769 | $16,219 | | Income before income tax expense | ($8,811) | $6,261 | | **Net income (loss)** | **($6,452)** | **$4,987** | | **Diluted earnings per share** | **($1.35)** | **$1.05** | [GAAP to Non-GAAP Reconciliations](index=16&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides reconciliations for non-GAAP financial measures, including fully taxable equivalent net interest income, adjusted efficiency ratio, and tangible book value Non-GAAP Net Income Reconciliation (Q2 2025) | (in thousands of dollars, except per share data) | Amount | | :--- | :--- | | Reported net income (GAAP) | ($6,452) | | Net losses on security transactions (net of tax) | $13,237 | | Net gain on sale of branch property (net of tax) | ($463) | | **Net income (non-GAAP)** | **$6,322** | | Reported basic and diluted EPS (GAAP) | ($1.35) | | **Basic and diluted EPS (non-GAAP)** | **$1.31** | Tangible Book Value Reconciliation (June 30, 2025) | (in thousands of dollars, except per share data) | Amount | | :--- | :--- | | Total shareholders' equity (GAAP) | $234,966 | | Less: intangible assets | ($21,824) | | **Tangible equity (non-GAAP)** | **$213,142** | | Book value per share (GAAP) | $48.85 | | **Tangible book value per share (non-GAAP)** | **$44.31** | Adjusted Efficiency Ratio (Q2 2025) | Metric | Value | | :--- | :--- | | Efficiency ratio (unadjusted) | 175.88% | | **Efficiency ratio (adjusted, non-GAAP)** | **65.69%** | ```
Chemung Financial Corporation Reports Second Quarter 2025 Results
Globenewswire· 2025-07-17 20:50
Core Points - Chemung Financial Corporation reported a net loss of $6.5 million, or $1.35 per share, for Q2 2025, contrasting with net income of $6.0 million, or $1.26 per share, in Q1 2025, and net income of $5.0 million, or $1.05 per share, in Q2 2024 [1] - The company undertook a balance sheet repositioning by issuing subordinated debt and selling a significant portion of its securities portfolio, which is expected to strengthen its regulatory capital position and improve funding flexibility [2] - Core operating results were solid, reflecting the resilience of the customer base and a disciplined organizational approach [3] Financial Performance - Net interest income for Q2 2025 was $20.8 million, up from $19.8 million in Q1 2025, marking a 5.0% increase driven by higher interest income on loans and interest-earning deposits [6] - Interest income on loans increased due to a $30.8 million rise in average loan balances and a 12 basis point increase in average yield on total loans [7] - Interest income on interest-earning deposits rose by $46.2 million in average balances, largely from proceeds of the securities sale and subordinated debt issuance [8] Balance Sheet Activity - Total assets increased to $2.852 billion as of June 30, 2025, up from $2.776 billion at the end of 2024, driven by increases in cash and cash equivalents and loans [38] - Total liabilities rose to $2.618 billion, primarily due to increases in total deposits and subordinated debt [42] - Total shareholders' equity increased to $235.0 million, reflecting a decrease in accumulated other comprehensive loss [46] Non-Interest Income and Expenses - The company recognized a pre-tax loss of $17.5 million on the sale of available for sale securities, leading to negative non-interest income of $10.7 million for the quarter [15] - Non-interest expense for Q2 2025 was $17.8 million, an increase of 5.3% from the prior quarter, driven by higher salaries, benefits, and professional services [18] Asset Quality - Non-performing loans totaled $8.2 million, or 0.39% of total loans, a decrease from $9.0 million, or 0.43%, at the end of 2024 [34] - The allowance for credit losses on loans was $22.7 million, reflecting an increase due to stronger loan growth and changes in economic forecasts [37] Market Position - The market value of total assets under management in the Wealth Management Group increased to $2.313 billion as of June 30, 2025, up from $2.212 billion at the end of 2024 [52] - The company completed the sale of a branch property, resulting in a pre-tax gain of $0.6 million, as part of its ongoing rationalization of physical distribution [53]