UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For Quarterly period ended MARCH 31, 2003
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Commission File No. 0-13888
	CHEMUNG FINANCIAL CORPORATION
	(Exact name of registrant as specified in its charter)
New York		16-1237038
(State or other jurisdiction of incorporation or organization)		I.R.S. Employer Identification No.
One Chemung Canal Plaza, Elmira, NY			14901
(Address of principal executive offices)			(Zip Code)
(607) 737-3711 or (800) 836-3711
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act.)
YES XX NO
Indicate the number of shares outstanding of each of the issuer's classes of common stock as of April 30, 2003.
Common Stock, $.01 par value -- outstanding 3,763,884 shares

(THIS PAGE INTENTIONALLY LEFT BLANK)

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

PART I.	FINANCIAL INFORMATION	PAGE
Item 1:	Financial Statements - Unaudited
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Cash Flows	3
	Notes to Unaudited Condensed Consolidated Financial Statements	4
Item 2:	Management's Discussion and Analysis of Financial Condition and Results of Operations	6
Item 3:	Quantitative and Qualitative Disclosures about Market Risk
	Information required by this Item is set forth herein in Management's Discussion and Analysis of Financial Condition and Results of Operations under the heading "Interest Rate Risk"	15
Item 4:	Controls and Procedures	16
PART II.	OTHER INFORMATION	18
Item 1:	Legal Proceedings
Item 2:	Changes in Securities and Use of Proceeds
Item 3:	Defaults Upon Senior Securities
Item 4:	Submission of Matters to a Vote of Security Holders
Item 5:	Other Information
Item 6:	Exhibits and Reports on Form 8-K	18
SIGNATURES		20
SECTION 302 CERTIFICATIONS		22

PART I. FINANCIAL INFORMATION

Item 1: Financial Statements

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	MARCH 31, 2003 Unaudited	DECEMBER 31, 2002
ASSETS
Cash and due from banks	$ 24,646,819	28,836,759
Federal funds sold	47,000,000	-
Interest-bearing deposits with other financial institutions	1,580,216	1,215,328
Total cash and cash equivalents	73,227,035	30,052,087
Securities available for sale, at estimated fair value	221,486,407	257,153,717
Securities held to maturity, estimated fair value of $8,199,206 at March 31, 2003 and $8,185,055 at December 31, 2002	7,838,588	7,835,498
Loans, net of deferred origination fees and costs, and unearned income	425,245,578	432,294,450
Allowance for loan losses	(6,312,512)	(7,674,377)
Loans, net	418,933,066	424,620,073
Premises and equipment, net	17,133,786	17,496,416
Goodwill, net of accumulated amortization	1,516,666	1,516,666
Other intangible assets, net of accumulated amortization	2,452,605	2,552,034
Other assets	10,407,299	9,944,364
Total assets	$752,995,452	751,170,855
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing	$109,436,827	109,602,512
Interest-bearing	443,752,138	432,162,955
Total deposits	553,188,965	541,765,467
Securities sold under agreements to repurchase	87,823,131	78,661,100
Federal Home Loan Bank advances	25,000,000	40,750,000
Accrued interest payable	1,433,314	1,482,058
Dividends payable	865,908	868,831
Other liabilities	4,794,845	8,216,222
Total liabilities	673,106,163	671,743,678
Shareholders' equity:
Common stock, $.01 par value per share, 10,000,000 shares authorized; 4,300,134 issued at March 31, 2003 and December 31, 2002
	43,001	43,001
Capital surplus	22,378,918	22,355,407
Retained earnings	62,407,222	61,247,551
Treasury stock, at cost (535,318 shares at March 31, 2003; 522,609 shares at December 31, 2002)	(12,175,540)	(11,826,290)
Accumulated other comprehensive income	7,235,688	7,607,508
Total shareholders' equity	79,889,289	79,427,177
Total liabilities and shareholders' equity	$752,995,452	751,170,855
See accompanying notes to unaudited condensed consolidated financial statements.

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited

	Three Months Ended March 31
INTEREST AND DIVIDEND INCOME	2003	2002
Loans	$ 7,196,127	7,761,990
Securities	2,916,515	3,423,999
Federal funds sold	41,309	44,452
Interest-bearing deposits	12,054	25,303
Total interest and dividend income	10,166,005	11,255,744
INTEREST EXPENSE
Deposits	2,396,974	3,185,854
Borrowed funds	277,420	312,547
Securities sold under agreements to repurchase	905,602	973,281
Total interest expense	3,579,996	4,471,682
Net interest income	6,586,009	6,784,062
Provision for loan losses	600,000	350,000
Net interest income after provision for loan losses	5,986,009	6,434,062
Other operating income:
Trust & investment services income	1,083,142	1,100,188
Service charges on deposit accounts	794,179	637,237
Net gain on securities transactions	540,000	245,379
Credit card merchant earnings	271,990	332,871
Other	465,401	387,910
Total other operating income	3,154,712	2,703,585
Other operating expenses:
Salaries & wages	2,390,297	2,444,807
Pension and other employee benefits	773,905	779,401
Net occupancy expenses	526,563	526,544
Furniture and equipment expenses	568,864	499,710
Other	2,002,058	2,243,710
Total other operating expenses	6,261,687	6,494,172
Income before income tax expense	2,879,034	2,643,475
Income tax expense	853,455	793,205
Net income	$ 2,025,579	1,850,270
Weighted average shares outstanding	3,832,298	4,009,299
Basic earnings per share (Note 2)	$0.53	$0.46

See accompanying notes to unaudited condensed consolidated financial statements.

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited

	Three Months Ended
	March 31
CASH FLOWS FROM OPERATING ACTIVITIES:	2003	2002
Net income	$ 2,025,579	1,850,270
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets	99,429	99,430
Provision for loan losses	600,000	350,000
Depreciation and amortization	549,952	472,742
Amortization of premiums and accretion of discounts on securities, net	491,912	89,508
Net gain on securities transactions	(540,000)	(245,379)
Increase in other assets	(386,614)	(420,459)
Decrease in accrued interest payable	(48,744)	(286,314)
Expense related to restricted stock units for directors' deferred compensation plan	40,736	37,884
Decrease in other liabilities	(3,114,738)	(303,622)
Net cash (used in) provided by operating activities	(282,488)	1,644,060
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale	1,312,552	9,981,250
Proceeds from maturities of and principal collected on securities available for sale	49,631,926	24,995,334
Proceeds from maturities of and principal collected on securities held to maturity	266,766	307,057
Purchases of securities available for sale	(15,905,845)	(36,097,760)
Purchases of securities held to maturity	(269,855)	(550,855)
Purchases of premises and equipment	(187,322)	(1,981,276)
Net decrease (increase) in loans	2,900,821	(7,212,333)
Proceeds from sales of student loans	2,109,862	1,160,139
Net cash provided by (used in) investing activities	39,858,905	(9,398,444)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in demand deposits, NOW accounts, savings accounts, and insured money market accounts	9,107,864	22,379,425
Net increase in time deposits and individual retirement accounts	2,315,634	5,824,417
Net increase in securities sold under agreements to repurchase	9,162,031	10,811,902
Net repayments of Federal Home Loan Bank advances	(15,750,000)	(12,600,000)
Purchase of treasury stock	(368,167)	(572,317)
Cash dividends paid	(868,831)	(911,773)
Net cash provided by financing activities	3,598,531	24,931,654
Net increase in cash and cash equivalents	43,174,948	17,177,270
Cash and cash equivalents at beginning of period	30,052,087	30,381,377
Cash and cash equivalents at end of period	$73,227,035	47,558,647
Supplemental disclosure of non-cash activity: Transfer of loans to other real estate owned	$ 76,323	74,140
Adjustment of securities available for sale to fair value, net of tax	$ (371,820)	(13,687)
Sale of securities available for sale pending settlement	$ 462,500	-
See accompanying notes to unaudited condensed consolidated financial statements.

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

Chemung Financial Corporation (the Corporation), through its wholly owned subsidiaries, Chemung Canal Trust Company (the Bank) and CFS Group, Inc., a financial services company, provides a wide range of banking, financing, fiduciary and other financial services to its local market area. The consolidated financial statements include the accounts of the Corporation and its wholly owned subsidiaries. All material intercompany accounts and transactions are eliminated in consolidation.

The data in the condensed consolidated balance sheet as of December 31, 2002 was derived from the audited consolidated financial statements in the Corporation's 2002 Form 10-K. That data, along with the other interim financial information presented in the condensed consolidated balance sheets, statements of income and statements of cash flows should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in the 2002 Form 10-K. Amounts in prior periods' condensed consolidated interim financial statements are reclassified whenever necessary to conform to the current period's presentation.

The condensed consolidated financial statements included herein reflect all adjustments which are, in the opinion of management, of a normal recurring nature and necessary to present fairly the Corporation's financial position as of March 31, 2003 and December 31, 2002, and results of operations for the three-month periods ended March 31, 2003 and 2002, and cash flows for the three-month periods ended March 31, 2003 and 2002. The results for the periods presented are not necessarily indicative of results to be expected for the entire fiscal year or any other interim period.

2. Basic Earnings Per Share

Basic earnings per share were computed by dividing net income by 3,832,298 and 4,009,299 weighted average shares outstanding for the three-month periods ended March 31, 2003 and 2002, respectively. Issuable shares (such as those related to directors' restricted stock units) are considered outstanding and are included in the computation of basic earnings per share. No dilutive common stock equivalents were outstanding during the three-month periods ended March 31, 2003 and 2002.

3. Recent Accounting Pronouncements

In December 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure," which amends FASB Statement No. 123, "Accounting for Stock-Based Compensation." Statement No. 148 provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, Statement No. 148 amends the disclosure requirements of Statement No. 123 to require more prominent and more frequent disclosures in financial statements about the effects of stock-based compensation. SFAS No. 148 will not currently impact the Corporation, as the Corporation did not have any stock-based employee compensation plans at March 31, 2003.

In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN No. 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others; an Interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34." FIN No. 45 requires certain disclosures and potential liability-recognition for the fair value at issuance of guarantees that fall within its scope. Under FIN No. 45, the Corporation does not issue any guarantees that would require liability-recognition or disclosure, other than its standby letters of credit. The Corporation had $2.8 million of standby letters of credit outstanding at March 31, 2003. The fair value of those standby letters of credit was not significant.

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN No. 46"), "Consolidation of Variable Interest Entities." The objective of this interpretation is to provide guidance on how to identify a variable interest entity ("VIE") and determine when the assets, liabilities, noncontrolling interests, and results of operations of a VIE need to be included in a company's consolidated financial statements. A company that holds variable interests in an entity will need to consolidate the entity if the company's interest in the VIE is such that the company will absorb a majority of the VIE's expected losses and/or receive a majority of the entity's expected residual returns, if they occur. FIN No. 46 also requires additional disclosures by primary beneficiaries and other significant variable interest holders. The provisions of this interpretation became effective upon issuance. The requirements of FIN No. 46 did not have any impact on the Corporation's consolidated financial position, results of operations or liquidity.

4. Intangible Assets

The following table presents information relative to the Corporation's core deposit intangible ("CDI") related to the acquisition of deposits from the Resolution Trust Company in 1994:

	At March 31, 2003	At December 31, 2002
Original core deposit intangible amount	$ 5,965,793	5,965,793
Less: Accumulated amortization	3,513,188	3,413,759
Carrying amount	$ 2,452,605	2,552,034

Amortization expense for the three months ended March 31, 2003 and 2002 related to the CDI was $99,429 and $99,430, respectively. As of March 31, 2003, the remaining amortization period for this CDI was approximately 6.1 years. The estimated amortization expense is $397,719 for each of the years ended December 31, 2003 through 2007, with $563,439 in aggregate amortization expense in years subsequent to 2007.

5. Comprehensive Income

Comprehensive income of the Corporation represents net income plus other comprehensive income or loss, which consists of the net change in unrealized holding gains or losses on securities available for sale, net of the related tax effect. Accumulated other comprehensive income or loss represents the net unrealized holding gains or losses on securities available for sale as of the consolidated balance sheet dates, net of the related tax effect.

Comprehensive income for the three-month periods ended March 31, 2003 and 2002 was $1,653,759 and $1,836,583, respectively. The following summarizes the components of other comprehensive loss:

Other Comprehensive Loss	Three Months Ended March 31
	2003	2002
Unrealized net holding (losses) gains on securities available for sale, net of tax (pre-tax amounts of ($69,042) and $222,838 for the respective periods indicated)	$ (42,150)	135,307
Less: Reclassification adjustment for net gains realized in net income (pre-tax amounts of $540,000 and $245,379 for the respective periods indicated)	$(329,670)	(148,994)
Total other comprehensive loss	$(371,820)	(13,687)

Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations

The review that follows focuses on the significant factors affecting the financial condition and results of operations of Chemung Financial Corporation (the "Corporation") during the three month period ended March 31, 2003, with comparisons to the comparable period in 2002, as applicable. The unaudited condensed consolidated interim financial statements and related notes, as well as the 2002 Form 10-K, should be read in conjunction with this review. The results for the periods presented are not necessarily indicative of results to be expected for the entire fiscal year or any other interim period.

Forward-looking Statements

Statements included in this report include "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Chemung Financial Corporation cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The following important factors, among others, could cause Chemung Financial Corporation's actual financial performance to differ materially from that expressed in any forward-looking statement: (1) credit risk, (2) interest rate risk, (3) competition, (4) changes in the regulatory environment, and (5) changes in general business and economic trends. The foregoing list should not be construed as exhaustive, and the Corporation disclaims any obligation to subsequently revise any forward-looking statements to reflect events or circumstances after the date of such statements, or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies

Critical accounting policies are those most important to the portrayal of the Corporation's financial condition and results of operations, and those that require management's most difficult, subjective or complex judgements. Management considers the accounting policy relating to the allowance for loan losses to be a critical accounting policy given the inherent uncertainty in evaluating the level of the allowance required to cover probable credit losses inherent in the loan portfolio, and the material effect that such judgements can have on the Corporation's results of operations. While management's current evaluation of the allowance for loan losses indicates that the allowance is adequate, under adversely different conditions or assumptions, the allowance would need to be increased. For example, if historical loan loss experience significantly worsened or if current economic conditions significantly deteriorated, additional provisions for loan losses would be required to increase the allowance. In addition, the assumptions and estimates used in the internal reviews of the Corporation's non-performing loans and potential problem loans, and the associated evaluation of the related collateral coverage for these loans, has a significant impact on the overall analysis of the adequacy of the allowance for loan losses. While management has concluded that the current evaluation of collateral values is reasonable under the circumstances, if collateral evaluations were significantly lowered, the Corporation's allowance for loan losses policy would also require additional provisions for loan losses.

Financial Condition

Consolidated assets at March 31, 2003 totaled $753.0 million, an increase of $1.8 million or 0.2% since the beginning of the year. Total loans, net of unearned income and deferred fees and costs, decreased by $7.0 million or 1.6% from December 31, 2002 to March 31, 2003. Approximately $4.2 million of this decrease is in the residential mortgage portfolio, and can be attributed to a combination of a lower volume of loan closings during the first quarter of this year, as well as the fact that with interest rates at historically low levels, we have been selling more mortgages in the secondary mortgage market. While the number and dollar amount of loan closings has decreased, mortgage application activity has been strong during the first quarter. Total commercial loans, including commercial mortgages, have decreased $1.9 million since the beginning of the year, as the volume in this portfolio has been impacted by weakness in the economy. In addition, the Corporation charged-off $1.9 million of a commercial loan relationship in the first quarter, which also contributed to the decrease. In total, consumer loans are down $953 thousand primarily due to decreases in credit card balances and student loans of $581 thousand and $406 thousand, respectively.

The composition of the loan portfolio is summarized as follows:

	March 31, 2003	December 31, 2002
Residential mortgages	$ 96,869,843	$101,035,998
Commercial mortgages	45,525,204	44,966,502
Commercial, financial and agricultural	150,030,942	152,518,010
Consumer loans	133,251,651	134,204,609
Net deferred origination fees and costs, and unearned income	(432,062)	(430,669)
	$425,245,578	$432,294,450

The Available for Sale segment of the securities portfolio totaled $221.5 million at March 31, 2003, compared to $257.2 million at the end of 2002, a decrease of $35.7 million. At amortized cost, the available for sale segment of the securities portfolio is down $35.0 million since year-end. This decrease is primarily related to the current low rate environment and the fact that with rates continuing at such low levels, approximately $27.5 million in federal agency bonds were called during the quarter. Additionally, paydowns of mortgage-backed securities during the quarter totaled $18.4 million. We have remained somewhat cautious in this rate environment in re-investing these funds in longer term investments, which, along with a decline in loans and an increase in deposits, have been the primary factors for our federal funds sold position totaling $47.0 million at period end compared to overnight borrowings of $15.8 million at year end 2002. In order to improve yield on excess liquidity, however, in April we settled on the purchase of federal agency bonds and mortgage-backed securities totaling approximately $20.0 million and $10.0 million, respectively. The pre-tax valuation adjustment for net unrealized gains has decreased $677 thousand since the beginning of the year, reflective of the decrease in the portfolio, gains taken on the sale of a corporate bond, and a decrease in the market value of equities held in the portfolio. The Held to Maturity segment of the portfolio, consisting primarily of local municipal obligations, totaled $7.8 million at March 31, 2003, unchanged from year-end 2002.

The $4.2 million reduction in cash and due from banks relates primarily to lower period end branch cash balances, as well as a lower volume of transit items.

Deposits at March 31, 2003 totaled $553.2 million, an increase of $11.4 million or 2.1% as compared to December 31, 2002. Approximately $8.5 million of this increase is in period-end public funds deposit balances (primarily local municipal deposits). Other period end balances increased $2.9 million, primarily the result of higher savings account balances. The $15.8 million decrease in Federal Home Loan Bank advances is due to the repayment of overnight advances under our line of credit that were outstanding as of year-end 2002.

Other liabilities were down $3.4 million, primarily due to the payment of previously accrued federal and state income taxes during the quarter.

Asset Quality

Non-performing loans at March 31, 2003 totaled $10.871 million as compared to $12.994 million at December 31, 2002, a decrease of $2.123 million. This reduction in non-performing loans is primarily the result of a $1.962 million decrease in loans in non-accrual status. During the first quarter, the Corporation charged $1.9 million of a non-accrual commercial relationship against the allowance for loan losses. It is the Corporation's policy that when a past due loan is referred to legal counsel, or in the case of a commercial loan which becomes 90 days delinquent, or in the case of a consumer, mortgage or home equity loan not guaranteed by a government agency which becomes 120 days delinquent, the loan is placed on non-accrual and previously accrued interest is reversed unless, because of collateral or other circumstances, it is deemed to be collectible. Loans may also be placed in non-accrual if management believes such classification is warranted for other reasons. Troubled debt restructurings remained relatively unchanged at $3.4 million. Included in this total is one commercial mortgage totaling $3.0 million, which was restructured at market terms during the fourth quarter of 2002 in light of cash flow difficulties experienced by the borrower. The appraisals of the properties securing this mortgage indicate adequate collateral coverage, and the borrower is evidencing sufficient cash flow to meet amortization requirements under the restructured terms.

The following table summarizes the Corporation's non-performing assets (dollars in thousands):

	March 31,2003	December 31, 2002
Non-accrual loans	$ 7,383	9,345
Troubled debt restructurings	3,364	3,382
Accruing loans past due 90 days or more	124	267
Total non-performing loans	$10,871	12,994
Other real estate owned	417	406
Securities on non-accrual	-	1,288
Total non-performing assets	$11,288	14,688

In addition to non-performing loans, as of March 31, 2003, the Corporation, through its loan review function, has identified 20 commercial loan relationships totaling $13.137 million in potential problem loans, as compared to $8.131 million (19 relationships) at December 31, 2002. This increase is due primarily to the addition of one commercial credit totaling $5.048 million. Potential problem loans are loans that are currently performing, but where known information about possible credit problems of the related borrowers causes management to have serious doubts as to the ability of such borrowers to comply with the present loan repayment terms, and which may result in the disclosure of such loans as non-performing at some time in the future. At the Corporation, potential problem loans are typically loans that are performing but are classified in the Corporation's loan rating system as "substandard". Management cannot predict the extent to which economic conditions may worsen or other factors which may impact borrowers and the potential problem loans. Accordingly, there can be no assurance that other loans will not become 90 days or more past due, be placed on non-accrual, become restructured, or require increased allowance coverage and provisions for loan losses.

Given the level of non-performing and classified relationships at March 31, 2003, and in recognition of the increased inherent risk of loss in the current loan portfolio, the Corporation increased its provision for loan losses during the first quarter of 2003 to $600 thousand as compared to $350 thousand during the first three months of 2002. The allowance for loan losses is an amount that management believes will be adequate to absorb probable loan losses on existing loans. Management's evaluation of the adequacy of the allowance for loan losses is performed on a periodic basis and takes into consideration such factors as the historical loan loss experience, review of specific problem loans (including evaluation of the underlying collateral), changes in the composition and volume of the loan portfolio, overall portfolio quality, and current economic conditions that may affect the borrowers' ability to pay. At March 31, 2003, the Corporation's allowance for loan losses totaled $6.313 million, resulting in a coverage ratio of allowance to non-performing loans of 58.07%. However, included in this ratio is the $3.0 million restructured commercial mortgage which management believes has sufficient collateral and cash flow as of March 31, 2003, to support the debt. Excluding this loan, the coverage ratio would be 80.16%. An internal review of non-performing loans and associated collateral coverage indicates that the current coverage ratio is adequate. Net loan charge-offs for the first quarter of 2003 totaled $1.961 million as compared to $120 thousand during the first quarter of 2002. This increase was due to the above noted charge-off of $1.9 million on a commercial relationship. The allowance for loan losses to total loans at March 31, 2003 was 1.48% as compared to 1.78% as of December 31, 2002.

Activity in the allowance for loan losses was as follows:

(in thousands of dollars)	Three Months Ended March 31
	2003	2002
Balance at beginning of period	$7,674	5,077
Charge-offs:
Commercial, financial and agricultural	(1,900)	(0)
Commercial mortgages	(0)	(0)
Residential mortgages	(2)	(5)
Consumer loans	(132)	(184)
Total	(2,034)	(189)
Recoveries:
Commercial, financial and agricultural	15	30
Commercial mortgages	0	0
Residential mortgages	2	1
Consumer loans	56	38
Total	73	69
Net charge-offs	(1,961)	(120)
Provision charged to operations	600	350
Balance at end of period	$6,313	5,307

At March 31, 2003, no loan concentrations to borrowers engaged in the same or similar industries exceeded 10% of total loans.

At December 31, 2002, the Corporation's available for sale securities portfolio included an investment in a $2.50 million par value corporate bond which was downgraded by nationally recognized rating agencies in July of 2002 to below investment grade status. Management had determined that the resulting decline in the estimated fair value of the bond was other-than-temporary, and accordingly had written the bond down to its estimated fair value, and placed the bond in non-accrual status. The write-down of the bond to 51.5% of par value resulted in a charge to earnings during the third quarter of 2002 of $1.006 million. During the first quarter of 2003, $1.0 million of this bond was sold at 85% of par, and $500 thousand was sold at 92.5% of par, resulting in first quarter gains of $540 thousand. The remaining $1.0 million was sold early in the second quarter of 2003 at 92.5% of par, resulting in an additional second quarter gain on the sale of $410 thousand.

Results of Operations

Net income for the first quarter totaled $2.026 million, an increase of $176 thousand or 9.5% as compared to first quarter 2002 net income of $1.850 million. Earnings per share increased 15.2% from $0.46 to $0.53 per share on 177,001 fewer average shares outstanding.

Net interest income totaled $6.586 million as compared to $6.784 million during the first quarter of 2002, a decrease of $198 thousand or 2.9%. While average earning assets were up $15.4 million or 2.3% as compared to the first quarter of 2002, total interest and dividend income decreased $1.09 million or 9.7% as the yield declined 79 basis points from 6.76% to 5.97%. Of the increase in average earning assets, approximately $12.2 million was in the securities portfolio, with the portfolio yield decreasing 112 basis points to 4.78%, impacted primarily by lower yields of federal agency bonds and mortgage-backed securities. Average loans increased $2.0 million, with the yield decreasing 57 basis points to 6.82%.

Total average funding liabilities have increased $13.0 million or 2.0% when compared to the first quarter of 2002. Substantially all of this growth is in average deposits, which when compared to the first quarter of last year are up $13.0 million or 2.4% despite public fund balances averaging approximately $9.3 million lower than last year. All other deposits are up approximately $22.3 million on average, with $13.6 million of this growth in personal account balances, reflected primarily in higher average savings and insured money market account balances. The balance of the average deposit growth is reflected primarily in higher non-personal insured money market and savings balances. While average funding sources increased $13.0 million, interest expense decreased $892 thousand or 19.9% as the cost of funds, including the effect of non-interest bearing funding sources (such as demand deposits) declined 60 basis points from 2.80% to 2.20%. The above yields and costs resulted in a net interest margin during the first quarter of 2003 of 3.87% as compared to 4.07% during the first quarter of 2002.

The provision for loan losses during the first quarter of 2003 totaled $600 thousand as compared to $350 thousand during the first quarter of 2002, an increase of $250 thousand. As indicated under the "Asset Quality" section of this report, management determined the increased provision necessary following a thorough review of the inherent risk in the loan portfolio.

Non-interest income increased $451 thousand or 16.7% to $3.155 million. Net gains on securities transactions were up $295 thousand, as the Corporation realized gains of $540 thousand during the quarter on the sale of $1.5 million of a previously classified non-performing corporate bond. All other non-interest income increased $156 thousand or 6.4% due in large part to an increase in service charges, which were up $157 thousand, reflective of fee changes that took place during the fourth quarter of 2002. Other areas of note include increases in cash management fee income (+ $27 thousand), checkcard interchange income (+ $18 thousand) and gains on the sale of mortgages and FHA and VA mortgage origination fees (+ $16 thousand). These increases were somewhat offset primarily by decreases in trust and investment services income and credit card merchant earnings of $17 thousand and $61 thousand, respectively. Trust and investment services income has been adversely impacted by market declines, some of which has been offset by fee increases instituted during the second quarter of 2002. The decrease in credit card merchant earnings is reflective of a lower volume of merchant deposit activity.

Operating expenses were $232 thousand or 3.6% lower than the comparable period last year. With the decrease in credit card merchant deposit services volume, the cost of third party processing for credit card and merchant deposit services has decreased $166 thousand as compared to the first quarter of last year. Additionally, salaries and wages, and pension and other employee benefits are down $60 thousand. The $55 thousand decrease in salaries and wages reflects a reduction of nine average full time equivalent employees (FTE's) compared to a year ago. While net periodic pension expense has increased $128 thousand, this has been offset primarily by decreases in bonus and profit sharing expense accruals of $69 thousand and $50 thousand, respectively. The increase in the 2003 net periodic pension expense is based upon actuarial estimates of future benefit obligations related to the plan, and has resulted primarily from the impact of a declining stock market on asset values, compensation increases and the discount rate used in calculating future benefit obligations. Due to market performance over the past couple of years, the funding position of the plan has deteriorated, and we expect a required contribution during 2003 of approximately $175 thousand based upon current actuarial estimates. Health insurance and post-retirement benefit costs have also decreased by $23 thousand in total. Depreciation expense has increased $77 thousand, reflective of the continuing investment in property and equipment.

The $60 thousand increase in income tax expense is the result of higher pre-tax earnings, offset to some extent primarily by a $59 thousand deduction related to dividends paid or credited to our profit sharing, savings and investment plan participants during the first quarter of 2003.

Average Consolidated Balance Sheet and Interest Analysis (Dollars in thousands)

For the purpose of these computations, non-accruing loans are included in the daily average loan amounts outstanding. Daily balances were used for average balance computations. Investment securities are stated at amortized cost. No tax equivalent adjustments have been made in calculating yields on obligations of states and political subdivisions.

	Three Months Ended March 2003			Three Months Ended March 2002
Assets	Average Balance	Interest	Yield/ Rate	Average Balance	Interest	Yield/ Rate
Earning assets:
Loans	$427,971	$7,196	6.82%	$425,996	$7,762	7.39%
Taxable securities	222,546	2,658	4.84%	210,352	3,154	6.08%
Tax-exempt securities	24,905	259	4.22%	24,872	270	4.40%
Federal funds sold	13,784	41	1.21%	10,603	45	1.72%
Interest-bearing deposits	1,754	12	2.77%	3,781	25	2.68%
Total earning assets	690,960	10,166	5.97%	675,604	11,256	6.76%
Non-earning assets:
Cash and due from banks	23,128			24,690
Premises and equipment, net	17,334			15,077
Other assets	13,512			14,480
Allowance for loan losses	(7,799)			(5,174)
AFS valuation allowance	12,533			9,502
Total	$749,668			$734,179
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Demand deposits	41,960	51	0.49%	41,777	76	0.74%
Savings and insured money market deposits	172,868	537	1.26%	150,185	668	1.80%
Time deposits	222,849	1,809	3.29%	232,808	2,442	4.25%
Federal Home Loan Bank advances and securities sold under agreements to repurchase	113,463	1,183	4.23%	113,448	1,286	4.60%
Total interest-bearing liabilities	551,140	3,580	2.63%	538,218	4,472	3.37%
Non-interest-bearing liabilities:
Demand deposits	109,040			108,997
Other liabilities	9,302			6,815
Total liabilities	669,482			654,030
Shareholders' equity	80,186			80,149
Total	$749,668			$734,179
Net interest income		$6,586			$6,784
Net interest rate spread			3.34%			3.39%
Net interest margin			3.87%			4.07%

The following table sets forth for the periods indicated, a summary of the changes in interest and dividends earned and interest paid resulting from changes in volume and changes in rates (in thousands of dollars):

	Three-Months Ended March 2003 Compared to Three Months Ended March 2002
	Increase (Decrease) Due to (1)
	Volume	Rate	Net
Interest and dividends earned on:
Loans	$ 36	(602)	(566)
Taxable securities	175	(671)	(496)
Tax-exempt securities	-	(11)	(11)
Federal funds sold	11	(15)	(4)
Interest-bearing deposits	(14)	1	(13)
Total earning assets	$ 208	(1,298)	(1,090)
Interest paid on:
Demand deposits	-	(25)	(25)
Savings and insured money market deposits	91	(222)	(131)
Time deposits	(100)	(533)	(633)
Federal Home Loan Bank advances and securities sold under agreements to repurchase	-	(103)	(103)
Total interest-bearing liabilities	$ (9)	(883)	(892)
Net interest income	$ 217	(415)	(198)

1. The change in interest due to both rate and volume has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each.

Liquidity and Capital Resources

Liquidity management involves the ability to meet the cash flow requirements of deposit customers, borrowers, and the operating, investing, and financing activities of the Corporation. The Corporation uses a variety of resources to meet its liquidity needs. These include short term investments, cash flow from lending and investing activities, core deposit growth and non-core funding sources, such as time deposits of $100,000 or more, securities sold under agreements to repurchase and other borrowings.

The Corporation is a member of the Federal Home Loan Bank of New York ("FHLB") which allows it to access borrowings which enhance management's ability to satisfy future liquidity needs. The Corporation maintained a $74.804 million line of credit at March 31, 2003. This compares to $73.197 million at March 31, 2002.

During the first three months of 2003, cash and cash equivalents increased $43.2 million, as compared to an increase of $17.2 million during the first three months of last year. In addition to cash provided by operating activities, other primary sources of cash in 2003 included proceeds from maturities, sales and principal payments on securities ($51.2 million), an increase in deposits ($11.4 million), and an increase in securities sold under agreements to repurchase ($9.2 million). During the first three months of 2002, primary sources of cash included proceeds from maturities, sales and principal payments on securities ($35.3 million), an increase in deposits ($28.2 million), and an increase in securities sold under agreements to repurchase ($10.8 million).

Cash generated in both periods was used primarily to fund growth in earning assets as well as to reduce Federal Home Loan Bank advances. During the first quarter of 2003, the purchase of securities totaled $16.2 million. Other significant uses of cash during the first quarter of 2003 included the repayment of Federal Home Loan Bank advances, net of new advances ($15.8 million), and the payment of cash dividends ($869 thousand). During the first quarter of 2002, the purchase of securities and funding of loans, net of repayments, totaled $36.6 million and $7.2 million, respectively. Other significant uses of cash during the first quarter of 2002 included the repayment of Federal Home Loan Bank advances, net of new advances ($12.6 million), purchases of premises and equipment ($2.0 million), and the payment of cash dividends ($912 thousand).

As of March 31, 2003, the Corporation's consolidated leverage ratio was 9.37%. The Tier I and Total Risk Adjusted Capital ratios were 14.67% and 16.45%, respectively. All of the above ratios are in excess of the requirements for being considered "well capitalized" by the FDIC, the Federal Reserve and the New York State Banking Department.

During the quarter, the Corporation declared a cash dividend of $0.23 per share, an amount equal to the dividend declared during the first quarter of 2002.

On May 9, 2001, the Corporation announced that its Board of Directors authorized the repurchase of up to 400,000 shares, or approximately 10% of its outstanding common shares, principally through open market transactions from time to time as market conditions warrant over a two-year period. As of March 31, 2003, 246,996 shares have been purchased since the inception of this program at an average price of $28.08 per share. While the authorization for this share repurchase program expires on May 9, 2003, the Corporation may continue to evaluate future share repurchases as market conditions warrant, after careful consideration of its capital position.

Interest Rate Risk

As intermediaries between borrowers and savers, commercial banks incur both interest rate risk and liquidity risk. The Corporation's Asset/Liability Committee (ALCO) has the strategic responsibility for setting the policy guidelines on acceptable exposure to these areas. These guidelines contain specific measures and limits regarding these risks, which are monitored on a regular basis. The ALCO is made up of the president, three executive vice presidents, asset liability management officer, senior lending officer, senior marketing officer, chief financial officer, and others representing key functions.

The ALCO is also responsible for supervising the preparation and annual revisions of the financial segments of the Annual Budget, which is built upon the committee's economic and interest-rate assumptions. It is the responsibility of the ALCO to modify prudently the Corporation's asset/liability policies.

Interest rate risk is the risk that net interest income will fluctuate as a result of a change in interest rates. It is the assumption of interest rate risk, along with credit risk, that drives the net interest margin of a financial institution. For that reason, the ALCO has established tolerance limits based upon a 200-basis point change in interest rates. At March 31, 2003, it is estimated that an immediate 200-basis point decrease in interest rates would negatively impact net interest income by 15.73% and an immediate 200-basis point increase would positively impact net interest income by 5.88%. The risk to declining interest rates is slightly over the allowable tolerance of 15.0% established by ALCO. Management attributes this to the overall low level of current interest rates and corresponding large percentage decrease that results when an immediate 200-basis point shock is modeled. Additionally, the Corporation's significant holdings of callable US agency securities, mortgage-backed securities and mortgage loans, results in less interest income in periods of declining interest rates, as the cash flow from called bonds and increased prepayments results in higher levels of repricing of assets at lower interest rates. Although currently outside of the policy guideline, management is comfortable with this exposure, as an immediate 200-basis point decrease in interest rates across the yield curve is not possible given the current interest rate environment. A more realistic approach includes estimates of an immediate 100-basis point decline and an immediate 300-basis point increase in interest rates. When applied, these scenarios estimate a negative impact to net interest income of 7.51% and a positive impact of 6.27% respectively. Both are well within policy guidelines.

A related component of interest rate risk is the expectation that the market value of our capital account will fluctuate with changes in interest rates. This component is a direct corollary to the earnings-impact component: an institution exposed to earnings erosion is also exposed to shrinkage in market value. At March 31, 2003, it is estimated that an immediate 200-basis point decrease in interest rates would negatively impact the market value of our capital account by 10.72% and an immediate 200-basis point increase in interest rates would negatively impact the market value by 3.69%. Both are within the established tolerance limit of 15.0%.

Management does recognize the need for certain hedging strategies during periods of anticipated higher fluctuations in interest rates and the Board-approved Funds Management Policy provides for limited use of certain derivatives in asset liability management. These strategies were not employed during the first quarter of 2003.

Item 4: Controls and Procedures

(a) The Company's management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934, as amended) (the "Exchange Act") as of a date (the "Evaluation Date") within 90 days prior to the filing date of this report. Based upon that evaluation, the Company's management, including the Chief Executive Officer and Chief Financial Officer, concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures were effective in timely alerting them to any material information relating to the Company and its subsidiaries required to be included in the Company's Exchange Act filings.

(b) There were no significant changes made in the Company's internal controls or in other factors that could significantly affect these internal controls subsequent to the date of the evaluation performed by the Company's Chief Executive Officer and Chief Financial Officer.

(THIS PAGE INTENTIONALLY LEFT BLANK)

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings
	There are no pending legal proceedings, other than ordinary routine litigation incidental to the Corporation's business, to which the Corporation or any of its subsidiaries is a party or of which any of their property is the subject.
Item 2.	Changes in Securities and Use of Proceeds
(a)	Not applicable
(b)	Not applicable
(c)	Not applicable
(d)	Not applicable
Item 3.	Defaults Upon Senior Securities
	Not applicable
Item 4.	Submission of Matters to a Vote of Security Holders
	Not applicable
Item 5.	Other Information
	Not applicable
Item 6.	Exhibits and Reports on Form 8-K
(a)	Exhibits
3.2	Bylaws of the Registrant, as amended to February 12,2003
99.1	Additional Exhibit - 906 Certification of Chief Executive Officer
99.2	Additional Exhibit - 906 Certification of Chief Financial Officer
(b)	Reports on Form 8-K
	During the quarter ended March 31, 2003, no reports on Form 8-K or amendments to any previously filed Form 8-K were filed by the registrant.

(THIS PAGE INTENTIONALLY LEFT BLANK)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

CHEMUNG FINANCIAL CORPORATION

DATE:	May 13, 2003	/s/ Jan P. Updegraff
		Jan P. Updegraff
		President & CEO
DATE:	May 13, 2003	/s/ John R. Battersby Jr.
		John R. Battersby Jr.
		Treasurer & CFO

(THIS PAGE INTENTIONALLY LEFT BLANK)

CERTIFICATIONS

I, Jan P. Updegraff, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chemung Financial Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 13, 2003

By: /s/ Jan P. Updegraff

President and Chief Executive Officer

(THIS PAGE INTENTIONALLY LEFT BLANK)

I, John R. Battersby Jr., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Chemung Financial Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 13, 2003

By: /s/ John R. Battersby Jr.

Treasurer and Chief Financial Officer

(THIS PAGE INTENTIONALLY LEFT BLANK)

FORM 10 - Q

QUARTERLY REPORT

EXHIBIT INDEX

FOR THE PERIOD ENDING MARCH 31, 2003

CHEMUNG FINANCIAL CORPORATION

ELMIRA, NEW YORK

EXHIBIT 3.2	Amended Bylaws Effective February 12, 2003
EXHIBIT 99.1	Additional Exhibit - Certification of Chief Executive Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
EXHIBIT 99.2	Additional Exhibit - Certification of Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

(THIS PAGE INTENTIONALLY LEFT BLANK)

CHEMUNG FINANCIAL CORPORATION

BY-LAWS

Amended to February 12, 2003

ARTICLE I

Offices

SECTION 1. Principal Office

The principal office of the corporation shall be located in the City of Elmira, County of Chemung and State of New York.

SECTION 2. Other Offices

The corporation may also have such other offices, either within or without the State of New York, as the Board of Directors may from time to time determine or the business of the corporation may require.

ARTICLE II

Shareholders

SECTION 1. Place of Meetings of Shareholders

Meetings of shareholders may be held at such place, within or without the State of New York, as may be fixed by the Board of Directors.

SECTION 2. Annual Meeting of Shareholders

A meeting of shareholders shall be held annually on such date and at such place and time as may be fixed by the Board of Directors for the election of directors and the transaction of other business.

SECTION 3. Special Meetings of Shareholders

Special meetings of the shareholders may be called by the Board of Directors or by the chairman of the board or by the president. Such call shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting shall be confined to the purpose or purposes for which the meeting is called.

SECTION 4. Fixing Record Date

The Board of Directors may fix, in advance, a date as the record date for purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action. Such date shall be not more than sixty (60) nor less than ten (10) days before the date of such meeting nor more than 60 days before any other action. If no record date is fixed, the record date for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given and for all other purposes shall be at the close of business on the day on which the resolution of the Board of Directors relating thereto is adopted.

SECTION 5. Notice of Meetings of Shareholders

Written notice of every meeting of shareholders shall state the place, date and hour of the meeting and unless it is the annual meeting, indicate that it is being issued by or at the direction of the person or persons calling the meeting. Notice of a special meeting shall also state the purpose or purposes for which the meeting is called. If, at any meeting, action is proposed to be taken which would, if taken, entitle shareholders fulfilling the statutory requirements to receive payment for their shares, the notice of such meeting shall include a statement of that purpose and to that effect. A copy of the notice of any meeting shall be given, personally or by mail, not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each shareholder entitled to vote at such meeting. If mailed, such notice shall be deemed given when deposited in the United States mail, with postage thereon prepaid, directed to the shareholder at his address as it appears on the record of shareholders or, if he shall have filed with the secretary of the corporation a written request that notices to him be mailed to some other address, then directed to him at such other address.

SECTION 6. Adjourned Meetings

When a determination of shareholders entitled to notice of or to vote at any meeting of shareholders has been made, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date for the adjourned meeting. When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the adjourned meeting the corporation may transact any business that might have been transacted on the original date of the meeting. However, if after the adjournment the Board of Directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to notice.

SECTION 7. List of Shareholders at Meeting

A list of shareholders as of the record date, certified by the secretary or by the transfer agent, shall be produced at any meeting of shareholders upon the request thereat or prior thereto of any shareholder. If the right to vote at any meeting is challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meetings, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

SECTION 8. Quorum of Shareholders

The holders of a majority of the shares entitled to vote thereat shall constitute a quorum at a meeting of shareholders for the transaction of any business. When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders. Despite the absence of a quorum, the shareholders present may adjourn the meeting.

SECTION 9. Proxies

Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent without a meeting may authorize another person or persons to act for him by proxy. Every proxy must be signed by the shareholder or his attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the shareholder executing it, except in those cases where an irrevocable proxy is provided by law.

SECTION 10. Inspectors at Shareholders Meetings

The Board of Directors, in advance of any shareholders meeting, may appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed, the person presiding at a shareholders meeting may, and on the request of any shareholder entitled to vote thereat shall, appoint inspectors. If appointed on the request of one or more shareholders, the holders of a majority of shares present and entitled to vote thereat shall determine the number of inspectors to be appointed. In case any person appointed fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, before entering upon the discharge of his duties, shall take and sign an oath faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability. The inspectors shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting or any shareholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, question or matter determined by them and execute a certificate of any fact found by them. A report or certificate made by them shall be prima facie evidence of the facts stated and of the vote as certified by them.

SECTION 11. Qualifications of Voters

Every shareholder of record shall be entitled at every meeting of shareholders to one vote for every share standing in his name on the record of shareholders.

Neither treasury shares nor shares held by another domestic or foreign corporation of any type or kind, if a majority of the shares entitled to vote in the election of directors of such other corporation is held by the corporation, shall be voted at any meeting or counted in determining the total number of outstanding shares.

Shares held by an administrator, executor, guardian, conservator, committee, or other fiduciary, except a trustee, may be voted by him, either in person or by proxy, without transfer of such shares into his name. Shares held by a trustee may be voted by him, either in person or by proxy, only after the shares have been transferred into his name as trustee or into the name of his nominee.

Shares held by or under the control of a receiver may be voted by him without the transfer thereof into his name if authority so to do is contained in an order of the court by which such received was appointed.

A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, or a nominee of the pledgee.

Shares standing in the name of another domestic or foreign corporation of any type or kind may be voted by such officer, agent or proxy as the By-Laws of such corporation may provide or, in the absence of such provision, as the Board of Directors of such corporation may determine.

SECTION 12. Vote of Shareholders

Directors shall, except as otherwise required by law, be elected by a plurality of the votes cast at a meeting of shareholders by the holders of shares entitled to vote in the election. Any other corporate action by vote of the shareholders shall, except as otherwise required by law, these By-Laws or the certificate of incorporation, be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon.

SECTION 13. Conduct of Shareholders' Meetings

The Officer presiding over the shareholders' meeting may establish such rules and regulations for the conduct of the meeting as the presiding Officer may deem to be reasonably necessary or desirable for the orderly and expeditious conduct of the meeting.

SECTION 14. Shareholder Proposals

No shareholder shall be entitled to submit a proposal to a meeting of shareholders unless at the time of submitting the proposal, the shareholder shall be a record or beneficial owner of at least 1% or $1,000 in market value of shares entitled to be voted at the meeting, and shall have held such shares for at least one year and shall continue to own such shares through the date on which the meeting is held. A shareholder meeting the above requirements shall deliver to the secretary of the corporation not later than 120 days prior to the date on which the corporation's proxy statement was mailed to stockholders in connection with the previous year's annual meeting, the text of any proposal which he intends to propose at an annual meeting of shareholders and a notice of the intention of the shareholder to present such proposal at the meeting. A proposal to be presented at any meeting of shareholders other than an annual meeting shall be delivered to the secretary a reasonable time before the mailing of the corporation's proxy material.

ARTICLE III

Directors

SECTION 1. Board of Directors

The business of the corporation shall be managed under the direction of its Board of Directors.

SECTION 2. Qualifications of Directors

Each director shall be at least 18 years of age and shall automatically cease to be a director on the last day of the month during which he or she attains the age of seventy-two (72) years. Each non-employee director shall directly own within one year following election to the Board of Directors, and at any time thereafter, at least 500 shares of capital stock of the corporation.

SECTION 3. Number of Directors

The number of directors constituting the entire Board shall be fourteen (14). This number may be increased or decreased from time to time by amendment of these By-Laws, provided, however, that the number may not be decreased to less than three (3). No decrease in the number of directors shall shorten the term of any incumbent director.

SECTION 4. Election and Term of Directors

The directors shall be classified by the Board of Directors with respect to the time for which they severally hold office, into three classes, as nearly equal in number for a term of one (1) year, the second class shall be originally elected for a term of two (2) years, and the third class shall be originally elected for a term of three (3) years, with the directors of each class to hold office until their successors are elected and qualified. Newly created directorships resulting from an increase in the number of directors shall be classified by the Board of Directors when the directorship is created. At each annual meeting of the stockholders of the corporation, the successors of the class of directors whose terms expire at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election or until their successors are elected and have qualified.

SECTION 5. Nominations for Directors

Nominations of candidates for election as directors of the corporation at any meeting of stockholders called for the election of directors may be made by the Board of Directors or by any stockholder entitled to vote at such meeting. Nominations made by the Board of Directors shall be made at a meeting of the Board of Directors, or by written consent of directors in lieu of a meeting, not later than 60 days prior to the date of any meeting of stockholders called for the election of directors. The secretary of the corporation shall request that each such proposed nominee provide the corporation with such information concerning himself as is required, under the rules of the Securities and Exchange Commission, to be included in the corporation's proxy statement soliciting proxies for his election as a director. Any stockholder who intends to make a nomination at any annual meeting of stockholders shall deliver to the secretary of the corporation not later than 120 days prior to the date on which the corporation's proxy statement was mailed to stockholders in connection with the previous year's annual meeting, or if such nomination is to be made at a meeting of shareholders other than an annual meeting, a reasonable time before the mailing of the corporation's proxy material, a notice setting forth (i) the name, age, business address and residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of capital stock of the corporation which are owned of record and beneficially by each such nominee and (iv) such other information concerning each such nominee as would be required, under the rules of the Securities and Exchange Commission, in a proxy statement soliciting proxies for the election of such nominees. Such notice shall include a signed consent of such nominee to serve as a director of the corporation, if elected. In the event that a person is validly designated as a nominee in accordance with the provisions of this section and shall thereafter become unable or unwilling to stand for election to the Board of Directors, the Board of Directors or the stockholder who proposed such nominee, as the case may be, may designate a substitute nominee. If the secretary of the meeting of stockholders called for the election of directors determines that a nomination was not made in accordance with the foregoing procedures, such nomination shall be void.

SECTION 6. Newly Created Directorships and Vacancies

Newly created directorships resulting from an increase in the number of directors and vacancies occurring in the Board of Directors for any reason may be filled by vote of a majority of the directors then in office, although less than a quorum exists. A director elected to fill a newly created directorship or a vacancy, shall be elected to hold office until the next meeting of shareholders at which the election of directors is in the regular order of business, and until his successor has been elected and qualified.

SECTION 7. Removal of Directors

Any director, an entire class of directors or the entire Board of Directors may be removed from office, with or without cause, only by the affirmative vote of the holders of at least 75% of the outstanding shares of stock of the corporation entitled to vote generally in the election of directors, voting together as a single class.

SECTION 8. Quorum of Directors

One-third (1/3) of the entire Board of Directors or seven directors, whichever number is greater, shall constitute a quorum for the transaction of business or of any specified item of business.

SECTION 9. Action by the Board of Directors

The vote of the majority of the directors present at a meeting of the Board of Directors at the time of the vote, if a quorum is present at such time, shall, except as otherwise provided by law, these By-Laws or the certificate of incorporation, be the act of the Board of Directors.

SECTION 10. Written Consent of Directors Without A Meeting

Any action required or permitted to be taken by the Board of Directors or a committee thereof may be taken without a meeting if all members of the Board or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the board or committee shall be filed with the minutes of the proceedings of the Board or committee.

SECTION 11. Place and Time of Meetings of Board of Directors

Meetings of the Board of Directors, regular or special, may be held at any place, within or without the State of New York and at any time, fixed by the Board of Directors or by the person or persons calling the meeting. Such meetings may be held by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time.

SECTION 12. Notice of Meetings of the Board of Directors

Regular meetings of the Board of Directors may be held without notice if the time and place of such meetings are fixed by the Board of Directors. Special meetings of the Board of Directors shall be held upon notice to the directors and may be called by the chairman of the board, the president, the executive vice president, or any two directors. The notice shall be given personally including by telephone or mail, telegram, cable or other public instrumentality. If given personally or by telephone, such notice shall be given not less than 48 hours before the meeting to each director. If given by mail, cable, telegram or other public instrumentality, such notice shall be given not less than five (5) days before the date of the meeting, to each director. Such notice shall be deemed given, if mailed, when deposited in the United States mail, with postage thereon prepaid or, if telegraphed, cabled or sent by other public instrumentality, when given to the telegraph company, cable company, or other public instrumentality, directed to the director at his business address or, if he shall have filed with the secretary of the corporation, a written request that notices to him be mailed or telegraphed, cabled or sent to some other address, then directed to him at such other address. The notice need not specify the purpose of any regular or special meeting of the Board of Directors.

SECTION 13. Interested Directors

No contract or other transaction between a corporation and one or more of its directors, or between a corporation and any other corporation, firm, association or other entity in which one or more of its directors, or officers, are directors or have a substantial financial interest, shall be either void or voidable for this reason alone or by reason alone that such director or directors are present at the meeting of the Board, or of a committee thereof, which approves such contract or transaction or that his or their votes are counted for such purpose:

1. If the material facts as to such director's interest in such contract or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known to the Board or committee, and the Board or committee approves such contract or transaction by a vote sufficient for such purpose without counting the vote of such interested director or, if the votes of the disinterested directors are insufficient to constitute an act of the Board as defined in Section 9 of this Article, by unanimous vote of the disinterested directors; or
2. If the material facts as to such director's interest in such contract or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known to the shareholders entitled to vote thereon, and such contract or transaction is approved by vote of such shareholders; or
3. If the contract or transaction is affirmatively established by the party or parties thereto to be fair and reasonable as to the corporation at the time it was approved by the Board, a committee thereof, or the shareholders.

Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or a committee thereof which approves such contract or transaction.

The Board of Directors shall have authority to fix the compensation of directors for services in any capacity.

A loan shall not be made by the corporation to any director unless it is authorized by vote of the shareholders. For this purpose, the shares of the director who would be the borrower shall not be shares entitled to vote.

SECTION 14. Reimbursement and Compensation of Directors

The directors may be paid their expenses of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as director. No such payment shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor. Members of the executive committee or other committees may be allowed similar reimbursement and compensation for their services as such.

SECTION 15. Executive Committee and Other Committees

The Board of Directors by resolution adopted by a majority of the entire Board, may designate from among its members an executive committee and other committees, each consisting of three or more directors, and each of which shall have and may exercise such powers as shall be conferred or authorized by the resolution appointing it, except that no such committee shall have authority as to the following matters:

1. The submission to shareholders of any action that needs shareholders' approval;
2. The filling of vacancies in the Board of Directors or in any committee:
3. The fixing of compensation of the directors for serving on the Board of Directors or on any committee;
4. The amendment or repeal of the By-Laws or the adoption of new By-Laws;
5. The amendment or repeal or any resolution of the Board of Directors.

Each such committee shall serve at the pleasure of the Board. The Board of Directors shall have the power at any time to fill vacancies in, to change the size or membership of, and to discharge any such committee.

A majority of any such committee may determine its action and may fix the time and place of its meetings, unless provided otherwise by the Board of Directors. Each such committee shall keep a written record of its acts and proceedings and shall submit such record to the Board of Directors at each regular meeting thereof and at such other times as requested by the Board of Directors. Failure to submit such record, or failure of the Board to approve any action indicated therein will not, however, invalidate such action to the extent it has been carried out by the corporation prior to the time the record of such action was, or should have been, submitted to the Board of Directors as herein provided.

ARTICLE IV

Officers

SECTION 1. Number

The Board of Directors may elect a chairman of the board who shall be a member of the Board of Directors and shall elect a president, one or more vice presidents, a secretary and a treasurer, who need not be members of the Board of Directors and such other officers and assistant officers who need not be members of the Board of Directors as the Board of Directors may from time to time deem proper. Any two or more offices may be held by the same person, except the offices of president and secretary.

SECTION 2. Election and Term of Office

The officers of the corporation to be elected or appointed by the Board of Directors shall be elected or appointed annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. Subject to the provisions of Section 3 of this Article, each officer shall hold office until the first meeting of the Board of Directors following the next annual meeting of shareholders and until his successor has been elected or appointed and qualified.

SECTION 3. Removal

Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. The election or appointment of an officer shall not of itself create contract rights.

SECTION 4. New Offices and Vacancies

Newly created offices and vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled from time to time by the Board of Directors for the unexpired portion of the term.

SECTION 5. Chief Executive Officer

The Board of Directors shall appoint either the chairman of the board, if any, or the president the chief executive officer of the corporation ("the CEO") who, subject to the control of the Board of Directors, shall direct and control all the business and affairs of the corporation.

SECTION 6. Chairman of the Board

The chairman of the board, if any, and if so designated by the Board of Directors, shall be the chief executive officer of the corporation and, subject to the control of the Board of Directors, shall in general perform all duties incident to the office of chief executive officer. He shall, when present, preside at all meetings of the shareholders and of the Board of Directors. He may sign, with the secretary or any other proper officer of the corporation thereunto authorized by the Board of Directors, certificates representing shares of the corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-Laws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and shall perform such other duties as may be prescribed by the Board of Directors from time to time.

SECTION 7. President

The president shall be the chief operating officer of the corporation and, subject to the control of the Board of Directors and the chairman of the board (if he is the CEO), shall direct the conduct and operation of the business and properties of the corporation. If so designated by the Board of Directors, he shall also be the chief executive officer of the corporation and shall perform all duties incident to that office. He shall, in the absence of the chairman of the board, preside at all meetings of the shareholders and of the Board of Directors. He may sign, with the secretary or any other proper officer of the corporation thereunto authorized by the Board of Directors, certificates representing shares of the corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-Laws to some other officer or agent of the corporation, or shall be required by law to be otherwise signed or executed; and shall perform such other duties as may be prescribed by the Board of Directors from time to time.

SECTION 8. Vice President

In the absence of the chairman of the board and the president or in the event of their death or inability to act, the executive vice president (or in the event of the death or inability to act of the executive vice president, the vice president designated by the Board of Directors, if any, or if none, the vice president having the greatest seniority) shall perform the duties of the chairman of the board and the president, and when so acting shall have the authority of and be subject to all the restrictions upon the chairman of the board and the president. Any vice president may sign, with the secretary or any other proper officer of the corporation thereunto authorized by the Board of Directors, certificates representing shares of the corporation; and shall perform such other duties as from time to time may be assigned to him by the chairman of the board (if he is the CEO) or by the president or by the Board of Directors.

SECTION 9. Secretary

The secretary shall: 1) keep the minutes of the proceedings of its shareholders, Board of Directors and executive committee and other committees, if any; in one or more books provided for that purpose; 2) see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law; 3) be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is affixed to all documents and execution of which on behalf of the corporation under its seal is duly authorized; 4) file each written request by a shareholder that notices to him be mailed to some address other than this address as it appears on the record of shareholders; 5) sign with the chairman of the board or the president or a vice president certificates representing shares of the corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; 6) have general charge of the record of shareholders of the corporation; and 7) in general perform all duties incident to the office of secretary and such other duties as from time to time may be assigned to him by the chairman of the board (if he is the CEO) or by the president or by the Board of Directors.

SECTION 10. Treasurer

If required by the Board of Directors, the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall: 1) have charge and custody of and be responsible for all funds and securities of the corporation, receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in such banks, trust companies or other depositaries as shall be selected in accordance with the provisions of these By-Laws; 2) have charge and custody of and be responsible for the keeping of correct and complete books and records of account of the corporation; sign with the chairman of the board, or the president or a vice president, certificates representing shares of the corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; and 3) in general perform all of the duties incident to the office of treasurer and such other duties as from time to time may be assigned to him by the chairman of the board (if he is the CEO) or by the president or by the Board of Directors.

SECTION 11. Assistant Secretaries and Assistant Treasurers

The assistant secretaries, when authorized by the Board of Directors, may sign with the chairman of the board or the president or a vice president, certificates representing shares of the corporation, the issuance of which shall have been authorized by a resolution of the Board of Directors. The assistant treasurers shall, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. Assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or the treasurer, respectively, or by the chairman of the board (if he is the CEO) or the president or the Board of Directors. In the absence of the secretary or in the event of his death, inability or refusal to act, the assistant secretary (or in the event there be more than one assistant secretary, the assistant secretaries in the order of their appointment or as determined by the chairman of the board (if he is the CEO) or the president or the Board of Directors), shall perform the duties and exercise the authority of the secretary. In the absence of the treasurer or in the event of his death, inability or refusal to act, the assistant treasurer, (or in the event there be more than one assistant treasurer, the assistant treasurers in the order of their appointment or as determined by the chairman of the board (if he is the CEO) or the president or the Board of Directors) shall perform the duties and exercise the authority of the treasurer.

SECTION 12. Auditor

The Auditor shall examine and verify the records of the Corporation and Corporation's subsidiaries and shall report to and be responsible to the Audit Committee of the Board of Directors.

SECTION 13. Compensation of Officers

The compensation of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such compensation by reason of the fact that he is also a director of the corporation.

ARTICLE V

Contracts, Checks and Deposits

SECTION 1. Contracts

The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation and such authority may be general or confined to specific instances.

SECTION 2. Checks, Drafts, etc.

All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors.

SECTION 3. Deposits

All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositaries as the Board of Directors may select.

ARTICLE VI

Certificates Representing Shares, Record

of Shareholders, Transfer of Shares

SECTION 1. Issuance of Shares

No shares of any class of the corporation or any obligations or other securities convertible into or carrying options to purchase any such shares of the corporation, or any options or rights to purchase any such shares or securities of the corporation, shall be issued or sold unless such issuance or sale is approved by the affirmative vote of at least 80% of the entire Board of Directors.

SECTION 2. Certificates Representing Shares

The shares of the corporation shall be represented by certificates which shall be in such form as shall be determined by the Board of Directors. All such certificates shall be consecutively numbered or otherwise identified. Such certificates shall be signed by the chairman of the board or the president or a vice president and the secretary or an assistant secretary or the treasurer or an assistant treasurer, and may, but need not, be sealed with the seal of the corporation or a facsimile thereof. The signature of the officers upon the certificate may be facsimile if the certificate is countersigned by a transfer agent or an assistant transfer agent, or registered by a registrar other than the corporation itself or its employee. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of issue. Each certificate shall state upon the face thereof; 1) that the corporation is formed under the laws of New York; 2) the name of the person or persons to whom issued; 3) the number and class of shares and the par value of each share represented by such certificate.

SECTION 3. Lost, Destroyed or Wrongfully Taken Certificates

The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the corporation, alleged to have been lost, apparently destroyed or wrongfully taken upon the making of an affidavit of that fact by the person claiming the certificate to be lost, apparently destroyed or wrongfully taken. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, apparently destroyed or wrongfully taken certificate or certificates, or his legal representative to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum and with such surety or sureties as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificates alleged to have been lost, apparently destroyed or wrongfully taken.

SECTION 4. Record of Shareholders

The corporation shall keep at its principal office, or at the office of its transfer agent in the State of New York, a record containing the names and addresses of all shareholders, the number and class of shares held by each and the dates when they respectively became the owners of record thereof. The corporation shall be protected in treating the persons in whose names shares stand on the record of shareholders as the owners thereof for all purposes.

SECTION 5. Transfer of Shares

Upon surrender to the corporation or the transfer agent of the corporation of a certificate representing shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, and cancel the old certificate. Every such transfer of shares shall be entered on the record of shareholders of the corporation.

ARTICLE VII

Fiscal Year

The fiscal year of the corporation shall be determined by resolution of the Board of Directors.

ARTICLE VIII

Dividends

The Board of Directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its certificate of incorporation.

ARTICLE IX

Seal

The seal of the corporation shall be circular in form and contain the name of the corporation, the year when it was formed, and the words "New York." The corporation may use the seal causing it or a facsimile to be affixed or impressed or reproduced in any other manner.

ARTICLE X

Waiver of Notice

SECTION 1. Waiver of Notice to Shareholders

Notice of meeting need not be given to any shareholder who signed a waiver of notice, in person or by proxy, whether before or after the meeting. The attendance of any shareholder at a meeting, in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice of such meeting, shall constitute a waiver of notice by him.

SECTION 2. Waiver of Notice to Director

Notice of meeting need not be given to any director who signs a waiver of notice whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at the commencement, the lack of notice to him. A waiver of notice need not specify the purpose of any regular or special meeting of the Board of Directors.

SECTION 3. Notice Dispensed with When Delivery Prohibited

Whenever communication to any shareholder or any director is unlawful under any statute of the State of New York or of the United States or any regulation, proclamation or order issued under said statutes, the giving of any notice to such shareholder or such director shall not be required and there shall be no duty to apply for license or other permission to do so.

ARTICLE XI

Indemnification

To the fullest extent permitted by law, either directly or by the purchase of insurance or in part directly and in part by the purchase of insurance, the corporation shall indemnify each natural person, or if deceased, his personal representative made or threatened to be made a party to any action or proceeding civil or criminal, including an appeal therein against the reasonable expenses, attorneys' fees, judgments, fines and amounts paid in settlement if such person is made or threatened to be made a party by reason of the fact that he or his testator or intestate is or was: 1) an officer, director or employee of the corporation or 2) an officer, director or employee of or served in any capacity in any other corporation, partnership, joint venture, trust or other enterprise, at the request of this corporation, provided that in the case of a person serving as an employee or in any capacity in any other corporation, that such person was at the time he was so designated to serve by this corporation, an employee of this corporation, or 3) the occupant of a position or a member of a committee or Board or a person having responsibilities under federal or state law, including but not limited to responsibilities under the Employee Retirement Income Security Act of 1974, who was appointed to such position or to such committee or Board by the Board of this corporation or by an officer of this corporation or who served in such position or on such committee or Board at the request or direction of the Board of this corporation or of an officer of this corporation or who assumed such responsibilities at the request or direction of the Board of this corporation or of any officer of this corporation, provided only that such person acted in good faith for a purpose which he reasonably believed would be in the best interest of the corporation or in the case of service for any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise, not opposed to the best interests of the corporation, and in criminal proceedings had no reasonable cause to believe that his conduct was unlawful.

The corporation's obligations under this Article shall be reduced by the amount of any insurance which is available to any such person whether such insurance is purchased by the corporation or otherwise. The right of indemnity created herein shall be personal to the officer, director, employee or other person and their respective legal representatives and in no case shall any insurance carrier be entitled to be subrogated to any rights created herein.

Nothing contained herein shall obligate the corporation to indemnify any person against any claim arising out of personal injuries, bodily injuries or property damage.

ARTICLE XII

Amendment and Repeal

SECTION 1. Amendment and Repeal by the Shareholders

These By-Laws may be amended or repealed by vote of the shareholders entitled to vote generally in the election of directors, provided that notice of meeting states such purpose, and provided further that the provisions of Article III may be amended or repealed only by the affirmative vote of holders of at least 75% of the outstanding shares of stock of the corporation entitled to vote generally in the election of directors.

SECTION 2. Amendment and Repeal by the Board of Directors

These By-Laws may also be amended or repealed by a majority of the entire Board of Directors provided that the provisions of Article III may be amended only by the affirmative vote of at least 75% of the entire Board of Directors and further provided that Section 1 of Article VI may be amended only by the affirmative vote of at least 80% of the entire Board of Directors.

CHEMUNG FINANCIAL CORPORATION

LEGEND FOR BY-LAWS

DATE	ARTICLE	SECTION	DESCRIPTION
4/9/97	Article III	Section 3	Number of Directors changed from twenty to nineteen.
4/8/98	Article II	Sections 4 & 5	Change fifty (50) days to sixty (60) days.
12/8/98	Article III	Section 3	Number of Directors changed from nineteen to seventeen.
8/11/99	Article III	Section 3	Number of Directors changed from seventeen to sixteen.
10/13/99	Article III	Section 3	Number of Directors changed from sixteen to fifteen.
1/12/00	Article III	Section 2	Required ownership of 500 shares capital stock for non-employee directors.
6/14/00	Article IV	Section 12	New Section. Addition of Auditor.
		Section 13	Renumbered- previous Section 12.
12/13/00	Article III	Section 3	Number of Directors changed from fifteen to fourteen.
07/10/02	Article III	Section 3	Number of Directors changed from fourteen to fifteen.
02/12/03	Article III	Section 3	Number of Directors changed from fifteen to fourteen.