11-K 1 cctcprofitsharing11k12312013.htm CHEMUNG CANAL TRUST COMPANY PROFIT SHARING, SAVINGS AND INVESTMENT PLAN - DECEMBER 31, 2013 cctcprofitsharing11k12312013.htm


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 11-K

[X] ANNUAL REPORT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934 - No Fee Required

For the Fiscal Year Ended: December 31, 2013

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE
SECURITIES AND EXCHANGE ACT OF 1934 - No Fee Required
For the transition period from ______to______

Commission file Number: 0-13888

CHEMUNG CANAL TRUST COMPANY PROFIT SHARING, SAVINGS & INVESTMENT PLAN
(Full title of Plan)

CHEMUNG FINANCIAL CORPORATION
(Name of issuer of the securities held pursuant to the Plan)
One Chemung Canal Plaza, P.O. Box 1522
Elmira, New York 14902
(607) 737-3711
____________________________________________
(Address of principal executive offices)


 
 
 

CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

ELMIRA, NEW YORK

AUDITED FINANCIAL STATEMENTS

SUPPLEMENTAL SCHEDULE

AND

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

DECEMBER 31, 2013 AND 2012
 
 
 
 
 
 


 
 
 

 



CONTENTS
               
AUDITED FINANCIAL STATEMENTS
      
 PAGE
               
 
Report of Independent Registered Public Accounting Firm
      
3
               
 
Statements of Net Assets Available for Benefits
      
5
               
 
Statements of Changes in Net Assets Available for Benefits
      
6
               
 
Notes to Financial Statements
      
7
               
               
SUPPLEMENTAL SCHEDULE
        
               
 
Form 5500 - Schedule H - Part IV:
        
               
   
Item 4i - Schedule of Assets Held for Investment Purposes
        
     
at End of Year - December 31, 2013
      
16
               





 
 
 




 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




Pension and Profit Sharing Committee
Chemung Canal Trust Company
Profit Sharing, Savings and Investment Plan

We have audited the accompanying statements of net assets available for benefits of the Chemung Canal Trust Company Profit Sharing, Savings and Investment Plan (“the Plan”) as of December 31, 2013 and 2012, and the related statements of changes in net assets available for benefits for the years then ended.  These financial statements are the responsibility of the Plan's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Plan is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2013 and 2012, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
 


- 3 -
 
 

 



Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole.  The accompanying supplemental Schedule of Assets Held for Investment Purposes At End of Year – December 31, 2013 is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.  This supplemental schedule is the responsibility of the Plan’s management.  The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic 2013 financial statements, and in our opinion, is fairly stated in all material respects in relation to the basic 2013 financial statements taken as a whole.


 


Elmira, New York
June 26, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


- 4 -
 
 
 

CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS


   
December 31,
  
   
2013
  
2012
  
ASSETS
      
 
  
  Investments, at fair value:
      
 
  
Chemung Financial Corporation common stock
  
 $   6,020,219
  
 $   5,628,989
  
           
Chemung Canal Trust Company common trust funds:
          
Short-Term Bond Fund
  
760,684
  
         687,387
  
Core Bond Fund
  
1,228,365
  
      1,362,445
  
Core Growth Fund
  
1,441,826
  
      1,506,077
  
Growth and Income Fund
  
1,452,893
  
      1,315,966
  
           
Mutual funds:
          
Invesco Small Cap Growth Fund
  
                    -
  
         709,843
  
Artisan International Fund
  
866,931
  
         696,127
  
Dodge & Cox Balanced Fund
  
216,330
  
           36,587
  
Dodge & Cox International Stock Fund
  
840,134
  
         664,513
  
Dodge & Cox Stock Fund
  
6,435,074
  
      5,116,648
  
Federated Automated Cash Management
  
338,874
  
         681,611
  
Federated Prime Obligations Fund
  
24
  
           90,692
  
Federated Stock Trust Fund
  
                    -
  
         239,031
  
Loomis Sayles Bond Fund
  
1,498,113
  
      1,688,998
  
Allianz NACM International Growth Opportunity Fund
  
1,239,625
  
      1,076,518
  
T. Rowe Price Blue Chip Growth Fund
  
1,406,708
  
         567,569
  
Vanguard Index Trust 500 Fund
  
                     -
  
      1,761,376
  
Vanguard Extended Market Index Fund
  
1,336,173
  
                    -
  
Vanguard 500 Index Fund - Signal Fund
  
2,402,828
  
                    -
  
Vanguard Short-term Bond
  
66,904
  
                    -
  
Westport Select Cap Fund
  
                     -
  
         826,347
  
BlackRock Equity Dividend Investors
  
354,445
  
                    -
  
Legg Mason Clearbridge Small Cap Growth
  
      1,240,525
  
                    -
  
TOTAL INVESTMENTS
  
    29,146,675
  
   24,656,724
  
           
  Accrued income receivable
  
46,224
  
                    3
  
  Employer contribution receivable
  
511,255
  
         393,085
  
  Cash - non-interest bearing
  
           68,384
  
             1,377
  
NET ASSETS AVAILABLE
          
FOR BENEFITS
  
 $ 29,772,538
  
 $ 25,051,189
  
           




The accompanying notes are an integral part of the financial statements.

- 5 -
 
 
 

CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS


     
 Year ended December 31,
     
2013
 
2012
 
ADDITIONS
  
 
 
 
 
  Additions to net assets attributed to:
  
 
 
 
 
    Investment income:
        
 
      Interest and dividends
  
 $     573,941
  
 $     679,852
 
      Net appreciation in fair value of investments
  
     5,337,302
  
     3,325,315
 
      Other income
  
                   -
  
            1,316
     
     5,911,243
  
     4,006,483
           
 
    Contributions:
        
 
      Employer
  
        511,255
  
        393,085
 
      Participant
  
     1,336,523
  
     1,261,656
 
      Rollover
  
        132,206
  
          22,461
     
     1,979,984
  
     1,677,202
 
TOTAL ADDITIONS
  
     7,891,227
  
     5,683,685
     
 
 
 
 
DEDUCTIONS
  
 
 
 
 
  Deductions from net assets attributed to:
  
 
 
 
 
    Benefits paid to participants
  
     3,169,878
  
     2,740,530
 
TOTAL DEDUCTIONS
  
     3,169,878
  
     2,740,530
     
 
 
 
 
NET INCREASE
  
     4,721,349
  
     2,943,155
     
 
 
 
 
Net assets available for benefits
  
 
 
 
 
  at beginning of year
  
   25,051,189
  
   22,108,034
 
NET ASSETS AVAILABLE FOR BENEFITS
  
 
 
 
 
AT END OF YEAR
  
 $29,772,538
  
 $25,051,189










The accompanying notes are an integral part of the financial statements.


- 6 -
 
 
 
CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2013 AND 2012



NOTE A:  DESCRIPTION OF PLAN

The following description of the Chemung Canal Trust Company Profit Sharing, Savings and Investment Plan (the “Plan”) provides only general information.  Participants should refer to the Plan agreement for a more complete description of the Plan's provisions.

General
The Plan is a defined contribution plan which was restated in 1985 to incorporate 401(k) savings and investment provisions.  Under the restated plan, investment accounts attributable to employer contributions made for plan years ended before January 1, 1985 were maintained.  Withdrawal privileges continue on these assets with certain limitations on frequency and amount.  The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

Eligibility
Participants are immediately eligible to make voluntary contributions.  Participants hired before July 1, 2010 are eligible for the employer discretionary matching contribution after attainment of age 21 and completion of one year of service.  Participants hired before July 1, 2010 are eligible for the employer discretionary contribution after attainment of age 21.  Employees hired on or after July 1, 2010 are eligible for the employer non-discretionary contribution after attainment of age 21.

Vesting
Participants are immediately vested in their voluntary contributions, employer matching contributions and employer discretionary contributions.  A five-year graded vesting schedule (20% per year of service) is applied to the employer non-discretionary contribution.

Contributions
Participants may contribute up to 70% of their current compensation, as defined, for investment in one or all of the available investment alternatives.  Contributions are subject to certain Internal Revenue Service limitations in each year.

The Plan sponsor may match a percentage of the voluntary contributions made by an eligible participant.  Traditionally, this discretionary match has been 50% up to the eligible participant’s first 6% of the participant’s compensation, as defined.  Prior to January 1, 2001, these matching contributions were invested in Chemung Financial Corporation common stock, except for participants age 50 or greater, for which these matching contributions were participant-directed.  Subsequent to January 1, 2001, these matching contributions are completely participant-directed.  Subsequent to January 1, 2004, employer matching contributions are discretionary and contributed annually as directed by the Board of Directors.  A participant must complete a year of service and be employed on December 31 to receive the matching contribution.

Additionally, the Plan sponsor may contribute amounts annually at the discretion of the Board of Directors.  Prior to July 1, 2002, these discretionary contributions were invested in Chemung Financial Corporation common stock, except for participants age 50 or greater, for which these contributions were participant-directed.  Subsequent to July 1, 2002, these contributions are completely participant-directed.  The Plan sponsor has the right to discontinue such discretionary contributions at any time.

- 7 -
 
 
 
CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS, Cont’d

DECEMBER 31, 2013 AND 2012



NOTE A:  DESCRIPTION OF PLAN, Cont’d

Participants hired after July 1, 2010, will receive a 4% non-discretionary contribution of eligible compensation if they are employed on December 31 and have completed a year of service.

Payment of benefits
Upon termination of service, the participant’s account is either maintained in the Plan, transferred to an individual retirement account in the participant’s name, directly rolled over into a qualified retirement plan or paid to the participant in a lump sum.

NOTE B:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting
The financial statements of the Plan are prepared under the accrual method of accounting.

Investment valuation and income recognition
The Trustee holds the Plan’s investments and executes transactions therein.  The investments of the Plan are reported at fair value.  The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price).

Following is a description of the valuation methodologies used for assets measured at fair value.  There have been no changes in the methodologies used at December 31, 2013 and 2012.

Chemung Financial Corporation common stock
Chemung Financial Corporation’s common stock is inactively traded on the Over-The-Counter market.  A trust investment committee values the common stock based on a review of trading activity for the most recent month.

Common trust funds
Common trust funds represent investments with designated investment managers within the trust division. Units held in common trusts are valued at the unit value as reported by the investment managers.  While the underlying assets are actively traded, the funds are not.

Mutual funds
Mutual funds represent investments with various investment managers. The fair value of these investments are determined by reference to the fund’s underlying assets, which are principally marketable equity and fixed income securities. Shares held in mutual funds traded on national securities exchanges are valued at the net asset value.

Cash and short-term investments
Cash and short-term investments include cash and short-term interest-bearing investments with initial maturities of three months or less.  Such amounts are recorded at cost, plus accrued interest, which approximates their fair value.

- 8 -
 
 
 
CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS, Cont’d

DECEMBER 31, 2013 AND 2012



NOTE B:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cont’d

Money market funds
Money market mutual funds are valued using the amortized cost or penny rounding method as permitted by Rule 2a-7 under the Investment Company Act of 1940, which approximates their fair value.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Purchases and sales of securities are recorded on a trade date basis.  The net appreciation (depreciation) in fair value of investments consists of realized gains or losses and the unrealized appreciation or depreciation on those investments.  Dividend income is recorded on the ex-dividend date and interest income is recorded as earned on the accrual basis.

Administrative expenses
The Plan sponsor has elected to pay all administrative expenses of the Plan.

Use of estimates in the preparation of financial statements
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities.  Actual results could differ from those estimates and assumptions.

Payment of benefits
Benefits are recorded when paid.

Subsequent events
The Plan has evaluated subsequent events and determined that no significant subsequent events have occurred requiring adjustments to the financial statements or disclosures.


- 9 -
 
 
 
CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS, Cont’d

DECEMBER 31, 2013 AND 2012



NOTE C:  FAIR VALUE MEASUREMENTS

Accounting principles generally accepted in the United States of America establishes a framework for measuring fair value.  That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 Measurements) and the lowest priority to unobservable inputs (Level 3 measurements).  The three levels of the fair value hierarchy are described as follows:

Level 1
Inputs to the valuation methodology are unadjusted quoted prices for identical assets of liabilities in active markets that the Plan has the ability to access.

Level 2
Inputs to the valuation methodology include:

-  
Quoted prices for similar assets or liabilities in active markets;
-  
Quoted prices for identical or similar assets or liabilities in inactive markets;
-  
Inputs other than quoted prices that are observable for the asset or liability;
-  
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used, as outlined in Note B, need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following disclosures are required by FASB ASC 820-10-55 and FASB ASU 2009-12, “Investment in Certain Entities That Calculate Net Asset Value Per Share”:

The fair values of these funds have been estimated using the net asset value per share of the underlying investments.  There are no unfunded commitments for the common trust funds as of December 31, 2013 and 2012.  There is no waiting period or other restrictions on redemptions from the common trust funds.  The following are descriptions of the common trust funds:
 
 
Short-Term Bond Fund
This fund invests primarily in fixed income securities of the U.S. Government, U.S. Government Agencies, and high quality corporate debt obligations.  The fund’s target duration is two years with bond maturity ranges between one and five years.


- 10 -
 
 
 
CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS, Cont’d

DECEMBER 31, 2013 AND 2012



NOTE C:  FAIR VALUE MEASUREMENTS, Cont’d

Core Bond Fund
This fund invests primarily in fixed income securities of the U.S. Government, U.S. Government Agencies, and high quality corporate debt obligations.  The fund’s target duration is five years with bond maturity ranges between two and fifteen years.  Management of the fund seeks income and preservation of principal.

Core Growth Fund
This fund invests primarily in large-cap domestic companies.  These companies are selected based on leadership positions in their respective industries and because they have shown the ability to grow both revenue and earnings over an extended period.  The fund will be fully invested in equities in most market conditions.  Management of the fund seeks primarily growth of principal.  Income is not a consideration in selecting investments for this fund.

Growth and Income Fund
This fund invests in stocks and bonds.  All stocks pay a dividend.  The fund is intended to do well in bear markets and to grow principal modestly in bull markets.  The stock and bond mix will change on the macro-economic conditions.  Management of the fund seeks a dual objective of growth of principal and income.

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value, as of December 31, 2013 and 2012:

   
Level 1
  
Level 2
  
Level 3
  
Total
  
December 31, 2013
                  
  Chemung Financial Corporation
                  
    common stock
  
 $                 -
  
 $  6,020,219
  
 $                -
  
 $ 6 ,020,219
  
  Common trust funds:
                  
    Short-term bond fund
  
                    -
  
        760,684
  
                   -
  
        760,684
  
    Core bond fund
  
                    -
  
     1,228,365
  
                   -
  
     1,228,365
  
    Core growth fund
  
                    -
  
     1,441,826
  
                   -
  
     1,441,826
  
    Growth and income fund
  
                    -
  
     1,452,893
  
                   -
  
     1,452,893
  
  Mutual funds:
                  
    Cash equivalents
  
        338,898
  
                    -
  
                   -
  
        338,898
  
    Mid/small cap growth fund
  
     1,240,525
  
                    -
  
                   -
  
     1,240,525
  
    International foreign funds
  
     2,946,690
  
                    -
  
                   -
  
     2,946,690
  
    Large cap actively managed
                  
      value funds
  
     6,789,519
  
                    -
  
                   -
  
     6,789,519
  
    Income/taxable fund
  
     1,565,017
  
                    -
  
                   -
  
     1,565,017
  
    Large cap actively managed growth fund
  
     1,406,708
  
                    -
  
                   -
  
     1,406,708
  
    Large cap index blend fund
  
    2,402,828
  
                    -
  
                   -
  
     2,402,828
  
    Mid/small cap blend fund
  
     1,336,173
  
                   -
  
                   -
  
     1,336,173
  
Moderate allocation
  
        216,330
  
                   -
  
                   -
  
        216,330
  
Total assets at fair value
  
 $18,242,688
  
 $10,903,987
  
 $                -
  
 $29,146,675
  


- 11 -
 
 
 
CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS, Cont’d

DECEMBER 31, 2013 AND 2012



NOTE C:  FAIR VALUE MEASUREMENTS, Cont’d

   
Level 1
  
Level 2
  
Level 3
  
Total
  
December 31, 2012
                  
  Chemung Financial Corporation
                  
    common stock
  
 $                    -
  
 $   5,628,989
  
 $                  -
  
 $    5,628,989
  
  Common trust funds:
                  
    Short-term bond fund
  
                       -
  
         687,387
  
                     -
  
          687,387
  
    Core bond fund
  
                       -
  
      1,362,445
  
                     -
  
       1,362,445
  
    Core growth fund
  
                       -
  
      1,506,077
  
                     -
  
       1,506,077
  
    Growth and income fund
  
                       -
  
      1,315,966
  
                     -
  
       1,315,966
  
  Mutual funds:
                  
    Cash equivalents
  
           772,303
  
                    -
  
                    -
  
          772,303
  
    Mid/small cap growth fund
  
           709,843
  
                    -
  
                    -
  
          709,843
  
    International foreign funds
  
        2,437,158
  
                    -
  
                    -
  
       2,437,158
  
    Large cap actively managed
                  
      value funds
  
        5,355,679
  
                    -
  
                    -
  
       5,355,679
  
    Income/taxable fund
  
        1,688,998
  
                    -
  
                    -
  
       1,688,998
  
    Large cap actively managed
                  
      growth fund
  
           567,569
  
                    -
  
                     -
  
          567,569
  
    Large cap index blend fund
  
        1,761,376
  
                    -
  
                     -
  
       1,761,376
  
    Mid/small cap blend fund
    Moderate allocation
  
           826,347
             36,587
  
                    -
                    -
  
                     -
                     -
  
          826,347
            36,587
  
Total assets at fair value
  
 $   14,155,860
  
 $ 10,500,864
  
 $                  -
  
 $  24,656,724
  

- 12 -
 
 
 
CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS, Cont’d

DECEMBER 31, 2013 AND 2012



NOTE D:  INVESTMENTS

The following presents the fair value of investments and the net appreciation (depreciation) in fair value.  Investments that represent 5% or more of the Plan’s net assets available for benefits are separately identified:

   
December 31, 2013
  
December 31, 2012
  
   
Net
      
Net
      
   
appreciation
      
appreciation
      
   
(depreciation)
 in fair
      
in fair
      
   
value during
  
Fair value
  
value during
  
Fair value
  
   
the year
  
at end of year
  
the year
  
at end of year
  
                   
Chemung Financial Corporation
                  
  common stock
  
 $          718,097
  
 $      6,020,219
 
 $       1,300,521
  
 $       5,628,989
  
Chemung Canal Trust Company
    
 
  
 
  
 
    
  common trust funds:
    
 
  
 
  
 
    
    Short-Term Bond Fund
  
                2,789
  
            760,684
  
               18,067
  
             687,387
  
    Core Bond Fund
  
            (12,609)
  
         1,228,365
 
               82,722
  
          1,362,445
  
    Core Growth Fund
  
            313,887
  
         1,441,826
 
             206,144
  
          1,506,077
  
    Growth and Income Fund
  
            362,100
  
         1,452,893
 
             126,839
  
          1,315,966
  
Mutual funds:
        
 
        
  Dodge & Cox Stock Fund
  
         1,834,831
  
         6,435,074
 
             837,274
  
          5,116,648
  
  Loomis Sayles Bond Fund
  
                (188)
  
         1,498,113
  
             116,654
  
          1,688,998
  
  Vanguard Index Trust 500 Fund
  
              41,430
  
                       -
  
             187,905
  
          1,761,376
  
  Vanguard 500 Index Fund - Signal
  
            489,692
  
         2,402,828
  
                        -
  
                        -
  
  Other
  
         1,587,273
  
         7,906,673
 
             449,189
  
          5,588,838
  
   
 $      5,337,302
  
 $    29,146,675
 
 $       3,325,315
  
 $     24,656,724
  

NOTE E:  TAX STATUS

The Internal Revenue Service has determined and informed the Bank by a letter dated March 4, 2002, that the Plan and related trust are designed in accordance with the applicable sections of the Internal Revenue Code (IRC).  The Plan has been amended since receiving the determination letter.  However, the Plan administrator and the Plan’s legal counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC.

Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service.  The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2013, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements.  The Plan is subject to routine audits by tax jurisdictions; however, there are currently no audits for any tax periods in progress.  The Plan Administrator believes it is no longer subject to income tax examinations for years prior to December 31, 2010.

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CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN

NOTES TO FINANCIAL STATEMENTS, Cont’d

DECEMBER 31, 2013 AND 2012



NOTE F:  PLAN TERMINATION

Although it has not expressed any intent to do so, the Plan sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA.  In the event of Plan termination, participants have a fully vested interest in their accounts and their accounts will be paid to them as provided by the plan document.

NOTE G:  TRANSACTIONS WITH PARTIES-IN-INTEREST

Chemung Canal Trust Company (the Bank), a wholly owned subsidiary of Chemung Financial Corporation, is the Plan sponsor and acts as trustee for the Plan’s assets.  In addition, the Plan invests in common trust funds managed by the Bank (representing approximately 16% and 19% of net assets at December 31, 2013 and 2012, respectively), and Chemung Financial Corporation common stock (representing approximately 20% and 22% of net assets at December 31, 2013 and 2012, respectively).

NOTE H:  RISKS AND UNCERTAINTIES

The Plan invests in various types of investment securities.  Investment securities are exposed to various risks, such as interest rate, market and credit risks.  Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the accompanying statements of net assets available for benefits.



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CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN


SUPPLEMENTAL SCHEDULE

 
 
 

CHEMUNG CANAL TRUST COMPANY
PROFIT SHARING, SAVINGS AND INVESTMENT PLAN
EIN:  16-0380815
PLAN #:  002

FORM 5500 – SCHEDULE H – PART IV

ITEM 4i - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT END OF YEAR - DECEMBER 31, 2013


(a)
  
(b) & (c)
  
(e)
  
   
Identity of issue, borrower, lessor or similar party and
      
Party
  
description of investment including maturity date,
      
in
  
rate of interest, collateral, par or
  
 Current
  
interest
  
maturity value
  
 value
  
           
*
  
Chemung Financial Corporation
 $    6,020,219
  
           
*
  
Chemung Canal Trust Company
    
   
common trust funds:
      
   
  Short-Term Bond Fund
  
          760,684
  
   
  Core Bond Fund
  
       1,228,365
  
   
  Core Growth Fund
  
       1,441,826
  
   
  Growth and Income Fund
       1,452,893
  
           
           
   
Mutual funds:
      
   
  Allianz NACM International Growth
      
   
    Opportunity Fund
  
       1,239,625
  
   
  Artisan International Fund
          866,931
  
   
  Blackrock Equity Dividend Fund
  
          354,445
  
   
  Dodge & Cox Balanced Fund
  
          216,330
  
   
  Dodge & Cox International Stock Fund
          840,134
  
   
  Dodge & Cox Stock Fund
       6,435,074
  
   
  Federated Automated Cash Management
          338,874
  
   
  Federated Prime Obligations Fund
                   24
  
   
  Legg Mason Clearbridge Small Cap Growth
  
       1,240,525
  
   
  Loomis Sayles Bond Fund
       1,498,113
  
   
  T. Rowe Price Blue Chip Growth Fund
  
       1,406,708
  
   
  Vanguard Extended Market Index Fund
  
       1,336,173
  
   
  Vanguard 500 Index Fund - Signal Fund
  
       2,402,828
  
   
  Vanguard Short-Term Bond
  
            66,904
  
       
 
  
   
 TOTAL INVESTMENTS
  
 $  29,146,675
  
           



Note:  Certain cost information in column (d) is not required to be disclosed as investments are participant directed under an individual account plan.


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