PARENT COMPANY FINANCIAL INFORMATION

Condensed parent company only financial statement information of Chemung Financial Corporation is as follows (investment in subsidiaries is recorded using the equity method of accounting) (in thousands):



BALANCE SHEETS - DECEMBER 31	2018		2017
Assets:
Cash on deposit with subsidiary bank	$	3,978	$	3,017
Investment in subsidiary - Chemung Canal Trust Company	158,166		142,884
Investment in subsidiary - CFS Group, Inc.	873		904
Investment in subsidiary - Chemung Risk Management, Inc.	1,748		1,624
Dividends receivable from subsidiary bank	—		1,233
Securities available for sale, at estimated fair value	554		420
Other assets	1,071		1,039
Total assets	$	166,390	$	151,121
Liabilities and shareholders' equity:
Dividends payable	$	1,254	$	1,233
Other liabilities	107		75
Total liabilities	1,361		1,308
Shareholders' equity:
Total shareholders' equity	165,029		149,813
Total liabilities and shareholders' equity	$	166,390	$	151,121



STATEMENTS OF INCOME - YEARS ENDED DECEMBER 31	2018			2017			2016
Dividends from subsidiary bank and non-bank	$	3,187		$	4,926		$	4,889
Interest and dividend income	10			10			9
Non-interest income	(20		)	22			—
Non-interest expenses	477			433			526
Income before impact of subsidiaries' undistributed earnings	2,700			4,525			4,372
Equity in undistributed earnings of Chemung Canal Trust Company	16,670			1,939			4,856
Equity in undistributed earnings of CFS Group, Inc.	(32		)	(42		)	(48		)
Equity in undistributed earnings of Chemung Risk Management, Inc.	124			791			583
Income before income tax	19,462			7,213			9,763
Income tax benefit	(164		)	(217		)	(264		)
Net income	$	19,626		$	7,430		$	10,027



STATEMENTS OF CASH FLOWS - YEARS ENDED DECEMBER 31	2018			2017			2016
Cash flows from operating activities:
Net Income	$	19,626		$	7,430		$	10,027
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed earnings of Chemung Canal Trust Company	(16,670		)	(1,939		)	(4,856		)
Equity in undistributed earnings of CFS Group, Inc.	32			42			48
Equity in undistributed earnings of Chemung Risk Management, Inc.	(124		)	(791		)	(583		)
Change in dividend receivable	1,233			(8		)	(11		)
Change in other assets	(32		)	(214		)	82
Change in other liabilities	773			51			(203		)
Expense related to employee stock compensation	89			200			210
Expense related to restricted stock units for directors' deferred compensation plan	67			98			97
Expense to employee restricted stock awards	405			210			192
Net cash provided by operating activities	5,399			5,079			5,003
Cash flow from financing activities:
Cash dividends paid	(4,969		)	(4,919		)	(4,878		)
Purchase of treasury stock	(112		)	(61		)	(22		)
Sale of treasury stock	643			582			438
Net cash used in financing activities	(4,438		)	(4,398		)	(4,462		)
Increase (decrease) in cash and cash equivalents	961			681			541
Cash and cash equivalents at beginning of year	3,017			2,336			1,795
Cash and cash equivalents at end of year	$	3,978		$	3,017		$	2,336