10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarterly period ended March 31, 2024

Or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 001-35741

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)

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class	Trading Symbol	Name of exchange on which registered
Common stock, par value $.01 per share	CHMG	The Nasdaq Stock Market LLC

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. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer	☐	Non-accelerated filer	☐
Accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒
As of May 3, 2024, there were 4,752,375 shares of Common Stock, $0.01 par value, outstanding.

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES

INDEX

		PAGES
	Glossary of Abbreviations and Terms	3
PART I.	FINANCIAL INFORMATION
Item 1:	Financial Statements – Unaudited
	Consolidated Balance Sheets	7
	Consolidated Statements of Income	8
	Consolidated Statements of Comprehensive Income	9
	Consolidated Statements of Shareholders’ Equity	10
	Consolidated Statements of Cash Flows	11
	Notes to Unaudited Consolidated Financial Statements	13
Item 2:	Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	67
Item 4:	Controls and Procedures	69
PART II.	OTHER INFORMATION
Item 1:	Legal Proceedings	70
Item 1A:	Risk Factors	70
Item 2:	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchase of Equity Securities	70
Item 3:	Defaults Upon Senior Securities	70
Item 4:	Mine Safety Disclosures	70
Item 5:	Other Information	70
Item 6:	Exhibits	71
SIGNATURES		72
EXHIBIT INDEX

2

GLOSSARY OF ABBREVIATIONS AND TERMS

To assist the reader the Corporation has provided the following list of commonly used abbreviations and terms included in the Notes to the Unaudited Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Abbreviations

ACL	Allowance for Credit Losses
AFS	Available for sale securities
ALCO	Asset-Liability Committee
AOCI	Accumulated Other Comprehensive Income
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
Bank	Chemung Canal Trust Company
Basel III	The Third Basel Accord of the Basel Committee on Banking Supervision
Board of Directors	Board of Directors of Chemung Financial Corporation
BOLI	Bank Owned Life Insurance
BTFP	Bank Term Funding Program
CAM	Common Area Maintenance Charges
CDARS	Certificate of Deposit Account Registry Service
CDO	Collateralized Debt Obligation
CECL	Current expected credit loss
CFS	CFS Group, Inc.
Corporation	Chemung Financial Corporation
CRM	Chemung Risk Management, Inc.
Dodd-Frank Act	The Dodd-Frank Wall Street Reform and Consumer Protection Act
EPS	Earnings per share
Exchange Act	Securities Exchange Act of 1934
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
FHLBNY	Federal Home Loan Bank of New York
FOMC	Federal Open Market Committee
FRB	Board of Governors of the Federal Reserve System
FRBNY	Federal Reserve Bank of New York
Freddie Mac	Federal Home Loan Mortgage Corporation
GAAP	U.S. Generally Accepted Accounting Principles
HTM	Held to maturity securities
ICS	Insured Cash Sweep Service
IFRS	International Financial Reporting Standards
LGD	Loss given default
MD&A	Management’s Discussion and Analysis of Financial Condition and Results of Operations
NAICS	North American Industry Classification System
N/M	Not meaningful
OPEB	Other postemployment benefits
OREO	Other real estate owned

3

PD	Probability of default
Regulatory Relief Act	Economic Growth, Regulatory Relief, and Consumer Protection Act
ROA	Return on average assets
ROE	Return on average equity
RWA	Risk-weighted assets
SBA	Small Business Administration
SEC	Securities and Exchange Commission
Securities Act	Securities Act of 1933
Tax Act	Tax Cuts and Jobs Act of 2017
WMG	Wealth Management Group

Terms

Allowance for Credit Losses	Replaces the Allowance for Loan and Lease Losses as the contra asset account used to represent the lifetime amount the Corporation anticipates will be unrecoverable from its assets. The ACL conforms to the CECL requirements as outlined in ASU 2016-13, and was implemented by the Corporation on January 1, 2023.
Allowance for credit losses to total loans	Represents period-end allowance for credit losses divided by retained loans.
Assets under administration	Represents assets that are beneficially owned by clients and all investment decisions pertaining to these assets are also made by clients.
Assets under management	Represents assets that are managed on behalf of clients.
Basel I	A set of international banking regulations, which set out the minimum capital requirements of financial institutions with the goal of minimizing credit risk. The primary focus was on credit risk by creating a bank asset classification system.
Basel III	A comprehensive set of reform measures designed to improve the regulation, supervision, and risk management within the banking sector. The reforms require banks to maintain proper leverage ratios and meet certain capital requirements.
Benefit obligation	Refers to the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for OPEB plans.
Brokered deposits	Refers to deposits obtained from or through the mediation or assistance of a deposit broker.
CAM	Expenses associated with shared-space maintenance of leased premises.
Capital Bank	Division of Chemung Canal Trust Company located in the “Capital Region” of New York State and includes the counties of Albany, Saratoga, and Schenectady.
Captive insurance company	A company that provides risk-mitigation services for its parent company.
CDARS	Product involving a network of financial institutions that exchange certificates of deposits among members in order to ensure FDIC insurance coverage on customer deposits above the single institution limit. Using a sophisticated matching system, funds are exchanged on a dollar-for-dollar basis, so that the equivalent of an original deposit comes back to the originating institution.
Collateralized debt obligation	A structured financial product that pools together cash flow-generating assets, such as mortgages, bonds, and loans.
Collateralized mortgage obligations	A type of mortgage-backed security with principal repayments organized according to their maturities and into different classes based on risk.  The mortgages serve as collateral and are organized into classes based on their risk profile.
Dodd-Frank Act	The Dodd-Frank Act was enacted on July 21, 2010 and significantly changed the bank regulatory landscape and has impacted and will continue to impact the lending, deposit, investment, trading, and operating activities of financial institutions and their holding companies. The Dodd-Frank Act requires various federal agencies to adopt a broad range of new rules and regulations, and to prepare various studies and reports for Congress.
Employee Retention Tax Credit	The Employee Retention Tax Credit is a refundable payroll tax credit available to eligible employers as defined by the CARES Act of 2020, and amended by the Consolidated Appropriations Act of 2021 and American Rescue Plan Act of 2021.

4

Fully taxable equivalent basis	Income from tax-exempt loans and investment securities that have been increased by an amount equivalent to the taxes that would have been paid if this income were taxable at statutory rates; the corresponding income tax impact related to tax-exempt items is recorded within income tax expense.
GAAP	Accounting principles generally accepted in the United States of America.
Holding company	Consists of the operations for Chemung Financial Corporation (parent only).
ICS	Product involving a network of financial institutions that exchange interest-bearing money market deposits among members in order to ensure FDIC insurance coverage on customer deposits above the single institution limit.  Using a sophisticated matching system, funds are exchanged on a dollar-for-dollar basis, so that the equivalent of an original deposit comes back to the originating institution.
Loans held for sale	Residential real estate loans originated for sale on the secondary market with maturities from 15-30 years.
Long term lease obligation	An obligation extending beyond the current year, which is related to a long term finance lease that is considered to have the economic characteristics of asset ownership.
Mortgage-backed securities	A type of asset-backed security that is secured by a collection of mortgages.
Municipal clients	A political unit, such as a city, town, or village, incorporated for local self-government.
N/A	Data is not applicable or available for the period presented.
N/M	Not meaningful.
Non-GAAP	A calculation not made according to GAAP.
Obligations of state and political subdivisions	An obligation that is guaranteed by the full faith and credit of a state or political subdivision that has the power to tax.
Obligations of U.S. Government	A federally guaranteed obligation backed by the full power of the U.S. government, including Treasury bills, Treasury notes and Treasury bonds.
Obligations of U.S. Government sponsored enterprises	Obligations of agencies originally established or chartered by the U.S. government to serve public purposes as specified by the U.S. Congress; these obligations are not explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government.
OREO	Represents real property owned by the Corporation, which is not directly related to its business and is most frequently the result of a foreclosure on real property.
Political subdivision	A county, city, town, or other municipal corporation, a public authority, or a publicly-owned entity that is an instrumentality of a state or a municipal corporation.
Pre-provision profit/(loss)	Represents total net revenue less non-interest expense, before income tax expense (benefit). The Corporation believes that this financial measure is useful in assessing the ability of a bank to generate income in excess of its provision for credit losses.
Regulatory Relief Act	The Economic Growth, Regulatory Relief and Consumer Protection Act was enacted on May 24, 2018 provides certain limited amendments to the Dodd-Frank Act, as well as certain targeted modifications to other post-financial crisis regulatory requirements. In addition, the legislation establishes new consumer protections and amends various securities- and investment company-related requirements.
RWA	Risk-weighted assets consist of on- and off-balance sheet assets that are assigned to one of several broad risk categories and weighted by factors representing their risk and potential for default. On-balance sheet assets are risk-weighted based on the perceived credit risk associated with the obligor or counterparty, the nature of any collateral, and the guarantor, if any. Off-balance sheet assets such as lending-related commitments, guarantees, derivatives and other applicable off-balance sheet positions are risk-weighted by multiplying the contractual amount by the appropriate credit conversion factor to determine the on-balance sheet credit equivalent amount, which is then risk-weighted based on the same factors used for on-balance sheet assets. Risk-weighted assets also incorporate a measure for market risk related to applicable trading assets-debt and equity instruments. The resulting risk-weighted values for each of the risk categories are then aggregated to determine total risk-weighted assets.
SBA loan pools	Business loans partially guaranteed by the SBA.
Securities sold under agreements to repurchase	Sale of securities together with an agreement for the seller to buy back the securities at a later date.

5

Tax Act	The Tax Act was enacted on December 22, 2017 and amended the Internal Revenue Code of 1986. The legislation reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent, with some related business deductions and credits being either reduced or eliminated.
Trust preferred securities	A hybrid security with characteristics of both subordinated debt and preferred stock which allows for early redemption by the issuer, makes fixed or variable payments, and matures at face value.
Unaudited	Financial statements and information that have not been subjected to auditing procedures sufficient to permit an independent certified public accountant to express an opinion.
WMG	Provides services as executor and trustee under wills and agreements, and guardian, custodian, trustee and agent for pension, profit-sharing and other employee benefit trusts, as well as various investment, financial planning, pension, estate planning and employee benefit administration services.

6

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)	March 31, 2024		December 31, 2023
ASSETS
Cash and due from financial institutions	$	22,984	$	22,247
Interest-earning deposits in other financial institutions	71,878		14,600
Total cash and cash equivalents	94,862		36,847
Equity investments, at estimated fair value	3,093		3,046
Securities available for sale, at estimated fair value (amortized cost of $656,640, at March 31, 2024 and $669,092 at December 31, 2023, net of allowance for credit losses on securities of $0 at March 31, 2024 and December 31, 2023, respectively)	566,028		583,993
Securities held to maturity, (estimated fair value of $785 at March 31, 2024 and December 31, 2023, respectively, net of allowance for credit losses of $0 at March 31, 2024 and December 31, 2023, respectively)	785		785
FHLBNY and FRBNY Stock, at cost	4,071		5,498
Loans, net of deferred loan fees	2,003,610		1,972,664
Allowance for credit losses	(20,471)		(22,517)
Loans, net	1,983,139		1,950,147
Loans held for sale	96		—
Premises and equipment, net	14,183		14,571
Operating lease right-of-use assets	6,018		5,648
Goodwill	21,824		21,824
Bank-owned life insurance	2,923		2,914
Interest rate swap assets	25,806		23,942
Accrued interest receivable and other assets	62,062		61,314
Total assets	$	2,784,890	$	2,710,529
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing	$	656,330	$	653,166
Interest-bearing	1,824,442		1,776,261
Total deposits	2,480,772		2,429,427
FHLBNY overnight advances	—		31,920
FRB term advance	50,000		—
Long term finance lease obligation	2,979		3,050
Operating lease liabilities	6,197		5,827
Dividends payable	1,473		1,469
Interest rate swap liabilities	25,811		23,981
Accrued interest payable and other liabilities	20,530		19,614
Total liabilities	2,587,762		2,515,288
Shareholders' equity:
Common stock, $0.01 par value per share, 10,000,000 shares authorized; 5,310,076 issued at March 31, 2024 and December 31, 2023	53		53
Additional paid-in capital	47,794		47,773
Retained earnings	235,506		229,930
Treasury stock, at cost; 559,226 shares at March 31, 2024 and 572,663 shares at December 31, 2023	(16,147)		(16,502)
Accumulated other comprehensive loss	(70,078)		(66,013)
Total shareholders' equity	197,128		195,241
Total liabilities and shareholders' equity	$	2,784,890	$	2,710,529

See accompanying notes to unaudited consolidated financial statements.

7

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended   March 31,
(in thousands, except per share data)	2024		2023
Interest and dividend income:
Loans, including fees	$	27,198	$	22,289
Taxable securities	3,557		3,583
Tax exempt securities	258		261
Interest-earning deposits	206		97
Total interest and dividend income	31,219		26,230
Interest expense:
Deposits	12,145		5,387
Borrowed funds	985		896
Total interest expense	13,130		6,283
Net interest income	18,089		19,947
Provision (credit) for credit losses	(2,040)		277
Net interest income after provision for credit losses	20,129		19,670
Non-interest income:
WMG fee income	2,703		2,580
Service charges on deposit accounts	949		941
Interchange revenue from debit card transactions	1,063		1,133
Changes in fair value of equity investments	101		72
Net gains (losses) on sales of loans held for sale	32		5
Income from bank-owned life insurance	9		10
Other	800		682
Total non-interest income	5,657		5,423
Non-interest expenses:
Salaries and wages	7,016		6,783
Pension and other employee benefits	2,082		1,680
Other components of net periodic pension and postretirement benefits	(232)		(174)
Net occupancy	1,493		1,465
Furniture and equipment	398		418
Data processing	2,573		2,381
Professional services	559		440
Marketing and advertising	345		332
Other real estate owned	49		38
FDIC insurance	577		497
Loan expense	255		232
Other	1,583		1,744
Total non-interest expenses	16,698		15,836
Income before income tax expense	9,088		9,257
Income tax expense	2,038		1,987
Net income	$	7,050	$	7,270
Weighted average shares outstanding	4,764		4,721
Basic and diluted earnings per share	$	1.48	$	1.54

See accompanying notes to unaudited consolidated financial statements.

8

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended   March 31,
(in thousands)	2024		2023
Net income	$	7,050	$	7,270
Other comprehensive income (loss):
Unrealized holding gains (losses) on securities available for sale	(5,513)		7,825
Tax effect	(1,443)		2,050
Net of tax amount	(4,070)		5,775
Change in funded status of defined benefit pension plan and other benefit plans:
Reclassification adjustment for amortization of net actuarial loss	7		12
Total before tax effect	7		12
Tax effect	2		3
Net of tax amount	5		9
Total other comprehensive income (loss)	(4,065)		5,784
Comprehensive income	$	2,985	$	13,054

See accompanying notes to unaudited consolidated financial statements.

9

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(UNAUDITED)

(in thousands, except share and per share data)	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total
Balances at January 1, 2023	$	53	$	47,331	$	211,859	$	(17,598)	$	(75,257)	$	166,388
Cumulative effect of accounting change (b)	—		—		(1,076)		—		—		(1,076)
Balances at January 1, 2023, as adjusted	53		47,331		210,783		(17,598)		(75,257)		165,312
Net income	—		—		7,270		—		—		7,270
Other comprehensive loss	—		—		—		—		5,784		5,784
Restricted stock awards	—		263		—		—		—		263
Restricted stock units for directors' deferred compensation plan	—		5		—		—		—		5
Distribution of 4,577 shares of treasury stock grants for employee restricted stock awards	—		(131)		—		131		—		—
Cash dividends declared ($0.31 per share)	—		—		(1,460)		—		—		(1,460)
Distribution of 8,492 shares of treasury stock for directors' compensation	—		(147)		—		243		—		96
Repurchase of 2,148 shares of common stock	—		—		—		(98)		—		(98)
Sale of 3,554 shares of treasury stock (a)	—		66		—		103		—		169
Balances at March 31, 2023	$	53	$	47,387	$	216,593	$	(17,219)	$	(69,473)	$	177,341
Balances at January 1, 2024	$	53	$	47,773	$	229,930	$	(16,502)	$	(66,013)	$	195,241
Net income	—		—		7,050		—		—		7,050
Other comprehensive loss	—		—		—		—		(4,065)		(4,065)
Restricted stock awards	—		308		—		—		—		308
Restricted stock units for directors' deferred compensation plan	—		5		—		—		—		5
Distribution of 4,573 shares of treasury stock grants for employee restricted stock awards	—		(132)		—		132		—		—
Cash dividends declared ($0.31 per share)	—		—		(1,474)		—		—		(1,474)
Distribution of 7,515 shares of treasury stock for directors' compensation	—		(217)		—		217		—		—
Repurchase of 1,707 shares of common stock	—		—		—		(82)		—		(82)
Sale of 3,056 shares of treasury stock (a)	—		57		—		88		—		145
Balances at March 31, 2024	$	53	$	47,794	$	235,506	$	(16,147)	$	(70,078)	$	197,128

(a) All treasury stock sales were completed at the prevailing market price with the Chemung Canal Trust Company Profit Sharing, Savings, and Investment Plan which is a defined contribution plan sponsored by the Bank.

(b) Implementation of ASC 326.

See accompanying notes to unaudited consolidated financial statements.

10

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)	Three Months Ended   March 31,
CASH FLOWS FROM OPERATING ACTIVITIES:	2024		2023
Net income	$	7,050	$	7,270
Adjustments to reconcile net income to net cash provided by operating activities:
(Increases in) Amortization of right-of-use assets	(370)		199
Provision (credit) for credit losses	(2,040)		277
(Gains) on disposal of fixed assets	(27)		—
Depreciation and amortization of fixed assets	465		533
Amortization of premiums on securities, net	510		656
Gain on sales of loans held for sale, net	(32)		(5)
Proceeds from sales of loans held for sale	1,677		210
Loans originated and held for sale	(1,741)		(205)
Net change in fair value of equity investments	(101)		(72)
Proceeds from sales of trading assets	89		—
Purchase of equity investments	(35)		(47)
Decrease (Increase) in other assets and accrued interest receivable	926		(132)
Increase in accrued interest payable	1,920		636
Expense related to restricted stock units for directors' deferred compensation plan	5		5
Expense related to employee restricted stock awards	308		394
Increases in (payments on) operating lease liabilities	370		(193)
Net (gain) loss on interest rate swaps	(34)		11
(Decrease) increase in other liabilities	(997)		1,159
Income from bank owned life insurance	(9)		(10)
Net cash provided by operating activities	7,934		10,686
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities, calls, and principal paydowns on securities available for sale	11,942		15,901
Proceeds from maturities and principal collected on securities held to maturity	—		492
Purchases of securities available for sale	—		(2,199)
Purchase of FHLBNY and FRBNY stock	(10,894)		(16,853)
Redemption of FHLBNY and FRBNY stock	12,321		17,137
Proceeds from sales of fixed assets	31		—
Purchases of premises and equipment	(81)		(287)
Net increase in loans	(31,185)		(44,114)
Net cash used in investing activities	(17,866)		(29,923)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand, interest-bearing demand, savings, and insured money market deposits	34,250		(44,507)
Net increase in time deposits	17,095		49,709
Net change in FHLB overnight advances	(31,920)		(5,740)
Payments made on finance leases	(71)		(69)
Proceeds from FRB advances	50,000		—
Purchase of treasury stock	(82)		(98)
Sale of treasury stock	145		169
Cash dividends paid	(1,470)		(1,455)
Net cash provided by (used in) financing activities	67,947		(1,991)
Net increase (decrease) in cash and cash equivalents	58,015		(21,228)
Cash and cash equivalents, beginning of period	36,847		55,869
Cash and cash equivalents, end of period	$	94,862	$	34,641

See accompanying notes to unaudited consolidated financial statements.

11

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

(UNAUDITED)

(in thousands)	Three Months Ended   March 31,
Supplemental disclosure of cash flow information:	2024		2023
Cash paid for:
Interest	$	11,210	$	5,647
Income taxes	459		431
Supplemental disclosure of non-cash activity:
Transfer of loans to other real estate owned	233		—
Dividends declared, not yet paid	1,473		1,460

See accompanying notes to unaudited consolidated financial statements.

12

CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Corporation, through its wholly-owned subsidiaries, the Bank and CFS, provides a wide range of banking, financing, fiduciary, and other financial services to its clients.  The Corporation and the Bank are subject to the regulations of certain federal and state agencies and undergo periodic examinations by those regulatory authorities.

Chemung Risk Management, Inc., (CRM), a wholly-owned subsidiary of the Corporation, was a Nevada-based captive insurance company which insured against certain risks unique to the operations of the Corporation and its subsidiaries and for which insurance may not have been currently available or economically feasible in today's insurance marketplace. CRM was dissolved by the Corporation, effective December 6, 2023.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X of the Exchange Act. These financial statements include the accounts of the Corporation and its subsidiaries, and all significant intercompany balances and transactions are eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and disclosures provided, and actual results could differ. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures necessary for the fair presentation of the accompanying consolidated financial statements have been included. The unaudited consolidated financial statements should be read in conjunction with the Corporation's 2023 Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations for any interim periods are not necessarily indicative of the results which may be expected for the entire year or any other period.

Reclassifications

Amounts in the prior year financial statements are reclassified whenever necessary to conform to the current year's presentation.

Recent Accounting Pronouncements

In March 2024, the U.S. Securities and Exchange Commission ("SEC") issued SEC Release No. 33-11275, adopting its final rule“The Enhancement and Standardization of Climate-Related Disclosures for Investors.” This rule will require registrants to disclose limited climate-related information in registration statements and annual reports. In April 2024, the SEC voluntarily stayed the implementation of its final rule, pending judicial review. As a smaller reporting company, these disclosure requirements, once issued in the final rule, would apply to the Corporation's filings for the fiscal year beginning January 1, 2027.

Accounting Standards Pending Adoption

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, which modifies the disclosure or presentation requirements of a variety of Topics in the Accounting Standards Codification, in response to SEC Release No. 33-10532, Disclosure Update and Simplifications, issued on August 17, 2018. The SEC identified several disclosure requirements that overlap with U.S. GAAP, but require incremental information to comply with disclosure standards in Regulations S-X and Regulation S-K. ASU 2023-06 codifies specific amendments to align the codification with SEC regulations. The effective date for each amendment is that date on which each disclosure requirement is removed from Regulation S-K or Regulation S-X. The Corporation anticipates that certain amendments will pertain to the Corporation's financial disclosures or presentation, but cannot determine with certainty which amendments are applicable until removal from Regulation S-K or Regulation S-X.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, enhancing disclosure requirements for reportable segments, focusing on significant segment expenses, the identification of a segment's chief decision making officer, and the metrics used by the chief decision making officer in evaluating segment-level operating performance. The ASU is effective for fiscal years beginning after December 15, 2023. The Corporation will begin providing enhanced segment reporting disclosures in accordance with ASU 2023-07 for the fiscal year ending December 31, 2024, and for interim periods thereafter.

13

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require public business entities to disclose annually a tabular rate reconciliation, including specific items such as state and local income tax, tax credits, nontaxable or nondeductible items, among others, and a separate disclosure requiring disaggregation of reconciling items as described above which equal or exceed 5% percent of the product of multiplying income from continuing operations by the applicable statutory income tax rate. The ASU is effective for all public business entities for annual periods beginning after December 31, 2024.

Use of Analogous Accounting Standards

Under U.S. GAAP, there is no specific guidance related to government assistance received by a for-profit entity that is not in the form of a loan, income tax credit, or revenue from a contract with a customer. Therefore, the Corporation must rely upon analogous accounting standards to determine appropriate treatment when such circumstances arise. During 2023, the Corporation accounted for the recognition of the Employee Retention Tax Credit (ERTC) using ASC 958-605, Revenue Recognition for Not-for-Profit entities. ASC 958-10-15-1 specifies that certain Subtopics within ASC 958-605 also apply to business entities.

The Corporation considers the recognition of the ERTC to be analogous to the stipulations for "conditional contributions" under ASC 958-605-20. Conditional contributions have at least one barrier needing to be overcome before the recipient is entitled to the assets transferred or promised; there must be a right-of-return to the contributor; and barriers to the condition should be measurable. The Corporation recognized the gross amount of the ERTC through non-interest income during the period in which the barrier was overcome, identified as the period during which amended tax returns were filed. The Corporation incurred and recognized additional income tax expense during 2023 in relation to its amended tax returns.

NOTE 2        EARNINGS PER COMMON SHARE (shares in thousands)

Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. Issuable shares, including those related to directors’ restricted stock shares, are considered outstanding and are included in the computation of basic earnings per share. All outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends are considered participating securities for this calculation. Restricted stock awards are grants of participating securities and are considered outstanding at grant date. Earnings per share information is adjusted to present comparative results for stock splits and stock dividends that occur.

Earnings per share were computed by dividing net income by 4,764 and 4,721 weighted average shares outstanding for the three month periods ended March 31, 2024 and 2023, respectively. There were no common stock equivalents during the three month periods ended March 31, 2024 or 2023.

NOTE 3        SECURITIES

Amortized cost and estimated fair value of securities available for sale are as follows (in thousands):

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
U.S. Treasury notes and bonds	$	59,828	$	—	$	4,666	$	—	$	55,162
Mortgage-backed securities, residential	467,125		7		77,425		—		389,707
Obligations of states and political subdivisions	39,415		—		1,270		—		38,145
Corporate bonds and notes	25,750		—		4,818		—		20,932
SBA loan pools	64,522		57		2,497		—		62,082
Total	$	656,640	$	64	$	90,676	$	—	$	566,028

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	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
U.S. Treasury notes and bonds	$	59,812	$	—	$	4,480	$	—	$	55,332
Mortgage-backed securities, residential	476,240		6		72,422		—		403,824
Obligations of states and political subdivisions	39,503		—		817		—		38,686
Corporate bonds and notes	25,750		—		5,081		—		20,669
SBA loan pools	67,787		75		2,380		—		65,482
Total	$	669,092	$	81	$	85,180	$	—	$	583,993

Amortized cost and estimated fair value of securities held to maturity are as follows (in thousands):

	March 31, 2024
	Amortized Cost		Unrecognized Gains		Unrecognized Losses		Estimated Fair Value		Allowance for Credit Losses
Obligations of states and political subdivisions	$	785	$	—	$	—	$	785	$	—

	December 31, 2023
	Amortized Cost		Unrecognized Gains		Unrecognized Losses		Estimated Fair Value		Allowance for Credit Losses
Obligations of states and political subdivisions	$	785	$	—	$	—	$	785	$	—

The amortized cost and estimated fair value of debt securities are shown below by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately (in thousands):

	March 31, 2024
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	8,499	$	8,297	$	—	$	—
After one, but within five years	97,948		90,687		145		145
After five, but within ten years	18,076		14,838		640		640
After ten years	470		417		—		—
	124,993		114,239		785		785
Mortgage-backed securities, residential	467,125		389,707		—		—
Collateralized mortgage obligations	—		—		—		—
SBA loan pools	64,522		62,082		—		—
Total	$	656,640	$	566,028	$	785	$	785

There were no proceeds from sales and calls of securities resulting in gains or losses for the three month periods ended March 31, 2024 and 2023.

15

The following tables summarize the investment securities available for sale with unrealized losses at March 31, 2024 and December 31, 2023 by aggregated major security type and length of time in a continuous unrealized loss position (in thousands):

	Less than 12 months				12 months or longer				Total
March 31, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury notes and bonds	$	—	$	—	$	55,162	$	4,666	$	55,162	$	4,666
Mortgage-backed securities, residential	—		—		388,878		77,425		388,878		77,425
Obligations of states and political subdivisions	1,154		24		36,991		1,246		38,145		1,270
Corporate bonds and notes	—		—		20,932		4,818		20,932		4,818
SBA loan pools	1,067		2		54,894		2,495		55,961		2,497
Total temporarily impaired securities	$	2,221	$	26	$	556,857	$	90,650	$	559,078	$	90,676

	Less than 12 months				12 months or longer				Total
December 31, 2023	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury notes and bonds	$	—	$	—	$	55,332	$	4,480	$	55,332	$	4,480
Mortgage-backed securities, residential	—		—		402,986		72,422		402,986		72,422
Obligations of states and political subdivisions	17,891		241		20,686		576		38,577		817
Corporate bonds and notes	7,492		2,508		13,177		2,573		20,669		5,081
SBA loan pools	3,914		13		54,468		2,367		58,382		2,380
Total temporarily impaired securities	$	29,297	$	2,762	$	546,649	$	82,418	$	575,946	$	85,180

Assessment of Available for Sale Debt Securities for Credit Risk

Management assesses the decline in fair value of investment securities on a regular basis. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates both qualitative and quantitative factors to assess whether an impairment exists. The following is a discussion of the credit quality characteristics of portfolio segments carrying material unrealized losses as of March 31, 2024.

Obligations of U.S. Governmental agencies and sponsored enterprises:

As of March 31, 2024, the majority of the Corporation’s unrealized losses in available for sale investment securities related to mortgage-backed securities, issued by government-sponsored entities and agencies. Declines in fair value are attributable to changes in interest rates and illiquidity, not credit quality. The Corporation does not have the intent, and it is not likely to be required to, sell these securities prior to their anticipated recovery. Because the Corporation considers these obligations to carry zero loss estimates, no allowance for credit losses has been recorded as of March 31, 2024.

Corporate bonds and notes:

The Corporation's corporate bonds and notes portfolio is comprised of subordinated debt issues of community and regional banks. Management considers the credit quality of these investments on an individual basis. Management reviewed the collectability of these securities, taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, and credit ratings when available, among other pertinent factors. All corporate bond debt securities continue to accrue interest and make payments as expected with no defaults or deferrals on the part of the issuers. Therefore, the Corporation considers the potential credit risk of these issuers to be immaterial, and has not recorded an allowance for credit losses on its corporate bonds and notes portfolio as of March 31, 2024.

Equity Method Investments

The Corporation holds a non-qualified deferred compensation plan to allow a select group of management and employees the opportunity to defer all or a portion of their annual compensation, and treats assets held under this plan as equity method investments. As of March 31, 2024 and December 31, 2023, the fair value of investments held in relation to the deferred compensation plan was $2.5 million and $2.4 million, respectively. The Corporation also held $0.6 million of marketable securities as equity method investments as of March 31, 2024 and December 31, 2023.

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NOTE 4        LOANS AND ALLOWANCE FOR CREDIT LOSSES

The composition of the loan portfolio, net of deferred origination fees and costs, is summarized as follows (in thousands):

	March 31, 2024		December 31, 2023
Commercial and agricultural:
Commercial and industrial	$	279,414	$	264,140
Agricultural	221		256
Commercial mortgages:
Construction	141,604		138,887
Commercial mortgages, other	1,004,198		984,038
Residential mortgages	277,246		277,992
Consumer loans:
Home equity lines and loans	87,608		87,056
Indirect consumer loans	204,081		210,423
Direct consumer loans	9,238		9,872
Total loans, net of deferred loan fees and costs	2,003,610		1,972,664
Allowance for credit losses	(20,471)		(22,517)
Loans, net	$	1,983,139	$	1,950,147

The Corporation's concentrations of credit risk by loan type are reflected in the preceding table. The concentrations of credit risk with standby letters of credit, committed lines of credit and commitments to originate new loans generally follow the loan classifications in the table above.

Accrued interest receivable on loans totaled $8.1 million as of March 31, 2024 and $7.8 million as of December 31, 2023. Accrued interest receivable on loans is included in the Accrued interest receivable and other assets line item on the Corporation's Consolidated Balance Sheets, and is excluded from the amortized cost basis of loans and estimate of the allowance for credit losses, as presented in this Note.

The following tables present the activity in the allowance for credit losses by portfolio segment for the three month periods ended March 31, 2024 and March 31, 2023 (in thousands):

	Three Months Ended March 31, 2024
Allowance for credit losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Beginning balance, January 1, 2024	$	5,055	$	12,026	$	2,194	$	3,242	$	22,517
Charge-offs	—		—		(16)		(351)		(367)
Recoveries	37		1		22		125		185
Net recoveries (charge-offs)	37		1		6		(226)		(182)
Provision (credit) (1)	(576)		(1,660)		(138)		510		(1,864)
Ending balance, March 31, 2024	$	4,516	$	10,367	$	2,062	$	3,526	$	20,471

(1)Additional provision related to off-balance sheet exposure was a credit of $176 thousand for the three months ended March 31, 2024.

The Corporation performs an annual update to the loss drivers used in modeling its estimate of the allowance for credit losses. Annual updates for the model in 2024 were completed during the three month period ended March 31, 2024.

17

	Three Months Ended March 31, 2023
Allowance for credit losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Beginning balance, January 1, 2023	$	3,373	$	11,576	$	1,845	$	2,865	$	19,659
Cumulative effect adjustment for the adoption of ASC 326	909		(695)		(16)		176		374
Beginning balance after cumulative effect adjustment	4,282		10,881		1,829		3,041		20,033
Charge-offs	(190)		—		—		(193)		(383)
Recoveries	6		—		—		108		114
Net recoveries (charge-offs)	(184)		—		—		(85)		(269)
Provision (credit) (1)	(45)		102		63		191		311
Ending balance, March 31, 2023	$	4,053	$	10,983	$	1,892	$	3,147	$	20,075

(1)Additional provision related to off-balance sheet exposure was a credit of $34 thousand for the three months ended March 31, 2023.

Unfunded Commitments

The allowance for credit losses on unfunded commitments is recognized as a liability, and included in the Accrued interest payable and other liabilities line item on the Corporation's Consolidated Balance Sheets, with adjustments to the allowance recognized in the Provision for credit losses on the Consolidated Statements of Income. The Corporation established an allowance for credit losses on unfunded commitments in conjunction with its adoption of ASC 326-Financial Instruments-Credit Losses.

The following table presents the activity in the allowance for credit losses on unfunded commitments for the three month periods ended March 31, 2024 and 2023 (in thousands):

	For the Three Months Ended
Allowance for credit losses on unfunded commitments	March 31, 2024		March 31, 2023
Beginning balance	$	919	$	—
Impact of ASC 326 adoption	—		1,082
Provision (credit) for credit losses on unfunded commitments	(176)		(34)
Ending balance	$	743	$	1,048

The following table presents the provision for credit losses on loans and unfunded commitments for the three month periods ended March 31, 2024 and March 31, 2023 (in thousands):

	For the Three Months Ended
Provision (credit) for credit losses	March 31, 2024		March 31, 2023
Provision (credit) for credit losses on loans	$	(1,864)	$	311
Provision (credit) for credit losses on unfunded commitments	(176)		(34)
Total provision (credit) for credit losses	$	(2,040)	$	277

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The following tables present the balance in the allowance for credit losses by portfolio segment, as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
Allowance for credit losses	Commercial and		Commercial		Residential		Consumer
Ending allowance balance attributable to loans:	Agricultural		Mortgages		Mortgages		Loans		Total
Individually analyzed	$	1,663	$	24	$	—	$	—	$	1,687
Collectively analyzed	2,853		10,343		2,062		3,526		18,784
Total ending allowance balance	$	4,516	$	10,367	$	2,062	$	3,526	$	20,471

	December 31, 2023
Allowance for credit losses	Commercial and		Commercial		Residential		Consumer
Ending allowance balance attributable to loans:	Agricultural		Mortgages		Mortgages		Loans		Total
Individually analyzed	$	1,928	$	27	$	—	$	—	$	1,955
Collectively analyzed	3,127		11,999		2,194		3,242		20,562
Total ending allowance balance	$	5,055	$	12,026	$	2,194	$	3,242	$	22,517

The following tables present the amortized cost basis of loans by portfolio segment, as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
Amortized cost basis of loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Individually analyzed	$	1,746	$	3,965	$	—	$	—	$	5,711
Collectively analyzed	277,889		1,141,837		277,246		300,927		1,997,899
Total ending loans balance	$	279,635	$	1,145,802	$	277,246	$	300,927	$	2,003,610

	December 31, 2023
Amortized cost basis of loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Individually analyzed	$	2,067	$	5,968	$	—	$	—	$	8,035
Collectively analyzed	262,329		1,116,957		277,992		307,351		1,964,629
Total ending loans balance	$	264,396	$	1,122,925	$	277,992	$	307,351	$	1,972,664

Modifications to Loans Made to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Corporation adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326)-Troubled Debt Restructurings and Vintage Disclosures. The Corporation may occasionally make modifications to loans where the borrower is considered to be experiencing financial difficulty. Types of modifications considered under ASU 2022-02 include principal reductions, interest rate reductions, term extensions, significant payment delays, or a combination thereof.

There were no loan modifications to borrowers experiencing financial difficulty, as considered under the requirements of ASU 2022-02, made during the three month period ended March 31, 2024.

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The following tables summarize the amortized cost basis of loans modified during the three month period ended March 31, 2023 (in thousands):

	Three Months Ended March 31, 2023
Loans modified under ASU 2022-02:	Principal Reduction		Interest Rate Reduction		Term Extension		Payment Delay		Combination		Total		(%) of Loan Class (1)
Commercial mortgages:
Commercial mortgages, other	$	—	$	—	$	277	$	—	$	—	$	277	0.03	%

(1) Represents the amortized cost basis of loans modified during the period as a percentage of the period-end loan balances by class.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three month period ended March 31, 2023 (in thousands):

	Three Months Ended March 31, 2023
Effect of loan modifications under ASU 2022-02:	Principal Reduction (in thousands)	Weighted-average interest rate reduction (%)	Weighted-average term extension (in months)	Weighted-average payment delay (in months)
Commercial mortgages:
Commercial mortgages, other	$—	—%	60 months	0

The Corporation had no outstanding commitments to lend additional amounts to borrowers for which modifications subject to ASU 2022-02 were made during the three months ended March 31, 2024 and the year-ended December 31, 2023.

During the three month period ended March 31, 2024, the Corporation had one loan, a commercial and industrial loan which was given a six month term extension during the three month period ended September 30, 2023, which experienced a payment default within twelve months of modification. There were no loans that defaulted during the three month period ended March 31, 2023 for which modifications were made subsequent to the adoption of ASU 2022-02 on January 1, 2023.

The Corporation monitors the performance of loans that have previously been modified under the guidance of ASU 2022-02 in order to gauge the effectiveness of modifications, and to determine the degree to which borrowers continue to demonstrate financial weakness following modification. The following tables present the performance of such loans that have been modified in the twelve month period preceding March 31, 2024 and the three month period preceding March 31, 2023 (in thousands):

	Twelve Months Ended March 31, 2024
Past Due Status of Modifications under ASU 2022-02:	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	—	$	—	$	675	$	129	$	804
Consumer loans:
Home equity lines and loans	—		—		—		116		116
Total	$	—	$	—	$	675	$	245	$	920

During the three months ended March 31, 2024, a commercial mortgage that was was granted a payment delay during the three months ended June 30, 2023 executed an early payoff. The amortized basis of the loan prior to the payoff was $1.9 million.

	Three Months Ended March 31, 2023 (1)
Past Due Status of Modifications under ASU 2022-02:	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Loans Not Past Due		Total
Commercial mortgages, other	$	—	$	—	$	—	$	277	$	277

(1) Represents loans which were modified during the three month period subsequent to the adoption of ASU 2022-02 on January 1, 2023.

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Collateral Dependent Individually Analyzed Loans

As of March 31, 2024, the amortized cost basis of individually analyzed loans totaled $5.7 million, of which $4.2 million were considered collateral dependent. As of December 31, 2023 the amortized basis of individually analyzed loans totaled $8.0 million, of which $6.3 million were considered collateral dependent. For collateral dependent loans where the borrower is experiencing financial difficulty and repayment is likely to be substantially provided through the sale or operation of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date.

Certain assets held as collateral may be exposed to future deterioration in fair value, particularly due to changes in real estate markets or usage. The Corporation closely monitors trends in real estate values throughout its market area to determine whether collateral values, after appropriate discounting, are likely to be sufficient to extinguish existing borrower indebtedness.

The following table presents the amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral dependent as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Amortized Cost Basis		Related Allowance		Amortized Cost Basis		Related Allowance
Commercial and agricultural:
Commercial and industrial (3)	$	282	$	200	$	353	$	214
Agricultural (3)	2		1		26		26
Commercial mortgages:
Construction (1)	2,207		—		2,209		—
Commercial mortgages, other (1) (2) (3)	1,757		24		3,759		27
Total	$	4,248	$	225	$	6,347	$	267

(1) Secured by commercial real estate

(2) Secured by residential real estate

(3) Secured by business assets

The following tables present the average amortized cost basis and interest income recognized on loans individually analyzed, by class of loans, for the three month periods ended March 31, 2024 and 2023 (in thousands):

	Three Months Ended   March 31, 2024				Three Months Ended   March 31, 2023
With no related allowance recorded:	Average Amortized Cost Basis		Interest Income Recognized (1)		Average Amortized Cost Basis		Interest Income Recognized (1)
Commercial and agricultural:
Commercial and industrial	$	49	$	1	$	729	$	—
Agricultural	—		—		—		—
Commercial mortgages:
Construction	2,208		—		—		—
Commercial mortgages, other	2,733		—		4,053		7
Residential mortgages	—		—		715		9
Consumer loans:
Home equity lines & loans	—		—		254		—
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial	1,844		3		1,049		2
Agricultural	14		—		—		—
Commercial mortgages:
Commercial mortgages, other	25		—		36		—
Total	$	6,873	$	4	$	6,836	$	18

(1) Cash basis interest income approximates interest income recognized.

21

The following table presents the amortized cost basis in nonaccrual loans without an associated allocation in the allowance for credit losses, total nonaccrual loans, and loans past due greater than 90 days and still accruing, by class of loan as of March 31, 2024 and December 31, 2023 (in thousands):

	Nonaccrual with No Allowance for Credit Losses				Nonaccrual				Loans Past Due 90 Days or More and Still Accruing
	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Commercial and agricultural:
Commercial and industrial	$	23	$	76	$	1,615	$	1,904	$	8	$	10
Agricultural	—		—		2		26		—		—
Commercial mortgages:
Construction	2,207		2,209		2,207		2,209		—		—
Commercial mortgages, other	1,734		3,732		1,758		3,760		—		—
Residential mortgages	1,118		1,315		1,118		1,315		—		—
Consumer loans:
Home equity lines and loans	496		508		496		508		—		—
Indirect consumer loans	631		687		631		687		—		—
Direct consumer loans	8		2		8		2		—		—
Total	$	6,217	$	8,529	$	7,835	$	10,411	$	8	$	10

The following tables present the aging of the amortized cost basis of loans as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	181	$	238	$	683	$	1,102	$	278,312	$	279,414
Agricultural	—		—		—		—		221		221
Commercial mortgages:
Construction	—		—		2,207		2,207		139,397		141,604
Commercial mortgages, other	1,012		2,238		175		3,425		1,000,773		1,004,198
Residential mortgages	1,529		594		589		2,712		274,534		277,246
Consumer loans:
Home equity lines and loans	612		100		282		994		86,614		87,608
Indirect consumer loans	1,063		379		379		1,821		202,260		204,081
Direct consumer loans	18		20		6		44		9,194		9,238
Total	$	4,415	$	3,569	$	4,321	$	12,305	$	1,991,305	$	2,003,610

22

	December 31, 2023
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	1,196	$	31	$	10	$	1,237	$	262,903	$	264,140
Agricultural	—		—		—		—		256		256
Commercial mortgages:
Construction	2,164		—		2,207		4,371		134,516		138,887
Commercial mortgages, other	1,022		103		261		1,386		982,652		984,038
Residential mortgages	2,244		201		585		3,030		274,962		277,992
Consumer loans:
Home equity lines and loans	461		87		366		914		86,142		87,056
Indirect consumer loans	2,473		501		426		3,400		207,023		210,423
Direct consumer loans	2		20		—		22		9,850		9,872
Total	$	9,562	$	943	$	3,855	$	14,360	$	1,958,304	$	1,972,664

Credit Quality Indicators

The Corporation establishes a risk rating at origination for all commercial loans. The primary factors considered in assigning risk ratings include, but are not limited to: historic and future debt service coverage, collateral position, operating performance, liquidity, leverage, payment history, management ability, and the customer’s industry. Commercial relationship managers monitor all loans in their respective portfolios for any changes in the borrower’s ability to service its debt and affirm the risk ratings for the loans at least annually.

For retail loans, which include residential mortgages, indirect and direct consumer loans, and home equity lines and loans, once a loan is properly approved and closed, the Corporation evaluates credit quality based upon loan repayment. Retail loans that have been modified subject to ASU 2022-02, but are otherwise performing, are assigned a risk rating of Special Mention, as defined below. Retail loans are not rated until they become 90 days past due, or are modified under ASU 2022-02.

The Corporation uses the risk rating system to identify criticized and classified loans. Commercial relationships within the criticized and classified risk ratings are analyzed quarterly.  The Corporation uses the following definitions for criticized and classified loans (which are consistent with regulatory guidelines):

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capability of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Commercial loans not meeting the criteria above to be considered criticized or classified, are considered to be pass rated loans. Loans listed as not rated, are included in groups of homogeneous loans performing under terms of the loan notes.

23

Based on the analyses performed as of March 31, 2024, the risk category of the amortized cost basis of loans by class and vintage, as well as gross charge-offs by class and vintage for the period, were as follows (in thousands):

	Term Loans Amortized Cost by Origination Year												Revolving Loans Amortized Cost		Revolving Loans Converted to Term		Total
	2024		2023		2022		2021		2020		Prior
Commercial & industrial
Pass	$	10,885	$	39,011	$	34,108	$	21,370	$	12,349	$	39,698	$	92,497	$	1,643	$	251,561
Special mention	—		—		9,159		—		4,060		4,586		7,223		453		25,481
Substandard	—		89		221		788		83		205		—		176		1,562
Doubtful	24		—		—		—		—		764		22		—		810
Total	10,909		39,100		43,488		22,158		16,492		45,253		99,742		2,272		279,414
Gross charge-offs	—		—		—		—		—		—		—		—		—
Agricultural
Pass	—		—		14		143		—		—		62		—		219
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		2		—		—		—		—		—		—		2
Doubtful	—		—		—		—		—		—		—		—		—
Total	—		2		14		143		—		—		62		—		221
Gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	1,076		48,500		77,995		9,686		—		1,658		482		—		139,397
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		2,207		—		—		2,207
Doubtful	—		—		—		—		—		—		—		—		—
Total	1,076		48,500		77,995		9,686		—		3,865		482		—		141,604
Gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial mortgages
Pass	13,784		117,235		258,049		171,090		111,407		296,080		5,127		742		973,514
Special mention	—		—		2,522		8,092		2,590		8,082		2,001		—		23,287
Substandard	—		2,412		1,081		339		1,012		2,432		97		—		7,373
Doubtful	—		—		—		—		—		24		—		—		24
Total	13,784		119,647		261,652		179,521		115,009		306,618		7,225		742		1,004,198
Gross charge-offs	—		—		—		—		—		—		—		—		—
Residential mortgages
Not rated	4,014		20,000		57,204		59,311		70,050		65,549		—		—		276,128
Substandard	—		—		75		342		247		454		—		—		1,118
Total	4,014		20,000		57,279		59,653		70,297		66,003		—		—		277,246
Gross charge-offs	—		—		—		—		—		16		—		—		16
Home equity lines and loans
Not rated	3,298		12,904		15,846		5,577		3,009		12,494		32,773		1,095		86,996
Special mention	—		—		116		—		—		—		—		—		116
Substandard	—		—		76		—		—		291		86		43		496
Total	3,298		12,904		16,038		5,577		3,009		12,785		32,859		1,138		87,608
Gross charge-offs	—		—		—		—		—		11		—		—		11
Indirect consumer
Not rated	11,861		67,401		90,413		20,411		7,652		5,712		—		—		203,450
Substandard	—		139		208		141		49		94		—		—		631
Total	11,861		67,540		90,621		20,552		7,701		5,806		—		—		204,081
Gross charge-offs	—		104		127		29		24		54		—		—		338
Direct consumer
Not rated	700		2,622		2,391		607		174		332		2,401		3		9,230
Substandard	—		—		—		5		2		—		1		—		8
Total	700		2,622		2,391		612		176		332		2,402		3		9,238
Gross charge-offs	—		—		—		—		—		—		2		—		2
Total loans	$	45,642	$	310,315	$	549,478	$	297,902	$	212,684	$	440,662	$	142,772	$	4,155	$	2,003,610
Total gross charge-offs	$	—	$	104	$	127	$	29	$	24	$	81	$	2	$	—	$	367

24

Based on the analyses performed as of December 31, 2023, the risk category of the amortized cost basis of loans by class and vintage, as well as gross charge-offs by class and vintage for the period, were as follows (in thousands):

	Term Loans Amortized Cost by Origination Year												Revolving Loans Amortized Cost		Revolving Loans Converted to Term		Total
	2023		2022		2021		2020		2019		Prior
Commercial & industrial
Pass	$	41,925	$	40,564	$	21,742	$	13,541	$	31,233	$	10,523	$	77,176	$	1,662	$	238,366
Special mention	185		4,608		—		4,020		—		4,690		9,137		482		23,122
Substandard	—		24		991		109		23		456		—		161		1,764
Doubtful	—		—		—		—		—		790		75		23		888
Total	42,110		45,196		22,733		17,670		31,256		16,459		86,388		2,328		264,140
Gross charge-offs	—		—		—		—		9		272		—		—		281
Agricultural
Pass	—		15		150		—		—		—		65		—		230
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		26		26
Doubtful	—		—		—		—		—		—		—		—		—
Total	—		15		150		—		—		—		65		26		256
Gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	46,951		68,483		19,066		—		28		1,669		481		—		136,678
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		2,207		2		—		—		2,209
Doubtful	—		—		—		—		—		—		—		—		—
Total	46,951		68,483		19,066		—		2,235		1,671		481		—		138,887
Gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial mortgages
Pass	110,864		260,763		161,858		113,198		57,782		244,211		5,197		767		954,640
Special mention	—		2,533		8,189		2,609		—		8,642		—		—		21,973
Substandard	272		1,107		345		1,022		—		4,555		97		—		7,398
Doubtful	—		—		—		—		—		27		—		—		27
Total	111,136		264,403		170,392		116,829		57,782		257,435		5,294		767		984,038
Gross charge-offs	—		—		—		—		—		—		—		—		—
Residential mortgages
Not rated	18,653		58,098		60,024		71,369		15,948		52,585		—		—		276,677
Substandard	—		75		346		—		169		725		—		—		1,315
Total	18,653		58,173		60,370		71,369		16,117		53,310		—		—		277,992
Gross charge-offs	—		32		—		—		—		—		—		—		32
Home equity lines and loans
Not rated	13,552		16,384		5,821		3,134		2,867		10,400		33,275		1,115		86,548
Substandard	—		77		—		—		—		293		25		113		508
Total	13,552		16,461		5,821		3,134		2,867		10,693		33,300		1,228		87,056
Gross charge-offs	—		—		—		—		—		—		6		—		6
Indirect consumer
Not rated	72,264		98,008		23,015		9,192		3,870		3,387		—		—		209,736
Substandard	119		246		135		48		36		103		—		—		687
Total	72,383		98,254		23,150		9,240		3,906		3,490		—		—		210,423
Gross charge-offs	184		375		215		121		21		55		—		—		971
Direct consumer
Not rated	3,005		2,745		785		256		53		324		2,697		5		9,870
Substandard	—		—		—		2		—		—		—		—		2
Total	3,005		2,745		785		258		53		324		2,697		5		9,872
Gross charge-offs	4		15		8		6		—		54		6		—		93
Total loans	$	307,790	$	553,730	$	302,467	$	218,500	$	114,216	$	343,382	$	128,225	$	4,354	$	1,972,664
Total gross charge-offs	$	188	$	422	$	223	$	127	$	30	$	381	$	12	$	—	$	1,383

25

NOTE 5        FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Corporation used the following methods and significant assumptions to estimate fair value on a recurring basis:

Available for Sale Securities:  The fair values of securities available for sale are usually determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs), or matrix pricing, which is a mathematical technique widely used to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3 inputs).

Equity Investments: Securities that are held to fund a deferred compensation plan and securities that have a readily determinable fair market value, are recorded at fair value with changes in fair value included in earnings. The fair values of equity investments are determined by quoted market prices (Level 1 inputs).

Individually Analyzed Loans: At the time a loan is considered individually analyzed, it is valued at the lower of cost or fair value. Individually analyzed loans carried at fair value have been partially charged-off or receive specific allocations as part of the allowance for credit loss accounting. For collateral dependent loans, fair value is commonly based on real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, typically resulting in a Level 3 fair value classification. Individually analyzed loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

OREO: Assets acquired through or in lieu of loan foreclosures are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral dependent loans and OREO are performed by certified general appraisers (commercial properties) or certified residential appraisers (residential properties) whose qualifications and licenses have been reviewed and verified by the Corporation. Once received, appraisals are reviewed for reasonableness of assumptions, approaches utilized, Uniform Standards of Professional Appraisal Practice and other regulatory compliance, as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Appraisals are generally completed within the twelve month period prior to a property being placed into OREO. On individually analyzed loans, appraisal values are adjusted based on the age of the appraisal, the position of the lien, the type of the property and its condition.

26

Derivatives: The fair values of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2 inputs). Derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices, and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The Corporation also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counter-party's nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Corporation has considered the impact of any applicable credit enhancements, such as collateral postings. Although the Corporation has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize credit default rate assumptions (Level 3 inputs).

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

			Fair Value Measurement at March 31, 2024 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury notes and bonds	$	55,162	$	55,162	$	—	$	—
Mortgage-backed securities, residential	389,707		—		389,707		—
Obligations of states and political subdivisions	38,145		—		38,145		—
Corporate bonds and notes	20,932		—		13,211		7,721
SBA loan pools	62,082		—		62,082		—
Total available for sale securities	$	566,028	$	55,162	$	503,145	$	7,721
Equity investments, at fair value	$	2,600	$	2,600	$	—	$	—
Derivative assets	$	25,806	$	—	$	25,806	$	—
Financial Liabilities:
Derivative liabilities	$	25,811	$	—	$	25,811	$	—

There were no transfers between Level 1 and Level 2 during the three month period ended March 31, 2024.

			Fair Value Measurement at December 31, 2023 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury notes and bonds	$	55,332	$	55,332	$	—	$	—
Mortgage-backed securities, residential	403,824		—		403,824		—
Obligations of states and political subdivisions	38,686		—		38,686		—
Corporate bonds and notes	20,669		—		13,139		7,530
SBA loan pools	65,482		—		65,482		—
Total available for sale securities	$	583,993	$	55,332	$	521,131	$	7,530
Equity investments, at fair value	$	2,552	$	2,552	$	—	$	—
Derivative assets	$	23,942	$	—	$	23,942	$	—
Financial Liabilities:
Derivative liabilities	$	23,981	$	—	$	23,981	$	—

There were no transfers between Level 1 and Level 2 during the three month period ended March 31, 2023.

27

The Corporation transfers assets and liabilities between Level 2 and Level 3 of the fair value hierarchy when the methodology to obtain fair value changes such that there are either more or fewer unobservable inputs as of the end of the reporting period, compared to the prior reporting period. Illiquidity in new issuances of comparable bonds and the size of issuances may lead to pricing difficulties, particularly for smaller corporate bond issuances and warrant transfer into Level 3 of assets previously measured using Level 2 inputs. The Corporation utilizes a "beginning of reporting period" timing assumption when recognizing transfers between hierarchy levels, consistent with ASC 820-10-50-2.

There were no transfers between Level 2 and Level 3 during the three month period ended March 31, 2024. The Corporation transferred its investment in eight corporate subordinated debt issuances from Level 2 to Level 3 during the three month period ended March 31, 2023.

The following table presents a reconciliation of assets and liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended March 31, 2024 and March 31, 2023 (in thousands):

Corporate bonds and notes:	For the Three Months Ended
Level 3 Financial Assets	March 31, 2024		March 31, 2023
Balance of recurring Level 3 assets as of January 1,	$	7,530	$	—
Total gains or losses for the period:	—		—
Included in Other Comprehensive Income	191		(1,289)
Transfers into Level 3	—		9,955
Transfers out of Level 3	—
Balance of recurring Level 3 assets as of March 31,	$	7,721	$	8,666

The following table presents quantitative information about recurring Level 3 fair value measurements as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024	Fair Value		Valuation Techniques	Unobservable Input	Range [Weighted Average] at March 31, 2024
Corporate bonds and notes	$	7,721	Discounted cash flow	Market discount rate	12.50% -12.50% [12.50%]

December 31, 2023	Fair Value		Valuation Techniques	Unobservable Input	Range [Weighted Average] at December 31, 2023
Corporate bonds and notes	$	7,530	Discounted cash flow	Market discount rate	12.50% -12.50% [12.50%]

28

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of other financial instruments, as of March 31, 2024 and December 31, 2023, are as follows (in thousands):

	March 31, 2024
Financial assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial institutions	$	22,984	$	22,984	$	—	$	—	$	22,984
Interest-earning deposits in other financial institutions	71,878		71,878		—		—		71,878
Equity investments	3,093		3,093		—		—		3,093
Securities available for sale	566,028		55,162		503,145		7,721		566,028
Securities held to maturity	785		—		—		785		785
FHLBNY and FRBNY stock	4,071		—		—		—		N/A
Loans, net and loans held for sale	2,003,706		—		—		1,896,266		1,896,266
Derivative assets	25,806		—		25,806		—		25,806
Financial liabilities:
Deposits:
Demand, savings, and insured money market deposits	$	1,851,412	$	1,851,412	$	—	$	—	$	1,851,412
Time deposits	629,360		—		626,423		—		626,423
FHLBNY overnight advances	—		—		—		—		—
FRB term advances	50,000		—		49,828		—		49,828
Derivative liabilities	25,811		—		25,811		—		25,811

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

	December 31, 2023
Financial assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial institutions	$	22,247	$	22,247	$	—	$	—	$	22,247
Interest-earning deposits in other financial institutions	14,600		14,600		—		—		14,600
Equity investments	3,046		3,046		—		—		3,046
Securities available for sale	583,993		55,332		521,131		7,530		583,993
Securities held to maturity	785		—		—		785		785
FHLBNY and FRBNY stock	5,498		—		—		—		N/A
Loans, net and loans held for sale	1,972,664		—		—		1,875,390		1,875,390
Derivative assets	23,942		—		23,942		—		23,942
Financial liabilities:
Deposits:
Demand, savings, and insured money market deposits	$	1,817,162	$	1,817,162	$	—	$	—	$	1,817,162
Time deposits	612,265		—		609,863		—		609,863
FHLBNY overnight advances	31,920		—		31,925		—		31,925
Derivative liabilities	23,981		—		23,981		—		23,981

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

29

NOTE 6        LEASES

Operating Leases

The Corporation leases certain branch properties under long-term, operating lease agreements. The leases expire at various dates through 2033 and generally include renewal options. As of March 31, 2024, the weighted average remaining lease term was 7.56 years with a weighted average discount rate of 3.51%. Rent expense was $0.3 million for the three months ended March 31, 2024. Certain leases provide for increases in future minimum annual rent payments as defined in the lease agreements. The Corporation’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately. The Corporation’s lease agreements do not contain any residual value guarantees.

Leased branch properties at March 31, 2024 and December 31, 2023 consist of the following (in thousands):

	March 31, 2024		December 31, 2023
Operating lease right-of-use asset	$	5,648	$	6,449
Less: accumulated amortization	(200)		(801)
Less: lease termination	—		—
Add: new lease agreement and modifications	570		—
Operating lease right-of-use-assets, net	$	6,018	$	5,648

The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding CAM charges, as of March 31, 2024 (in thousands):

Year	Amount
2024	$	717
2025	959
2026	965
2027	977
2028	845
2029 and thereafter	2,590
Total minimum lease payments	7,053
Less: amount representing interest	(856)
Present value of net minimum lease payments	$	6,197

The Corporation had one operating lease that was signed on October 19, 2023, but had not yet commenced.

Finance Leases

The Corporation leases certain buildings under finance leases. The lease arrangements require monthly payments through 2036. As of March 31, 2024, the weighted average remaining lease term was 9.10 years with a weighted average discount rate of 3.42%. The Corporation has included these leases in premises and equipment as of March 31, 2024 and December 31, 2023 as follows (in thousands):

	March 31, 2024		December 31, 2023
Buildings	$	5,572	$	5,572
Less: accumulated depreciation	(2,955)		(2,872)
Net book value	$	2,617	$	2,700

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The following is a schedule by year of future minimum lease payments under the capitalized lease, together with the present value of net minimum lease payments as of March 31, 2024 (in thousands):

Year	Amount
2024	$	293
2025	409
2026	425
2027	428
2028	428
2029 and thereafter	1,560
Total minimum lease payments	3,543
Less: amount representing interest	(564)
Present value of net minimum lease payments	$	2,979

As of March 31, 2024, the Corporation had no finance leases that were signed, but had not yet commenced.

Related Party Transactions

The Bank leases its branch located at 2 Rush Street, Schenectady, New York, under a lease agreement through February, 2033 from a member of the Corporation's Board of Directors with monthly rent and CAM related expenses totaling $9 thousand per month. Rent and CAM related expenses paid to this Board member totaled $27 thousand and $26 thousand for the three month periods ended March 31, 2024 and 2023, respectively.

NOTE 7        GOODWILL AND INTANGIBLE ASSETS

The changes in goodwill included in the core banking segment during the three month periods ended March 31, 2024 and 2023 were as follows (in thousands):

	2024		2023
Beginning of year	$	21,824	$	21,824
Acquired goodwill	—		—
Ending balance March 31,	$	21,824	$	21,824

The Corporation had no aggregate amortization expense for the three month periods ended March 31, 2024 and 2023.

The amount of goodwill reflected in the Corporation's Unaudited Consolidated Financial statements is required to be tested by management for impairment on at least an annual basis. Goodwill impairment testing is performed annually as of December 31 and no impairment charges were incurred.

NOTE 8        COMMITMENTS AND CONTINGENCIES

The Corporation is a party to certain financial instruments with off-balance sheet risk such as commitments under standby letters of credit, unused portions of lines of credit, overdraft protection and commitments to fund new loans. In accordance with GAAP, these financial instruments are not recorded in the financial statements. The Corporation's policy is to record such instruments when funded. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk.  Such transactions are generally used by the Corporation to manage clients' requests for funding and other client needs.

The following table lists the contractual amounts of financial instruments with off-balance sheet risk as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	14,387	$	61,128	$	23,809	$	78,790
Unused lines of credit	$	2,249	$	327,681	$	3,387	$	332,439
Standby letters of credit	$	—	$	18,201	$	—	$	11,317

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Commitments to make real estate and home equity loans are generally made for periods of sixty days or less. As of March 31, 2024, the fixed rate real estate and home equity commitments to make loans have interest rates ranging from 5.63% to 7.38% and maturities ranging from four years to thirty years. Commitments to fund commercial draw notes are generally made for periods of three months to twenty-four months. As of March 31, 2024, the fixed rate commercial draw commitments have interest rates ranging from 2.79% to 8.17%.

Because many commitments and almost all standby letters of credit expire without being funded in whole or in part, the contract amounts are not estimates of future cash flows. Loan commitments and unused lines of credit have off-balance sheet credit risk because only origination fees are recognized on the consolidated balance sheet until commitments are fulfilled or expire. The credit risk amounts are equal to the contractual amounts, assuming the amounts are fully advanced and collateral or other security is of no value. The Corporation does not anticipate losses as a result of these transactions. These commitments also have off-balance sheet interest rate risk in that the interest rate at which these commitments were made may not be at market rates on the date the commitments are fulfilled.

In conjunction with the Corporation's adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), an allowance for credit losses on unfunded commitments was established as of January 1, 2023. As of March 31, 2024 and December 31, 2023, the allowance for credit losses on unfunded commitments was $0.7 million and $0.9 million, respectively.

In the normal course of business, there are various outstanding claims and legal proceedings involving the Corporation or its subsidiaries. The Corporation believes that it is not a party to any pending legal, arbitration, or regulatory proceedings that could have a material adverse impact on its financial results or liquidity.

NOTE 9        ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) represents the net unrealized holding gains or losses on securities available for sale and the funded status of the Corporation's defined benefit pension plan and other benefit plans, as of the consolidated balance sheet dates, net of the related tax effect.

The following is a summary of the changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods indicated (in thousands):

	Unrealized Gains and Losses on Securities Available for Sale		Defined Benefit and Other Benefit Plans		Total
Balance at January 1, 2024	$	(62,800)	$	(3,213)	$	(66,013)
Other comprehensive income before reclassification	(4,070)		—		(4,070)
Amounts reclassified from accumulated other comprehensive income	—		5		5
Net current period other comprehensive income (loss)	(4,070)		5		(4,065)
Balance at March 31, 2024	$	(66,870)	$	(3,208)	$	(70,078)

	Unrealized Gains and Losses on Securities Available for Sale		Defined Benefit and Other Benefit Plans		Total
Balance at January 1, 2023	$	(71,296)	$	(3,961)	$	(75,257)
Other comprehensive income before reclassification	5,775		—		5,775
Amounts reclassified from accumulated other comprehensive income	—		9		9
Net current period other comprehensive income	5,775		9		5,784
Balance at March 31, 2023	$	(65,521)	$	(3,952)	$	(69,473)

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The following is the reclassification out of accumulated other comprehensive income for the periods indicated (in thousands):

Details about Accumulated Other Comprehensive Income (Loss) Components	Three Months Ended   March 31,				Affected Line Item in the Statement Where Net Income is Presented
	2024		2023
Amortization of defined pension plan and other benefit plan items:
Prior service costs (a)	$	—	$	—	Other components of net periodic pension and postretirement benefits
Actuarial losses (a)	7		12		Other components of net periodic pension and postretirement benefits
Tax effect	(2)		(3)		Income tax expense
Net of tax	5		9
Total reclassification for the period, net of tax	$	5	$	9

(a) These accumulated other comprehensive income components are included in the computation of net periodic pension and other benefit plan costs (see Note 11 for additional information).

NOTE 10    REVENUE FROM CONTRACTS WITH CUSTOMERS

All of the Corporation's revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. The following tables present the Corporation's non-interest income by revenue stream and reportable segment for the three months ended March 31, 2024 and 2023 (in thousands). Items outside the scope of ASC 606 are noted as such.

	Three Months Ended March 31, 2024
Revenue by Operating Segment: Non-interest income	Core Banking		WMG		Holding Company and CFS(b)		Total
Service charges on deposit accounts
Overdraft fees	$	710	$	—	$	—	$	710
Other	239		—		—		239
Interchange revenue from debit card transactions	1,063		—		—		1,063
WMG fee income	—		2,703		—		2,703
CFS fee and commission income	—		—		228		228
Net gains on sales of loans(a)	32		—		—		32
Loan servicing fees(a)	36		—		—		36
Changes in fair value of equity investments(a)	117		—		(16)		101
Income from bank-owned life insurance(a)	9		—		—		9
Other(a)	536		—		—		536
Total non-interest income (loss)	$	2,742	$	2,703	$	212	$	5,657

(a) Not within scope of ASC 606.

(b) The Holding Company, and CFS column above includes amounts to eliminate transactions between segments.

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	Three Months Ended March 31, 2023
Revenue by Operating Segment: Non-interest income	Core Banking		WMG		Holding Company, CFS, and CRM(b)(c)		Total
Service charges on deposit accounts
Overdraft fees	$	714	$	—	$	—	$	714
Other	227		—		—		227
Interchange revenue from debit card transactions	1,133		—		—		1,133
WMG fee income	—		2,580		—		2,580
CFS fee and commission income	—		—		241		241
Net gains on sales of loans(a)	5		—		—		5
Loan servicing fees(a)	36		—		—		36
Changes in fair value of equity investments(a)	78		—		(6)		72
Income from bank-owned life insurance(a)	10		—		—		10
Other(a)	448		—		(43)		405
Total non-interest income	$	2,651	$	2,580	$	192	$	5,423

(a) Not within scope of ASC 606.

(b) The Holding Company, CFS, and CRM column above includes amounts to eliminate transactions between segments.

(c) Chemung Risk Management, Inc. (CRM) was dissolved December 6, 2023.

A description of the Corporation's revenue streams accounted for under ASC 606 follows:

Service Charges on Deposit Accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which included services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Corporation fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are recognized at the time the maintenance occurs. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance.

Interchange Income from Debit Card Transactions: The Corporation earns interchange fees from debit cardholder transactions conducted through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with transaction processing services provided to the cardholder.

WMG Fee Income (Gross): The Corporation earns wealth management fees from its contracts with customers to manage assets for investment, and/or to conduct transactions on their accounts. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management (AUM) at quarter-end.

CFS Fee and Commission Income (Net): The Corporation earns fees from investment brokerage services provided to its customers by a third-party service provider. The Corporation receives commissions from the third-party service provider on a monthly basis based upon customer activity for the month. The Corporation (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers. Investment brokerage fees are presented net of related costs. The Corporation also earns fees from tax services provided to its customers.

Net Gains/Losses on Sales of OREO: The Corporation records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Corporation finances the sale of OREO to the buyer, the Corporation assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Corporation adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.

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NOTE 11    COMPONENTS OF QUARTERLY AND YEAR TO DATE NET PERIODIC BENEFIT COSTS

The components of net periodic expense for the Corporation’s pension and other benefit plans for the periods indicated are as follows (in thousands):

	Three Months Ended   March 31,
	2024		2023
Qualified Pension Plan
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	378		396
Expected return on plan assets	(629)		(596)
Amortization of unrecognized transition obligation	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	—		6
Net periodic pension benefit	$	(251)	$	(194)
Supplemental Pension Plan
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	11		12
Expected return on plan assets	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	3		2
Net periodic supplemental pension cost	$	14	$	14
Postretirement Plan, Medical and Life
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	1		1
Expected return on plan assets	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	4		5
Net periodic postretirement, medical and life benefit	$	5	$	6

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NOTE 12    SEGMENT REPORTING

The Corporation manages its operations through two primary business segments: core banking and WMG. The core banking segment provides revenues by attracting deposits from the general public and using such funds to originate consumer, commercial, commercial real estate, and residential mortgage loans, primarily in the Corporation’s local markets, and to invest in securities. The WMG services segment provides revenues by providing trust and investment advisory services to clients.

Accounting policies for the segments are the same as those described in Note 1 of the Corporation’s 2023 Annual Report on Form 10-K, which was filed with the SEC on March 13, 2024. Summarized financial information concerning the Corporation’s reportable segments and the reconciliation to the Corporation’s consolidated results are shown in the following table. Income taxes are allocated based on the separate taxable income of each entity and indirect overhead expenses are allocated based on reasonable and equitable allocations applicable to the reportable segment.

The Holding Company and CFS columns below include amounts to eliminate transactions between segments (in thousands).

	Three months ended March 31, 2024
	Core Banking		WMG		Holding Company, and CFS		Consolidated Totals
Interest and dividend income	$	31,211	$	—	$	8	$	31,219
Interest expense	13,130		—		—		13,130
Net interest income	18,081		—		8		18,089
Provision for credit losses	(2,040)		—		—		(2,040)
Net interest income after provision for credit losses	20,121		—		8		20,129
Other non-interest income	2,742		2,703		212		5,657
Other non-interest expenses	14,539		1,895		264		16,698
Income (loss) before income tax expense (benefit)	8,324		808		(44)		9,088
Income tax expense (benefit)	1,870		182		(14)		2,038
Segment net income (loss)	$	6,454	$	626	$	(30)	$	7,050
Segment assets	$	2,778,785	$	2,898	$	3,207	$	2,784,890

	Three months ended March 31, 2023
	Core Banking		WMG		Holding Company, CFS, and CRM(1)		Consolidated Totals
Interest and dividend income	$	26,203	$	—	$	27	$	26,230
Interest expense	6,283		—				6,283
Net interest income	19,920		—		27		19,947
Provision for credit losses	277		—		—		277
Net interest income after provision for credit losses	19,643		—		27		19,670
Other non-interest income	2,651		2,580		192		5,423
Other non-interest expenses	13,696		1,798		342		15,836
Income (loss) before income tax expense (benefit)	8,598		782		(123)		9,257
Income tax expense (benefit)	1,831		177		(21)		1,987
Segment net income (loss)	$	6,767	$	605	$	(102)	$	7,270
Segment assets	$	2,644,158	$	2,538	$	1,714	$	2,654,183

(1)Chemung Risk Management, Inc. (CRM) was dissolved December 6, 2023.

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NOTE 13    STOCK COMPENSATION

Pursuant to the Corporation's 2021 Equity Incentive Plan (the "2021 Plan") the Corporation may make discretionary grants of restricted shares of the Corporation’s common stock to or for the benefit of employees selected to participate in the 2021 Plan, the chief executive officer and members of the Board of Directors. Awards are based on the performance, responsibility and contributions of the individual and are targeted at an average of the peer group. The maximum number of shares of the Corporation’s common stock that may be awarded as restricted shares related to the 2021 Plan may not exceed 170,000, upon which time a new plan may be created. Compensation expense for shares granted will be recognized over the vesting period of the award based upon the closing price of the Corporation's stock on the grant date.

During the three months ended March 31, 2024 and 2023, 12,088 and 13,069 shares, respectively, were re-issued from treasury to fund stock compensation. The expense related to these grants is recognized over a one year or a five year vesting period. Total expense related to the 2021 Plan of $0.3 million and $0.4 million was recognized during each of the three month periods ended March 31, 2024 and 2023, respectively.

A summary of restricted stock activity for the three months ended March 31, 2024 is presented below:

	Shares	Weighted–Average Grant Date Fair Value
Nonvested at January 1, 2024	62,984	$45.87
Granted	12,088	$48.11
Vested	(13,208)	$45.86
Forfeited or cancelled	—	—
Nonvested at March 31, 2024	61,864	$46.31

As of March 31, 2024, there was $2.1 million of total unrecognized compensation cost related to nonvested shares granted under the 2021 Plan. The cost is expected to be recognized over a weighted-average period of 3.81 years. The total fair value of shares vested was $0.6 million for each of the three month periods ended March 31, 2024 and 2023, respectively. Due to the adoption of the 2021 Plan, certain grants were transitioned to a one-year vesting period.

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

Introduction

The following is the MD&A of the Corporation in this Quarterly Report on Form 10-Q for the three months ended March 31, 2024. Reference should be made to the accompanying unaudited consolidated financial statements and footnotes, and the Corporation’s 2023 Annual Report on Form 10-K, which was filed with the SEC on March 13, 2024, for an understanding of the following discussion and analysis. See the list of commonly used abbreviations and terms on pages 3–6.

The MD&A included in this Form 10-Q contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the Corporation's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. For a discussion of those risks and uncertainties and the factors that could cause the Corporation’s actual results to differ materially from those risks and uncertainties, see Forward-looking Statements below, in Part I, Item 1A, Risk Factors and on pages 20–31 of the Corporation’s 2023 Form 10-K. For a discussion of the use of non-GAAP financial measures, see pages 63-66 of the Corporation's 2023 Form 10-K, and pages 63-66 in this Form 10-Q.

The Corporation has been a financial holding company since 2000, the Bank was established in 1833 and CFS in 2001. Through the Bank and CFS, the Corporation provides a wide range of financial services, including demand, savings and time deposits, commercial, residential and consumer loans, interest rate swaps, letters of credit, wealth management services, employee benefit plans, insurance products, mutual funds and brokerage services. The Bank relies substantially on a foundation of locally generated deposits. The Corporation, on a stand-alone basis, has minimal results of operations. The Bank derives its income primarily from interest and fees on loans, interest income on investment securities, WMG fee income, and fees received in connection with deposit and other services. The Bank’s operating expenses are interest expense paid on deposits and borrowings, salaries and employee benefit plans, and general operating expenses.

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Forward-looking Statements

This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. The Corporation intends its forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in these sections. All statements regarding the Corporation's expected financial position and operating results, the Corporation's business strategy, the Corporation's financial plans, forecasted demographic and economic trends relating to the Corporation's industry and similar matters are forward-looking statements. These statements can sometimes be identified by the Corporation's use of forward-looking words such as "may," "will," "anticipate," "estimate," "expect," or "intend." The Corporation cannot guarantee that its expectations in such forward-looking statements will turn out to be correct. The Corporation's actual results could be materially different from expectations because of various factors, including changes in economic conditions or interest rates, credit risk, inflation, cybersecurity risks, difficulties in managing the Corporation’s growth, recent bank failures, changes in FDIC assessments, public health issues, geopolitical conflicts, competition, changes in law or the regulatory environment, and changes in general business and economic trends.

Information concerning these and other factors, including Risk Factors, can be found in the Corporation’s periodic filings with the SEC, including the discussion under the heading “Item 1A. Risk Factors” in the Corporation’s 2023 Annual Report on Form 10-K. These filings are available publicly on the SEC’s web site at http://www.sec.gov, on the Corporation's web site at http://www.chemungcanal.com or upon request from the Corporate Secretary at (607) 737-3746. Except as otherwise required by law, the Corporation undertakes no obligation to publicly update or revise its forward-looking statements, whether as a result of new information, future events, or otherwise.

Critical Accounting Estimates

Critical accounting estimates include the areas where the Corporation has made what it considers to be particularly difficult, subjective, or complex judgments concerning estimates, and where these estimates can significantly affect the Corporation's financial results under different assumptions and conditions. The Corporation prepares its financial statements in conformity with GAAP. As a result, the Corporation is required to make certain estimates, judgments, and assumptions that it believes are reasonable based upon the information available at that time. These estimates, judgments, and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Actual results could be different from these estimates. Significant accounting policies followed by the Corporation are presented in Note 1–Summary of Significant Accounting Policies, to the Audited Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2023, and in Note 1-Summary of Significant Accounting Policies of this Form 10-Q.

Allowance for Credit Losses

Management considers the allowance for credit losses to be a critical accounting estimate, given the uncertainty in estimating lifetime credit losses attributable to its portfolios of assets exhibiting credit risk, particularly in its loan portfolio, and the material effect that such judgments can have on the Corporation's results of operations. Determining the amount requires significant judgement on the part of management, is multi-faceted, and can be imprecise. The level of the allowance for credit losses on loans is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past events, current conditions, and expectations of the future based on reasonable and supportable forecasts.

The allowance is established through a provision for credit losses in the Consolidated Statements of Income, and evaluation of the adequacy of the allowance for credit losses is performed by management on a quarterly basis. While management uses available information to anticipate credit losses, future additions to the allowance may be necessary based on changes in economic conditions or the composition of its portfolios. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Corporation's allowance for credit losses.

Because the Corporation's methodology for maintaining its allowance for credit losses is based on historical experience and trends, current economic information, forecasted data, and management's judgement, a range of estimates for the estimate of the allowance for credit losses may be supportable. Deteriorating conditions may lead to further required increases to the allowance; conversely, improvements to conditions may warrant further reductions to the allowance. In estimating the allowance for credit losses, management considers the sensitivity of the model and significant judgments and assumptions that could result in an amount that is materially different from management’s estimate, including as it relates to qualitative considerations.

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As of March 31, 2024 and December 31, 2023, the allowance for credit losses totaled $20.5 million and $22.5 million, respectively. Due to the nature and composition of the Bank's lending activities, a significant portion of the allowance for credit losses is allocated to the commercial portfolio, both commercial real estate and commercial and industrial loans. As of March 31, 2024 and December 31, 2023, the allowance for credit losses allocated to the total commercial portfolio was $14.9 million and $17.1 million respectively, or 72.8% and 75.9%, respectively.

Changes in the FOMC's median forecasted year over year U.S. civilian unemployment rate and the year over year change in U.S GDP could have a material impact on the model's estimation of the allowance. FOMC projections are sourced from a quarterly Summary of Projections, which accompanies select FOMC meetings. Each participant's projections represent the value to which selected variables would be expected to converge over time under appropriate monetary policy, and considers all currently available information. An immediate "shock" or increase of 100 bps in the FOMC's projected rate of U.S. civilian unemployment, and a decrease of 50 bps in the FOMC's projected rate of U.S. GDP growth would increase the model's total calculated allowance by $1.3 million, or 6.20%, to $21.7 million, assuming qualitative adjustment are kept at current levels, as of March 31, 2024.

While management has concluded that its current evaluation is reasonable under the circumstances, and that sensitivity analysis is based on a series of hypothetical scenarios not intended to represent management’s assumptions or judgement of factors as of March 31, 2024, it has also concluded that differing assumptions could materially impact allowance calculations, either positively or adversely.

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Consolidated Financial Highlights (in thousands, except per share data)	As of or for the Three Months Ended
	Mar. 31,			Dec. 31,			Sept. 30,			June 30,			Mar. 31
RESULTS OF OPERATIONS	2024			2023			2023			2023			2023
Interest and divided income	$	31,219		$	30,033		$	29,015		$	27,796		$	26,230
Interest expense	13,130			12,135			10,998			9,201			6,283
Net interest income	18,089			17,898			18,017			18,595			19,947
Provision (credit) for credit losses (a)	(2,040)			2,300			449			236			277
Net interest income after provision for credit losses	20,129			15,598			17,568			18,359			19,670
Non-interest income	5,657			5,871			7,808			5,447			5,423
Non-interest expense	16,698			16,826			15,668			15,913			15,836
Income before income tax expense	9,088			4,643			9,708			7,893			9,257
Income tax expense	2,038			841			2,060			1,613			1,987
Net income	$	7,050		$	3,802		$	7,648		$	6,280		$	7,270
Basic and diluted earnings per share	$	1.48		$	0.80		$	1.61		$	1.33		$	1.54
Average basic and diluted shares outstanding	4,764			4,743			4,736			4,729			4,721
PERFORMANCE RATIOS - Annualized
Return on average assets	1.04		%	0.56		%	1.14		%	0.95		%	1.12		%
Return on average equity	14.48		%	8.63		%	16.89		%	13.97		%	16.97		%
Return on average tangible equity (b)	16.29		%	9.86		%	19.22		%	15.89		%	19.40		%
Efficiency ratio (unadjusted) (c)	70.32		%	70.79		%	60.67		%	66.19		%	62.42		%
Efficiency ratio (adjusted) (b)	70.07		%	70.42		%	66.55		%	65.94		%	62.18		%
Non-interest expense to average assets	2.47		%	2.48		%	2.33		%	2.41		%	2.44		%
Loans to deposits	80.77		%	81.20		%	78.05		%	79.24		%	80.33		%
AVERAGE YIELDS / RATES - Fully Taxable Equivalent
Yield on loans	5.51		%	5.31		%	5.21		%	5.09		%	4.90		%
Yield on investments	2.35		%	2.24		%	2.22		%	2.22		%	2.18		%
Yield on interest-earning assets	4.70		%	4.50		%	4.40		%	4.29		%	4.12		%
Cost of interest-bearing deposits	2.75		%	2.59		%	2.44		%	2.01		%	1.34		%
Cost of borrowings	5.15		%	5.52		%	5.25		%	5.13		%	4.91		%
Cost of interest-bearing liabilities	2.85		%	2.68		%	2.47		%	2.11		%	1.49		%
Interest rate spread	1.85		%	1.82		%	1.93		%	2.18		%	2.63		%
Net interest margin, fully taxable equivalent (b)	2.73		%	2.69		%	2.73		%	2.87		%	3.14		%
CAPITAL
Total equity to total assets at end of period	7.08		%	7.20		%	6.28		%	6.63		%	6.68		%
Tangible equity to tangible assets at end of period (b)	6.34		%	6.45		%	5.52		%	5.87		%	5.91		%
Book value per share	$	41.34		$	41.07		$	35.90		$	37.49		$	37.53
Tangible book value per share (b)	36.77			36.48			31.29			32.88			32.91
Period-end market value per share	42.48			49.80			39.61			38.41			41.50
Dividends declared per share	0.31			0.31			0.31			0.31			0.31
AVERAGE BALANCES
Loans and loans held for sale (d)	$	1,989,185		$	1,956,022		$	1,909,100		$	1,880,224		$	1,849,310
Earning assets	2,681,059			2,654,638			2,627,012			2,609,893			2,592,709
Total assets	2,724,391			2,688,536			2,664,570			2,649,399			2,627,088
Deposits	2,402,215			2,397,663			2,410,931			2,363,847			2,337,476
Total equity	195,860			174,868			179,700			180,357			173,786
Tangible equity (b)	174,036			153,044			157,876			158,533			151,962
ASSET QUALITY
Net charge-offs	$	182		$	171		$	356		$	146		$	269
Non-performing loans (e)	7,835			10,411			6,826			7,304			7,731
Non-performing assets (f)	8,394			10,738			7,055			7,471			7,927
Allowance for credit losses (a)	20,471			22,517			20,252			20,172			20,075
Annualized net charge-offs to average loans	0.04		%	0.03		%	0.07		%	0.03		%	0.06		%
Non-performing loans to total loans	0.39		%	0.53		%	0.35		%	0.39		%	0.41		%
Non-performing assets to total assets	0.30		%	0.40		%	0.26		%	0.28		%	0.30		%
Allowance for credit losses to total loans (a)	1.02		%	1.14		%	1.05		%	1.07		%	1.07		%
Allowance for credit losses to non-performing loans (a)	261.28		%	216.28		%	296.69		%	276.17		%	259.66		%
(a) Corporation adopted CECL as of January 1, 2023.	(d) Does not reflect Allowance for Credit Losses.
(b) See the GAAP to Non-GAAP reconciliations.	(e) Includes nonaccrual loans only.
(e) Non-interest expense divided by total net interest income plus non-interest income.	(f) Includes non-performing loans plus other real estate owned.

40

In addition to analyzing the Corporation’s results on a reported basis, management uses certain non-GAAP financial measures because it believes these non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Corporation and, therefore, facilitate a comparison of the Corporation with the performance of other companies. Non-GAAP financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies. Refer to pages 63-66 for further explanation and reconciliation of the Corporation’s use of non-GAAP measures.

Consolidated Results of Operations

The following section of the MD&A provides a comparative discussion of the Corporation’s Consolidated Results of Operations on a reported basis for the three months ended March 31, 2024 and 2023. For a discussion of the Critical Accounting Estimates that affect the Consolidated Results of Operations, see pages 38-39 of this Form 10-Q and page 37 of the Corporation’s 2023 Form 10-K.

Net Income

The following table presents selected financial information for the periods indicated, and the dollar and percent change (in thousands, except per share and ratio data):

	Three Months Ended   March 31,
	2024		2023		Change		% Change
Net interest income	$	18,089	$	19,947	$	(1,858)	(9.3)	%
Non-interest income	5,657		5,423		234		4.3	%
Non-interest expense	16,698		15,836		862		5.4	%
Pre-provision income	7,048		9,534		(2,486)		(26.1)	%
Provision (credit) for credit losses(1)	(2,040)		277		(2,317)		(836.5)	%
Income tax expense	2,038		1,987		51		2.6	%
Net income	$	7,050	$	7,270	$	(220)	(3.0)	%
Basic and diluted earnings per share	$	1.48	$	1.54	$	(0.06)	(3.9)	%

(1) Effective January 1, 2023, the allowance calculation is based upon the Current Expected Credit loss methodology.

	Three Months Ended   March 31,
Selected financial ratios:	2024		2023
Return on average assets	1.04	%	1.12	%
Return on average equity	14.48	%	16.97	%
Net interest margin, fully taxable equivalent (a)	2.73	%	3.14	%
Efficiency ratio (adjusted) (a)	70.07	%	62.18	%
Non-interest expenses to average assets	2.47	%	2.44	%
(a) See the GAAP to Non-GAAP reconciliations.

Net income for the first quarter of 2024 was $7.1 million, or $1.48 per share, compared to $7.3 million, or $1.54 per share, for the same period in the prior year. Return on average equity for the current quarter was 14.48%, compared to 16.97% for the same period in the prior year. The decrease in net income was due primarily to a decrease in net interest income and an increase in non-interest expense, offset by a decrease in the provision for credit losses, and an increase in non-interest income.

41

Net Interest Income

The following table presents net interest income for the periods indicated, and the dollar and percent change (in thousands):

	Three Months Ended   March 31,						Percentage
	2024		2023		Change		Change
Interest and dividend income	$	31,219	$	26,230	$	4,989	19.0	%
Interest expense	13,130		6,283		6,847		109.0	%
Net interest income	$	18,089	$	19,947	$	(1,858)	(9.3)	%

Net interest income, which is the difference between the interest income earned on interest-earning assets such as loans and securities, and the interest expense paid on interest-bearing liabilities such as deposits and borrowings, is the largest contributor to the Corporation’s earnings.

Net interest income for the first quarter ended March 31, 2024 decreased $1.9 million, or 9.3%, to $18.1 million compared to the same period in the prior year, due primarily to increases of $6.8 million in interest expense on deposits, and $0.1 million in interest expense on borrowed funds, offset by increases of $4.9 million in interest income on loans, including fees, and $0.1 million in interest-earning deposits. Interest income on taxable securities was comparable between the first quarters of 2023 and 2024.

The increase in interest expense on deposits was due primarily to a 141 basis points increase in the average rates paid on interest-bearing deposits which included brokered deposits, due to the higher interest rate environment and increased competition, and an increase of $134.2 million in the average balance of customer interest-bearing deposits as a result of the increase in average time deposits. The average balance of brokered deposits increased $8.3 million, and the average interest rate paid on brokered deposits increased 50 basis points, compared to the same period in the prior year.

The increase in interest expense on borrowed funds was primarily due to a 24 basis points increase in the average interest rate paid on borrowed funds, and a $2.4 million increase in the average balances of borrowed funds, compared to the same period in the prior year. The composition of borrowed funds reflected the Corporation's shift to the lower cost funding source of the Federal Reserve Bank Term Funding Program (BTFP), related to a $50.0 million advance in the first quarter of 2024, partially replacing relatively higher cost FHLBNY overnight advances. The average balance of FHLBNY overnight advances decreased $35.8 million compared to the same period in the prior year, and the average interest rate paid on FHLBNY overnight advances increased 55 basis points.

Interest income on loans, including fees, increased primarily due to a $145.9 million increase in average commercial loan balances, compared to the same period in the prior year, and an increase of 57 basis points in the average yield on commercial loans between these periods, due to the rising interest rate environment. Average consumer loan balances, supported by growth in the indirect auto portfolio, increased $1.9 million, and the average yield on consumer loans increased 90 basis points, primarily due to originations of higher rate indirect auto loans and interest rate increases on variable rate home equity loans. Average balances of residential mortgage loans decreased $7.9 million compared to the same period in the prior year, due to adverse conditions for borrowers in the residential real estate market, while the average yield on residential mortgage loans increased 23 basis points compared to the same period in the prior year.

Interest and dividend income on taxable securities was comparable between the first quarters of 2023 and 2024. The average yield on taxable securities increased 17 basis points, due to an increase in interest rates on variable rate securities. This increase was offset by $61.8 million decrease in the average balance of securities held in the portfolio between the first quarters of 2023 and 2024, primarily due to paydowns and maturities.

Fully taxable equivalent net interest margin was 2.73% in the first quarter of 2024, compared to 3.14% for the same period in the prior year. Average interest-earning assets increased $88.4 million for the three months ended March 31, 2024 compared to the same period in the prior year. The average yield on interest-earning assets increased 58 basis points to 4.70%, and the average cost of interest-bearing liabilities increased 136 basis points to 2.85%, for the three months ended March 31, 2024, compared to the same period in the prior year, due to the rising rate environment as well as a shift in the overall deposit mix to higher cost deposits.

42

Average Consolidated Balance Sheets and Interest Analysis

The following table presents certain information related to the Corporation’s average consolidated balance sheets and its consolidated statements of income for the three months ended March 31, 2024 and 2023. For the purpose of the table below, nonaccruing 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. Tax equivalent adjustments have been made in calculating yields on obligations of states and political subdivisions, tax-free commercial loans, and dividends on equity investments.

AVERAGE CONSOLIDATED BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS
	Three Months Ended   March 31, 2024						Three Months Ended   March 31, 2023
($ in thousands)	Average Balance		Interest		Yield/Rate (3)		Average Balance		Interest		Yield/Rate (3)
Interest-earning assets:
Commercial loans	$	1,406,950	$	20,642	5.90	%	$	1,261,054	$	16,584	5.33	%
Mortgage loans	277,661		2,597		3.74	%	285,588		2,472		3.51	%
Consumer loans	304,574		4,016		5.30	%	302,668		3,285		4.40	%
Taxable securities	633,294		3,560		2.26	%	695,079		3,585		2.09	%
Tax-exempt securities	40,266		282		2.82	%	40,769		305		3.03	%
Interest-earning deposits	18,314		206		4.52	%	7,551		97		5.21	%
Total interest-earning assets	2,681,059		31,303		4.70	%	2,592,709		26,328		4.12	%
Non-earning assets:
Cash and due from banks	25,255						25,084
Other assets	40,665						29,393
Allowance for credit losses (4)	(22,588)						(20,098)
Total assets	$	2,724,391					$	2,627,088
Interest-bearing liabilities:
Interest-bearing demand deposits	$	307,895	$	1,335	1.74	%	$	291,090	$	274	0.38	%
Savings and insured money market deposits	865,113		4,266		1.98	%	906,947		1,648		0.74	%
Time deposits	481,965		4,904		4.09	%	322,710		2,092		2.63	%
Brokered deposits	121,405		1,640		5.43	%	113,074		1,374		4.93	%
FHLBNY overnight advances	34,875		487		5.52	%	70,699		866		4.97	%
FRB advances and other debt	41,465		498		4.83	%	3,281		29		3.58	%
Total interest-bearing liabilities	1,852,718		13,130		2.85	%	1,707,801		6,283		1.49	%
Non-interest-bearing liabilities:
Demand deposits	625,837						703,655
Other liabilities	49,976						41,846
Total liabilities	2,528,531						2,453,302
Shareholders' equity	195,860						173,786
Total liabilities and shareholders’ equity	$	2,724,391					$	2,627,088
Fully taxable equivalent net interest income			18,173						20,045
Net interest rate spread (1)					1.85	%					2.63	%
Net interest margin, fully taxable equivalent (2)					2.73	%					3.14	%
Taxable equivalent adjustment			(84)						(98)
Net interest income			$	18,089					$	19,947

(1)  Net interest rate spread is the difference in the average yield on interest-earning assets less the average rate on interest-bearing liabilities.

(2)  Net interest margin is the ratio of fully taxable equivalent net interest income divided by average interest-earning assets.

(3) Annualized.

(4) Corporation adopted CECL as of January 1, 2023.

43

Changes Due to Rate and Volume

Net interest income can be analyzed in terms of the impact of changes in rates and volumes. The table below illustrates the extent to which changes in interest rates and the volume of average interest-earning assets and interest-bearing liabilities have affected the Corporation’s interest income and interest expense during the three months ended March 31, 2024 and 2023. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate); (ii) changes attributable to changes in rates (changes in rates multiplied by prior volume); and (iii) the net changes. For purpose of this table, changes that are not due solely to volume or rate changes have been allocated to these categories based on the respective percentage changes in average volume and rate. Due to the numerous simultaneous volume and rate changes during the periods analyzed, it is not possible to precisely allocate changes between volume and rates. In addition, average interest-earning assets include nonaccrual loans and taxable equivalent adjustments were made.

RATE/VOLUME ANALYSIS OF NET INTEREST INCOME
Quarter to date:	Three Months Ended Mar. 31, 2024 vs. 2023
(in thousands)	Increase/(Decrease)
	Total Change		Due to Volume		Due to Rate
Interest and dividend income on:
Commercial loans	$	4,058	$	2,109	$	1,949
Mortgage loans	125		(60)		185
Consumer loans	731		22		709
Taxable investment securities	(25)		(321)		296
Tax-exempt investment securities	(23)		(3)		(20)
Interest-earning deposits	109		123		(14)
Total interest and dividend income, fully taxable equivalent	4,975		1,870		3,105
Interest expense on:
Interest-bearing demand deposits	1,061		17		1,044
Savings and insured money market deposits	2,618		(80)		2,698
Time deposits	2,812		1,323		1,489
Brokered deposits	266		112		154
FHLBNY overnight advances	(379)		(470)		91
Long-term capital leases	469		455		14
Total interest expense	6,847		1,357		5,490
Net interest income, fully taxable equivalent	$	(1,872)	$	513	$	(2,385)

44

Provision for credit losses

Management has established and maintains a methodology for determining and adjusting its allowance for credit losses in conformity with ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, adopted by the Corporation on January 1, 2023. The allowance is based on a combination of quantitative and qualitative analysis and changes in the required allowance are recorded through income as a provision (credit). The quantitative portion of the model is significantly influenced by changes in projected economic conditions, as well as changes in the composition of the numerous loan portfolio segments. Qualitative adjustments reflect the degree to which management anticipates future outcomes could differ from those projected by the quantitative model.

The provision for credit losses decreased $2.3 million for the first quarter of 2024, compared to the first quarter of 2023. The decrease in provision was primarily attributable to the annual review and update of the loss drivers used in the Bank's CECL model, favorable changes in economic forecasts, and a comparatively smaller increase in loan volume during the current period. The Bank's updated loss drivers resulted in lower loss experience over the historical look back period, however the economic factors used did not change as a result of these updates. FOMC forecasts improved substantially between the first quarters of 2023 and 2024. Forecasted year-end 2023 U.S. unemployment was projected at 4.5% as of March 2023, and year-end 2024 unemployment was projected at 4.0% as of March 2024. U.S annual GDP growth was projected at 0.4% for year-end 2023 as of March 2023, and year-end 2024 U.S. annual GDP growth was projected at 2.1% as of March 2024. 2023 FOMC projections reflected uncertainty concerning the impact of interest rate increases in the wake of multiple regional banks being placed into receivership prior to the FOMC's March 2023 meeting. Loan growth in the first quarter of 2024 totaled $30.9 million, compared to $44.3 million in the first quarter of 2023, resulting in lower volume-related provisioning in the current period.

Non-interest income

The following table presents non-interest income for the periods indicated, and the dollar and percent change (dollars in thousands):

	Three Months Ended   March 31,						Percentage
	2024		2023		Change		Change
WMG fee income	$	2,703	$	2,580	$	123	4.8	%
Service charges on deposit accounts	949		941		8		0.9	%
Interchange revenue from debit card transactions	1,063		1,133		(70)		(6.2)	%
Changes in fair value of equity investments	101		72		29		40.3	%
Net gains on sales of loans held for sale	32		5		27		N/M
Income from bank owned life insurance	9		10		(1)		(10.0)	%
CFS fee and commission income	228		241		(13)		(5.4)	%
Other	572		441		131		29.7	%
Total non-interest income	$	5,657	$	5,423	$	234	4.3	%

Total non-interest income for the first quarter of 2024 increased $0.2 million compared to the same period in the prior year primarily due to increases in WMG fee income and other non-interest income. The remaining components of non-interest income in the first quarter of 2024 were relatively consistent compared to the same period in the prior year.

WMG Fee Income

The increase in WMG fee income can primarily be attributed to an increase in assets under management when compared to the same period in the prior year.

Other Non-Interest Income

The increase in other non-interest income was primarily due to gains on the transfer of two properties to OREO in the current period.

45

Non-interest expense

The following table presents non-interest expense for the periods indicated, and the dollar and percent change (dollars in thousands):

	Three Months Ended   March 31,						Percentage
	2024		2023		Change		Change
Compensation expense:
Salaries and wages	$	7,016	$	6,783	$	233	3.4	%
Pension and other employee benefits	2,082		1,680		402		23.9	%
Other components of net periodic pension and postretirement benefits	(232)		(174)		(58)		(33.3)	%
Total compensation expense	8,866		8,289		577		7.0	%
Non-compensation expense:
Net occupancy	1,493		1,465		28		1.9	%
Furniture and equipment	398		418		(20)		(4.8)	%
Data processing	2,573		2,381		192		8.1	%
Professional services	559		440		119		27.0	%
Marketing and advertising	345		332		13		3.9	%
Other real estate owned expenses	49		38		11		28.9	%
FDIC insurance	577		497		80		16.1	%
Loan expenses	255		232		23		9.9	%
Other	1,583		1,744		(161)		(9.2)	%
Total non-compensation expense	7,832		7,547		285		3.8	%
Total non-interest expense	$	16,698	$	15,836	$	862	5.4	%

Total non-interest expense for the first quarter of 2024 increased $0.9 million compared to the same period in the prior year. The increase was due to increases in total compensation expense and total non-compensation expense. For the three months ended March 31, 2024, non-interest expense to average assets was 2.47%, compared to 2.44% for the same period in the prior year.

Compensation expense

The increase in compensation expense for the current period, compared to the same period in the prior year, can be primarily attributed to increases in pension and other employee benefits, and salaries and wages. The increase in pension and other employee benefits for the current quarter was primarily attributable to an increase in employee healthcare expense, compared to the same period in the prior year. Salaries and wages increased in the current quarter, compared to the same period in the prior year, primarily due to increases in base wages, severance expense, and an increase in the market value of the Corporation's deferred compensation plan.

Non-compensation expense

The increase in non-compensation expense for the current period, compared to the same period in the prior year, can be primarily attributed to increases in data processing expense, and professional services, offset by a decrease in other non-interest expense. The increase in data processing expense in the current quarter was primarily attributable to increases in software related expenses, compared to the same period in the prior year. Professional services increased in the current quarter, compared to the same period in the prior year, primarily due to outsourced services related to the realignment of certain back office functions, new strategic consulting arrangements, and fee increases. The decrease in other non-interest expense was primarily attributable to decreases across a majority of other expense categories in the current quarter, compared to the same period in the prior year.

46

Income tax expense

The following table presents income tax expense and the effective tax rate for the periods indicated, and the dollar and percent change (dollars in thousands):

	Three Months Ended   March 31,								Percentage
	2024			2023			Change		Change
Income before income tax expense	$	9,088		$	9,257		$	(169)	(1.8)	%
Income tax expense	$	2,038		$	1,987		$	51	2.6	%
Effective tax rate	22.4		%	21.5		%

Income tax expense was $2.0 million for each of the three month periods ended March 31, 2024 and 2023. The effective income tax rate for the periods ended March 31, 2024 and 2023 was 22.4% and 21.5%, respectively.

Financial Condition

The following table presents selected financial information at the dates indicated, and the dollar and percent change (dollars in thousands):

ASSETS	March 31, 2024		December 31, 2023		Change		Percentage Change
Total cash and cash equivalents	$	94,862	$	36,847	$	58,015	157.4	%
Total investment securities, FHLB, and FRB stock	573,977		593,322		(19,345)		(3.3)	%
Loans, net of deferred loan fees	2,003,610		1,972,664		30,946		1.6	%
Allowance for credit losses	(20,471)		(22,517)		(2,046)		9.1	%
Loans, net	1,983,139		1,950,147		32,992		1.7	%
Goodwill and other intangible assets, net	21,824		21,824		—		—	%
Other assets	111,088		108,389		2,699		2.5	%
Total assets	$	2,784,890	$	2,710,529	$	74,361	2.7	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Total deposits	$	2,480,772	$	2,429,427	$	51,345	2.1	%
Advances and other debt	52,979		34,970		18,009		51.5	%
Other liabilities	54,011		50,891		3,120		6.1	%
Total liabilities	2,587,762		2,515,288		72,474		2.9	%
Total shareholders’ equity	197,128		195,241		1,887		1.0	%
Total liabilities and shareholders’ equity	$	2,784,890	$	2,710,529	$	74,361	2.7	%

Cash and Cash Equivalents

The increase in cash and cash equivalents can be attributed to changes in loans, deposits, borrowings, and securities.

Investment securities

The decrease in investment securities can mostly be attributed to $11.9 million in paydowns and maturities in the securities available for sale portfolio, and a decrease in the fair value of the available for sale portfolio of $5.5 million. FHLB stock decreased $1.4 million due to lower FHLBNY overnight advance borrowing activity.

Loans, net

The increase in loans, net of deferred loan fees, can primarily be attributed to increases of $22.9 million in commercial mortgages, and $15.2 million in commercial and industrial loans, offset by decreases of $6.3 million in indirect consumer loans, and $0.7 million in residential mortgages.

47

Allowance for Credit Losses

The decrease in the allowance for credit losses can primarily be attributed to the annual review and update of loss drivers used in the Bank's CECL model, paydown activity on individually analyzed loans for which specific reserve allocations had previously been made, and favorable changes in forecasted economic variables. The annual update to the loss drivers used in the Bank's CECL model resulted in baseline loss rates that were lower than previous iterations of the model, however the economic variables used to derive loss rates were unchanged. FOMC forecasted U.S. unemployment for year-end 2024 improved from 4.1% in December 2023 to 4.0% in March 2024, while the forecasted U.S. GDP growth rate for year-end 2024 improved from 1.4% in December 2023 to 2.1% in March 2024. Paydown activity on loans individually analyzed resulted in a decrease of $0.3 million in specific reserve allocations.

Other Assets

The increase in other assets can primarily be attributed to increases of $1.3 million in interest rate swap assets, due to an increase in the market value of swaps, and $1.2 million in accrued interest receivable, primarily on loans.

Deposits

The increase in deposits can primarily be attributed to increases of $24.0 million in interest-bearing demand deposit accounts, and $17.1 million in total time deposits, which include customer time deposits and brokered deposits. Customer time deposits increased $33.9 million, while brokered deposits decreased $16.8 million. Insured money market accounts increased $7.6 million, and and non-interest bearing demand deposits increased $3.2 million, respectively. Savings deposits decreased $0.6 million.

Advances and Other Debt

The increase in advances and other debt can primarily be attributed to a $50.0 million advance from the Federal Reserve, as the Corporation took advantage of lower interest rates offered by the Bank Term Funding Program (BTFP), offset by a decrease of $31.9 million in FHLBNY overnight borrowings.

Other liabilities

The increase in other liabilities can primarily be attributed to an increase of $1.2 million in interest rate swap liabilities, primarily due to an increase in the market value of swaps. and accrued interest payable of $1.9 million, primarily on deposits.

Shareholders’ equity

Shareholders’ equity was $197.1 million at March 31, 2024 compared to $195.2 million at December 31, 2023. The increase can primarily be attributed to an increase of $5.6 million in retained earnings, partially offset by an increase in accumulated other comprehensive loss of $4.1 million. The increase in retained earnings can primarily be attributed to net income of $7.1 million, offset by $1.5 million in dividends declared. The increase in accumulated other comprehensive loss can primarily be attributed to a decrease in the fair market value of the available for sale securities portfolio.

Assets under management or administration

The market value of total assets under management or administration in WMG was $2.350 billion at March 31, 2024, including $390.2 million of assets held under management or administration for the Corporation, compared to $2.242 billion at December 31, 2023, including $381.3 million of assets held under management or administration for the Corporation, an increase of $108.0 million, or 4.8%, due to an increase in assets under management, due primarily to improvements in financial markets.

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Securities

The Corporation’s Funds Management Policy includes an investment policy that in general, requires debt securities purchased for the bond portfolio to carry a minimum agency rating of "Baa." After an independent credit analysis is performed, the policy also allows the Corporation to purchase local municipal obligations that are not rated. The Corporation intends to maintain a reasonable level of securities to provide adequate liquidity and in order to have securities available to pledge to secure public deposits, repurchase agreements, and other types of transactions. Fluctuations in the fair value of the Corporation’s securities relate primarily to changes in interest rates. Marketable securities are classified as Available for Sale, while investments in local municipal obligations are generally classified as Held to Maturity. 

The available for sale segment of the securities portfolio totaled $566.0 million at March 31, 2024, a decrease of $18.0 million, or 3.1%, from $584.0 million at December 31, 2023. The decrease can mostly be attributed to $11.9 million in paydowns and maturities, and a decrease in the fair value of the portfolio of $5.5 million. The held to maturity securities portfolio consists of obligations of political subdivisions in the Corporation’s market areas. These securities totaled $0.8 million each at March 31, 2024 and December 31, 2023, respectively.

Non-marketable equity securities at March 31, 2024 include shares of FRBNY stock and FHLBNY stock, carried at their cost of $1.9 million and $2.2 million, respectively. At December 31, 2023, non-marketable equity securities include shares of FRBNY stock and FHLBNY stock, carried at their cost of $1.9 million and $3.6 million, respectively. The fair value of these securities is assumed to approximate their cost. The investment in these stocks is regulated by regulatory policies of the respective institutions.

Loans

The Corporation has reporting systems to monitor: (i) loan origination and concentrations, (ii) delinquent loans, (iii) non-performing assets, including non-performing loans, certain loans made with modifications to borrowers experiencing financial difficulty, and other real estate owned, (iv) loans analyzed on an individual basis for credit risk, and (v) potential problem loans. Management reviews these systems on a regular basis.

The table below presents the Corporation’s loan composition by segment as of the dates indicated, and the dollar and percent change from December 31, 2023 to March 31, 2024 (in thousands, except percentages):

LOAN COMPOSITION
	March 31, 2024		% of Total Loans		December 31, 2023		% of Total Loans		Dollar Change		% Change
Commercial and agricultural:
Commercial and industrial	$	279,414	13.9	%	$	264,140	13.4	%	$	15,274	5.8	%
Agricultural	221		—	%	256		—	%	(35)		(13.7)	%
Commercial mortgages:
Construction	141,604		7.1	%	138,887		7.0	%	2,717		2.0	%
Commercial mortgages, other	1,004,198		50.1	%	984,038		49.9	%	20,160		2.0	%
Residential mortgages	277,246		13.8	%	277,992		14.1	%	(746)		(0.3)	%
Consumer loans:
Home equity lines and loans	87,608		4.4	%	87,056		4.4	%	552		0.6	%
Indirect consumer loans	204,081		10.2	%	210,423		10.7	%	(6,342)		(3.0)	%
Direct consumer loans	9,238		0.5	%	9,872		0.5	%	(634)		(6.4)	%
Total	$	2,003,610	100.0	%	$	1,972,664	100.0	%	$	30,946	1.6	%

Portfolio loans totaled $2.004 billion as of March 31, 2024, an increase of $30.9 million, or 1.6%, from $1.973 billion as of December 31, 2023. The increase in loans can primarily be attributed to increases of $22.9 million in commercial mortgage loans and $15.2 million in commercial and industrial loans, and offset by a decrease of $6.3 million in indirect consumer loans.

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Commercial real estate lending continues to be a primary driver of asset growth for the Corporation, as demand for project financing remains robust across the Corporation's footprint, particularly in the Albany and Buffalo regions. As of March 31, 2024, total commercial real estate loans, inclusive of construction loans, in the Albany and Buffalo regions have grown $20.9 million and $1.1 million from December 31, 2023, respectively. Growth in commercial and industrial loans between March 31, 2024 and December 31, 2023 was also concentrated in the Albany and Buffalo regions, which grew $8.5 million and $6.8 million, respectively.

Residential mortgage loans totaled $277.2 million as of March 31, 2024, a decrease of $0.7 million, or 0.3%, when compared to December 31, 2023. During the three months ended March 31, 2024, $7.1 million of residential mortgages were originated, of which $1.6 million were sold in the secondary market to Freddie Mac. Demand for residential mortgage originations continues to be weak as a result of the higher interest rate environment and low market mobility due to many borrowers securing lower interest rates in prior years. Indirect consumer loans totaled $204.1 million as of March 31, 2024, a decrease of $6.3 million, or 3.0%, from December 31, 2023 as consumer demand for automobiles weakened during the current period, as well as a shift in the composition of auto originations towards lower-cost used vehicles.

The table below presents the Corporation’s outstanding loan balance by bank division (in thousands):

LOANS BY DIVISION
	March 31, 2024		December 31, 2023		December 31, 2022		December 31, 2021		December 31, 2020
Chemung Canal Trust Company*^	$	764,932	$	766,103	$	731,344	$	658,468	$	576,399
Capital Bank Division	1,238,678		1,206,561		1,098,104		877,995		732,820
Total loans	$	2,003,610	$	1,972,664	$	1,829,448	$	1,536,463	$	1,309,219

* All loans, excluding those originated by the Capital Bank division.

^ Includes $108.2 million, $100.4 million, $79.8 million and $47.0 million as of March 31, 2024, December 31, 2023, December 31, 2022, and December 31, 2021, respectively, in the Western New York market.

Loan concentrations are considered to exist when there are amounts loaned to a multiple number of borrowers engaged in similar activities, which may cause them to be similarly impacted by economic or other conditions. Industries are identified using NAICS codes, and the Corporation monitors specific NAICS industry classifications of commercial loans to identify concentrations of greater than 10.0% of total loans. As of March 31, 2024 and December 31, 2023, commercial loans to borrowers involved in the real estate, and real estate rental and leasing businesses were 50.4% and 49.5% of total loans, respectively. No other concentration of loans existed in the commercial loan portfolio in excess of 10.0% of total loans as of March 31, 2024 and December 31, 2023.

Commercial real estate lending represented the largest portion of the Corporation's loan portfolio as of March 31, 2024 and December 31, 2023. Commercial real estate lending is comprised of the Construction and Commercial mortgage, other segments of the loan portfolio, as presented in Note 4 - Loans and Allowance for Credit Losses to the Consolidated Financial Statements. As of March 31, 2024 and December 31, 2023, total commercial real estate loans totaled $1.146 billion and $1.123 billion, respectively. Management evaluates the risk inherent in its portfolio of commercial real estate loans using a variety of metrics, including but not limited to type, geography, collateral, and borrower or sponsor industry.

The table below presents commercial real estate loans by type and percentage as of March 31, 2024 and December 31, 2023 (in thousands, except percentages):

Commercial real estate loans by type:	March 31, 2024		% of Total		December 31, 2023		% of Total		% Change
Construction	$	141,604	12.4	%	$	138,887	12.4	%	2.0	%
1-4 Family Residential(1)	44,899		3.9	%	45,792		4.1	%	(1.9)	%
Multifamily	359,857		31.4	%	349,327		31.1	%	3.0	%
Owner-Occupied	127,917		11.2	%	123,989		11.0	%	3.2	%
Non-Owner Occupied	471,525		41.1	%	464,930		41.4	%	1.4	%
Total	$	1,145,802	100.0	%	$	1,122,925	100.0	%

(1) 1-4 Family residential loans included in the commercial real estate portfolio segment are comprised of properties whose primary purpose is to generate rental income for the borrower, but are not considered multifamily properties within the confines of the FFIEC's Call Report definition of a multifamily property. This may include single family residences, duplexes, triplexes, and quadplexes.

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Commercial real estate loans are primarily made within the counties comprising the geographic footprint of the Corporation's physical branch network, as well as to borrowers whose business interests include projects that may be located in counties that are geographically contiguous with the Corporation's physical footprint. The location of collateral securing commercial real estate loans typically mirrors the location of the properties being financed. However, certain commercial real estate loans are secured by property other than the property being financed, and therefore the geographic location of collateral may differ from that of the financed property.

The table below presents commercial real estate loans by regional location of collateral and percentage as of March 31, 2024 and December 31, 2023 (dollars in thousands):

Commercial real estate loans by regional location of collateral:	March 31, 2024		% of Total		December 31, 2023		% of Total		% Change
Capital & Adirondacks	$	752,014	65.6	%	$	736,971	65.6	%	2.0	%
Southern Tier & Finger Lakes	216,663		18.9	%	213,970		19.1	%	1.3	%
Western New York	126,880		11.1	%	123,202		11.0	%	3.0	%
Other	50,245		4.4	%	48,782		4.3	%	3.0	%
Total	$	1,145,802	100.0	%	$	1,122,925	100.0	%

The Corporation closely monitors economic and credit trends for the industries in which its commercial real estate borrowers are involved. Property types are designated based on the purpose of the collateral securing commercial real estate loans. The table below presents commercial real estate loans by borrower industry and percentage as of March 31, 2024 and December 31, 2023 (in thousands, except percentages):

Commercial real estate loans by borrower industry:	March 31, 2024		% of Total		December 31, 2023		% of Total		% Change
Construction & Land Development	$	136,393	11.9	%	$	141,551	12.6	%	(3.6)	%
Industrial	51,079		4.5	%	41,784		3.8	%	22.2	%
Warehouse & Storage	72,760		6.4	%	65,379		5.8	%	11.3	%
Retail	199,380		17.4	%	195,561		17.4	%	2.0	%
Office	118,978		10.4	%	118,344		10.5	%	0.5	%
Hotel	49,915		4.4	%	55,533		4.9	%	(10.1)	%
1-4 Family Residential Rental	44,899		3.9	%	45,792		4.1	%	(2.0)	%
Multifamily (5+)	387,541		33.7	%	372,569		33.2	%	4.0	%
Medical	32,248		2.8	%	32,859		2.9	%	(1.9)	%
Educational	25,423		2.2	%	25,738		2.3	%	(1.2)	%
Other	27,186		2.4	%	27,815		2.5	%	(2.3)	%
Total	$	1,145,802	100.0	%	$	1,122,925	100.0	%

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The table below presents the maturity of loans outstanding as of March 31, 2024 (in thousands):

	Within One Year		After One But Within Five Years		After Five But Within 15 Years		After 15 Years		Total
Commercial and agricultural:
Commercial and industrial	$	93,993	$	102,421	$	79,273	$	3,727	$	279,414
Agricultural	—		221		—		—		221
Commercial mortgages:
Construction	31,382		41,206		68,693		323		141,604
Commercial mortgages	59,876		254,103		662,798		27,421		1,004,198
Residential mortgages	3,839		10,307		108,725		154,375		277,246
Consumer loans:
Home equity lines and loans	73		6,286		58,264		22,985		87,608
Indirect consumer loans	1,539		122,085		80,452		5		204,081
Direct consumer loans	316		5,957		1,874		1,091		9,238
Total	$	191,018	$	542,586	$	1,060,079	$	209,927	$	2,003,610

The tables below present the amounts due after one year, classified according to fixed interest rates and variable interest rates as of March 31, 2024 (in thousands):

Loans maturing with fixed interest rates:	After One But Within Five Years		After Five But Within 15 Years		After 15 Years		Total
Commercial and agricultural:
Commercial and industrial	$	62,853	$	35,936	$	419	$	99,208
Agricultural	160		—		—		160
Commercial mortgages:
Construction	8,137		24,675		—		32,812
Commercial mortgages	159,324		155,295		2,557		317,176
Residential mortgages	9,703		104,185		107,579		221,467
Consumer loans:
Home equity lines and loans	5,121		48,019		517		53,657
Indirect consumer loans	122,085		80,452		5		202,542
Direct consumer loans	5,956		859		49		6,864
Total	$	373,339	$	449,421	$	111,126	$	933,886

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Loans maturing with variable interest rates:	After One But Within Five Years		After Five But Within 15 Years		After 15 Years		Total
Commercial and agricultural:
Commercial and industrial	$	39,568	$	43,337	$	3,308	$	86,213
Agricultural	61		—		—		61
Commercial mortgages:							—
Construction	33,069		44,018		323		77,410
Commercial mortgages	94,779		507,503		24,864		627,146
Residential mortgages	604		4,540		46,796		51,940
Consumer loans:							—
Home equity lines and loans	1,165		10,245		22,468		33,878
Indirect consumer loans	—		—		—		—
Direct consumer loans	1		1,015		1,042		2,058
Total	$	169,247	$	610,658	$	98,801	$	878,706

Non-Performing Assets

Non-performing assets consist of nonaccrual loans and other real estate owned that has been acquired in partial or full satisfaction of loan obligations or upon foreclosure. Effective January 1, 2023, the Corporation adopted ASU 2022-02, which eliminated troubled debt restructuring accounting guidance. Prior to adoption, nonaccrual troubled debt restructurings were considered to be non-performing assets. The Corporation closely monitors loan modifications made to borrowers deemed to be experiencing financial difficulty, in accordance with ASU 2022-02. As of March 31, 2024, there were four loans being monitored under ASU 2022-02 guidance, three of which were accruing, and one of which was nonaccrual and therefore included in non-performing loans.

Past due status on all loans is based on the contractual terms of the loan. It is generally the Corporation's policy that a loan 90 days past due be placed on nonaccrual status unless factors exist that would eliminate the need to classify a loan as such. A loan may also be designated as nonaccrual at any time if payment of principal or interest in full is not expected due to deterioration in the financial condition of the borrower. At the time loans are placed into nonaccrual status, the accrual of interest is discontinued and previously accrued interest is reversed. All payments received on nonaccrual loans are applied to principal. Loans are considered for return to accrual status when they become current as to principal and interest and remain current for a period of six consecutive months or when, in the opinion of management, the Corporation expects to receive all of its original principal and interest. In the case of nonaccrual loans where a portion of the loan has been charged off, the remaining balance is kept in nonaccrual status until the entire principal balance has been recovered.

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

NON-PERFORMING ASSETS
	March 31, 2024			December 31, 2023
Nonaccrual loans	$	7,835		$	10,411
Total non-performing loans	7,835			10,411
Other real estate owned	559			326
Total non-performing assets	$	8,394		$	10,737
Ratio of non-performing loans to total loans	0.39		%	0.53		%
Ratio of non-performing assets to total assets	0.30		%	0.40		%
Ratio of allowance for credit losses to non-performing loans	261.28		%	216.28		%
Accruing loans past due 90 days or more (1)	$	8		$	10

(1) Not included in non-performing assets above.

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Non-Performing Loans and Assets

Non-performing loans totaled $7.8 million, or 0.39% of total loans as of March 31, 2024, compared to $10.4 million, or 0.53% of total loans as of December 31, 2023. Non-performing assets, which are comprised of non-performing loans and other real estate owned, was $8.4 million, or 0.30% of total assets, as of March 31, 2024, compared to $10.7 million, or 0.40% of total assets, as of December 31, 2023. The decrease in non-performing loans was primarily attributable to the payoff of a nonaccrual commercial real estate loan totaling $1.9 million during the period, as well as $0.5 million in paydown activity on other nonaccrual commercial loans. The decrease in non-performing assets can be attributed to the decrease in non-performing loans.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Corporation works closely with borrowers experiencing financial difficulties to identify viable solutions that minimize the potential for loss. The Corporation monitors modifications made to borrowers experiencing financial difficulty in which contractual cash flows are directly impacted. Modifications included under this guidance include principal reductions, reductions in effective interest rates, term extensions, significant payment delays, or a combination thereof. ASU 2022-02 was implemented on a prospective basis, and as of March 31, 2024, the Corporation had four loans modified under this accounting guidance, which consisted of term extensions on two commercial and industrial loans, one commercial mortgage, and one home equity loan. As of March 31, 2024, one of the aforementioned commercial and industrial loans given an extension of six months was non-performing, while the remainder of the modified loans were considered to be performing. During the three month period ended March 31, 2024, a $1.9 million commercial mortgage previously modified under ASU 2022-02 was paid off.

Individually Analyzed Loans

The Corporation analyzes loans on an individual basis when management determined that a loan no longer exhibited risk characteristics consistent with those existing in its designated pool of loans, in accordance with the Corporation's CECL methodology. The amortized cost basis of individually analyzed loans as of March 31, 2024 totaled $5.7 million, compared to $8.0 million as of December 31, 2023. Included in the amortized cost basis of individually analyzed loans as of March 31, 2024 were loans totaling $1.7 million for which allowances of $1.7 million have been specifically allocated to the allowance for credit losses. As of December 31, 2023, the amortized cost basis of individually analyzed loans included $2.0 million of loans for which allowances of $2.0 million were allocated to the allowance for credit losses.

The majority of the Corporation's individually analyzed loans are secured and measured for credit loss based on collateral evaluations.  It is the Corporation's policy to obtain updated appraisals, by independent third parties, on loans secured by real estate at the time a loan is determined to require individual analysis. A measurement is performed based upon the most recent appraisal on file to determine the amount of any specific allocation or charge-off. In determining the amount of any specific allocation or charge-off, the Corporation will make adjustments to reflect the estimated costs to sell the property. Upon receipt and review of updated appraisals, an additional measurement is performed to determine if any adjustments are necessary to reflect proper provisioning or charge-offs. Individually analyzed loans are reviewed on a quarterly basis to determine if any changes in credit quality or market conditions would require any additional allocation or recognition of additional charge-offs. Real estate values in each of the Corporation's market areas have remained stable. Non-real estate collateral may be valued using (i) an appraisal, (ii) net book value of the collateral per the borrower’s financial statements, or (iii) accounts receivable aging reports, that may be adjusted based on management’s knowledge of the client and client’s business. If market conditions warrant, future appraisals are obtained for both real estate and non-real estate collateral.

Allowance for Credit Losses

The allowance for credit losses is an amount that management believes will be adequate to absorb the estimated lifetime credit losses inherent in assets exhibiting credit risk as of the measurement date. The allowance is in conformity with the requirements established by ASC 326-Financial Instruments-Credit Losses, and is a departure from the allowance for loan losses (ALLL) that the Corporation previously estimated using an incurred loss methodology. The allowance covers loans, unfunded commitments, and certain debt securities exhibiting credit risk potential, and incorporates both quantitative and qualitative components.

Loans are analyzed on either an individual basis or a pooled basis, determined by risk characteristics. Loans that no longer exhibit risk characteristics substantially consistent with those of loans within a given pool, may necessitate being evaluated individually, based on management discretion. It is the Corporation's policy to analyze all nonaccrual commercial loans on an individual basis, unless specific circumstances warrant that the loan should continue to be analyzed on a pooled basis. Individually analyzed loans are primarily valued based on the collateral method, however, certain loans may be valued using a cash flow analysis. Pooled loans are segmented based on groups of assigned FFIEC call codes, in order to provide enough granularity to meaningfully capture the risk profile of each instrument, yet broad enough to accurately allow for the application of certain pool-level assumptions.

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Quantitative analysis is based on an estimated discounted cash flow analysis (DCF) performed at the loan level. The modeled reserve requirement equals the difference between the book balance of the instrument at the measurement date and the present value of assumed cash flows for the life of the loan. The underlying assumptions of the DCF are based on the relationship between a projected value of an economic indicator, and the implied historical loss experience amongst a group of curated peers. The Corporation utilized a regression analysis to determine suitable loss drivers for each pool of loans. Based on these results, a probability of default (PD) and loss given default (LGD), is assigned to each potential value of an economic indicator for each pool of loans, and is then applied to the portfolio to derive the statistical loss implications thereof. A hypothetical loss for each period of the DCF, as well as implied recovery of past losses, is incorporated into the DCF. The Corporation relies on FOMC data as the source for its readily available and reasonable economic forecast. The forecasted values are applied over a four-quarter period, and revert back to the historic mean of a lookback period over an eight-quarter horizon, on a straight-line basis.

Qualitative adjustments represent management's expectation of certain risks not being captured entirely in the quantitative portion of the model. Qualitative adjustment rates are applied to each instrument within a pool on a consistent basis. Factors considered as part of the qualitative adjustment analysis include economic considerations potentially not captured by the model, changes in conditions within the Bank such as lending standards, personnel, concentrations of credit, among others, as well as other external factors such as change in the regulatory and competitive landscape.

The allowance for credit losses is adjusted though a provision (credit) for credit losses, which is charged to operations. Separate provision accounts have been established for on-balance sheet credit exposures and off-balance sheet credit exposures, and are combined in the line item "Provision (credit) for credit losses" on the Corporation's Consolidated Statements of Income. Loans are charged against the allowance for credit losses when management believes that the collectability of all or a portion of the principal is unlikely. Management's evaluation of the adequacy of the allowance for credit losses is performed on a periodic basis and takes into consideration such factors as the outcomes of the quantitative analysis, a review of specific individually analyzed loans, and considerations for qualitative adjustments. While management uses available information to recognize losses on credits, future additions to the allowance may be necessary based on changing economic conditions or portfolio composition. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Corporation's allowance for credit losses. Such agencies may require the Corporation to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

The allowance for credit losses was $20.5 million as of March 31, 2024, and $22.5 million as of December 31, 2023. The allowance for credit losses was 261.28% of non-performing loans as of March 31, 2024, compared to 216.28% as of December 31, 2023. The ratio of allowance for credit losses to total loans was 1.02% at March 31, 2024 and 1.14% as of December 31, 2023. Net charge-offs for the three months ended March 31, 2024 and March 31, 2023 were $0.2 million and $0.3 million, respectively. Net charge-off activity for the three months ended March 31, 2024 primarily reflected activity in the indirect auto segment of the consumer loan portfolio, while activity for the three months ended March 31, 2023 primarily reflected a partial charge off on a commercial and industrial loan, as well as charge-off activity in the indirect auto segment of the consumer loan portfolio.

The decrease in the allowance for credit losses was primarily attributable to the annual review and update performed on the loss drivers used as the basis for the Bank's CECL model. Loss drivers are the economic variables used to make forward looking credit loss projections. Recalibration of the loss drivers resulted in a decline in the baseline loss rates used in the CECL model, however, the composition of the economic variables selected as loss drivers did not change as a result of this update. In addition to the impact of the loss driver update, improvements in FOMC forecasted data and paydown activity on individually analyzed loans contributed to the decrease in the allowance for credit losses. The projected year-end 2024 U.S. unemployment rate improved from 4.1% as of December 2023 to 4.0% as of March 2024, while the projected year-end 2024 U.S. annual GDP growth improved from 1.4% as of December 2023 to 2.1% as of March 2024. Paydown activity on individually analyzed loans for which a specific allocation had been made during the three months ended March 31, 2024 was $0.3 million.

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The table below summarizes the Corporation’s allowance for credit losses and nonaccrual loans outstanding by loan category as of March 31, 2024 and December 31, 2023 (in thousands, except percentages):

ALLOWANCE BY LOAN CATEGORY
Balance at March 31, 2024	Allowance for credit losses		Allowance to loans1		Non-performing loans		Non-performing loans to loans(1)		Allowance to non-performing loans
Commercial and agricultural	$	4,516	1.61	%	$	1,617	0.58	%	279.28	%
Commercial mortgages	10,367		0.90	%	3,965		0.35	%	261.46	%
Residential mortgages	2,062		0.74	%	1,118		0.40	%	184.44	%
Consumer loans	3,526		1.17	%	1,135		0.38	%	310.66	%
Total	$	20,471	1.02	%	$	7,835	0.39	%	261.28	%
Balance at December 31, 2023	Allowance for credit losses		Allowance to loans1		Non-performing loans		Non-performing loans to loans1		Allowance to non-performing loans
Commercial and agricultural	$	5,055	1.91	%	$	1,930	0.73	%	261.92	%
Commercial mortgages	12,026		1.07	%	5,969		0.53	%	201.47	%
Residential mortgages	2,194		0.79	%	1,315		0.47	%	166.84	%
Consumer loans	3,242		1.05	%	1,197		0.39	%	270.84	%
Total	$	22,517	1.14	%	$	10,411	0.53	%	216.28	%
(1) Ratio is a percentage of loan category.

The table below summarizes the Corporation’s consolidated credit ratios at March 31, 2024 and December 31, 2023:

Consolidated Ratios	March 31, 2024		December 31, 2023
Non-performing loans to total loans	0.39	%	0.53	%
Allowance for credit losses to total loans	1.02	%	1.14	%
Allowance for credit losses to non-performing loans	261.28	%	216.28	%

The table below summarizes the Corporation’s ratio of net charge-offs and recoveries to average loans outstanding by loan category for the three months ended March 31, 2024 and March 31, 2023:

Credit Ratios1	March 31, 2024		March 31, 2023
Commercial and agricultural	(0.01)	%	0.07	%
Commercial mortgages	—	%	—	%
Residential mortgages	—	%	—	%
Consumer loans	0.30	%	0.04	%
Total	0.04	%	0.02	%
1 Current period annualized.

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The table below summarizes the Corporation’s credit loss experience for the three months ended March 31, 2024 and 2023 (in thousands):

SUMMARY OF CREDIT LOSS EXPERIENCE
	Three Months Ended   March 31,
	2024		2023
Balance of allowance for credit losses at beginning of period	$	22,517	$	19,659
Impact of ASC 326 Adoption	—		374
Charge-offs:
Commercial and agricultural	—		190
Commercial mortgages	—		—
Residential mortgages	16		—
Consumer loans	351		193
Total charge-offs	$	367	$	383
Recoveries:
Commercial and agricultural	$	37	$	6
Commercial mortgages	1		—
Residential mortgages	22		—
Consumer loans	125		108
Total recoveries	$	185	$	114
Net charge-offs (recoveries)	182		269
Provision (credit) for credit losses on-balance sheet exposure(1)	(1,864)		311
Balance of allowance for credit losses at end of period	$	20,471	$	20,075

(1) Additional provision related to off-balance sheet exposure was a credit of $176 thousand for the three months ended March 31, 2024 and a credit of $34 thousand for the three months ended March 31, 2023.

Other Real Estate Owned

OREO totaled $0.6 million as of March 31, 2024, and $0.3 million as of December 31, 2023, respectively. There was one residential mortgage property and two home equity loan properties added to other real estate owned in the first three months of 2024.

Deposits

The table below summarizes the Corporation’s deposit composition by segment at March 31, 2024, and December 31, 2023, and the dollar and percent change from December 31, 2023 to March 31, 2024 (in thousands):

DEPOSITS
									March 31, 2024 v. December 31, 2023
	March 31, 2024				December 31, 2023
	Amount		% of Total		Amount		% of Total		$ Change		% Change
Non-interest-bearing demand deposits	$	656,330	26.5	%	$	653,166	26.9	%	$	3,164	0.5	%
Interest-bearing demand deposits	315,154		12.7	%	291,138		12.0	%	24,016		8.2	%
Money market accounts	631,350		25.4	%	623,714		25.7	%	7,636		1.2	%
Savings deposits	248,578		10.0	%	249,144		10.3	%	(566)		(0.2)	%
Certificates of deposit $250,000 or less	384,722		15.5	%	365,058		15.0	%	19,664		5.4	%
Certificates of deposit greater than $250,000	90,626		3.7	%	76,804		3.1	%	13,822		18.0	%
Brokered deposits	125,988		5.1	%	142,776		5.9	%	(16,788)		(11.8)	%
Other time deposits	28,024		1.1	%	27,627		1.1	%	397		1.4	%
Total	$	2,480,772	100.0	%	$	2,429,427	100.0	%	$	51,345	2.1	%

57

Deposits totaled $2.481 billion at March 31, 2024 compared to $2.429 billion at December 31, 2023, an increase of $51.3 million, or 2.1%. The increase was primarily attributable to increases of $33.9 million in time deposits excluding brokered deposits, $24.0 million in interest-bearing demand deposits, $7.6 million in insured money market accounts, and $3.2 million in non-interest bearing demand deposits, offset by decreases of $16.8 million in brokered deposits and $0.6 million in savings deposits.

The growth in deposits was due primarily to increases of $37.5 million in public deposits, $18.2 million in ICS deposits, $10.8 million in consumer deposits, and $5.0 million in commercial deposits, offset by decreases of $16.8 million in brokered deposits, and $3.1 million in CDARS deposits. At March 31, 2024, demand deposit and money market accounts comprised 64.6% of total deposits compared to 64.5% at December 31, 2023. The aggregate amount of the Corporation's outstanding uninsured deposits, was 27.8% and 27.0% of total deposits, as of March 31, 2024 and December 31, 2023, respectively.

The table below presents the Corporation's deposits balance by bank division (in thousands):

DEPOSITS BY DIVISION
	March 31, 2024		December 31, 2023		December 31, 2022		December 31, 2021		December 31, 2020
Chemung Canal Trust Company*	$	2,109,000	$	2,048,465	$	1,892,020	$	1,739,826	$	1,686,370
Capital Bank Division	371,772		380,962		435,207		415,607		351,404
Total	$	2,480,772	$	2,429,427	$	2,327,227	$	2,155,433	$	2,037,774

*All deposits, excluding those originated by the Capital Bank division.

In addition to consumer, commercial, and public deposits, other sources of funds include reciprocal deposits. The Regulatory Relief Act changed the definition of brokered deposits, such that subject to certain conditions, reciprocal deposits of another depository institution obtained through a deposit placement network for purposes of obtaining maximum deposit insurance would not be considered brokered deposits subject to the FDIC’s brokered-deposit regulations. This applies to the Corporation's participation in the CDARS and ICS programs. The CDARS and ICS programs involve a network of financial institutions that exchange funds among members in order to ensure FDIC insurance coverage on customer deposits above the single institution limit. Using a sophisticated matching system, funds are exchanged on a dollar-for-dollar basis, so that the equivalent of an original deposit comes back to the originating institution. Brokered deposits include funds obtained through brokers. Deposits obtained through the CDARS, ICS, and brokered relationship programs were $439.7 million as of March 31, 2024, including $126.0 million of brokered deposits, and $424.6 million as of December 31, 2023, which included $142.8 million of brokered deposits.

The Corporation’s deposit strategy is to fund the Bank with stable, low-cost deposits, primarily checking account deposits and other low interest-bearing deposit accounts. A checking account is the driver of a banking relationship and consumers consider the bank where they have their checking account as their primary bank. These customers will typically turn to their primary bank first when in need of other financial services. Strategies that have been developed and implemented to generate these deposits include: (i) acquiring deposits by entering new markets through branch acquisitions or de novo branching, (ii) an annual checking account marketing campaign, (iii) training branch employees to identify and meet client financial needs with Bank products and services, (iv) linking business and consumer loans to the customer's primary checking account at the Bank, (v) aggressively promoting direct deposit of client’s payroll checks or benefit checks and (vi) constantly monitoring the Corporation’s pricing strategies to ensure competitive products and services. The Corporation also considers brokered deposits to be an element of its deposit strategy and uses brokered deposits as a secondary source of funding to support growth.

Borrowings

Borrowings increased $18.0 million to $53.0 million at March 31, 2024 from December 31, 2023, primarily attributable to a $50.0 million advance from the Federal Reserve, as the Corporation took advantage of lower interest rates offered by the Bank Term Funding Program (BTFP), offset by a decrease of $31.9 million in FHLBNY overnight advances when compared to December 31, 2023. There were no outstanding FHLBNY term advances as of and for the three months ended March 31, 2024, and as of and for the year ended December 31, 2023.

58

Shareholders’ Equity

Total shareholders' equity increased $1.9 million from $195.2 million at December 31, 2023 to $197.1 million at March 31, 2024, primarily due to an increase in retained earnings, offset by an increase in accumulated other comprehensive loss. The increase in retained earnings of $5.6 million was due primarily to earnings of $7.1 million, offset by $1.5 million in dividends declared during the three months ended March 31, 2024. The increase in accumulated other comprehensive loss of $4.1 million can be mostly attributed to a decrease in the fair market value of the available for sale securities portfolio, due to rising interest rates. Treasury stock decreased $0.4 million, primarily due to the issuance of shares related to the Corporation's employee benefit plans and grants issued under the Corporation's stock compensation plan. The total shareholders’ equity to total assets ratio was 7.08% at March 31, 2024 compared to 7.20% at December 31, 2023. The tangible equity to tangible assets ratio was 6.34% at March 31, 2024 compared to 6.45% at December 31, 2023. Book value per share increased to $41.34 at March 31, 2024 from $41.07 at December 31, 2023.

The Bank is subject to capital adequacy guidelines of the Federal Reserve which establish a framework for the classification of financial institutions into five categories: well-capitalized, adequately capitalized, under-capitalized, significantly under-capitalized and critically under-capitalized. As of March 31, 2024, the Bank’s capital ratios were in excess of those required to be considered well-capitalized under regulatory capital guidelines.

When shares of the Corporation become available in the market, the Corporation may purchase them after careful consideration of the Corporation’s liquidity and capital positions. Purchases may be made from time to time on the open market or in privately negotiated transactions at the discretion of management. On January 8, 2021, the Corporation's Board of Directors approved a new stock repurchase program. Under the new repurchase program, the Corporation may repurchase up to 250,000 shares of its common stock, or approximately 5% of its then outstanding shares. The repurchase program permits shares to be repurchased in open market or privately negotiated transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. No shares were repurchased in the first quarter of 2024. As of March 31, 2024, the Corporation repurchased a total of 49,184 shares of common stock at a total cost of $2.0 million under the repurchase program, at the weighted average cost of $40.42 per share. Remaining buyback authority under the share repurchase program was 200,816 shares at March 31, 2024.

Liquidity

Liquidity management involves the ability to meet the cash flow requirements of deposit clients, 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 $250,000 or more, brokered deposits, securities sold under agreements to repurchase, and other borrowings.

The Corporation has a detailed Funds Management Policy that includes sections on liquidity measurement and management, and a Liquidity Contingency Plan that provides for the prompt and comprehensive response to unexpected demands for liquidity. This policy and plan are established and revised as needed by the management and Board ALCO committees. The ALCO is responsible for measuring liquidity, establishing liquidity targets and implementing strategies to achieve selected targets. The ALCO is responsible for coordinating activities across the Corporation to ensure that prudent levels of contingent or standby liquidity are available at all times. Based on the ongoing assessment of the liquidity considerations, management believes the Corporation’s sources of funding meet anticipated funding needs.

As of March 31, 2024, the Corporation's cash and cash equivalents balance was $94.9 million. The Corporation also maintains an investment portfolio of securities available for sale, comprised primarily of mortgage-backed securities, U.S. Gov't Treasury securities, Small Business Administration loan pools, and municipal bonds. Although this portfolio generates interest income for the Corporation, it also serves as an available source of liquidity and capital if the need should arise. As of March 31, 2024, the Corporation's investment in securities available for sale was $566.0 million, $240.3 million of which was not pledged as collateral.

59

The Corporation is a member of the FHLBNY which allows it to access borrowings which enhance management's ability to satisfy future liquidity needs. The Bank has pledged $254.0 million and $254.6 million of residential mortgage loans and home equity loans under a blanket lien arrangement at March 31, 2024 and December 31, 2023, respectively, as collateral for future borrowings. Based on this available collateral, securities held and current advances outstanding, the Corporation was eligible to borrow up to a total of $231.0 million and $193.4 million at March 31, 2024 and December 31, 2023, respectively. The Corporation did not borrow with the FHLBNY as of March 31, 2024, and borrowed FHLBNY overnight advances of $31.9 million as of December 31, 2023. The Bank's unused borrowing capacity at the Federal Home Loan Bank of New York was $231.0 million as of March 31, 2024. Borrowings may be used on a short-terms basis for liquidity purposes or on a long-term basis to fund asset growth.

Uninsured deposits totaled $689.4 million as of March 31, 2024, and $655.7 million as of December 31, 2023, which included $190.7 million and $153.2 million of municipal deposits that were collateralized by pledged assets, respectively. The Corporation considers the level of uninsured deposits to be an important factor when considering liquidity management and strategic decisions due to their fluidity.

The Corporation also considers brokered deposits to be an element of its deposit strategy and anticipates that it will continue using brokered deposits as a secondary source of funding to support growth. Borrowings may be used on a short-term basis for liquidity purposes or on a long-term basis to fund asset growth. Brokered deposits were $126.0 million and $142.8 million, as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, brokered deposits carried terms between two and 48 months with staggered maturities. The Corporation also had a total of $60.0 million of unsecured lines of credit with five different financial institutions, all of which was available at March 31, 2024 and December 31, 2023.

On March 12, 2023, the Treasury Department, Federal Reserve, and FDIC jointly announced a new liquidity program, the Bank Term Funding Program (BTFP), in response to the failure of two banks earlier that week. Under the BTFP, institutions could pledge certain securities (i.e., securities eligible for purchase by the Federal Reserve Banks in open market operations) for the par value of the securities at a borrowing rate of ten basis points over the one-year overnight index swap rate. Certain U.S. federally insured depository institutions were eligible to participate in the BTFP. No new borrowings may be made under the BTFP after March 11, 2024. In January 2024, the Corporation utilized the BTFP, with an advance of $50.0 million, at an interest rate of 4.91%, which matures in January 2025, and may be repaid at any time without prepayment penalty. Also available to the Corporation is the Discount Window Lending provided by the Federal Reserve Bank.

Consolidated Cash Flows Analysis

The table below summarizes the Corporation's cash flows for the periods indicated (in thousands):

CONSOLIDATED SUMMARY OF CASH FLOWS
(in thousands)	Three Months Ended   March 31,
	2024		2023
Net cash provided by operating activities	$	7,934	$	10,686
Net cash used in investing activities	(17,866)		(29,923)
Net cash provided (used) by financing activities	67,947		(1,991)
Net increase (decrease) in cash and cash equivalents	$	58,015	$	(21,228)

Operating activities

The Corporation believes cash flows from operations, available cash balances, and its ability to generate cash through short-term and long-term borrowings are sufficient to fund the Corporation’s operating liquidity needs. Cash provided by operating activities in the first three months of 2024 and 2023 predominantly resulted from net income after non-cash operating adjustments.

Investing activities

Cash used in investing activities during the first three months of 2024 and 2023 predominantly resulted from a net increase in loans, offset by maturities and principal paydowns on securities available for sale.

Financing activities

Cash provided by financing activities during the first three months of 2024 predominantly resulted from an increase in deposits, including brokered deposits, and an advance from the Federal Reserve BTFP, offset by a net repayment of overnight advances held at the end of the prior quarter. Cash used by financing activities during the first three months of 2023 predominantly resulted from the net repayment of overnight advances held at the end of the prior quarter, offset by a net increase in deposits.

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Capital Resources

The Bank is subject to regulatory capital requirements administered by federal banking agencies. As a result of the Regulatory Relief Act, the FRB amended its small bank holding company and savings and loan holding company policy statement to provide that holding companies with consolidated assets of less than $3 billion that are (i) not engaged in significant non-banking activities, (ii) do not conduct significant off-balance sheet activities, and (iii) do not have a material amount of SEC-registered debt or equity securities, other than trust preferred securities, that contribute to an organization’s complexity, are not subject to regulatory capital requirements. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Under Basel III rules, the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is 2.50%. Organizations that fail to maintain the minimum capital conservation buffer could face restrictions on capital distributions or discretionary bonus payments to executive officers. The net unrealized gain or loss on available for sale securities and changes in the funded status of the defined benefit pension plan and other benefit plans are not included in computing regulatory capital.

Pursuant to the Regulatory Relief Act, the FRB finalized a rule that established a community bank leverage ratio (tier 1 capital to average consolidated assets) at 9% for institutions under $10 billion in assets that such institutions may elect to utilize in lieu of the general applicable risk-based capital requirements under Basel III. Such institutions that meet the community bank leverage ratio and certain other qualifying criteria will automatically be deemed to be well-capitalized. The new rule took effect on January 1, 2020. The Bank has not elected to use the community bank leverage ratio.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. Management believes that, as of March 31, 2024 and December 31, 2023, the Bank met all capital adequacy requirements to which it was subject. As of December 31, 2018, the Corporation is no longer subject to FRB consolidated capital requirements applicable to bank holding companies, which are similar to those applicable to the Bank, until it reaches $3.0 billion in assets.

As of March 31, 2024, the most recent notification from the Federal Reserve Bank of New York categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There have been no conditions or events since that notification that management believes have changed the Bank's capital category.

The regulatory capital ratios as of March 31, 2024 and December 31, 2023 were calculated under Basel III rules. There is no threshold for well-capitalized status for bank holding companies.

61

The Corporation and the Bank’s capital ratios as of March 31, 2024 were as follows (in thousands, except ratio data):

	Actual				Minimum Capital Adequacy				Minimum Capital Adequacy with Capital Buffer				To Be Well Capitalized Under Prompt Corrective Action Provisions
As of March 31, 2024	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets):
Consolidated	$	266,595	13.18	%	N/A		N/A		N/A		N/A		N/A		N/A
Bank	$	257,952	12.76	%	$	161,762	8.00	%	$	212,313	10.50	%	$	202,203	10.00	%
Tier 1 Capital (to Risk Weighted Assets):
Consolidated	$	245,382	12.13	%	N/A		N/A		N/A		N/A		N/A		N/A
Bank	$	236,739	11.71	%	$	121,322	6.00	%	$	171,872	8.50	%	$	161,762	8.00	%
Common Equity Tier 1 Capital (to Risk Weighted Assets):
Consolidated	$	245,382	12.13	%	N/A		N/A		N/A		N/A		N/A		N/A
Bank	$	236,739	11.71	%	$	90,991	4.50	%	$	141,542	7.00	%	$	131,432	6.50	%
Tier 1 Capital (to Average Assets):
Consolidated	$	245,382	8.79	%	N/A		N/A		N/A		N/A		N/A		N/A
Bank	$	236,739	8.49	%	$	111,572	4.00	%	N/A		N/A		$	139,466	5.00	%

The Corporation and the Bank’s capital ratios as of December 31, 2023 were as follows (in thousands, except ratio data):

	Actual				Minimum Capital Adequacy				Minimum Capital Adequacy with Capital Buffer				To Be Well Capitalized Under Prompt Corrective Action Provisions
As of December 31, 2023	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk Weighted Assets):
Consolidated	$	262,864	13.26	%	N/A		N/A		N/A		N/A		N/A		N/A
Bank	$	252,783	12.76	%	$	158,438	8.00	%	$	207,950	10.50	%	$	198,048	10.00	%
Tier 1 Capital (to Risk Weighted Assets):
Consolidated	$	239,429	12.08	%	N/A		N/A		N/A		N/A		N/A		N/A
Bank	$	229,348	11.58	%	$	118,829	6.00	%	$	168,341	8.50	%	$	158,438	8.00	%
Common Equity Tier 1 Capital (to Risk Weighted Assets):
Consolidated	$	239,429	12.08	%	N/A		N/A		N/A		N/A		N/A		N/A
Bank	$	229,348	11.58	%	$	89,122	4.50	%	$	138,634	7.00	%	$	128,731	6.50	%
Tier 1 Capital (to Average Assets):
Consolidated	$	239,429	8.62	%	N/A		N/A		N/A		N/A		N/A		N/A
Bank	$	229,348	8.26	%	$	111,034	4.00	%	N/A		N/A		$	138,792	5.00	%

62

Dividend Restrictions

The Corporation’s principal source of funds for dividend payments is dividends received from the Bank. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to current year’s net income, combined with the retained net income of the preceding two years, subject to the capital requirements in the table above. At March 31, 2024, the Bank could, without prior approval, declare dividends of approximately $47.0 million.

Adoption of New Accounting Standards

Please refer to Note 1, Summary of Significant Accounting Policies - Recent Accounting Pronouncements for a discussion of new accounting standards.

Explanation and Reconciliation of the Corporation’s Use of Non-GAAP Measures

The Corporation prepares its Consolidated Financial Statements in accordance with GAAP; these financial statements appear on pages 7–12. That presentation provides the reader with an understanding of the Corporation’s results that can be tracked consistently from year-to-year and enables a comparison of the Corporation’s performance with other companies’ GAAP financial statements.

In addition to analyzing the Corporation’s results on a reported basis, management uses certain non-GAAP financial measures, because it believes these non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Corporation and, therefore, facilitate a comparison of the Corporation with the performance of other companies. Non-GAAP financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies.

The SEC has adopted Regulation G, which applies to all public disclosures, including earnings releases, made by registered companies that contain “non-GAAP financial measures.” Under Regulation G, companies making public disclosures containing non-GAAP financial measures must also disclose, along with each non-GAAP financial measure, certain additional information, including a reconciliation of the non-GAAP financial measure to the closest comparable GAAP financial measure and a statement of the Corporation’s reasons for utilizing the non-GAAP financial measure as part of its financial disclosures. The SEC has exempted from the definition of “non-GAAP financial measures” certain commonly used financial measures that are not based on GAAP. When these exempted measures are included in public disclosures, supplemental information is not required.  The following measures used in this Report, which are commonly utilized by financial institutions, have not been specifically exempted by the SEC and may constitute "non-GAAP financial measures" within the meaning of the SEC's rules, although we are unable to state with certainty that the SEC would so regard them.

Fully Taxable Equivalent Net Interest Income and Net Interest Margin

Net interest income is commonly presented on a tax-equivalent basis. That is, to the extent that some component of the institution's net interest income, which is presented on a before-tax basis, is exempt from taxation (e.g., is received by the institution as a result of its holdings of state or municipal obligations), an amount equal to the tax benefit derived from that component is added to the actual before-tax net interest income total. This adjustment is considered helpful in comparing one financial institution's net interest income to that of other institutions or in analyzing any institution’s net interest income trend line over time, to correct any analytical distortion that might otherwise arise from the fact that financial institutions vary widely in the proportions of their portfolios that are invested in tax-exempt securities, and that even a single institution may significantly alter over time the proportion of its own portfolio that is invested in tax-exempt obligations. Moreover, net interest income is itself a component of a second financial measure commonly used by financial institutions, net interest margin, which is the ratio of net interest income to average interest-earning assets. For purposes of this measure as well, fully taxable equivalent net interest income is generally used by financial institutions, as opposed to actual net interest income, again to provide a better basis of comparison from institution to institution and to better demonstrate a single institution’s performance over time.  The Corporation follows these practices.

63

NET INTEREST MARGIN - FULLY TAXABLE EQUIVALENT	As of the Three Months Ended
(in thousands, except ratio data)	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Net interest income (GAAP)	$	18,089		$	17,898		$	18,017		$	18,595		$	19,947
Fully taxable equivalent adjustment	84			87			87			92			98
Fully taxable equivalent net interest income (non-GAAP)	$	18,173		$	17,985		$	18,104		$	18,687		$	20,045
Average interest-earning assets (GAAP)	$	2,681,059		$	2,654,638		$	2,627,012		$	2,609,893		$	2,592,709
Net interest margin - fully taxable equivalent (non-GAAP)	2.73		%	2.69		%	2.73		%	2.87		%	3.14		%

Efficiency Ratio

The unadjusted efficiency ratio is calculated as non-interest expense divided by total revenue (net interest income and non-interest income). The adjusted efficiency ratio is a non-GAAP financial measure which represents the Corporation’s ability to turn resources into revenue and is calculated as non-interest expense divided by total revenue (fully taxable equivalent net interest income and non-interest income), adjusted for one-time occurrences and amortization. This measure is meaningful to the Corporation, as well as investors and analysts, in assessing the Corporation’s productivity measured by the amount of revenue generated for each dollar spent.

EFFICIENCY RATIO	As of the Three Months Ended
(in thousands, except ratio data)	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Net interest income (GAAP)	$	18,089		$	17,898		$	18,017		$	18,595		$	19,947
Fully taxable equivalent adjustment	84			87			87			92			98
Fully taxable equivalent net interest income (non-GAAP)	$	18,173		$	17,985		$	18,104		$	18,687		$	20,045
Non-interest income (GAAP)	$	5,657		$	5,871		$	7,808		$	5,447		$	5,423
Less: changes in fair value of equity investments	—			39			—			—			—
Less:  recognition of employee retention tax credit	—			—			(2,370)			—			—
Adjusted non-interest income (non-GAAP)	$	5,657		$	5,910		$	5,438		$	5,447		$	5,423
Non-interest expense (GAAP)	$	16,698		$	16,826		$	15,668		$	15,913		$	15,836
Less:  amortization of intangible assets	—			—			—			—			—
Adjusted non-interest expense (non-GAAP)	$	16,698		$	16,826		$	15,668		$	15,913		$	15,836
Efficiency ratio (unadjusted)	70.32		%	70.79		%	60.67		%	66.19		%	62.42		%
Efficiency ratio (adjusted)	70.07		%	70.42		%	66.55		%	65.94		%	62.18		%

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Tangible Equity and Tangible Assets (Period-End)

Tangible equity, tangible assets, and tangible book value per share are each non-GAAP financial measures. Tangible equity represents the Corporation’s stockholders’ equity, less goodwill and intangible assets. Tangible assets represents the Corporation’s total assets, less goodwill and other intangible assets. Tangible book value per share represents the Corporation’s tangible equity divided by common shares at period-end. These measures are meaningful to the Corporation, as well as investors and analysts, in assessing the Corporation’s use of equity.

TANGIBLE EQUITY AND TANGIBLE ASSETS (PERIOD END)	As of or for the Three Months Ended
(in thousands, except per share and ratio data)	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Total shareholders' equity (GAAP)	$	197,128		$	195,241		$	170,064		$	177,426		$	177,341
Less: intangible assets	(21,824)			(21,824)			(21,824)			(21,824)			(21,824)
Tangible equity (non-GAAP)	$	175,304		$	173,417		$	148,240		$	155,602		$	155,517
Total assets (GAAP)	$	2,784,890		$	2,710,529		$	2,707,834		$	2,674,673		$	2,654,183
Less: intangible assets	(21,824)			(21,824)			(21,824)			(21,824)			(21,824)
Tangible assets (non-GAAP)	$	2,763,066		$	2,688,705		$	2,686,010		$	2,652,849		$	2,632,359
Total equity to total assets at end of period (GAAP)	7.08		%	7.20		%	6.28		%	6.63		%	6.68		%
Book value per share (GAAP)	$	41.34		$	41.07		$	35.90		$	37.49		$	37.53
Tangible equity to tangible assets at end of period (non-GAAP)	6.34		%	6.45		%	5.52		%	5.87		%	5.91		%
Tangible book value per share (non-GAAP)	$	36.77		$	36.48		$	31.29		$	32.88		$	32.91

Tangible Equity (Average)

Average tangible equity and return on average tangible equity are each non-GAAP financial measures. Average tangible equity represents the Corporation’s average stockholders’ equity, less average goodwill and intangible assets for the period. Return on average tangible equity measures the Corporation’s earnings as a percentage of average tangible equity. These measures are meaningful to the Corporation, as well as investors and analysts, in assessing the Corporation’s use of equity.

TANGIBLE EQUITY (AVERAGE)	As of or for the Three Months Ended
(in thousands, except ratio data)	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Total average shareholders' equity (GAAP)	$	195,860		$	174,868		$	179,700		$	180,357		$	173,786
Less: average intangible assets	(21,824)			(21,824)			(21,824)			(21,824)			(21,824)
Average tangible equity (non-GAAP)	$	174,036		$	153,044		$	157,876		$	158,533		$	151,962
Return on average equity (GAAP)	14.48		%	8.63		%	16.89		%	13.97		%	16.97		%
Return on average tangible equity (non-GAAP)	16.29		%	9.86		%	19.22		%	15.89		%	19.40		%

65

Adjustments for Certain Items of Income or Expense

In addition to disclosures of certain GAAP financial measures, including net income, EPS, ROA, and ROE, we may also provide comparative disclosures that adjust these GAAP financial measures for a particular period by removing from the calculation thereof the impact of certain transactions or other material items of income or expense occurring during the period, including certain nonrecurring items. The Corporation believes that the resulting non-GAAP financial measures may improve an understanding of its results of operations by separating out any such transactions or items that may have had a disproportionate positive or negative impact on the Corporation’s financial results during the particular period in question. In the Corporation’s presentation of any such non-GAAP (adjusted) financial measures not specifically discussed in the preceding paragraphs, the Corporation supplies the supplemental financial information and explanations required under Regulation G.

NON-GAAP NET INCOME	As of or for the Three Months Ended
(in thousands, except per share and ratio data)	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
	2024			2023			2023			2023			2023
Reported net income (GAAP)	$	7,050		$	3,802		$	7,648		$	6,280		$	7,270
Net (gains) losses on security transactions (net of tax)	—			29			—			—			—
Recognition of employee retention tax credit	—			—			(1,873)			—			—
Non- GAAP net income	$	7,050		$	3,831		$	5,775		$	6,280		$	7,270
Average basic and diluted shares outstanding	4,764			4,743			4,736			4,729			4,721
Reported basic and diluted earnings per share (GAAP)	$	1.48		$	0.80		$	1.61		$	1.33		$	1.54
Reported return on average assets (GAAP)	1.04		%	0.56		%	1.14		%	0.95		%	1.12		%
Reported return on average equity (GAAP)	14.48		%	8.63		%	16.89		%	13.97		%	16.97		%
Non-GAAP basic and diluted earnings per share	$	1.48		$	0.81		$	1.21		$	1.33		$	1.54
Non-GAAP return on average assets	1.04		%	0.57		%	0.86		%	0.95		%	1.12		%
Non-GAAP return on average equity	14.48		%	8.69		%	12.75		%	13.97		%	16.97		%

66

ITEM 3:    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Management considers interest rate risk to be the most significant market risk for the Corporation. Market risk is the risk of loss from adverse changes in market prices and rates.  Interest rate risk is the exposure to adverse changes in the net income of the Corporation as a result of changes in interest rates.

The Corporation’s primary earnings source is net interest income, which is affected by changes in the level of interest rates, the relationship between rates, the impact of interest rate fluctuations on asset prepayments, the level and composition of deposits and liabilities, and credit quality of earning assets.

The Corporation’s objectives in its asset and liability management are to maintain a strong, stable net interest margin, to utilize its capital effectively without taking undue risks, to maintain adequate liquidity, and to reduce vulnerability of its operations to changes in interest rates. The Corporation's ALCO has the strategic responsibility for setting the policy guidelines on acceptable exposure to interest rate risk. These guidelines contain specific measures and limits regarding the risks, which are monitored on a regular basis. The ALCO is made up of the President and Chief Executive Officer, the Chief Financial Officer and Treasurer, the Asset Liability Management Officer, and other officers representing key functions.

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 various basis point changes in interest rates, with appropriate floors set for interest-bearing liabilities. At March 31, 2024, it is estimated that immediate decreases in interest rates of 100-basis points and 200-basis points would positively impact the next 12 months net interest income by 2.98% and 4.62%, respectively. Immediate increases in interest rates of 100-basis points and 200-basis points would positively impact the next 12 months net interest income by 2.18% and 4.34%, respectively. All scenarios are within the Corporation's policy guidelines.

Change in interest rates	Percentage Increase (Decrease) in Net Interest Income over 12 Months
200 basis points decrease	4.62%
100 basis points decrease	2.98%
100 basis points increase	2.18%
200 basis points increase	4.34%

A related component of interest rate risk is the expectation that the market value of the Corporation’s equity 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 a decline in market value. At March 31, 2024, it is estimated that immediate decreases in interest rates of 100-basis points and 200-basis points would positively impact the market value of the Corporation’s capital account by 4.34% and 6.41% respectively. Immediate increases in interest rates of 100-basis points and 200-basis points would positively impact the market value by 0.47% and 0.83% respectively. All scenarios are within the Corporation's policy guidelines.

Change in interest rates	Percentage Increase (Decrease) in Present Value of Corporation's Equity
200 basis points decrease	6.41%
100 basis points decrease	4.34%
100 basis points increase	0.47%
200 basis points increase	0.83%

Management does recognize the need for certain hedging strategies during periods of anticipated higher fluctuations in interest rates and the Funds Management Policy provides for limited use of certain derivatives in asset liability management.

67

Credit Risk

The Corporation manages credit risk consistent with state and federal laws governing the making of loans through written policies and procedures; loan review to identify loan problems at the earliest possible time; collection procedures (continued even after a loan is charged off); an adequate allowance for credit losses; and continuing education and training to ensure lending expertise. Diversification by loan product is maintained through offering commercial loans, 1-4 family mortgages, and a full range of consumer loans.

The Corporation monitors its loan portfolio carefully. The Loan Committee of the Corporation's Board of Directors is designated to receive required loan reports, oversee loan policy, and approve loans above authorized individual and Senior Loan Committee lending limits. The Senior Loan Committee, consisting of the President and Chief Executive Officer, Chief Financial Officer and Treasurer (non-voting), Chief Credit and Risk Officer, Business Client Division Manager, Retail Client Division Manager, Retail Loan Manager, Senior Commercial Real Estate Lender, and Commercial Loan Managers, implements the Board-approved loan policy.

68

ITEM 4:    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Corporation's management, with the participation of its Chief Executive Officer, who is the Corporation's principal executive officer, and its Chief Financial Officer and Treasurer, who is the Corporation's principal financial and accounting officer, have evaluated the effectiveness of the Corporation's disclosure controls and procedures as of March 31, 2024 pursuant to Rule 13a-15 of the Exchange Act, as amended. Based upon that evaluation, the principal executive officer and principal financial and accounting officer have concluded that the Corporation's disclosure controls and procedures are effective as of March 31, 2024. In addition, there have been no changes in the Corporation's internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Corporation's internal control over financial reporting.

Disclosure controls and procedures are designed with the objective of ensuring that information required to be disclosed in reports filed by the Corporation under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures are also designed with the objective of ensuring that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

69

PART II.    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

On February 4, 2020, the Corporation filed a lawsuit against Pioneer Bank, Albany, New York, in the Supreme Court of the State of New York in the County of Albany. As disclosed in the Corporation’s September 12, 2019 Current Report on Form 8-K, the Bank owns a participating interest totaling $4.2 million in an approximately $36.0 million commercial credit facility on which the borrower defaulted due to fraudulent activity. The Bank’s complaint alleges that Pioneer Bank, as lead bank, breached the participation agreement and engaged in fraud and negligent misrepresentation. The Corporation received a recovery of $0.5 million in April, 2020, and continues to pursue recovery of the remaining $3.7 million and accumulated expenses as a result of purchasing the participation interest.

Other than as noted above, the Corporation believes that it is not a party to any pending legal, arbitration, or regulatory proceedings that could have a material adverse impact on our financial results or liquidity as of March 31, 2024.

ITEM 1A.    RISK FACTORS

There have been no material changes in the risk factors set forth in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission on March 13, 2024. Additional risks not presently known to us, or that we currently deem immaterial, may adversely affect our business, financial condition or results of operations.

ITEM 2.    Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

    (c)    Issuer Purchases of Equity Securities (1)

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
January 1 - January 31, 2024	—	—		—	200,816
February 1 - February 29, 2024	—	—		—	200,816
March 1 - March 31, 2024	—	—		—	200,816
Quarter ended March 1, 2024	—	$	—	—	200,816
(1) On January 8, 2021, the Corporation’s Board of Directors approved a new stock repurchase plan. Under the new repurchase program, the Corporation may repurchase up to 250,000 shares of its common stock, or approximately 5% of its outstanding shares. Purchases may be made from time to time on the open market or in private negotiated transactions and will be at the discretion of management. As of March 31, 2024 the Corporation has repurchased a total of 49,184 shares at the weighted average cost of $40.42 per share.

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

        Not applicable.

ITEM 4.    MINE SAFETY DISCLOSURES

        Not applicable.

ITEM 5.    OTHER INFORMATION

During the first quarter of 2024, none of our directors or officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Corporation securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement,” as that term is used in SEC regulations.

70

ITEM 6.    EXHIBITS

    The following exhibits are either filed with this Form 10-Q or are incorporated herein by reference. The Corporation’s Securities Exchange Act File number is 000-13888.

3.1	Certificate of Incorporation of Chemung Financial Corporation dated December 20, 1984 (as incorporated by reference to Exhibit 3.1 to Registrant's Form 10-K for the year ended December 31, 2007 filed with the Commission on March 13, 2008).
3.2	Certificate of Amendment to the Certificate of Incorporation of Chemung Financial Corporation, dated March 28, 1988 (as incorporated by reference to Exhibit 3.2 to Registrant's Form 10-K for the year ended December 31, 2007 filed with the Commission on March 13, 2008).
3.3	Certificate of Amendment to the Certificate of Incorporation of Chemung Financial Corporation, dated May 13, 1998 (as incorporated by reference to Exhibit 3.4 to Registrant’s Form 10-K for the year ended December 31, 2005 and filed with the Commission on March 15, 2006).
3.4	Amended and Restated Bylaws of Chemung Financial Corporation, as amended August 17, 2022 (as incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K filed with the Commission on August 19, 2022).
31.1	Certification of Principal Executive Officer of the Registrant pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.*
31.2	Certification of Principal Financial Officer of the Registrant pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.*
32.1	Certification of Principal Executive Officer of the Registrant pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. §1350.*
32.2	Certification of Principal Financial Officer of the Registrant pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. §1350.*
101.INS	Instance Document*
101.SCH	XBRL Taxonomy Schema*
101.CAL	XBRL Taxonomy Calculation Linkbase*
101.DEF	XBRL Taxonomy Definition Linkbase*
101.LAB	XBRL Taxonomy Label Linkbase*
101.PRE	XBRL Taxonomy Presentation Linkbase*
*	Filed herewith.

71

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

DATED: May 8, 2024	By:  /s/ Anders M. Tomson
	Anders M. Tomson President and Chief Executive Officer (Principal Executive Officer)

DATED: May 8, 2024	By:  /s/ Dale M. McKim, III
	Dale M. McKim, III Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

72

EXHIBIT INDEX

The following exhibits are either filed with this Form 10-Q or are incorporated herein by reference. The Corporation’s Securities Exchange Act File number is 000-13888

3.1	Certificate of Incorporation of Chemung Financial Corporation dated December 20, 1984 (as incorporated by reference to Exhibit 3.1 to Registrant's Form 10-K for the year ended December 31, 2007 filed with the Commission on March 13, 2008).
3.2	Certificate of Amendment to the Certificate of Incorporation of Chemung Financial Corporation, dated March 28, 1988 (as incorporated by reference to Exhibit 3.2 to Registrant's Form 10-K for the year ended December 31, 2007 filed with the Commission on March 13, 2008).
3.3	Certificate of Amendment to the Certificate of Incorporation of Chemung Financial Corporation, dated May 13, 1998 (as incorporated by reference to Exhibit 3.4 to Registrant’s Form 10-K for the year ended December 31, 2005 and filed with the Commission on March 15, 2006).
3.4	Amended and Restated Bylaws of Chemung Financial Corporation, as amended August 17, 2022 (as incorporated by reference to Exhibit 3.1 to Registrant’s Form 8-K filed with the Commission on August 19, 2022).
31.1	Certification of Principal Executive Officer of the Registrant pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.*
31.2	Certification of Principal Financial Officer of the Registrant pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.*
32.1	Certification of Principal Executive Officer of the Registrant pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. §1350.*
32.2	Certification of Principal Financial Officer of the Registrant pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. §1350.*
101.INS	Instance Document*
101.SCH	XBRL Taxonomy Schema*
101.CAL	XBRL Taxonomy Calculation Linkbase*
101.DEF	XBRL Taxonomy Definition Linkbase*
101.LAB	XBRL Taxonomy Label Linkbase*
101.PRE	XBRL Taxonomy Presentation Linkbase*
*	Filed herewith.

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF CHEMUNG FINANCIAL CORPORATION PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934.

I, Anders M. Tomson, certify that:

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

2.  Based on my knowledge, this 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 report;

3.  Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b)  designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 8, 2024

By:/s/ Anders M. Tomson

Anders M. Tomson

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF CHEMUNG FINANCIAL CORPORATION PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934.

I, Karl F. Krebs, certify that:

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

2.  Based on my knowledge, this 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 report;

3.  Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4.  The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b)  designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.  The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a)  all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting

Date: May 8, 2024

By: /s/ Dale M. McKim, III

Dale M. McKim, III

Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF CHEMUNG FINANCIAL CORPORATION PURSUANT TO RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. §1350.

The undersigned, the Chief Executive Officer of Chemung Financial Corporation (the "Corporation"), hereby certifies that, to his knowledge on the date hereof:

(a)the Quarterly Report on Form 10-Q of the Corporation for the period ended March 31, 2024, filed on the date hereof with the Securities and Exchange Commission (the "Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(b)information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Anders M. Tomson

Anders M. Tomson

President and Chief Executive Officer

May 8, 2024

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF CHEMUNG FINANCIAL CORPORATION PURSUANT TO RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. §1350.

The undersigned, the Chief Financial Officer of Chemung Financial Corporation (the "Corporation"), hereby certifies that, to his knowledge on the date hereof:

(a)the Quarterly Report on Form 10-Q of the Corporation for the period ended March 31, 2024, filed on the date hereof with the Securities and Exchange Commission (the "Report"), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(b)information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Dale M. McKim, III

Dale M. McKim, III

Chief Financial Officer and Treasurer

May 8, 2024

XML

COVER - shares	3 Months Ended
	Mar. 31, 2024	May 03, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	001-35741
Entity Registrant Name	CHEMUNG FINANCIAL CORP
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	16-1237038
Entity Address, Address Line One	One Chemung Canal Plaza
Entity Address, City or Town	Elmira
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	14901
City Area Code	607
Local Phone Number	737-3711
Title of 12(b) Security	Common stock, par value $.01 per share
Trading Symbol	CHMG
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,752,375
Entity Central Index Key	0000763563
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
ASSETS
Cash and due from financial institutions	$ 22,984	$ 22,247
Interest-earning deposits in other financial institutions	71,878	14,600
Total cash and cash equivalents	94,862	36,847
Equity investments, at estimated fair value	3,093	3,046
Securities available for sale, at estimated fair value (amortized cost of $656,640, at March 31, 2024 and $669,092 at December 31, 2023, net of allowance for credit losses on securities of $0 at March 31, 2024 and December 31, 2023, respectively)	566,028	583,993
Securities held to maturity	785	785
FHLBNY and FRBNY Stock, at cost	4,071	5,498
Loans, net of deferred loan fees	2,003,610	1,972,664
Allowance for credit losses	(20,471)	(22,517)
Loans, net	1,983,139	1,950,147
Loans held for sale	96	0
Premises and equipment, net	14,183	14,571
Operating lease right-of-use assets	6,018	5,648
Goodwill	21,824	21,824
Bank-owned life insurance	2,923	2,914
Interest rate swap assets	25,806	23,942
Accrued interest receivable and other assets	62,062	61,314
Total assets	2,784,890	2,710,529
Deposits:
Non-interest-bearing	656,330	653,166
Interest-bearing	1,824,442	1,776,261
Total deposits	2,480,772	2,429,427
FHLBNY overnight advances	0	31,920
FRB term advance	50,000	0
Long term finance lease obligation	2,979	3,050
Operating lease liabilities	6,197	5,827
Dividends payable	1,473	1,469
Interest rate swap liabilities	25,811	23,981
Accrued interest payable and other liabilities	20,530	19,614
Total liabilities	2,587,762	2,515,288
Shareholders' equity:
Common stock, $0.01 par value per share, 10,000,000 shares authorized; 5,310,076 issued at March 31, 2024 and December 31, 2023	53	53
Additional paid-in capital	47,794	47,773
Retained earnings	235,506	229,930
Treasury stock, at cost; 559,226 shares at March 31, 2024 and 572,663 shares at December 31, 2023	(16,147)	(16,502)
Accumulated other comprehensive loss	(70,078)	(66,013)
Total shareholders' equity	197,128	195,241
Total liabilities and shareholders' equity	$ 2,784,890	$ 2,710,529

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Available-for-sale, amortized cost, net	$ 656,640	$ 669,092
Available-for-sale, allowance for credit loss	0	0
Securities held to maturity, estimated fair value	785	785
Securities held to maturity, allowance for credit loss	$ 0	$ 0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	10,000,000	10,000,000
Common stock, shares issued (in shares)	5,310,076	5,310,076
Treasury stock, at cost (in shares)	559,226	572,663

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Interest and dividend income:
Loans, including fees	$ 27,198	$ 22,289
Taxable securities	3,557	3,583
Tax exempt securities	258	261
Interest-earning deposits	206	97
Total interest and dividend income	31,219	26,230
Interest expense:
Deposits	12,145	5,387
Borrowed funds	985	896
Total interest expense	13,130	6,283
Net interest income	18,089	19,947
Provision (credit) for credit losses	(2,040)	277
Net interest income after provision for credit losses	20,129	19,670
Non-interest income:
Changes in fair value of equity investments	101	72
Net gains (losses) on sales of loans held for sale	32	5
Net gains on sales of other real estate owned	9	10
Other	800	682
Total non-interest income	5,657	5,423
Non-interest expenses:
Salaries and wages	7,016	6,783
Pension and other employee benefits	2,082	1,680
Other components of net periodic pension and postretirement benefits	(232)	(174)
Net occupancy	1,493	1,465
Furniture and equipment	398	418
Data processing	2,573	2,381
Professional services	559	440
Marketing and advertising	345	332
Other real estate owned	49	38
FDIC insurance	577	497
Loan expense	255	232
Other	1,583	1,744
Total non-interest expenses	16,698	15,836
Income before income tax expense	9,088	9,257
Income tax expense	2,038	1,987
Net income	$ 7,050	$ 7,270
Weighted average shares outstanding, basic (in shares)	4,764	4,721
Weighted average shares outstanding, diluted (in shares)	4,764	4,721
Basic earnings per share (in dollars per share)	$ 1.48	$ 1.54
Diluted earnings per share (in dollars per share)	$ 1.48	$ 1.54
WMG fee income
Non-interest income:
Revenues from contracts with customer	$ 2,703	$ 2,580
Service charges on deposit accounts
Non-interest income:
Revenues from contracts with customer	949	941
Interchange revenue from debit card transactions
Non-interest income:
Revenues from contracts with customer	$ 1,063	$ 1,133

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 7,050	$ 7,270
Other comprehensive income (loss):
Unrealized holding gains (losses) on securities available for sale	(5,513)	7,825
Tax effect	(1,443)	2,050
Net of tax amount	(4,070)	5,775
Change in funded status of defined benefit pension plan and other benefit plans:
Reclassification adjustment for amortization of net actuarial loss	7	12
Total before tax effect	7	12
Tax effect	2	3
Net of tax amount	5	9
Total other comprehensive income (loss)	(4,065)	5,784
Comprehensive income	$ 2,985	$ 13,054

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands		Total	Cumulative effect adjustment for the adoption of ASC 326	[1]	Cumulative Effect, Period of Adoption, Adjusted Balance	Common Stock	Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Additional Paid-in Capital	Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjusted Balance	Retained Earnings	Retained Earnings Cumulative effect adjustment for the adoption of ASC 326	[1]	Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance	Treasury Stock	Treasury Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Cumulative Effect, Period of Adoption, Adjusted Balance
Beginning balance at Dec. 31, 2022		$ 166,388	$ (1,076)		$ 165,312	$ 53	$ 53	$ 47,331	$ 47,331	$ 211,859	$ (1,076)		$ 210,783	$ (17,598)	$ (17,598)	$ (75,257)	$ (75,257)
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Net income		7,270								7,270
Other comprehensive loss		5,784														5,784
Restricted stock awards		263						263
Restricted stock units for directors' deferred compensation plan		5						5
Distribution of shares of treasury stock grants for employee restricted stock awards		0						(131)						131
Cash dividends declared		(1,460)								(1,460)
Distribution of treasury stock for directors' compensation		96						(147)						243
Repurchase of shares of common stock		(98)												(98)
Sale of shares of treasury stock	[2]	169						66						103
Ending balance at Mar. 31, 2023		177,341				53		47,387		216,593				(17,219)		(69,473)
Beginning balance at Dec. 31, 2023		195,241				53		47,773		229,930				(16,502)		(66,013)
Increase (Decrease) in Shareholders' Equity [Roll Forward]
Net income		7,050								7,050
Other comprehensive loss		(4,065)														(4,065)
Restricted stock awards		308						308
Restricted stock units for directors' deferred compensation plan		5						5
Distribution of shares of treasury stock grants for employee restricted stock awards		0						(132)						132
Cash dividends declared		(1,474)								(1,474)
Distribution of treasury stock for directors' compensation		0						(217)						217
Repurchase of shares of common stock		(82)												(82)
Sale of shares of treasury stock	[2]	145						57						88
Ending balance at Mar. 31, 2024		$ 197,128				$ 53		$ 47,794		$ 235,506				$ (16,147)		$ (70,078)

[1] Implementation of ASC 326.

[2] All treasury stock sales were completed at the prevailing market price with the Chemung Canal Trust Company Profit Sharing, Savings, and Investment Plan which is a defined contribution plan sponsored by the Bank.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Stockholders' Equity [Abstract]
Distribution of shares of treasury stock for employee restricted stock awards (in shares)	4,573	4,577
Cash dividends declared (in dollars per share)	$ 0.31	$ 0.31
Distribution of shares of treasury stock for director restricted stock awards (in shares)	7,515	8,492
Treasury stock acquired (in shares)	1,707	2,148
Sale of shares of treasury stock (in shares)	3,056	3,554

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 7,050	$ 7,270
Adjustments to reconcile net income to net cash provided by operating activities:
(Increases in) Amortization of right-of-use assets	(370)	199
Provision (credit) for credit losses	(2,040)	277
(Gains) on disposal of fixed assets	(27)	0
Depreciation and amortization of fixed assets	465	533
Amortization of premiums on securities, net	510	656
Gain on sales of loans held for sale, net	(32)	(5)
Proceeds from sales of loans held for sale	1,677	210
Loans originated and held for sale	(1,741)	(205)
Net change in fair value of equity investments	(101)	(72)
Proceeds from sales of trading assets	89	0
Purchase of equity investments	(35)	(47)
Decrease (Increase) in other assets and accrued interest receivable	926	(132)
Increase in accrued interest payable	1,920	636
Expense related to restricted stock units for directors' deferred compensation plan	5	5
Expense related to employee restricted stock awards	308	394
Increases in (payments on) operating lease liabilities	370	(193)
Net (gain) loss on interest rate swaps	(34)	11
(Decrease) increase in other liabilities	(997)	1,159
Income from bank owned life insurance	(9)	(10)
Net cash provided by operating activities	7,934	10,686
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities, calls, and principal paydowns on securities available for sale	11,942	15,901
Proceeds from maturities and principal collected on securities held to maturity	0	492
Purchases of securities available for sale	0	(2,199)
Purchase of FHLBNY and FRBNY stock	(10,894)	(16,853)
Redemption of FHLBNY and FRBNY stock	12,321	17,137
Proceeds from sales of fixed assets	31	0
Purchases of premises and equipment	(81)	(287)
Net increase in loans	(31,185)	(44,114)
Net cash used in investing activities	(17,866)	(29,923)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in demand, interest-bearing demand, savings, and insured money market deposits	34,250	(44,507)
Net increase in time deposits	17,095	49,709
Net change in FHLB overnight advances	(31,920)	(5,740)
Payments made on finance leases	(71)	(69)
Proceeds from FRB advances	50,000	0
Purchase of treasury stock	(82)	(98)
Sale of treasury stock	145	169
Cash dividends paid	(1,470)	(1,455)
Net cash provided by (used in) financing activities	67,947	(1,991)
Net increase (decrease) in cash and cash equivalents	58,015	(21,228)
Cash and cash equivalents, beginning of period	36,847	55,869
Cash and cash equivalents, end of period	94,862	34,641
Cash paid for:
Interest	11,210	5,647
Income taxes	459	431
Supplemental disclosure of non-cash activity:
Transfer of loans to other real estate owned	233	0
Dividends declared, not yet paid	$ 1,473	$ 1,460

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The Corporation, through its wholly-owned subsidiaries, the Bank and CFS, provides a wide range of banking, financing, fiduciary, and other financial services to its clients.  The Corporation and the Bank are subject to the regulations of certain federal and state agencies and undergo periodic examinations by those regulatory authorities.

Chemung Risk Management, Inc., (CRM), a wholly-owned subsidiary of the Corporation, was a Nevada-based captive insurance company which insured against certain risks unique to the operations of the Corporation and its subsidiaries and for which insurance may not have been currently available or economically feasible in today's insurance marketplace. CRM was dissolved by the Corporation, effective December 6, 2023.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X of the Exchange Act. These financial statements include the accounts of the Corporation and its subsidiaries, and all significant intercompany balances and transactions are eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and disclosures provided, and actual results could differ. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures necessary for the fair presentation of the accompanying consolidated financial statements have been included. The unaudited consolidated financial statements should be read in conjunction with the Corporation's 2023 Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations for any interim periods are not necessarily indicative of the results which may be expected for the entire year or any other period.

Reclassifications

Amounts in the prior year financial statements are reclassified whenever necessary to conform to the current year's presentation.

Recent Accounting Pronouncements

In March 2024, the U.S. Securities and Exchange Commission ("SEC") issued SEC Release No. 33-11275, adopting its final rule“The Enhancement and Standardization of Climate-Related Disclosures for Investors.” This rule will require registrants to disclose limited climate-related information in registration statements and annual reports. In April 2024, the SEC voluntarily stayed the implementation of its final rule, pending judicial review. As a smaller reporting company, these disclosure requirements, once issued in the final rule, would apply to the Corporation's filings for the fiscal year beginning January 1, 2027.

Accounting Standards Pending Adoption

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, which modifies the disclosure or presentation requirements of a variety of Topics in the Accounting Standards Codification, in response to SEC Release No. 33-10532, Disclosure Update and Simplifications, issued on August 17, 2018. The SEC identified several disclosure requirements that overlap with U.S. GAAP, but require incremental information to comply with disclosure standards in Regulations S-X and Regulation S-K. ASU 2023-06 codifies specific amendments to align the codification with SEC regulations. The effective date for each amendment is that date on which each disclosure requirement is removed from Regulation S-K or Regulation S-X. The Corporation anticipates that certain amendments will pertain to the Corporation's financial disclosures or presentation, but cannot determine with certainty which amendments are applicable until removal from Regulation S-K or Regulation S-X.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, enhancing disclosure requirements for reportable segments, focusing on significant segment expenses, the identification of a segment's chief decision making officer, and the metrics used by the chief decision making officer in evaluating segment-level operating performance. The ASU is effective for fiscal years beginning after December 15, 2023. The Corporation will begin providing enhanced segment reporting disclosures in accordance with ASU 2023-07 for the fiscal year ending December 31, 2024, and for interim periods thereafter.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require public business entities to disclose annually a tabular rate reconciliation, including specific items such as state and local income tax, tax credits, nontaxable or nondeductible items, among others, and a separate disclosure requiring disaggregation of reconciling items as described above which equal or exceed 5% percent of the product of multiplying income from continuing operations by the applicable statutory income tax rate. The ASU is effective for all public business entities for annual periods beginning after December 31, 2024.

Use of Analogous Accounting Standards

Under U.S. GAAP, there is no specific guidance related to government assistance received by a for-profit entity that is not in the form of a loan, income tax credit, or revenue from a contract with a customer. Therefore, the Corporation must rely upon analogous accounting standards to determine appropriate treatment when such circumstances arise. During 2023, the Corporation accounted for the recognition of the Employee Retention Tax Credit (ERTC) using ASC 958-605, Revenue Recognition for Not-for-Profit entities. ASC 958-10-15-1 specifies that certain Subtopics within ASC 958-605 also apply to business entities.

The Corporation considers the recognition of the ERTC to be analogous to the stipulations for "conditional contributions" under ASC 958-605-20. Conditional contributions have at least one barrier needing to be overcome before the recipient is entitled to the assets transferred or promised; there must be a right-of-return to the contributor; and barriers to the condition should be measurable. The Corporation recognized the gross amount of the ERTC through non-interest income during the period in which the barrier was overcome, identified as the period during which amended tax returns were filed. The Corporation incurred and recognized additional income tax expense during 2023 in relation to its amended tax returns.

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EARNINGS PER COMMON SHARE

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

EARNINGS PER COMMON SHARE

EARNINGS PER COMMON SHARE (shares in thousands)

Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. Issuable shares, including those related to directors’ restricted stock shares, are considered outstanding and are included in the computation of basic earnings per share. All outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends are considered participating securities for this calculation. Restricted stock awards are grants of participating securities and are considered outstanding at grant date. Earnings per share information is adjusted to present comparative results for stock splits and stock dividends that occur.

Earnings per share were computed by dividing net income by 4,764 and 4,721 weighted average shares outstanding for the three month periods ended March 31, 2024 and 2023, respectively. There were no common stock equivalents during the three month periods ended March 31, 2024 or 2023.

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SECURITIES

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

SECURITIES

SECURITIES

Amortized cost and estimated fair value of securities available for sale are as follows (in thousands):

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
U.S. Treasury notes and bonds	$	59,828	$	—	$	4,666	$	—	$	55,162
Mortgage-backed securities, residential	467,125		7		77,425		—		389,707
Obligations of states and political subdivisions	39,415		—		1,270		—		38,145
Corporate bonds and notes	25,750		—		4,818		—		20,932
SBA loan pools	64,522		57		2,497		—		62,082
Total	$	656,640	$	64	$	90,676	$	—	$	566,028

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
U.S. Treasury notes and bonds	$	59,812	$	—	$	4,480	$	—	$	55,332
Mortgage-backed securities, residential	476,240		6		72,422		—		403,824
Obligations of states and political subdivisions	39,503		—		817		—		38,686
Corporate bonds and notes	25,750		—		5,081		—		20,669
SBA loan pools	67,787		75		2,380		—		65,482
Total	$	669,092	$	81	$	85,180	$	—	$	583,993

Amortized cost and estimated fair value of securities held to maturity are as follows (in thousands):

	March 31, 2024
	Amortized Cost		Unrecognized Gains		Unrecognized Losses		Estimated Fair Value		Allowance for Credit Losses
Obligations of states and political subdivisions	$	785	$	—	$	—	$	785	$	—

	December 31, 2023
	Amortized Cost		Unrecognized Gains		Unrecognized Losses		Estimated Fair Value		Allowance for Credit Losses
Obligations of states and political subdivisions	$	785	$	—	$	—	$	785	$	—

The amortized cost and estimated fair value of debt securities are shown below by expected maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately (in thousands):

	March 31, 2024
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	8,499	$	8,297	$	—	$	—
After one, but within five years	97,948		90,687		145		145
After five, but within ten years	18,076		14,838		640		640
After ten years	470		417		—		—
	124,993		114,239		785		785
Mortgage-backed securities, residential	467,125		389,707		—		—
Collateralized mortgage obligations	—		—		—		—
SBA loan pools	64,522		62,082		—		—
Total	$	656,640	$	566,028	$	785	$	785

There were no proceeds from sales and calls of securities resulting in gains or losses for the three month periods ended March 31, 2024 and 2023.

The following tables summarize the investment securities available for sale with unrealized losses at March 31, 2024 and December 31, 2023 by aggregated major security type and length of time in a continuous unrealized loss position (in thousands):

	Less than 12 months				12 months or longer				Total
March 31, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury notes and bonds	$	—	$	—	$	55,162	$	4,666	$	55,162	$	4,666
Mortgage-backed securities, residential	—		—		388,878		77,425		388,878		77,425
Obligations of states and political subdivisions	1,154		24		36,991		1,246		38,145		1,270
Corporate bonds and notes	—		—		20,932		4,818		20,932		4,818
SBA loan pools	1,067		2		54,894		2,495		55,961		2,497
Total temporarily impaired securities	$	2,221	$	26	$	556,857	$	90,650	$	559,078	$	90,676

	Less than 12 months				12 months or longer				Total
December 31, 2023	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury notes and bonds	$	—	$	—	$	55,332	$	4,480	$	55,332	$	4,480
Mortgage-backed securities, residential	—		—		402,986		72,422		402,986		72,422
Obligations of states and political subdivisions	17,891		241		20,686		576		38,577		817
Corporate bonds and notes	7,492		2,508		13,177		2,573		20,669		5,081
SBA loan pools	3,914		13		54,468		2,367		58,382		2,380
Total temporarily impaired securities	$	29,297	$	2,762	$	546,649	$	82,418	$	575,946	$	85,180

Assessment of Available for Sale Debt Securities for Credit Risk

Management assesses the decline in fair value of investment securities on a regular basis. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates both qualitative and quantitative factors to assess whether an impairment exists. The following is a discussion of the credit quality characteristics of portfolio segments carrying material unrealized losses as of March 31, 2024.

Obligations of U.S. Governmental agencies and sponsored enterprises:

As of March 31, 2024, the majority of the Corporation’s unrealized losses in available for sale investment securities related to mortgage-backed securities, issued by government-sponsored entities and agencies. Declines in fair value are attributable to changes in interest rates and illiquidity, not credit quality. The Corporation does not have the intent, and it is not likely to be required to, sell these securities prior to their anticipated recovery. Because the Corporation considers these obligations to carry zero loss estimates, no allowance for credit losses has been recorded as of March 31, 2024.

Corporate bonds and notes:

The Corporation's corporate bonds and notes portfolio is comprised of subordinated debt issues of community and regional banks. Management considers the credit quality of these investments on an individual basis. Management reviewed the collectability of these securities, taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, and credit ratings when available, among other pertinent factors. All corporate bond debt securities continue to accrue interest and make payments as expected with no defaults or deferrals on the part of the issuers. Therefore, the Corporation considers the potential credit risk of these issuers to be immaterial, and has not recorded an allowance for credit losses on its corporate bonds and notes portfolio as of March 31, 2024.

Equity Method Investments

The Corporation holds a non-qualified deferred compensation plan to allow a select group of management and employees the opportunity to defer all or a portion of their annual compensation, and treats assets held under this plan as equity method investments. As of March 31, 2024 and December 31, 2023, the fair value of investments held in relation to the deferred compensation plan was $2.5 million and $2.4 million, respectively. The Corporation also held $0.6 million of marketable securities as equity method investments as of March 31, 2024 and December 31, 2023.

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LOANS AND ALLOWANCE FOR CREDIT LOSSES

3 Months Ended

Mar. 31, 2024

Credit Loss [Abstract]

LOANS AND ALLOWANCE FOR CREDIT LOSSES

LOANS AND ALLOWANCE FOR CREDIT LOSSES

The composition of the loan portfolio, net of deferred origination fees and costs, is summarized as follows (in thousands):

	March 31, 2024		December 31, 2023
Commercial and agricultural:
Commercial and industrial	$	279,414	$	264,140
Agricultural	221		256
Commercial mortgages:
Construction	141,604		138,887
Commercial mortgages, other	1,004,198		984,038
Residential mortgages	277,246		277,992
Consumer loans:
Home equity lines and loans	87,608		87,056
Indirect consumer loans	204,081		210,423
Direct consumer loans	9,238		9,872
Total loans, net of deferred loan fees and costs	2,003,610		1,972,664
Allowance for credit losses	(20,471)		(22,517)
Loans, net	$	1,983,139	$	1,950,147

The Corporation's concentrations of credit risk by loan type are reflected in the preceding table. The concentrations of credit risk with standby letters of credit, committed lines of credit and commitments to originate new loans generally follow the loan classifications in the table above.

Accrued interest receivable on loans totaled $8.1 million as of March 31, 2024 and $7.8 million as of December 31, 2023. Accrued interest receivable on loans is included in the Accrued interest receivable and other assets line item on the Corporation's Consolidated Balance Sheets, and is excluded from the amortized cost basis of loans and estimate of the allowance for credit losses, as presented in this Note.

The following tables present the activity in the allowance for credit losses by portfolio segment for the three month periods ended March 31, 2024 and March 31, 2023 (in thousands):

	Three Months Ended March 31, 2024
Allowance for credit losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Beginning balance, January 1, 2024	$	5,055	$	12,026	$	2,194	$	3,242	$	22,517
Charge-offs	—		—		(16)		(351)		(367)
Recoveries	37		1		22		125		185
Net recoveries (charge-offs)	37		1		6		(226)		(182)
Provision (credit) (1)	(576)		(1,660)		(138)		510		(1,864)
Ending balance, March 31, 2024	$	4,516	$	10,367	$	2,062	$	3,526	$	20,471

(1)Additional provision related to off-balance sheet exposure was a credit of $176 thousand for the three months ended March 31, 2024.

The Corporation performs an annual update to the loss drivers used in modeling its estimate of the allowance for credit losses. Annual updates for the model in 2024 were completed during the three month period ended March 31, 2024.

	Three Months Ended March 31, 2023
Allowance for credit losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Beginning balance, January 1, 2023	$	3,373	$	11,576	$	1,845	$	2,865	$	19,659
Cumulative effect adjustment for the adoption of ASC 326	909		(695)		(16)		176		374
Beginning balance after cumulative effect adjustment	4,282		10,881		1,829		3,041		20,033
Charge-offs	(190)		—		—		(193)		(383)
Recoveries	6		—		—		108		114
Net recoveries (charge-offs)	(184)		—		—		(85)		(269)
Provision (credit) (1)	(45)		102		63		191		311
Ending balance, March 31, 2023	$	4,053	$	10,983	$	1,892	$	3,147	$	20,075

(1)Additional provision related to off-balance sheet exposure was a credit of $34 thousand for the three months ended March 31, 2023.

Unfunded Commitments

The allowance for credit losses on unfunded commitments is recognized as a liability, and included in the Accrued interest payable and other liabilities line item on the Corporation's Consolidated Balance Sheets, with adjustments to the allowance recognized in the Provision for credit losses on the Consolidated Statements of Income. The Corporation established an allowance for credit losses on unfunded commitments in conjunction with its adoption of ASC 326-Financial Instruments-Credit Losses.

The following table presents the activity in the allowance for credit losses on unfunded commitments for the three month periods ended March 31, 2024 and 2023 (in thousands):

	For the Three Months Ended
Allowance for credit losses on unfunded commitments	March 31, 2024		March 31, 2023
Beginning balance	$	919	$	—
Impact of ASC 326 adoption	—		1,082
Provision (credit) for credit losses on unfunded commitments	(176)		(34)
Ending balance	$	743	$	1,048

The following table presents the provision for credit losses on loans and unfunded commitments for the three month periods ended March 31, 2024 and March 31, 2023 (in thousands):

	For the Three Months Ended
Provision (credit) for credit losses	March 31, 2024		March 31, 2023
Provision (credit) for credit losses on loans	$	(1,864)	$	311
Provision (credit) for credit losses on unfunded commitments	(176)		(34)
Total provision (credit) for credit losses	$	(2,040)	$	277

The following tables present the balance in the allowance for credit losses by portfolio segment, as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
Allowance for credit losses	Commercial and		Commercial		Residential		Consumer
Ending allowance balance attributable to loans:	Agricultural		Mortgages		Mortgages		Loans		Total
Individually analyzed	$	1,663	$	24	$	—	$	—	$	1,687
Collectively analyzed	2,853		10,343		2,062		3,526		18,784
Total ending allowance balance	$	4,516	$	10,367	$	2,062	$	3,526	$	20,471

	December 31, 2023
Allowance for credit losses	Commercial and		Commercial		Residential		Consumer
Ending allowance balance attributable to loans:	Agricultural		Mortgages		Mortgages		Loans		Total
Individually analyzed	$	1,928	$	27	$	—	$	—	$	1,955
Collectively analyzed	3,127		11,999		2,194		3,242		20,562
Total ending allowance balance	$	5,055	$	12,026	$	2,194	$	3,242	$	22,517

The following tables present the amortized cost basis of loans by portfolio segment, as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
Amortized cost basis of loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Individually analyzed	$	1,746	$	3,965	$	—	$	—	$	5,711
Collectively analyzed	277,889		1,141,837		277,246		300,927		1,997,899
Total ending loans balance	$	279,635	$	1,145,802	$	277,246	$	300,927	$	2,003,610

	December 31, 2023
Amortized cost basis of loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Individually analyzed	$	2,067	$	5,968	$	—	$	—	$	8,035
Collectively analyzed	262,329		1,116,957		277,992		307,351		1,964,629
Total ending loans balance	$	264,396	$	1,122,925	$	277,992	$	307,351	$	1,972,664

Modifications to Loans Made to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Corporation adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326)-Troubled Debt Restructurings and Vintage Disclosures. The Corporation may occasionally make modifications to loans where the borrower is considered to be experiencing financial difficulty. Types of modifications considered under ASU 2022-02 include principal reductions, interest rate reductions, term extensions, significant payment delays, or a combination thereof.

There were no loan modifications to borrowers experiencing financial difficulty, as considered under the requirements of ASU 2022-02, made during the three month period ended March 31, 2024.

The following tables summarize the amortized cost basis of loans modified during the three month period ended March 31, 2023 (in thousands):

	Three Months Ended March 31, 2023
Loans modified under ASU 2022-02:	Principal Reduction		Interest Rate Reduction		Term Extension		Payment Delay		Combination		Total		(%) of Loan Class (1)
Commercial mortgages:
Commercial mortgages, other	$	—	$	—	$	277	$	—	$	—	$	277	0.03	%

(1) Represents the amortized cost basis of loans modified during the period as a percentage of the period-end loan balances by class.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three month period ended March 31, 2023 (in thousands):

	Three Months Ended March 31, 2023
Effect of loan modifications under ASU 2022-02:	Principal Reduction (in thousands)	Weighted-average interest rate reduction (%)	Weighted-average term extension (in months)	Weighted-average payment delay (in months)
Commercial mortgages:
Commercial mortgages, other	$—	—%	60 months	0

The Corporation had no outstanding commitments to lend additional amounts to borrowers for which modifications subject to ASU 2022-02 were made during the three months ended March 31, 2024 and the year-ended December 31, 2023.

During the three month period ended March 31, 2024, the Corporation had one loan, a commercial and industrial loan which was given a six month term extension during the three month period ended September 30, 2023, which experienced a payment default within twelve months of modification. There were no loans that defaulted during the three month period ended March 31, 2023 for which modifications were made subsequent to the adoption of ASU 2022-02 on January 1, 2023.

The Corporation monitors the performance of loans that have previously been modified under the guidance of ASU 2022-02 in order to gauge the effectiveness of modifications, and to determine the degree to which borrowers continue to demonstrate financial weakness following modification. The following tables present the performance of such loans that have been modified in the twelve month period preceding March 31, 2024 and the three month period preceding March 31, 2023 (in thousands):

	Twelve Months Ended March 31, 2024
Past Due Status of Modifications under ASU 2022-02:	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	—	$	—	$	675	$	129	$	804
Consumer loans:
Home equity lines and loans	—		—		—		116		116
Total	$	—	$	—	$	675	$	245	$	920

During the three months ended March 31, 2024, a commercial mortgage that was was granted a payment delay during the three months ended June 30, 2023 executed an early payoff. The amortized basis of the loan prior to the payoff was $1.9 million.

	Three Months Ended March 31, 2023 (1)
Past Due Status of Modifications under ASU 2022-02:	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Loans Not Past Due		Total
Commercial mortgages, other	$	—	$	—	$	—	$	277	$	277

(1) Represents loans which were modified during the three month period subsequent to the adoption of ASU 2022-02 on January 1, 2023.

Collateral Dependent Individually Analyzed Loans

As of March 31, 2024, the amortized cost basis of individually analyzed loans totaled $5.7 million, of which $4.2 million were considered collateral dependent. As of December 31, 2023 the amortized basis of individually analyzed loans totaled $8.0 million, of which $6.3 million were considered collateral dependent. For collateral dependent loans where the borrower is experiencing financial difficulty and repayment is likely to be substantially provided through the sale or operation of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date.

Certain assets held as collateral may be exposed to future deterioration in fair value, particularly due to changes in real estate markets or usage. The Corporation closely monitors trends in real estate values throughout its market area to determine whether collateral values, after appropriate discounting, are likely to be sufficient to extinguish existing borrower indebtedness.

The following table presents the amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral dependent as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Amortized Cost Basis		Related Allowance		Amortized Cost Basis		Related Allowance
Commercial and agricultural:
Commercial and industrial (3)	$	282	$	200	$	353	$	214
Agricultural (3)	2		1		26		26
Commercial mortgages:
Construction (1)	2,207		—		2,209		—
Commercial mortgages, other (1) (2) (3)	1,757		24		3,759		27
Total	$	4,248	$	225	$	6,347	$	267

(1) Secured by commercial real estate

(2) Secured by residential real estate

(3) Secured by business assets

The following tables present the average amortized cost basis and interest income recognized on loans individually analyzed, by class of loans, for the three month periods ended March 31, 2024 and 2023 (in thousands):

	Three Months Ended   March 31, 2024				Three Months Ended   March 31, 2023
With no related allowance recorded:	Average Amortized Cost Basis		Interest Income Recognized (1)		Average Amortized Cost Basis		Interest Income Recognized (1)
Commercial and agricultural:
Commercial and industrial	$	49	$	1	$	729	$	—
Agricultural	—		—		—		—
Commercial mortgages:
Construction	2,208		—		—		—
Commercial mortgages, other	2,733		—		4,053		7
Residential mortgages	—		—		715		9
Consumer loans:
Home equity lines & loans	—		—		254		—
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial	1,844		3		1,049		2
Agricultural	14		—		—		—
Commercial mortgages:
Commercial mortgages, other	25		—		36		—
Total	$	6,873	$	4	$	6,836	$	18

(1) Cash basis interest income approximates interest income recognized.

The following table presents the amortized cost basis in nonaccrual loans without an associated allocation in the allowance for credit losses, total nonaccrual loans, and loans past due greater than 90 days and still accruing, by class of loan as of March 31, 2024 and December 31, 2023 (in thousands):

	Nonaccrual with No Allowance for Credit Losses				Nonaccrual				Loans Past Due 90 Days or More and Still Accruing
	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Commercial and agricultural:
Commercial and industrial	$	23	$	76	$	1,615	$	1,904	$	8	$	10
Agricultural	—		—		2		26		—		—
Commercial mortgages:
Construction	2,207		2,209		2,207		2,209		—		—
Commercial mortgages, other	1,734		3,732		1,758		3,760		—		—
Residential mortgages	1,118		1,315		1,118		1,315		—		—
Consumer loans:
Home equity lines and loans	496		508		496		508		—		—
Indirect consumer loans	631		687		631		687		—		—
Direct consumer loans	8		2		8		2		—		—
Total	$	6,217	$	8,529	$	7,835	$	10,411	$	8	$	10

The following tables present the aging of the amortized cost basis of loans as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	181	$	238	$	683	$	1,102	$	278,312	$	279,414
Agricultural	—		—		—		—		221		221
Commercial mortgages:
Construction	—		—		2,207		2,207		139,397		141,604
Commercial mortgages, other	1,012		2,238		175		3,425		1,000,773		1,004,198
Residential mortgages	1,529		594		589		2,712		274,534		277,246
Consumer loans:
Home equity lines and loans	612		100		282		994		86,614		87,608
Indirect consumer loans	1,063		379		379		1,821		202,260		204,081
Direct consumer loans	18		20		6		44		9,194		9,238
Total	$	4,415	$	3,569	$	4,321	$	12,305	$	1,991,305	$	2,003,610

	December 31, 2023
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	1,196	$	31	$	10	$	1,237	$	262,903	$	264,140
Agricultural	—		—		—		—		256		256
Commercial mortgages:
Construction	2,164		—		2,207		4,371		134,516		138,887
Commercial mortgages, other	1,022		103		261		1,386		982,652		984,038
Residential mortgages	2,244		201		585		3,030		274,962		277,992
Consumer loans:
Home equity lines and loans	461		87		366		914		86,142		87,056
Indirect consumer loans	2,473		501		426		3,400		207,023		210,423
Direct consumer loans	2		20		—		22		9,850		9,872
Total	$	9,562	$	943	$	3,855	$	14,360	$	1,958,304	$	1,972,664

Credit Quality Indicators

The Corporation establishes a risk rating at origination for all commercial loans. The primary factors considered in assigning risk ratings include, but are not limited to: historic and future debt service coverage, collateral position, operating performance, liquidity, leverage, payment history, management ability, and the customer’s industry. Commercial relationship managers monitor all loans in their respective portfolios for any changes in the borrower’s ability to service its debt and affirm the risk ratings for the loans at least annually.

For retail loans, which include residential mortgages, indirect and direct consumer loans, and home equity lines and loans, once a loan is properly approved and closed, the Corporation evaluates credit quality based upon loan repayment. Retail loans that have been modified subject to ASU 2022-02, but are otherwise performing, are assigned a risk rating of Special Mention, as defined below. Retail loans are not rated until they become 90 days past due, or are modified under ASU 2022-02.

The Corporation uses the risk rating system to identify criticized and classified loans. Commercial relationships within the criticized and classified risk ratings are analyzed quarterly.  The Corporation uses the following definitions for criticized and classified loans (which are consistent with regulatory guidelines):

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capability of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Commercial loans not meeting the criteria above to be considered criticized or classified, are considered to be pass rated loans. Loans listed as not rated, are included in groups of homogeneous loans performing under terms of the loan notes.

Based on the analyses performed as of March 31, 2024, the risk category of the amortized cost basis of loans by class and vintage, as well as gross charge-offs by class and vintage for the period, were as follows (in thousands):

	Term Loans Amortized Cost by Origination Year												Revolving Loans Amortized Cost		Revolving Loans Converted to Term		Total
	2024		2023		2022		2021		2020		Prior
Commercial & industrial
Pass	$	10,885	$	39,011	$	34,108	$	21,370	$	12,349	$	39,698	$	92,497	$	1,643	$	251,561
Special mention	—		—		9,159		—		4,060		4,586		7,223		453		25,481
Substandard	—		89		221		788		83		205		—		176		1,562
Doubtful	24		—		—		—		—		764		22		—		810
Total	10,909		39,100		43,488		22,158		16,492		45,253		99,742		2,272		279,414
Gross charge-offs	—		—		—		—		—		—		—		—		—
Agricultural
Pass	—		—		14		143		—		—		62		—		219
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		2		—		—		—		—		—		—		2
Doubtful	—		—		—		—		—		—		—		—		—
Total	—		2		14		143		—		—		62		—		221
Gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	1,076		48,500		77,995		9,686		—		1,658		482		—		139,397
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		2,207		—		—		2,207
Doubtful	—		—		—		—		—		—		—		—		—
Total	1,076		48,500		77,995		9,686		—		3,865		482		—		141,604
Gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial mortgages
Pass	13,784		117,235		258,049		171,090		111,407		296,080		5,127		742		973,514
Special mention	—		—		2,522		8,092		2,590		8,082		2,001		—		23,287
Substandard	—		2,412		1,081		339		1,012		2,432		97		—		7,373
Doubtful	—		—		—		—		—		24		—		—		24
Total	13,784		119,647		261,652		179,521		115,009		306,618		7,225		742		1,004,198
Gross charge-offs	—		—		—		—		—		—		—		—		—
Residential mortgages
Not rated	4,014		20,000		57,204		59,311		70,050		65,549		—		—		276,128
Substandard	—		—		75		342		247		454		—		—		1,118
Total	4,014		20,000		57,279		59,653		70,297		66,003		—		—		277,246
Gross charge-offs	—		—		—		—		—		16		—		—		16
Home equity lines and loans
Not rated	3,298		12,904		15,846		5,577		3,009		12,494		32,773		1,095		86,996
Special mention	—		—		116		—		—		—		—		—		116
Substandard	—		—		76		—		—		291		86		43		496
Total	3,298		12,904		16,038		5,577		3,009		12,785		32,859		1,138		87,608
Gross charge-offs	—		—		—		—		—		11		—		—		11
Indirect consumer
Not rated	11,861		67,401		90,413		20,411		7,652		5,712		—		—		203,450
Substandard	—		139		208		141		49		94		—		—		631
Total	11,861		67,540		90,621		20,552		7,701		5,806		—		—		204,081
Gross charge-offs	—		104		127		29		24		54		—		—		338
Direct consumer
Not rated	700		2,622		2,391		607		174		332		2,401		3		9,230
Substandard	—		—		—		5		2		—		1		—		8
Total	700		2,622		2,391		612		176		332		2,402		3		9,238
Gross charge-offs	—		—		—		—		—		—		2		—		2
Total loans	$	45,642	$	310,315	$	549,478	$	297,902	$	212,684	$	440,662	$	142,772	$	4,155	$	2,003,610
Total gross charge-offs	$	—	$	104	$	127	$	29	$	24	$	81	$	2	$	—	$	367

Based on the analyses performed as of December 31, 2023, the risk category of the amortized cost basis of loans by class and vintage, as well as gross charge-offs by class and vintage for the period, were as follows (in thousands):

	Term Loans Amortized Cost by Origination Year												Revolving Loans Amortized Cost		Revolving Loans Converted to Term		Total
	2023		2022		2021		2020		2019		Prior
Commercial & industrial
Pass	$	41,925	$	40,564	$	21,742	$	13,541	$	31,233	$	10,523	$	77,176	$	1,662	$	238,366
Special mention	185		4,608		—		4,020		—		4,690		9,137		482		23,122
Substandard	—		24		991		109		23		456		—		161		1,764
Doubtful	—		—		—		—		—		790		75		23		888
Total	42,110		45,196		22,733		17,670		31,256		16,459		86,388		2,328		264,140
Gross charge-offs	—		—		—		—		9		272		—		—		281
Agricultural
Pass	—		15		150		—		—		—		65		—		230
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		26		26
Doubtful	—		—		—		—		—		—		—		—		—
Total	—		15		150		—		—		—		65		26		256
Gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	46,951		68,483		19,066		—		28		1,669		481		—		136,678
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		2,207		2		—		—		2,209
Doubtful	—		—		—		—		—		—		—		—		—
Total	46,951		68,483		19,066		—		2,235		1,671		481		—		138,887
Gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial mortgages
Pass	110,864		260,763		161,858		113,198		57,782		244,211		5,197		767		954,640
Special mention	—		2,533		8,189		2,609		—		8,642		—		—		21,973
Substandard	272		1,107		345		1,022		—		4,555		97		—		7,398
Doubtful	—		—		—		—		—		27		—		—		27
Total	111,136		264,403		170,392		116,829		57,782		257,435		5,294		767		984,038
Gross charge-offs	—		—		—		—		—		—		—		—		—
Residential mortgages
Not rated	18,653		58,098		60,024		71,369		15,948		52,585		—		—		276,677
Substandard	—		75		346		—		169		725		—		—		1,315
Total	18,653		58,173		60,370		71,369		16,117		53,310		—		—		277,992
Gross charge-offs	—		32		—		—		—		—		—		—		32
Home equity lines and loans
Not rated	13,552		16,384		5,821		3,134		2,867		10,400		33,275		1,115		86,548
Substandard	—		77		—		—		—		293		25		113		508
Total	13,552		16,461		5,821		3,134		2,867		10,693		33,300		1,228		87,056
Gross charge-offs	—		—		—		—		—		—		6		—		6
Indirect consumer
Not rated	72,264		98,008		23,015		9,192		3,870		3,387		—		—		209,736
Substandard	119		246		135		48		36		103		—		—		687
Total	72,383		98,254		23,150		9,240		3,906		3,490		—		—		210,423
Gross charge-offs	184		375		215		121		21		55		—		—		971
Direct consumer
Not rated	3,005		2,745		785		256		53		324		2,697		5		9,870
Substandard	—		—		—		2		—		—		—		—		2
Total	3,005		2,745		785		258		53		324		2,697		5		9,872
Gross charge-offs	4		15		8		6		—		54		6		—		93
Total loans	$	307,790	$	553,730	$	302,467	$	218,500	$	114,216	$	343,382	$	128,225	$	4,354	$	1,972,664
Total gross charge-offs	$	188	$	422	$	223	$	127	$	30	$	381	$	12	$	—	$	1,383

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FAIR VALUE

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE

FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Corporation used the following methods and significant assumptions to estimate fair value on a recurring basis:

Available for Sale Securities:  The fair values of securities available for sale are usually determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs), or matrix pricing, which is a mathematical technique widely used to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3 inputs).

Equity Investments: Securities that are held to fund a deferred compensation plan and securities that have a readily determinable fair market value, are recorded at fair value with changes in fair value included in earnings. The fair values of equity investments are determined by quoted market prices (Level 1 inputs).

Individually Analyzed Loans: At the time a loan is considered individually analyzed, it is valued at the lower of cost or fair value. Individually analyzed loans carried at fair value have been partially charged-off or receive specific allocations as part of the allowance for credit loss accounting. For collateral dependent loans, fair value is commonly based on real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, typically resulting in a Level 3 fair value classification. Individually analyzed loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

OREO: Assets acquired through or in lieu of loan foreclosures are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral dependent loans and OREO are performed by certified general appraisers (commercial properties) or certified residential appraisers (residential properties) whose qualifications and licenses have been reviewed and verified by the Corporation. Once received, appraisals are reviewed for reasonableness of assumptions, approaches utilized, Uniform Standards of Professional Appraisal Practice and other regulatory compliance, as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Appraisals are generally completed within the twelve month period prior to a property being placed into OREO. On individually analyzed loans, appraisal values are adjusted based on the age of the appraisal, the position of the lien, the type of the property and its condition.

Derivatives: The fair values of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2 inputs). Derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices, and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The Corporation also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counter-party's nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Corporation has considered the impact of any applicable credit enhancements, such as collateral postings. Although the Corporation has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize credit default rate assumptions (Level 3 inputs).

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

			Fair Value Measurement at March 31, 2024 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury notes and bonds	$	55,162	$	55,162	$	—	$	—
Mortgage-backed securities, residential	389,707		—		389,707		—
Obligations of states and political subdivisions	38,145		—		38,145		—
Corporate bonds and notes	20,932		—		13,211		7,721
SBA loan pools	62,082		—		62,082		—
Total available for sale securities	$	566,028	$	55,162	$	503,145	$	7,721
Equity investments, at fair value	$	2,600	$	2,600	$	—	$	—
Derivative assets	$	25,806	$	—	$	25,806	$	—
Financial Liabilities:
Derivative liabilities	$	25,811	$	—	$	25,811	$	—

There were no transfers between Level 1 and Level 2 during the three month period ended March 31, 2024.

			Fair Value Measurement at December 31, 2023 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury notes and bonds	$	55,332	$	55,332	$	—	$	—
Mortgage-backed securities, residential	403,824		—		403,824		—
Obligations of states and political subdivisions	38,686		—		38,686		—
Corporate bonds and notes	20,669		—		13,139		7,530
SBA loan pools	65,482		—		65,482		—
Total available for sale securities	$	583,993	$	55,332	$	521,131	$	7,530
Equity investments, at fair value	$	2,552	$	2,552	$	—	$	—
Derivative assets	$	23,942	$	—	$	23,942	$	—
Financial Liabilities:
Derivative liabilities	$	23,981	$	—	$	23,981	$	—

There were no transfers between Level 1 and Level 2 during the three month period ended March 31, 2023.

The Corporation transfers assets and liabilities between Level 2 and Level 3 of the fair value hierarchy when the methodology to obtain fair value changes such that there are either more or fewer unobservable inputs as of the end of the reporting period, compared to the prior reporting period. Illiquidity in new issuances of comparable bonds and the size of issuances may lead to pricing difficulties, particularly for smaller corporate bond issuances and warrant transfer into Level 3 of assets previously measured using Level 2 inputs. The Corporation utilizes a "beginning of reporting period" timing assumption when recognizing transfers between hierarchy levels, consistent with ASC 820-10-50-2.

There were no transfers between Level 2 and Level 3 during the three month period ended March 31, 2024. The Corporation transferred its investment in eight corporate subordinated debt issuances from Level 2 to Level 3 during the three month period ended March 31, 2023.

The following table presents a reconciliation of assets and liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended March 31, 2024 and March 31, 2023 (in thousands):

Corporate bonds and notes:	For the Three Months Ended
Level 3 Financial Assets	March 31, 2024		March 31, 2023
Balance of recurring Level 3 assets as of January 1,	$	7,530	$	—
Total gains or losses for the period:	—		—
Included in Other Comprehensive Income	191		(1,289)
Transfers into Level 3	—		9,955
Transfers out of Level 3	—
Balance of recurring Level 3 assets as of March 31,	$	7,721	$	8,666

The following table presents quantitative information about recurring Level 3 fair value measurements as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024	Fair Value		Valuation Techniques	Unobservable Input	Range [Weighted Average] at March 31, 2024
Corporate bonds and notes	$	7,721	Discounted cash flow	Market discount rate	12.50% -12.50% [12.50%]

December 31, 2023	Fair Value		Valuation Techniques	Unobservable Input	Range [Weighted Average] at December 31, 2023
Corporate bonds and notes	$	7,530	Discounted cash flow	Market discount rate	12.50% -12.50% [12.50%]

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and estimated fair values of other financial instruments, as of March 31, 2024 and December 31, 2023, are as follows (in thousands):

	March 31, 2024
Financial assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial institutions	$	22,984	$	22,984	$	—	$	—	$	22,984
Interest-earning deposits in other financial institutions	71,878		71,878		—		—		71,878
Equity investments	3,093		3,093		—		—		3,093
Securities available for sale	566,028		55,162		503,145		7,721		566,028
Securities held to maturity	785		—		—		785		785
FHLBNY and FRBNY stock	4,071		—		—		—		N/A
Loans, net and loans held for sale	2,003,706		—		—		1,896,266		1,896,266
Derivative assets	25,806		—		25,806		—		25,806
Financial liabilities:
Deposits:
Demand, savings, and insured money market deposits	$	1,851,412	$	1,851,412	$	—	$	—	$	1,851,412
Time deposits	629,360		—		626,423		—		626,423
FHLBNY overnight advances	—		—		—		—		—
FRB term advances	50,000		—		49,828		—		49,828
Derivative liabilities	25,811		—		25,811		—		25,811

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

	December 31, 2023
Financial assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial institutions	$	22,247	$	22,247	$	—	$	—	$	22,247
Interest-earning deposits in other financial institutions	14,600		14,600		—		—		14,600
Equity investments	3,046		3,046		—		—		3,046
Securities available for sale	583,993		55,332		521,131		7,530		583,993
Securities held to maturity	785		—		—		785		785
FHLBNY and FRBNY stock	5,498		—		—		—		N/A
Loans, net and loans held for sale	1,972,664		—		—		1,875,390		1,875,390
Derivative assets	23,942		—		23,942		—		23,942
Financial liabilities:
Deposits:
Demand, savings, and insured money market deposits	$	1,817,162	$	1,817,162	$	—	$	—	$	1,817,162
Time deposits	612,265		—		609,863		—		609,863
FHLBNY overnight advances	31,920		—		31,925		—		31,925
Derivative liabilities	23,981		—		23,981		—		23,981

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

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LEASES

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

LEASES

LEASES

Operating Leases

The Corporation leases certain branch properties under long-term, operating lease agreements. The leases expire at various dates through 2033 and generally include renewal options. As of March 31, 2024, the weighted average remaining lease term was 7.56 years with a weighted average discount rate of 3.51%. Rent expense was $0.3 million for the three months ended March 31, 2024. Certain leases provide for increases in future minimum annual rent payments as defined in the lease agreements. The Corporation’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately. The Corporation’s lease agreements do not contain any residual value guarantees.

Leased branch properties at March 31, 2024 and December 31, 2023 consist of the following (in thousands):

	March 31, 2024		December 31, 2023
Operating lease right-of-use asset	$	5,648	$	6,449
Less: accumulated amortization	(200)		(801)
Less: lease termination	—		—
Add: new lease agreement and modifications	570		—
Operating lease right-of-use-assets, net	$	6,018	$	5,648

The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding CAM charges, as of March 31, 2024 (in thousands):

Year	Amount
2024	$	717
2025	959
2026	965
2027	977
2028	845
2029 and thereafter	2,590
Total minimum lease payments	7,053
Less: amount representing interest	(856)
Present value of net minimum lease payments	$	6,197

The Corporation had one operating lease that was signed on October 19, 2023, but had not yet commenced.

Finance Leases

The Corporation leases certain buildings under finance leases. The lease arrangements require monthly payments through 2036. As of March 31, 2024, the weighted average remaining lease term was 9.10 years with a weighted average discount rate of 3.42%. The Corporation has included these leases in premises and equipment as of March 31, 2024 and December 31, 2023 as follows (in thousands):

	March 31, 2024		December 31, 2023
Buildings	$	5,572	$	5,572
Less: accumulated depreciation	(2,955)		(2,872)
Net book value	$	2,617	$	2,700

The following is a schedule by year of future minimum lease payments under the capitalized lease, together with the present value of net minimum lease payments as of March 31, 2024 (in thousands):

Year	Amount
2024	$	293
2025	409
2026	425
2027	428
2028	428
2029 and thereafter	1,560
Total minimum lease payments	3,543
Less: amount representing interest	(564)
Present value of net minimum lease payments	$	2,979

As of March 31, 2024, the Corporation had no finance leases that were signed, but had not yet commenced.

Related Party Transactions

The Bank leases its branch located at 2 Rush Street, Schenectady, New York, under a lease agreement through February, 2033 from a member of the Corporation's Board of Directors with monthly rent and CAM related expenses totaling $9 thousand per month. Rent and CAM related expenses paid to this Board member totaled $27 thousand and $26 thousand for the three month periods ended March 31, 2024 and 2023, respectively.

LEASES

LEASES

Operating Leases

The Corporation leases certain branch properties under long-term, operating lease agreements. The leases expire at various dates through 2033 and generally include renewal options. As of March 31, 2024, the weighted average remaining lease term was 7.56 years with a weighted average discount rate of 3.51%. Rent expense was $0.3 million for the three months ended March 31, 2024. Certain leases provide for increases in future minimum annual rent payments as defined in the lease agreements. The Corporation’s operating lease agreements contain both lease and non-lease components, which are generally accounted for separately. The Corporation’s lease agreements do not contain any residual value guarantees.

Leased branch properties at March 31, 2024 and December 31, 2023 consist of the following (in thousands):

	March 31, 2024		December 31, 2023
Operating lease right-of-use asset	$	5,648	$	6,449
Less: accumulated amortization	(200)		(801)
Less: lease termination	—		—
Add: new lease agreement and modifications	570		—
Operating lease right-of-use-assets, net	$	6,018	$	5,648

The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding CAM charges, as of March 31, 2024 (in thousands):

Year	Amount
2024	$	717
2025	959
2026	965
2027	977
2028	845
2029 and thereafter	2,590
Total minimum lease payments	7,053
Less: amount representing interest	(856)
Present value of net minimum lease payments	$	6,197

The Corporation had one operating lease that was signed on October 19, 2023, but had not yet commenced.

Finance Leases

The Corporation leases certain buildings under finance leases. The lease arrangements require monthly payments through 2036. As of March 31, 2024, the weighted average remaining lease term was 9.10 years with a weighted average discount rate of 3.42%. The Corporation has included these leases in premises and equipment as of March 31, 2024 and December 31, 2023 as follows (in thousands):

	March 31, 2024		December 31, 2023
Buildings	$	5,572	$	5,572
Less: accumulated depreciation	(2,955)		(2,872)
Net book value	$	2,617	$	2,700

The following is a schedule by year of future minimum lease payments under the capitalized lease, together with the present value of net minimum lease payments as of March 31, 2024 (in thousands):

Year	Amount
2024	$	293
2025	409
2026	425
2027	428
2028	428
2029 and thereafter	1,560
Total minimum lease payments	3,543
Less: amount representing interest	(564)
Present value of net minimum lease payments	$	2,979

As of March 31, 2024, the Corporation had no finance leases that were signed, but had not yet commenced.

Related Party Transactions

The Bank leases its branch located at 2 Rush Street, Schenectady, New York, under a lease agreement through February, 2033 from a member of the Corporation's Board of Directors with monthly rent and CAM related expenses totaling $9 thousand per month. Rent and CAM related expenses paid to this Board member totaled $27 thousand and $26 thousand for the three month periods ended March 31, 2024 and 2023, respectively.

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GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

The changes in goodwill included in the core banking segment during the three month periods ended March 31, 2024 and 2023 were as follows (in thousands):

	2024		2023
Beginning of year	$	21,824	$	21,824
Acquired goodwill	—		—
Ending balance March 31,	$	21,824	$	21,824

The Corporation had no aggregate amortization expense for the three month periods ended March 31, 2024 and 2023.

The amount of goodwill reflected in the Corporation's Unaudited Consolidated Financial statements is required to be tested by management for impairment on at least an annual basis. Goodwill impairment testing is performed annually as of December 31 and no impairment charges were incurred.

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

The Corporation is a party to certain financial instruments with off-balance sheet risk such as commitments under standby letters of credit, unused portions of lines of credit, overdraft protection and commitments to fund new loans. In accordance with GAAP, these financial instruments are not recorded in the financial statements. The Corporation's policy is to record such instruments when funded. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity risk.  Such transactions are generally used by the Corporation to manage clients' requests for funding and other client needs.

The following table lists the contractual amounts of financial instruments with off-balance sheet risk as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	14,387	$	61,128	$	23,809	$	78,790
Unused lines of credit	$	2,249	$	327,681	$	3,387	$	332,439
Standby letters of credit	$	—	$	18,201	$	—	$	11,317

Commitments to make real estate and home equity loans are generally made for periods of sixty days or less. As of March 31, 2024, the fixed rate real estate and home equity commitments to make loans have interest rates ranging from 5.63% to 7.38% and maturities ranging from four years to thirty years. Commitments to fund commercial draw notes are generally made for periods of three months to twenty-four months. As of March 31, 2024, the fixed rate commercial draw commitments have interest rates ranging from 2.79% to 8.17%.

Because many commitments and almost all standby letters of credit expire without being funded in whole or in part, the contract amounts are not estimates of future cash flows. Loan commitments and unused lines of credit have off-balance sheet credit risk because only origination fees are recognized on the consolidated balance sheet until commitments are fulfilled or expire. The credit risk amounts are equal to the contractual amounts, assuming the amounts are fully advanced and collateral or other security is of no value. The Corporation does not anticipate losses as a result of these transactions. These commitments also have off-balance sheet interest rate risk in that the interest rate at which these commitments were made may not be at market rates on the date the commitments are fulfilled.

In conjunction with the Corporation's adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), an allowance for credit losses on unfunded commitments was established as of January 1, 2023. As of March 31, 2024 and December 31, 2023, the allowance for credit losses on unfunded commitments was $0.7 million and $0.9 million, respectively.

In the normal course of business, there are various outstanding claims and legal proceedings involving the Corporation or its subsidiaries. The Corporation believes that it is not a party to any pending legal, arbitration, or regulatory proceedings that could have a material adverse impact on its financial results or liquidity.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) represents the net unrealized holding gains or losses on securities available for sale and the funded status of the Corporation's defined benefit pension plan and other benefit plans, as of the consolidated balance sheet dates, net of the related tax effect.

The following is a summary of the changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods indicated (in thousands):

	Unrealized Gains and Losses on Securities Available for Sale		Defined Benefit and Other Benefit Plans		Total
Balance at January 1, 2024	$	(62,800)	$	(3,213)	$	(66,013)
Other comprehensive income before reclassification	(4,070)		—		(4,070)
Amounts reclassified from accumulated other comprehensive income	—		5		5
Net current period other comprehensive income (loss)	(4,070)		5		(4,065)
Balance at March 31, 2024	$	(66,870)	$	(3,208)	$	(70,078)

	Unrealized Gains and Losses on Securities Available for Sale		Defined Benefit and Other Benefit Plans		Total
Balance at January 1, 2023	$	(71,296)	$	(3,961)	$	(75,257)
Other comprehensive income before reclassification	5,775		—		5,775
Amounts reclassified from accumulated other comprehensive income	—		9		9
Net current period other comprehensive income	5,775		9		5,784
Balance at March 31, 2023	$	(65,521)	$	(3,952)	$	(69,473)

The following is the reclassification out of accumulated other comprehensive income for the periods indicated (in thousands):

Details about Accumulated Other Comprehensive Income (Loss) Components	Three Months Ended   March 31,				Affected Line Item in the Statement Where Net Income is Presented
	2024		2023
Amortization of defined pension plan and other benefit plan items:
Prior service costs (a)	$	—	$	—	Other components of net periodic pension and postretirement benefits
Actuarial losses (a)	7		12		Other components of net periodic pension and postretirement benefits
Tax effect	(2)		(3)		Income tax expense
Net of tax	5		9
Total reclassification for the period, net of tax	$	5	$	9

(a) These accumulated other comprehensive income components are included in the computation of net periodic pension and other benefit plan costs (see Note 11 for additional information).

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REVENUE FROM CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

All of the Corporation's revenue from contracts with customers in the scope of ASC 606 is recognized within non-interest income. The following tables present the Corporation's non-interest income by revenue stream and reportable segment for the three months ended March 31, 2024 and 2023 (in thousands). Items outside the scope of ASC 606 are noted as such.

	Three Months Ended March 31, 2024
Revenue by Operating Segment: Non-interest income	Core Banking		WMG		Holding Company and CFS(b)		Total
Service charges on deposit accounts
Overdraft fees	$	710	$	—	$	—	$	710
Other	239		—		—		239
Interchange revenue from debit card transactions	1,063		—		—		1,063
WMG fee income	—		2,703		—		2,703
CFS fee and commission income	—		—		228		228
Net gains on sales of loans(a)	32		—		—		32
Loan servicing fees(a)	36		—		—		36
Changes in fair value of equity investments(a)	117		—		(16)		101
Income from bank-owned life insurance(a)	9		—		—		9
Other(a)	536		—		—		536
Total non-interest income (loss)	$	2,742	$	2,703	$	212	$	5,657

(a) Not within scope of ASC 606.

(b) The Holding Company, and CFS column above includes amounts to eliminate transactions between segments.

	Three Months Ended March 31, 2023
Revenue by Operating Segment: Non-interest income	Core Banking		WMG		Holding Company, CFS, and CRM(b)(c)		Total
Service charges on deposit accounts
Overdraft fees	$	714	$	—	$	—	$	714
Other	227		—		—		227
Interchange revenue from debit card transactions	1,133		—		—		1,133
WMG fee income	—		2,580		—		2,580
CFS fee and commission income	—		—		241		241
Net gains on sales of loans(a)	5		—		—		5
Loan servicing fees(a)	36		—		—		36
Changes in fair value of equity investments(a)	78		—		(6)		72
Income from bank-owned life insurance(a)	10		—		—		10
Other(a)	448		—		(43)		405
Total non-interest income	$	2,651	$	2,580	$	192	$	5,423

(a) Not within scope of ASC 606.

(b) The Holding Company, CFS, and CRM column above includes amounts to eliminate transactions between segments.

(c) Chemung Risk Management, Inc. (CRM) was dissolved December 6, 2023.

A description of the Corporation's revenue streams accounted for under ASC 606 follows:

Service Charges on Deposit Accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which included services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Corporation fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are recognized at the time the maintenance occurs. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance.

Interchange Income from Debit Card Transactions: The Corporation earns interchange fees from debit cardholder transactions conducted through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with transaction processing services provided to the cardholder.

WMG Fee Income (Gross): The Corporation earns wealth management fees from its contracts with customers to manage assets for investment, and/or to conduct transactions on their accounts. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management (AUM) at quarter-end.

CFS Fee and Commission Income (Net): The Corporation earns fees from investment brokerage services provided to its customers by a third-party service provider. The Corporation receives commissions from the third-party service provider on a monthly basis based upon customer activity for the month. The Corporation (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers. Investment brokerage fees are presented net of related costs. The Corporation also earns fees from tax services provided to its customers.

Net Gains/Losses on Sales of OREO: The Corporation records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Corporation finances the sale of OREO to the buyer, the Corporation assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Corporation adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.

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COMPONENTS OF QUARTERLY AND YEAR TO DATE NET PERIODIC BENEFIT COSTS

3 Months Ended

Mar. 31, 2024

Retirement Benefits [Abstract]

COMPONENTS OF QUARTERLY AND YEAR TO DATE NET PERIODIC BENEFIT COSTS

COMPONENTS OF QUARTERLY AND YEAR TO DATE NET PERIODIC BENEFIT COSTS

The components of net periodic expense for the Corporation’s pension and other benefit plans for the periods indicated are as follows (in thousands):

	Three Months Ended   March 31,
	2024		2023
Qualified Pension Plan
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	378		396
Expected return on plan assets	(629)		(596)
Amortization of unrecognized transition obligation	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	—		6
Net periodic pension benefit	$	(251)	$	(194)
Supplemental Pension Plan
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	11		12
Expected return on plan assets	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	3		2
Net periodic supplemental pension cost	$	14	$	14
Postretirement Plan, Medical and Life
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	1		1
Expected return on plan assets	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	4		5
Net periodic postretirement, medical and life benefit	$	5	$	6

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

SEGMENT REPORTING

SEGMENT REPORTING

The Corporation manages its operations through two primary business segments: core banking and WMG. The core banking segment provides revenues by attracting deposits from the general public and using such funds to originate consumer, commercial, commercial real estate, and residential mortgage loans, primarily in the Corporation’s local markets, and to invest in securities. The WMG services segment provides revenues by providing trust and investment advisory services to clients.

Accounting policies for the segments are the same as those described in Note 1 of the Corporation’s 2023 Annual Report on Form 10-K, which was filed with the SEC on March 13, 2024. Summarized financial information concerning the Corporation’s reportable segments and the reconciliation to the Corporation’s consolidated results are shown in the following table. Income taxes are allocated based on the separate taxable income of each entity and indirect overhead expenses are allocated based on reasonable and equitable allocations applicable to the reportable segment.

The Holding Company and CFS columns below include amounts to eliminate transactions between segments (in thousands).

	Three months ended March 31, 2024
	Core Banking		WMG		Holding Company, and CFS		Consolidated Totals
Interest and dividend income	$	31,211	$	—	$	8	$	31,219
Interest expense	13,130		—		—		13,130
Net interest income	18,081		—		8		18,089
Provision for credit losses	(2,040)		—		—		(2,040)
Net interest income after provision for credit losses	20,121		—		8		20,129
Other non-interest income	2,742		2,703		212		5,657
Other non-interest expenses	14,539		1,895		264		16,698
Income (loss) before income tax expense (benefit)	8,324		808		(44)		9,088
Income tax expense (benefit)	1,870		182		(14)		2,038
Segment net income (loss)	$	6,454	$	626	$	(30)	$	7,050
Segment assets	$	2,778,785	$	2,898	$	3,207	$	2,784,890

	Three months ended March 31, 2023
	Core Banking		WMG		Holding Company, CFS, and CRM(1)		Consolidated Totals
Interest and dividend income	$	26,203	$	—	$	27	$	26,230
Interest expense	6,283		—				6,283
Net interest income	19,920		—		27		19,947
Provision for credit losses	277		—		—		277
Net interest income after provision for credit losses	19,643		—		27		19,670
Other non-interest income	2,651		2,580		192		5,423
Other non-interest expenses	13,696		1,798		342		15,836
Income (loss) before income tax expense (benefit)	8,598		782		(123)		9,257
Income tax expense (benefit)	1,831		177		(21)		1,987
Segment net income (loss)	$	6,767	$	605	$	(102)	$	7,270
Segment assets	$	2,644,158	$	2,538	$	1,714	$	2,654,183

(1)Chemung Risk Management, Inc. (CRM) was dissolved December 6, 2023.

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STOCK COMPENSATION

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK COMPENSATION

STOCK COMPENSATION

Pursuant to the Corporation's 2021 Equity Incentive Plan (the "2021 Plan") the Corporation may make discretionary grants of restricted shares of the Corporation’s common stock to or for the benefit of employees selected to participate in the 2021 Plan, the chief executive officer and members of the Board of Directors. Awards are based on the performance, responsibility and contributions of the individual and are targeted at an average of the peer group. The maximum number of shares of the Corporation’s common stock that may be awarded as restricted shares related to the 2021 Plan may not exceed 170,000, upon which time a new plan may be created. Compensation expense for shares granted will be recognized over the vesting period of the award based upon the closing price of the Corporation's stock on the grant date.

During the three months ended March 31, 2024 and 2023, 12,088 and 13,069 shares, respectively, were re-issued from treasury to fund stock compensation. The expense related to these grants is recognized over a one year or a five year vesting period. Total expense related to the 2021 Plan of $0.3 million and $0.4 million was recognized during each of the three month periods ended March 31, 2024 and 2023, respectively.

A summary of restricted stock activity for the three months ended March 31, 2024 is presented below:

	Shares	Weighted–Average Grant Date Fair Value
Nonvested at January 1, 2024	62,984	$45.87
Granted	12,088	$48.11
Vested	(13,208)	$45.86
Forfeited or cancelled	—	—
Nonvested at March 31, 2024	61,864	$46.31

As of March 31, 2024, there was $2.1 million of total unrecognized compensation cost related to nonvested shares granted under the 2021 Plan. The cost is expected to be recognized over a weighted-average period of 3.81 years. The total fair value of shares vested was $0.6 million for each of the three month periods ended March 31, 2024 and 2023, respectively. Due to the adoption of the 2021 Plan, certain grants were transitioned to a one-year vesting period.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net income	$ 7,050	$ 7,270

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Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Organization

Organization

The Corporation, through its wholly-owned subsidiaries, the Bank and CFS, provides a wide range of banking, financing, fiduciary, and other financial services to its clients.  The Corporation and the Bank are subject to the regulations of certain federal and state agencies and undergo periodic examinations by those regulatory authorities.

Chemung Risk Management, Inc., (CRM), a wholly-owned subsidiary of the Corporation, was a Nevada-based captive insurance company which insured against certain risks unique to the operations of the Corporation and its subsidiaries and for which insurance may not have been currently available or economically feasible in today's insurance marketplace. CRM was dissolved by the Corporation, effective December 6, 2023.

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in conformity with GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X of the Exchange Act. These financial statements include the accounts of the Corporation and its subsidiaries, and all significant intercompany balances and transactions are eliminated in consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and disclosures provided, and actual results could differ. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures necessary for the fair presentation of the accompanying consolidated financial statements have been included. The unaudited consolidated financial statements should be read in conjunction with the Corporation's 2023 Annual Report on Form 10-K for the year ended December 31, 2023. The results of operations for any interim periods are not necessarily indicative of the results which may be expected for the entire year or any other period.

Reclassifications

Reclassifications

Amounts in the prior year financial statements are reclassified whenever necessary to conform to the current year's presentation.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In March 2024, the U.S. Securities and Exchange Commission ("SEC") issued SEC Release No. 33-11275, adopting its final rule“The Enhancement and Standardization of Climate-Related Disclosures for Investors.” This rule will require registrants to disclose limited climate-related information in registration statements and annual reports. In April 2024, the SEC voluntarily stayed the implementation of its final rule, pending judicial review. As a smaller reporting company, these disclosure requirements, once issued in the final rule, would apply to the Corporation's filings for the fiscal year beginning January 1, 2027.

Accounting Standards Pending Adoption

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements, which modifies the disclosure or presentation requirements of a variety of Topics in the Accounting Standards Codification, in response to SEC Release No. 33-10532, Disclosure Update and Simplifications, issued on August 17, 2018. The SEC identified several disclosure requirements that overlap with U.S. GAAP, but require incremental information to comply with disclosure standards in Regulations S-X and Regulation S-K. ASU 2023-06 codifies specific amendments to align the codification with SEC regulations. The effective date for each amendment is that date on which each disclosure requirement is removed from Regulation S-K or Regulation S-X. The Corporation anticipates that certain amendments will pertain to the Corporation's financial disclosures or presentation, but cannot determine with certainty which amendments are applicable until removal from Regulation S-K or Regulation S-X.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, enhancing disclosure requirements for reportable segments, focusing on significant segment expenses, the identification of a segment's chief decision making officer, and the metrics used by the chief decision making officer in evaluating segment-level operating performance. The ASU is effective for fiscal years beginning after December 15, 2023. The Corporation will begin providing enhanced segment reporting disclosures in accordance with ASU 2023-07 for the fiscal year ending December 31, 2024, and for interim periods thereafter.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require public business entities to disclose annually a tabular rate reconciliation, including specific items such as state and local income tax, tax credits, nontaxable or nondeductible items, among others, and a separate disclosure requiring disaggregation of reconciling items as described above which equal or exceed 5% percent of the product of multiplying income from continuing operations by the applicable statutory income tax rate. The ASU is effective for all public business entities for annual periods beginning after December 31, 2024.

Use of Analogous Accounting Standards

Under U.S. GAAP, there is no specific guidance related to government assistance received by a for-profit entity that is not in the form of a loan, income tax credit, or revenue from a contract with a customer. Therefore, the Corporation must rely upon analogous accounting standards to determine appropriate treatment when such circumstances arise. During 2023, the Corporation accounted for the recognition of the Employee Retention Tax Credit (ERTC) using ASC 958-605, Revenue Recognition for Not-for-Profit entities. ASC 958-10-15-1 specifies that certain Subtopics within ASC 958-605 also apply to business entities.

The Corporation considers the recognition of the ERTC to be analogous to the stipulations for "conditional contributions" under ASC 958-605-20. Conditional contributions have at least one barrier needing to be overcome before the recipient is entitled to the assets transferred or promised; there must be a right-of-return to the contributor; and barriers to the condition should be measurable. The Corporation recognized the gross amount of the ERTC through non-interest income during the period in which the barrier was overcome, identified as the period during which amended tax returns were filed. The Corporation incurred and recognized additional income tax expense during 2023 in relation to its amended tax returns.

Earnings Per Common Share

Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. Issuable shares, including those related to directors’ restricted stock shares, are considered outstanding and are included in the computation of basic earnings per share. All outstanding unvested share-based payment awards that contain rights to non-forfeitable dividends are considered participating securities for this calculation. Restricted stock awards are grants of participating securities and are considered outstanding at grant date. Earnings per share information is adjusted to present comparative results for stock splits and stock dividends that occur.

Fair Value Measurement

Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Corporation used the following methods and significant assumptions to estimate fair value on a recurring basis:

Available for Sale Securities:  The fair values of securities available for sale are usually determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs), or matrix pricing, which is a mathematical technique widely used to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3 inputs).

Equity Investments: Securities that are held to fund a deferred compensation plan and securities that have a readily determinable fair market value, are recorded at fair value with changes in fair value included in earnings. The fair values of equity investments are determined by quoted market prices (Level 1 inputs).

Individually Analyzed Loans: At the time a loan is considered individually analyzed, it is valued at the lower of cost or fair value. Individually analyzed loans carried at fair value have been partially charged-off or receive specific allocations as part of the allowance for credit loss accounting. For collateral dependent loans, fair value is commonly based on real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation, and management’s expertise and knowledge of the client and client’s business, typically resulting in a Level 3 fair value classification. Individually analyzed loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly.

OREO: Assets acquired through or in lieu of loan foreclosures are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for both collateral dependent loans and OREO are performed by certified general appraisers (commercial properties) or certified residential appraisers (residential properties) whose qualifications and licenses have been reviewed and verified by the Corporation. Once received, appraisals are reviewed for reasonableness of assumptions, approaches utilized, Uniform Standards of Professional Appraisal Practice and other regulatory compliance, as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Appraisals are generally completed within the twelve month period prior to a property being placed into OREO. On individually analyzed loans, appraisal values are adjusted based on the age of the appraisal, the position of the lien, the type of the property and its condition.

Derivatives: The fair values of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2 inputs). Derivatives are traded in an over-the-counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices, and indices to generate continuous yield or pricing curves, prepayment rates, and volatility factors to value the position. The Corporation also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counter-party's nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Corporation has considered the impact of any applicable credit enhancements, such as collateral postings. Although the Corporation has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize credit default rate assumptions (Level 3 inputs).

Revenue

A description of the Corporation's revenue streams accounted for under ASC 606 follows:

Service Charges on Deposit Accounts: The Corporation earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Transaction-based fees, which included services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Corporation fulfills the customer's request. Account maintenance fees, which relate primarily to monthly maintenance, are recognized at the time the maintenance occurs. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer's account balance.

Interchange Income from Debit Card Transactions: The Corporation earns interchange fees from debit cardholder transactions conducted through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with transaction processing services provided to the cardholder.

WMG Fee Income (Gross): The Corporation earns wealth management fees from its contracts with customers to manage assets for investment, and/or to conduct transactions on their accounts. These fees are primarily earned over time as the Corporation provides the contracted monthly or quarterly services and are generally assessed based on a tiered scale of the market value of assets under management (AUM) at quarter-end.

CFS Fee and Commission Income (Net): The Corporation earns fees from investment brokerage services provided to its customers by a third-party service provider. The Corporation receives commissions from the third-party service provider on a monthly basis based upon customer activity for the month. The Corporation (i) acts as an agent in arranging the relationship between the customer and the third-party service provider and (ii) does not control the services rendered to the customers. Investment brokerage fees are presented net of related costs. The Corporation also earns fees from tax services provided to its customers.

Net Gains/Losses on Sales of OREO: The Corporation records a gain or loss from the sale of OREO when control of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Corporation finances the sale of OREO to the buyer, the Corporation assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain or loss on sale is recorded upon the transfer of control of the property to the buyer. In determining the gain or loss on the sale, the Corporation adjusts the transaction price and related gain (loss) on sale if a significant financing component is present.

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SECURITIES (Tables)

3 Months Ended

Mar. 31, 2024

Investments, Debt and Equity Securities [Abstract]

Schedule of Amortized Cost and Estimated Fair Value of Securities Available for Sale

Amortized cost and estimated fair value of securities available for sale are as follows (in thousands):

	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
U.S. Treasury notes and bonds	$	59,828	$	—	$	4,666	$	—	$	55,162
Mortgage-backed securities, residential	467,125		7		77,425		—		389,707
Obligations of states and political subdivisions	39,415		—		1,270		—		38,145
Corporate bonds and notes	25,750		—		4,818		—		20,932
SBA loan pools	64,522		57		2,497		—		62,082
Total	$	656,640	$	64	$	90,676	$	—	$	566,028

	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Estimated Fair Value
U.S. Treasury notes and bonds	$	59,812	$	—	$	4,480	$	—	$	55,332
Mortgage-backed securities, residential	476,240		6		72,422		—		403,824
Obligations of states and political subdivisions	39,503		—		817		—		38,686
Corporate bonds and notes	25,750		—		5,081		—		20,669
SBA loan pools	67,787		75		2,380		—		65,482
Total	$	669,092	$	81	$	85,180	$	—	$	583,993

Schedule of Amortized Cost and Estimated Fair Value of Securities Held to Maturity

Amortized cost and estimated fair value of securities held to maturity are as follows (in thousands):

	March 31, 2024
	Amortized Cost		Unrecognized Gains		Unrecognized Losses		Estimated Fair Value		Allowance for Credit Losses
Obligations of states and political subdivisions	$	785	$	—	$	—	$	785	$	—

	December 31, 2023
	Amortized Cost		Unrecognized Gains		Unrecognized Losses		Estimated Fair Value		Allowance for Credit Losses
Obligations of states and political subdivisions	$	785	$	—	$	—	$	785	$	—

Schedule of Amortized Cost and Estimated Fair Value of Debt Securities by Contractual Maturity

Securities not due at a single maturity date are shown separately (in thousands):

	March 31, 2024
	Available for Sale				Held to Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within one year	$	8,499	$	8,297	$	—	$	—
After one, but within five years	97,948		90,687		145		145
After five, but within ten years	18,076		14,838		640		640
After ten years	470		417		—		—
	124,993		114,239		785		785
Mortgage-backed securities, residential	467,125		389,707		—		—
Collateralized mortgage obligations	—		—		—		—
SBA loan pools	64,522		62,082		—		—
Total	$	656,640	$	566,028	$	785	$	785

Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value

The following tables summarize the investment securities available for sale with unrealized losses at March 31, 2024 and December 31, 2023 by aggregated major security type and length of time in a continuous unrealized loss position (in thousands):

	Less than 12 months				12 months or longer				Total
March 31, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury notes and bonds	$	—	$	—	$	55,162	$	4,666	$	55,162	$	4,666
Mortgage-backed securities, residential	—		—		388,878		77,425		388,878		77,425
Obligations of states and political subdivisions	1,154		24		36,991		1,246		38,145		1,270
Corporate bonds and notes	—		—		20,932		4,818		20,932		4,818
SBA loan pools	1,067		2		54,894		2,495		55,961		2,497
Total temporarily impaired securities	$	2,221	$	26	$	556,857	$	90,650	$	559,078	$	90,676

	Less than 12 months				12 months or longer				Total
December 31, 2023	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury notes and bonds	$	—	$	—	$	55,332	$	4,480	$	55,332	$	4,480
Mortgage-backed securities, residential	—		—		402,986		72,422		402,986		72,422
Obligations of states and political subdivisions	17,891		241		20,686		576		38,577		817
Corporate bonds and notes	7,492		2,508		13,177		2,573		20,669		5,081
SBA loan pools	3,914		13		54,468		2,367		58,382		2,380
Total temporarily impaired securities	$	29,297	$	2,762	$	546,649	$	82,418	$	575,946	$	85,180

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LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)

3 Months Ended

Mar. 31, 2024

Credit Loss [Abstract]

Schedule of Composition of the Loan Portfolio by Type

The composition of the loan portfolio, net of deferred origination fees and costs, is summarized as follows (in thousands):

	March 31, 2024		December 31, 2023
Commercial and agricultural:
Commercial and industrial	$	279,414	$	264,140
Agricultural	221		256
Commercial mortgages:
Construction	141,604		138,887
Commercial mortgages, other	1,004,198		984,038
Residential mortgages	277,246		277,992
Consumer loans:
Home equity lines and loans	87,608		87,056
Indirect consumer loans	204,081		210,423
Direct consumer loans	9,238		9,872
Total loans, net of deferred loan fees and costs	2,003,610		1,972,664
Allowance for credit losses	(20,471)		(22,517)
Loans, net	$	1,983,139	$	1,950,147

Schedules of Allowance for Credit Loss

The following tables present the activity in the allowance for credit losses by portfolio segment for the three month periods ended March 31, 2024 and March 31, 2023 (in thousands):

	Three Months Ended March 31, 2024
Allowance for credit losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Beginning balance, January 1, 2024	$	5,055	$	12,026	$	2,194	$	3,242	$	22,517
Charge-offs	—		—		(16)		(351)		(367)
Recoveries	37		1		22		125		185
Net recoveries (charge-offs)	37		1		6		(226)		(182)
Provision (credit) (1)	(576)		(1,660)		(138)		510		(1,864)
Ending balance, March 31, 2024	$	4,516	$	10,367	$	2,062	$	3,526	$	20,471

(1)Additional provision related to off-balance sheet exposure was a credit of $176 thousand for the three months ended March 31, 2024.

	Three Months Ended March 31, 2023
Allowance for credit losses	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Beginning balance, January 1, 2023	$	3,373	$	11,576	$	1,845	$	2,865	$	19,659
Cumulative effect adjustment for the adoption of ASC 326	909		(695)		(16)		176		374
Beginning balance after cumulative effect adjustment	4,282		10,881		1,829		3,041		20,033
Charge-offs	(190)		—		—		(193)		(383)
Recoveries	6		—		—		108		114
Net recoveries (charge-offs)	(184)		—		—		(85)		(269)
Provision (credit) (1)	(45)		102		63		191		311
Ending balance, March 31, 2023	$	4,053	$	10,983	$	1,892	$	3,147	$	20,075

(1)Additional provision related to off-balance sheet exposure was a credit of $34 thousand for the three months ended March 31, 2023.

The following table presents the activity in the allowance for credit losses on unfunded commitments for the three month periods ended March 31, 2024 and 2023 (in thousands):

	For the Three Months Ended
Allowance for credit losses on unfunded commitments	March 31, 2024		March 31, 2023
Beginning balance	$	919	$	—
Impact of ASC 326 adoption	—		1,082
Provision (credit) for credit losses on unfunded commitments	(176)		(34)
Ending balance	$	743	$	1,048

The following table presents the provision for credit losses on loans and unfunded commitments for the three month periods ended March 31, 2024 and March 31, 2023 (in thousands):

	For the Three Months Ended
Provision (credit) for credit losses	March 31, 2024		March 31, 2023
Provision (credit) for credit losses on loans	$	(1,864)	$	311
Provision (credit) for credit losses on unfunded commitments	(176)		(34)
Total provision (credit) for credit losses	$	(2,040)	$	277

The following tables present the balance in the allowance for credit losses by portfolio segment, as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
Allowance for credit losses	Commercial and		Commercial		Residential		Consumer
Ending allowance balance attributable to loans:	Agricultural		Mortgages		Mortgages		Loans		Total
Individually analyzed	$	1,663	$	24	$	—	$	—	$	1,687
Collectively analyzed	2,853		10,343		2,062		3,526		18,784
Total ending allowance balance	$	4,516	$	10,367	$	2,062	$	3,526	$	20,471

	December 31, 2023
Allowance for credit losses	Commercial and		Commercial		Residential		Consumer
Ending allowance balance attributable to loans:	Agricultural		Mortgages		Mortgages		Loans		Total
Individually analyzed	$	1,928	$	27	$	—	$	—	$	1,955
Collectively analyzed	3,127		11,999		2,194		3,242		20,562
Total ending allowance balance	$	5,055	$	12,026	$	2,194	$	3,242	$	22,517

The following tables present the amortized cost basis of loans by portfolio segment, as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
Amortized cost basis of loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Individually analyzed	$	1,746	$	3,965	$	—	$	—	$	5,711
Collectively analyzed	277,889		1,141,837		277,246		300,927		1,997,899
Total ending loans balance	$	279,635	$	1,145,802	$	277,246	$	300,927	$	2,003,610

	December 31, 2023
Amortized cost basis of loans:	Commercial and Agricultural		Commercial Mortgages		Residential Mortgages		Consumer Loans		Total
Individually analyzed	$	2,067	$	5,968	$	—	$	—	$	8,035
Collectively analyzed	262,329		1,116,957		277,992		307,351		1,964,629
Total ending loans balance	$	264,396	$	1,122,925	$	277,992	$	307,351	$	1,972,664

Schedule of Financing Receivable, Modified

The following tables summarize the amortized cost basis of loans modified during the three month period ended March 31, 2023 (in thousands):

	Three Months Ended March 31, 2023
Loans modified under ASU 2022-02:	Principal Reduction		Interest Rate Reduction		Term Extension		Payment Delay		Combination		Total		(%) of Loan Class (1)
Commercial mortgages:
Commercial mortgages, other	$	—	$	—	$	277	$	—	$	—	$	277	0.03	%

(1) Represents the amortized cost basis of loans modified during the period as a percentage of the period-end loan balances by class.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the three month period ended March 31, 2023 (in thousands):

	Three Months Ended March 31, 2023
Effect of loan modifications under ASU 2022-02:	Principal Reduction (in thousands)	Weighted-average interest rate reduction (%)	Weighted-average term extension (in months)	Weighted-average payment delay (in months)
Commercial mortgages:
Commercial mortgages, other	$—	—%	60 months	0

Schedule of Recorded Investment in Past Due and Non-Accrual Status by Class of Loans

The following tables present the performance of such loans that have been modified in the twelve month period preceding March 31, 2024 and the three month period preceding March 31, 2023 (in thousands):

	Twelve Months Ended March 31, 2024
Past Due Status of Modifications under ASU 2022-02:	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	—	$	—	$	675	$	129	$	804
Consumer loans:
Home equity lines and loans	—		—		—		116		116
Total	$	—	$	—	$	675	$	245	$	920

	Three Months Ended March 31, 2023 (1)
Past Due Status of Modifications under ASU 2022-02:	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Loans Not Past Due		Total
Commercial mortgages, other	$	—	$	—	$	—	$	277	$	277

(1) Represents loans which were modified during the three month period subsequent to the adoption of ASU 2022-02 on January 1, 2023.

The following table presents the amortized cost basis in nonaccrual loans without an associated allocation in the allowance for credit losses, total nonaccrual loans, and loans past due greater than 90 days and still accruing, by class of loan as of March 31, 2024 and December 31, 2023 (in thousands):

	Nonaccrual with No Allowance for Credit Losses				Nonaccrual				Loans Past Due 90 Days or More and Still Accruing
	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Commercial and agricultural:
Commercial and industrial	$	23	$	76	$	1,615	$	1,904	$	8	$	10
Agricultural	—		—		2		26		—		—
Commercial mortgages:
Construction	2,207		2,209		2,207		2,209		—		—
Commercial mortgages, other	1,734		3,732		1,758		3,760		—		—
Residential mortgages	1,118		1,315		1,118		1,315		—		—
Consumer loans:
Home equity lines and loans	496		508		496		508		—		—
Indirect consumer loans	631		687		631		687		—		—
Direct consumer loans	8		2		8		2		—		—
Total	$	6,217	$	8,529	$	7,835	$	10,411	$	8	$	10

The following tables present the aging of the amortized cost basis of loans as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	181	$	238	$	683	$	1,102	$	278,312	$	279,414
Agricultural	—		—		—		—		221		221
Commercial mortgages:
Construction	—		—		2,207		2,207		139,397		141,604
Commercial mortgages, other	1,012		2,238		175		3,425		1,000,773		1,004,198
Residential mortgages	1,529		594		589		2,712		274,534		277,246
Consumer loans:
Home equity lines and loans	612		100		282		994		86,614		87,608
Indirect consumer loans	1,063		379		379		1,821		202,260		204,081
Direct consumer loans	18		20		6		44		9,194		9,238
Total	$	4,415	$	3,569	$	4,321	$	12,305	$	1,991,305	$	2,003,610

	December 31, 2023
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total Past Due		Loans Not Past Due		Total
Commercial and agricultural:
Commercial and industrial	$	1,196	$	31	$	10	$	1,237	$	262,903	$	264,140
Agricultural	—		—		—		—		256		256
Commercial mortgages:
Construction	2,164		—		2,207		4,371		134,516		138,887
Commercial mortgages, other	1,022		103		261		1,386		982,652		984,038
Residential mortgages	2,244		201		585		3,030		274,962		277,992
Consumer loans:
Home equity lines and loans	461		87		366		914		86,142		87,056
Indirect consumer loans	2,473		501		426		3,400		207,023		210,423
Direct consumer loans	2		20		—		22		9,850		9,872
Total	$	9,562	$	943	$	3,855	$	14,360	$	1,958,304	$	1,972,664

Schedule of Analysis of Collateral Dependent Loans

The following table presents the amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral dependent as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Amortized Cost Basis		Related Allowance		Amortized Cost Basis		Related Allowance
Commercial and agricultural:
Commercial and industrial (3)	$	282	$	200	$	353	$	214
Agricultural (3)	2		1		26		26
Commercial mortgages:
Construction (1)	2,207		—		2,209		—
Commercial mortgages, other (1) (2) (3)	1,757		24		3,759		27
Total	$	4,248	$	225	$	6,347	$	267

(1) Secured by commercial real estate

(2) Secured by residential real estate

(3) Secured by business assets

Schedule of Impaired Financing Receivables

he following tables present the average amortized cost basis and interest income recognized on loans individually analyzed, by class of loans, for the three month periods ended March 31, 2024 and 2023 (in thousands):

	Three Months Ended   March 31, 2024				Three Months Ended   March 31, 2023
With no related allowance recorded:	Average Amortized Cost Basis		Interest Income Recognized (1)		Average Amortized Cost Basis		Interest Income Recognized (1)
Commercial and agricultural:
Commercial and industrial	$	49	$	1	$	729	$	—
Agricultural	—		—		—		—
Commercial mortgages:
Construction	2,208		—		—		—
Commercial mortgages, other	2,733		—		4,053		7
Residential mortgages	—		—		715		9
Consumer loans:
Home equity lines & loans	—		—		254		—
With an allowance recorded:
Commercial and agricultural:
Commercial and industrial	1,844		3		1,049		2
Agricultural	14		—		—		—
Commercial mortgages:
Commercial mortgages, other	25		—		36		—
Total	$	6,873	$	4	$	6,836	$	18

(1) Cash basis interest income approximates interest income recognized.

Schedule of Risk Category of the Recorded Investment of Loans by Class of Loans

Based on the analyses performed as of March 31, 2024, the risk category of the amortized cost basis of loans by class and vintage, as well as gross charge-offs by class and vintage for the period, were as follows (in thousands):

	Term Loans Amortized Cost by Origination Year												Revolving Loans Amortized Cost		Revolving Loans Converted to Term		Total
	2024		2023		2022		2021		2020		Prior
Commercial & industrial
Pass	$	10,885	$	39,011	$	34,108	$	21,370	$	12,349	$	39,698	$	92,497	$	1,643	$	251,561
Special mention	—		—		9,159		—		4,060		4,586		7,223		453		25,481
Substandard	—		89		221		788		83		205		—		176		1,562
Doubtful	24		—		—		—		—		764		22		—		810
Total	10,909		39,100		43,488		22,158		16,492		45,253		99,742		2,272		279,414
Gross charge-offs	—		—		—		—		—		—		—		—		—
Agricultural
Pass	—		—		14		143		—		—		62		—		219
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		2		—		—		—		—		—		—		2
Doubtful	—		—		—		—		—		—		—		—		—
Total	—		2		14		143		—		—		62		—		221
Gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	1,076		48,500		77,995		9,686		—		1,658		482		—		139,397
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		2,207		—		—		2,207
Doubtful	—		—		—		—		—		—		—		—		—
Total	1,076		48,500		77,995		9,686		—		3,865		482		—		141,604
Gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial mortgages
Pass	13,784		117,235		258,049		171,090		111,407		296,080		5,127		742		973,514
Special mention	—		—		2,522		8,092		2,590		8,082		2,001		—		23,287
Substandard	—		2,412		1,081		339		1,012		2,432		97		—		7,373
Doubtful	—		—		—		—		—		24		—		—		24
Total	13,784		119,647		261,652		179,521		115,009		306,618		7,225		742		1,004,198
Gross charge-offs	—		—		—		—		—		—		—		—		—
Residential mortgages
Not rated	4,014		20,000		57,204		59,311		70,050		65,549		—		—		276,128
Substandard	—		—		75		342		247		454		—		—		1,118
Total	4,014		20,000		57,279		59,653		70,297		66,003		—		—		277,246
Gross charge-offs	—		—		—		—		—		16		—		—		16
Home equity lines and loans
Not rated	3,298		12,904		15,846		5,577		3,009		12,494		32,773		1,095		86,996
Special mention	—		—		116		—		—		—		—		—		116
Substandard	—		—		76		—		—		291		86		43		496
Total	3,298		12,904		16,038		5,577		3,009		12,785		32,859		1,138		87,608
Gross charge-offs	—		—		—		—		—		11		—		—		11
Indirect consumer
Not rated	11,861		67,401		90,413		20,411		7,652		5,712		—		—		203,450
Substandard	—		139		208		141		49		94		—		—		631
Total	11,861		67,540		90,621		20,552		7,701		5,806		—		—		204,081
Gross charge-offs	—		104		127		29		24		54		—		—		338
Direct consumer
Not rated	700		2,622		2,391		607		174		332		2,401		3		9,230
Substandard	—		—		—		5		2		—		1		—		8
Total	700		2,622		2,391		612		176		332		2,402		3		9,238
Gross charge-offs	—		—		—		—		—		—		2		—		2
Total loans	$	45,642	$	310,315	$	549,478	$	297,902	$	212,684	$	440,662	$	142,772	$	4,155	$	2,003,610
Total gross charge-offs	$	—	$	104	$	127	$	29	$	24	$	81	$	2	$	—	$	367

Based on the analyses performed as of December 31, 2023, the risk category of the amortized cost basis of loans by class and vintage, as well as gross charge-offs by class and vintage for the period, were as follows (in thousands):

	Term Loans Amortized Cost by Origination Year												Revolving Loans Amortized Cost		Revolving Loans Converted to Term		Total
	2023		2022		2021		2020		2019		Prior
Commercial & industrial
Pass	$	41,925	$	40,564	$	21,742	$	13,541	$	31,233	$	10,523	$	77,176	$	1,662	$	238,366
Special mention	185		4,608		—		4,020		—		4,690		9,137		482		23,122
Substandard	—		24		991		109		23		456		—		161		1,764
Doubtful	—		—		—		—		—		790		75		23		888
Total	42,110		45,196		22,733		17,670		31,256		16,459		86,388		2,328		264,140
Gross charge-offs	—		—		—		—		9		272		—		—		281
Agricultural
Pass	—		15		150		—		—		—		65		—		230
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		26		26
Doubtful	—		—		—		—		—		—		—		—		—
Total	—		15		150		—		—		—		65		26		256
Gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass	46,951		68,483		19,066		—		28		1,669		481		—		136,678
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		2,207		2		—		—		2,209
Doubtful	—		—		—		—		—		—		—		—		—
Total	46,951		68,483		19,066		—		2,235		1,671		481		—		138,887
Gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial mortgages
Pass	110,864		260,763		161,858		113,198		57,782		244,211		5,197		767		954,640
Special mention	—		2,533		8,189		2,609		—		8,642		—		—		21,973
Substandard	272		1,107		345		1,022		—		4,555		97		—		7,398
Doubtful	—		—		—		—		—		27		—		—		27
Total	111,136		264,403		170,392		116,829		57,782		257,435		5,294		767		984,038
Gross charge-offs	—		—		—		—		—		—		—		—		—
Residential mortgages
Not rated	18,653		58,098		60,024		71,369		15,948		52,585		—		—		276,677
Substandard	—		75		346		—		169		725		—		—		1,315
Total	18,653		58,173		60,370		71,369		16,117		53,310		—		—		277,992
Gross charge-offs	—		32		—		—		—		—		—		—		32
Home equity lines and loans
Not rated	13,552		16,384		5,821		3,134		2,867		10,400		33,275		1,115		86,548
Substandard	—		77		—		—		—		293		25		113		508
Total	13,552		16,461		5,821		3,134		2,867		10,693		33,300		1,228		87,056
Gross charge-offs	—		—		—		—		—		—		6		—		6
Indirect consumer
Not rated	72,264		98,008		23,015		9,192		3,870		3,387		—		—		209,736
Substandard	119		246		135		48		36		103		—		—		687
Total	72,383		98,254		23,150		9,240		3,906		3,490		—		—		210,423
Gross charge-offs	184		375		215		121		21		55		—		—		971
Direct consumer
Not rated	3,005		2,745		785		256		53		324		2,697		5		9,870
Substandard	—		—		—		2		—		—		—		—		2
Total	3,005		2,745		785		258		53		324		2,697		5		9,872
Gross charge-offs	4		15		8		6		—		54		6		—		93
Total loans	$	307,790	$	553,730	$	302,467	$	218,500	$	114,216	$	343,382	$	128,225	$	4,354	$	1,972,664
Total gross charge-offs	$	188	$	422	$	223	$	127	$	30	$	381	$	12	$	—	$	1,383

XML

FAIR VALUE (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

			Fair Value Measurement at March 31, 2024 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury notes and bonds	$	55,162	$	55,162	$	—	$	—
Mortgage-backed securities, residential	389,707		—		389,707		—
Obligations of states and political subdivisions	38,145		—		38,145		—
Corporate bonds and notes	20,932		—		13,211		7,721
SBA loan pools	62,082		—		62,082		—
Total available for sale securities	$	566,028	$	55,162	$	503,145	$	7,721
Equity investments, at fair value	$	2,600	$	2,600	$	—	$	—
Derivative assets	$	25,806	$	—	$	25,806	$	—
Financial Liabilities:
Derivative liabilities	$	25,811	$	—	$	25,811	$	—

There were no transfers between Level 1 and Level 2 during the three month period ended March 31, 2024.

			Fair Value Measurement at December 31, 2023 Using
Financial Assets:	Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
U.S. Treasury notes and bonds	$	55,332	$	55,332	$	—	$	—
Mortgage-backed securities, residential	403,824		—		403,824		—
Obligations of states and political subdivisions	38,686		—		38,686		—
Corporate bonds and notes	20,669		—		13,139		7,530
SBA loan pools	65,482		—		65,482		—
Total available for sale securities	$	583,993	$	55,332	$	521,131	$	7,530
Equity investments, at fair value	$	2,552	$	2,552	$	—	$	—
Derivative assets	$	23,942	$	—	$	23,942	$	—
Financial Liabilities:
Derivative liabilities	$	23,981	$	—	$	23,981	$	—

Information Related To Level 3 Non-Recurring Fair Value Measurement

The following table presents a reconciliation of assets and liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended March 31, 2024 and March 31, 2023 (in thousands):

Corporate bonds and notes:	For the Three Months Ended
Level 3 Financial Assets	March 31, 2024		March 31, 2023
Balance of recurring Level 3 assets as of January 1,	$	7,530	$	—
Total gains or losses for the period:	—		—
Included in Other Comprehensive Income	191		(1,289)
Transfers into Level 3	—		9,955
Transfers out of Level 3	—
Balance of recurring Level 3 assets as of March 31,	$	7,721	$	8,666

The following table presents quantitative information about recurring Level 3 fair value measurements as of March 31, 2024 and December 31, 2023 (in thousands):

March 31, 2024	Fair Value		Valuation Techniques	Unobservable Input	Range [Weighted Average] at March 31, 2024
Corporate bonds and notes	$	7,721	Discounted cash flow	Market discount rate	12.50% -12.50% [12.50%]

December 31, 2023	Fair Value		Valuation Techniques	Unobservable Input	Range [Weighted Average] at December 31, 2023
Corporate bonds and notes	$	7,530	Discounted cash flow	Market discount rate	12.50% -12.50% [12.50%]

Schedule of Carrying Value and Estimated Fair Value of Financial Instruments

The carrying amounts and estimated fair values of other financial instruments, as of March 31, 2024 and December 31, 2023, are as follows (in thousands):

	March 31, 2024
Financial assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial institutions	$	22,984	$	22,984	$	—	$	—	$	22,984
Interest-earning deposits in other financial institutions	71,878		71,878		—		—		71,878
Equity investments	3,093		3,093		—		—		3,093
Securities available for sale	566,028		55,162		503,145		7,721		566,028
Securities held to maturity	785		—		—		785		785
FHLBNY and FRBNY stock	4,071		—		—		—		N/A
Loans, net and loans held for sale	2,003,706		—		—		1,896,266		1,896,266
Derivative assets	25,806		—		25,806		—		25,806
Financial liabilities:
Deposits:
Demand, savings, and insured money market deposits	$	1,851,412	$	1,851,412	$	—	$	—	$	1,851,412
Time deposits	629,360		—		626,423		—		626,423
FHLBNY overnight advances	—		—		—		—		—
FRB term advances	50,000		—		49,828		—		49,828
Derivative liabilities	25,811		—		25,811		—		25,811

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

	December 31, 2023
Financial assets:	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Estimated Fair Value (1)
Cash and due from financial institutions	$	22,247	$	22,247	$	—	$	—	$	22,247
Interest-earning deposits in other financial institutions	14,600		14,600		—		—		14,600
Equity investments	3,046		3,046		—		—		3,046
Securities available for sale	583,993		55,332		521,131		7,530		583,993
Securities held to maturity	785		—		—		785		785
FHLBNY and FRBNY stock	5,498		—		—		—		N/A
Loans, net and loans held for sale	1,972,664		—		—		1,875,390		1,875,390
Derivative assets	23,942		—		23,942		—		23,942
Financial liabilities:
Deposits:
Demand, savings, and insured money market deposits	$	1,817,162	$	1,817,162	$	—	$	—	$	1,817,162
Time deposits	612,265		—		609,863		—		609,863
FHLBNY overnight advances	31,920		—		31,925		—		31,925
Derivative liabilities	23,981		—		23,981		—		23,981

(1) Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

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LEASES (Tables)

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Schedule of Leased Branch Properties

Leased branch properties at March 31, 2024 and December 31, 2023 consist of the following (in thousands):

	March 31, 2024		December 31, 2023
Operating lease right-of-use asset	$	5,648	$	6,449
Less: accumulated amortization	(200)		(801)
Less: lease termination	—		—
Add: new lease agreement and modifications	570		—
Operating lease right-of-use-assets, net	$	6,018	$	5,648

Schedule of Undiscounted Cash Flows of the Operating Lease Liabilities

The following is a schedule by year of the undiscounted cash flows of the operating lease liabilities, excluding CAM charges, as of March 31, 2024 (in thousands):

Year	Amount
2024	$	717
2025	959
2026	965
2027	977
2028	845
2029 and thereafter	2,590
Total minimum lease payments	7,053
Less: amount representing interest	(856)
Present value of net minimum lease payments	$	6,197

Schedule of Leases in Premises and Equipment

The Corporation has included these leases in premises and equipment as of March 31, 2024 and December 31, 2023 as follows (in thousands):

	March 31, 2024		December 31, 2023
Buildings	$	5,572	$	5,572
Less: accumulated depreciation	(2,955)		(2,872)
Net book value	$	2,617	$	2,700

Schedule of Future Minimum Financial Lease Payments

The following is a schedule by year of future minimum lease payments under the capitalized lease, together with the present value of net minimum lease payments as of March 31, 2024 (in thousands):

Year	Amount
2024	$	293
2025	409
2026	425
2027	428
2028	428
2029 and thereafter	1,560
Total minimum lease payments	3,543
Less: amount representing interest	(564)
Present value of net minimum lease payments	$	2,979

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GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Goodwill

The changes in goodwill included in the core banking segment during the three month periods ended March 31, 2024 and 2023 were as follows (in thousands):

	2024		2023
Beginning of year	$	21,824	$	21,824
Acquired goodwill	—		—
Ending balance March 31,	$	21,824	$	21,824

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COMMITMENTS AND CONTINGENCIES (Tables)

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Contractual Amounts of Financial Instruments with Off-Balance Sheet Risk

The following table lists the contractual amounts of financial instruments with off-balance sheet risk as of March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate
Commitments to make loans	$	14,387	$	61,128	$	23,809	$	78,790
Unused lines of credit	$	2,249	$	327,681	$	3,387	$	332,439
Standby letters of credit	$	—	$	18,201	$	—	$	11,317

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Schedule of Components of Accumulated Other Comprehensive Loss

The following is a summary of the changes in accumulated other comprehensive income (loss) by component, net of tax, for the periods indicated (in thousands):

	Unrealized Gains and Losses on Securities Available for Sale		Defined Benefit and Other Benefit Plans		Total
Balance at January 1, 2024	$	(62,800)	$	(3,213)	$	(66,013)
Other comprehensive income before reclassification	(4,070)		—		(4,070)
Amounts reclassified from accumulated other comprehensive income	—		5		5
Net current period other comprehensive income (loss)	(4,070)		5		(4,065)
Balance at March 31, 2024	$	(66,870)	$	(3,208)	$	(70,078)

	Unrealized Gains and Losses on Securities Available for Sale		Defined Benefit and Other Benefit Plans		Total
Balance at January 1, 2023	$	(71,296)	$	(3,961)	$	(75,257)
Other comprehensive income before reclassification	5,775		—		5,775
Amounts reclassified from accumulated other comprehensive income	—		9		9
Net current period other comprehensive income	5,775		9		5,784
Balance at March 31, 2023	$	(65,521)	$	(3,952)	$	(69,473)

Schedule of Reclassification Out of Accumulated Other Comprehensive Income

The following is the reclassification out of accumulated other comprehensive income for the periods indicated (in thousands):

Details about Accumulated Other Comprehensive Income (Loss) Components	Three Months Ended   March 31,				Affected Line Item in the Statement Where Net Income is Presented
	2024		2023
Amortization of defined pension plan and other benefit plan items:
Prior service costs (a)	$	—	$	—	Other components of net periodic pension and postretirement benefits
Actuarial losses (a)	7		12		Other components of net periodic pension and postretirement benefits
Tax effect	(2)		(3)		Income tax expense
Net of tax	5		9
Total reclassification for the period, net of tax	$	5	$	9

(a) These accumulated other comprehensive income components are included in the computation of net periodic pension and other benefit plan costs (see Note 11 for additional information).

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following tables present the Corporation's non-interest income by revenue stream and reportable segment for the three months ended March 31, 2024 and 2023 (in thousands). Items outside the scope of ASC 606 are noted as such.

	Three Months Ended March 31, 2024
Revenue by Operating Segment: Non-interest income	Core Banking		WMG		Holding Company and CFS(b)		Total
Service charges on deposit accounts
Overdraft fees	$	710	$	—	$	—	$	710
Other	239		—		—		239
Interchange revenue from debit card transactions	1,063		—		—		1,063
WMG fee income	—		2,703		—		2,703
CFS fee and commission income	—		—		228		228
Net gains on sales of loans(a)	32		—		—		32
Loan servicing fees(a)	36		—		—		36
Changes in fair value of equity investments(a)	117		—		(16)		101
Income from bank-owned life insurance(a)	9		—		—		9
Other(a)	536		—		—		536
Total non-interest income (loss)	$	2,742	$	2,703	$	212	$	5,657

(a) Not within scope of ASC 606.

(b) The Holding Company, and CFS column above includes amounts to eliminate transactions between segments.

	Three Months Ended March 31, 2023
Revenue by Operating Segment: Non-interest income	Core Banking		WMG		Holding Company, CFS, and CRM(b)(c)		Total
Service charges on deposit accounts
Overdraft fees	$	714	$	—	$	—	$	714
Other	227		—		—		227
Interchange revenue from debit card transactions	1,133		—		—		1,133
WMG fee income	—		2,580		—		2,580
CFS fee and commission income	—		—		241		241
Net gains on sales of loans(a)	5		—		—		5
Loan servicing fees(a)	36		—		—		36
Changes in fair value of equity investments(a)	78		—		(6)		72
Income from bank-owned life insurance(a)	10		—		—		10
Other(a)	448		—		(43)		405
Total non-interest income	$	2,651	$	2,580	$	192	$	5,423

(a) Not within scope of ASC 606.

(b) The Holding Company, CFS, and CRM column above includes amounts to eliminate transactions between segments.

(c) Chemung Risk Management, Inc. (CRM) was dissolved December 6, 2023.

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COMPONENTS OF QUARTERLY AND YEAR TO DATE NET PERIODIC BENEFIT COSTS (Tables)

3 Months Ended

Mar. 31, 2024

Retirement Benefits [Abstract]

Schedule of Components of Net Periodic Benefit Costs

The components of net periodic expense for the Corporation’s pension and other benefit plans for the periods indicated are as follows (in thousands):

	Three Months Ended   March 31,
	2024		2023
Qualified Pension Plan
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	378		396
Expected return on plan assets	(629)		(596)
Amortization of unrecognized transition obligation	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	—		6
Net periodic pension benefit	$	(251)	$	(194)
Supplemental Pension Plan
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	11		12
Expected return on plan assets	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	3		2
Net periodic supplemental pension cost	$	14	$	14
Postretirement Plan, Medical and Life
Service cost, benefits earned during the period	$	—	$	—
Interest cost on projected benefit obligation	1		1
Expected return on plan assets	—		—
Amortization of unrecognized prior service cost	—		—
Amortization of unrecognized net loss	4		5
Net periodic postretirement, medical and life benefit	$	5	$	6

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Schedule of Summarized Financial Information Showing Reconciliation of Segment Net Income Loss and Assets to Consolidated Results

The Holding Company and CFS columns below include amounts to eliminate transactions between segments (in thousands).

	Three months ended March 31, 2024
	Core Banking		WMG		Holding Company, and CFS		Consolidated Totals
Interest and dividend income	$	31,211	$	—	$	8	$	31,219
Interest expense	13,130		—		—		13,130
Net interest income	18,081		—		8		18,089
Provision for credit losses	(2,040)		—		—		(2,040)
Net interest income after provision for credit losses	20,121		—		8		20,129
Other non-interest income	2,742		2,703		212		5,657
Other non-interest expenses	14,539		1,895		264		16,698
Income (loss) before income tax expense (benefit)	8,324		808		(44)		9,088
Income tax expense (benefit)	1,870		182		(14)		2,038
Segment net income (loss)	$	6,454	$	626	$	(30)	$	7,050
Segment assets	$	2,778,785	$	2,898	$	3,207	$	2,784,890

	Three months ended March 31, 2023
	Core Banking		WMG		Holding Company, CFS, and CRM(1)		Consolidated Totals
Interest and dividend income	$	26,203	$	—	$	27	$	26,230
Interest expense	6,283		—				6,283
Net interest income	19,920		—		27		19,947
Provision for credit losses	277		—		—		277
Net interest income after provision for credit losses	19,643		—		27		19,670
Other non-interest income	2,651		2,580		192		5,423
Other non-interest expenses	13,696		1,798		342		15,836
Income (loss) before income tax expense (benefit)	8,598		782		(123)		9,257
Income tax expense (benefit)	1,831		177		(21)		1,987
Segment net income (loss)	$	6,767	$	605	$	(102)	$	7,270
Segment assets	$	2,644,158	$	2,538	$	1,714	$	2,654,183

(1)Chemung Risk Management, Inc. (CRM) was dissolved December 6, 2023.

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STOCK COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Restricted Stock Activity

A summary of restricted stock activity for the three months ended March 31, 2024 is presented below:

	Shares	Weighted–Average Grant Date Fair Value
Nonvested at January 1, 2024	62,984	$45.87
Granted	12,088	$48.11
Vested	(13,208)	$45.86
Forfeited or cancelled	—	—
Nonvested at March 31, 2024	61,864	$46.31

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EARNINGS PER COMMON SHARE (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Earnings Per Share [Abstract]
Weighted average shares outstanding, basic (in shares)	4,764,000	4,721,000
Weighted average shares outstanding, diluted (in shares)	4,764,000	4,721,000
Dilutive common stock equivalents (in shares)	0	0

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SECURITIES - Securities Available for Sale (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Amortized cost and estimated fair value of debt securities available-for-sale
Amortized Cost	$ 656,640	$ 669,092
Gross Unrealized Gains	64	81
Gross Unrealized Losses	90,676	85,180
Allowance for Credit Losses	0	0
Estimated Fair Value	566,028	583,993
Amortized Cost
Within one year	8,499
After one, but within five years	97,948
After five, but within ten years	18,076
After ten years	470
Total	124,993
Total	656,640	669,092
Fair Value
Within one year	8,297
After one, but within five years	90,687
After five, but within ten years	14,838
After ten years	417
Total	114,239
Total	566,028	583,993
U.S. Treasury notes and bonds
Amortized cost and estimated fair value of debt securities available-for-sale
Amortized Cost	59,828	59,812
Gross Unrealized Gains	0	0
Gross Unrealized Losses	4,666	4,480
Allowance for Credit Losses	0	0
Estimated Fair Value	55,162	55,332
Amortized Cost
Total	59,828	59,812
Fair Value
Total	55,162	55,332
Mortgage-backed securities, residential
Amortized cost and estimated fair value of debt securities available-for-sale
Amortized Cost	467,125	476,240
Gross Unrealized Gains	7	6
Gross Unrealized Losses	77,425	72,422
Allowance for Credit Losses	0	0
Estimated Fair Value	389,707	403,824
Amortized Cost
Without single maturity date	467,125
Total	467,125	476,240
Fair Value
Without single maturity date	389,707
Total	389,707	403,824
Collateralized mortgage obligations
Amortized Cost
Without single maturity date	0
Fair Value
Without single maturity date	0
Obligations of states and political subdivisions
Amortized cost and estimated fair value of debt securities available-for-sale
Amortized Cost	39,415	39,503
Gross Unrealized Gains	0	0
Gross Unrealized Losses	1,270	817
Allowance for Credit Losses	0	0
Estimated Fair Value	38,145	38,686
Amortized Cost
Total	39,415	39,503
Fair Value
Total	38,145	38,686
Corporate bonds and notes
Amortized cost and estimated fair value of debt securities available-for-sale
Amortized Cost	25,750	25,750
Gross Unrealized Gains	0	0
Gross Unrealized Losses	4,818	5,081
Allowance for Credit Losses	0	0
Estimated Fair Value	20,932	20,669
Amortized Cost
Total	25,750	25,750
Fair Value
Total	20,932	20,669
SBA loan pools
Amortized cost and estimated fair value of debt securities available-for-sale
Amortized Cost	64,522	67,787
Gross Unrealized Gains	57	75
Gross Unrealized Losses	2,497	2,380
Allowance for Credit Losses	0	0
Estimated Fair Value	62,082	65,482
Amortized Cost
Without single maturity date	64,522
Total	64,522	67,787
Fair Value
Without single maturity date	62,082
Total	$ 62,082	$ 65,482

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SECURITIES - Securities Held to Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Amortized cost and estimated fair value of securities held to maturity
Total	$ 785	$ 785
Estimated Fair Value	785	785
Amortized Cost
Within one year	0
After one, but within five years	145
After five, but within ten years	640
After ten years	0
Total	785
Total	785	785
Fair Value
Within one year	0
After one, but within five years	145
After five, but within ten years	640
After ten years	0
Total	785
Total	785	785
Obligations of states and political subdivisions
Amortized cost and estimated fair value of securities held to maturity
Total	785	785
Unrecognized Gains	0	0
Unrecognized Losses	0	0
Estimated Fair Value	785	785
Allowance for Credit Losses	0	0
Amortized Cost
Total	785	785
Fair Value
Total	785	$ 785
Mortgage-backed securities, residential
Amortized Cost
Without single maturity date	0
Fair Value
Without single maturity date	0
Collateralized mortgage obligations
Amortized Cost
Without single maturity date	0
Fair Value
Without single maturity date	0
SBA loan pools
Amortized Cost
Without single maturity date	0
Fair Value
Without single maturity date	$ 0

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SECURITIES - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Debt securities, gain (loss)	$ 0	$ 0
Deferred Compensation Plan
Debt Securities, Available-for-sale [Line Items]
Investments, fair value	2,500,000		$ 2,400,000
Marketable Securities
Debt Securities, Available-for-sale [Line Items]
Investments, fair value	$ 600,000		$ 600,000

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SECURITIES - Investment Securities Available for Sale in Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Fair Value
Less than 12 months	$ 2,221	$ 29,297
12 months or longer	556,857	546,649
Total	559,078	575,946
Unrealized Losses
Less than 12 months	26	2,762
12 months or longer	90,650	82,418
Total	90,676	85,180
U.S. Treasury notes and bonds
Fair Value
Less than 12 months	0	0
12 months or longer	55,162	55,332
Total	55,162	55,332
Unrealized Losses
Less than 12 months	0	0
12 months or longer	4,666	4,480
Total	4,666	4,480
Mortgage-backed securities, residential
Fair Value
Less than 12 months	0	0
12 months or longer	388,878	402,986
Total	388,878	402,986
Unrealized Losses
Less than 12 months	0	0
12 months or longer	77,425	72,422
Total	77,425	72,422
Obligations of states and political subdivisions
Fair Value
Less than 12 months	1,154	17,891
12 months or longer	36,991	20,686
Total	38,145	38,577
Unrealized Losses
Less than 12 months	24	241
12 months or longer	1,246	576
Total	1,270	817
Corporate bonds and notes
Fair Value
Less than 12 months	0	7,492
12 months or longer	20,932	13,177
Total	20,932	20,669
Unrealized Losses
Less than 12 months	0	2,508
12 months or longer	4,818	2,573
Total	4,818	5,081
SBA loan pools
Fair Value
Less than 12 months	1,067	3,914
12 months or longer	54,894	54,468
Total	55,961	58,382
Unrealized Losses
Less than 12 months	2	13
12 months or longer	2,495	2,367
Total	$ 2,497	$ 2,380

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LOANS AND ALLOWANCE FOR CREDIT LOSSES - Loan Portfolio (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	$ 2,003,610	$ 1,972,664
Allowance for credit losses	(20,471)	(22,517)	$ (20,075)	$ (19,659)
Loans, net	1,983,139	1,950,147
Construction
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	141,604	138,887
Commercial mortgages, other
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	1,004,198	984,038
Home equity lines and loans
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	87,608	87,056
Indirect consumer loans
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	204,081	210,423
Direct consumer loans
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	9,238	9,872
Commercial and Agricultural
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	279,635	264,396
Allowance for credit losses	(4,516)	(5,055)	(4,053)	(3,373)
Commercial Mortgages
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	1,145,802	1,122,925
Allowance for credit losses	(10,367)	(12,026)	(10,983)	(11,576)
Loans, net	1,900
Commercial Mortgages | Construction
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	141,604	138,887
Allowance for credit losses	0	0
Commercial Mortgages | Commercial mortgages, other
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	1,004,198	984,038
Residential Mortgages
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	277,246	277,992
Allowance for credit losses	(2,062)	(2,194)	(1,892)	(1,845)
Consumer Loans
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	300,927	307,351
Allowance for credit losses	(3,526)	(3,242)	$ (3,147)	$ (2,865)
Consumer Loans | Home equity lines and loans
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	87,608	87,056
Consumer Loans | Indirect consumer loans
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	204,081	210,423
Consumer Loans | Direct consumer loans
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	9,238	9,872
Commercial & industrial
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	279,414	264,140
Commercial & industrial | Commercial and Agricultural
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	279,414	264,140
Agricultural
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	221	256
Agricultural | Commercial and Agricultural
Composition of loan portfolio [Abstract]
Total loans, net of deferred loan fees and costs	$ 221	$ 256

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) loan	Mar. 31, 2023 loan	Dec. 31, 2023 USD ($)
Financing Receivable, Allowance for Credit Loss [Line Items]
Accrued interest	$ 8,100		$ 7,800
Number of modified loans | loan	0
Loans, net	$ 1,983,139		1,950,147
Loans subsequently defaulted | loan		0
Individually analyzed	$ 5,711		8,035
Number of days past due after which a retail loan is rated	90 days
Commercial Mortgages
Financing Receivable, Allowance for Credit Loss [Line Items]
Loans, net	$ 1,900
Individually analyzed	$ 3,965		5,968
Commercial and industrial | Defaulted Loan
Financing Receivable, Allowance for Credit Loss [Line Items]
Number of modified loans | loan	1
Weighted-average term extension (in months)	6 months
Collateral Pledged
Financing Receivable, Allowance for Credit Loss [Line Items]
Individually analyzed	$ 4,248		$ 6,347

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowances For Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 22,517	$ 19,659	$ 19,659
Charge-offs	(367)	(383)	(1,383)
Recoveries	185	114
Net recoveries (charge-offs)	(182)	(269)
Provision (credit)	(1,864)	311
Ending balance	20,471	20,075	22,517
Cumulative effect adjustment for the adoption of ASC 326
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		374	374
Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		20,033	20,033
Commercial and Agricultural
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	5,055	3,373	3,373
Charge-offs	0	(190)
Recoveries	37	6
Net recoveries (charge-offs)	37	(184)
Provision (credit)	(576)	(45)
Ending balance	4,516	4,053	5,055
Commercial and Agricultural | Cumulative effect adjustment for the adoption of ASC 326
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		909	909
Commercial and Agricultural | Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		4,282	4,282
Commercial Mortgages
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	12,026	11,576	11,576
Charge-offs	0	0
Recoveries	1	0
Net recoveries (charge-offs)	1	0
Provision (credit)	(1,660)	102
Ending balance	10,367	10,983	12,026
Commercial Mortgages | Cumulative effect adjustment for the adoption of ASC 326
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		(695)	(695)
Commercial Mortgages | Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		10,881	10,881
Residential Mortgages
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	2,194	1,845	1,845
Charge-offs	(16)	0	(32)
Recoveries	22	0
Net recoveries (charge-offs)	6	0
Provision (credit)	(138)	63
Ending balance	2,062	1,892	2,194
Residential Mortgages | Cumulative effect adjustment for the adoption of ASC 326
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		(16)	(16)
Residential Mortgages | Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		1,829	1,829
Consumer Loans
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	3,242	2,865	2,865
Charge-offs	(351)	(193)
Recoveries	125	108
Net recoveries (charge-offs)	(226)	(85)
Provision (credit)	510	191
Ending balance	3,526	3,147	3,242
Consumer Loans | Cumulative effect adjustment for the adoption of ASC 326
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		176	176
Consumer Loans | Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance		3,041	3,041
Unfunded Loan Commitment
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	919	0	0
Provision (credit)	(176)	(34)
Ending balance	743	1,048	919
Unfunded Loan Commitment | Cumulative effect adjustment for the adoption of ASC 326
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 0	$ 1,082	1,082
Ending balance			$ 0

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Provision for Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Financing Receivable, Allowance for Credit Loss [Line Items]
Provision (credit) for credit losses on unfunded commitments	$ (1,864)	$ 311
Loans And Unfunded Commitments
Financing Receivable, Allowance for Credit Loss [Line Items]
Provision (credit) for credit losses on unfunded commitments	(2,040)	277
Loans Portfolio Segment
Financing Receivable, Allowance for Credit Loss [Line Items]
Provision (credit) for credit losses on unfunded commitments	(1,864)	311
Unfunded Loan Commitment
Financing Receivable, Allowance for Credit Loss [Line Items]
Provision (credit) for credit losses on unfunded commitments	$ (176)	$ (34)

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Allowances by Impairment (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Allowance for credit losses
Individually analyzed	$ 1,687	$ 1,955
Collectively analyzed	18,784	20,562
Total ending allowance balance	20,471	22,517	$ 20,075	$ 19,659
Amortized cost basis of loans:
Individually analyzed	5,711	8,035
Collectively analyzed	1,997,899	1,964,629
Total loans, net of deferred loan fees and costs	2,003,610	1,972,664
Collateral Pledged
Allowance for credit losses
Total ending allowance balance	225	267
Amortized cost basis of loans:
Individually analyzed	4,248	6,347
Commercial and Agricultural
Allowance for credit losses
Individually analyzed	1,663	1,928
Collectively analyzed	2,853	3,127
Total ending allowance balance	4,516	5,055	4,053	3,373
Amortized cost basis of loans:
Individually analyzed	1,746	2,067
Collectively analyzed	277,889	262,329
Total loans, net of deferred loan fees and costs	279,635	264,396
Commercial Mortgages
Allowance for credit losses
Individually analyzed	24	27
Collectively analyzed	10,343	11,999
Total ending allowance balance	10,367	12,026	10,983	11,576
Amortized cost basis of loans:
Individually analyzed	3,965	5,968
Collectively analyzed	1,141,837	1,116,957
Total loans, net of deferred loan fees and costs	1,145,802	1,122,925
Residential Mortgages
Allowance for credit losses
Individually analyzed	0	0
Collectively analyzed	2,062	2,194
Total ending allowance balance	2,062	2,194	1,892	1,845
Amortized cost basis of loans:
Individually analyzed	0	0
Collectively analyzed	277,246	277,992
Total loans, net of deferred loan fees and costs	277,246	277,992
Consumer Loans
Allowance for credit losses
Individually analyzed	0	0
Collectively analyzed	3,526	3,242
Total ending allowance balance	3,526	3,242	$ 3,147	$ 2,865
Amortized cost basis of loans:
Individually analyzed	0	0
Collectively analyzed	300,927	307,351
Total loans, net of deferred loan fees and costs	$ 300,927	$ 307,351

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Modifications (Details) - Commercial Mortgages - Commercial mortgages, other $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 277
% of Loan Class	0.03%
Weighted-average interest rate reduction (%)	0.00%
Weighted-average term extension (in months)	60 months
Weighted-average payment delay (in months)	0 months
Principal Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 0
Principal Reduction	0
Interest Rate Reduction
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	0
Term Extension
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	277
Payment Delay
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	0
Combination
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 0

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Receivables Past Due (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Financing Receivable, Past Due [Line Items]
Financing receivable	$ 2,003,610	$ 1,972,664
Nonaccrual with No Allowance for Credit Losses	6,217	8,529
Nonaccrual	7,835	10,411
Loans Past Due 90 Days or More and Still Accruing	8	10
Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	12,305	14,360
Total Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	245
30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	4,415	9,562
30 - 59 Days Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	0
60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	3,569	943
60 - 89 Days Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	0
90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	4,321	3,855
90 Days or More Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	675
Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	1,991,305	1,958,304
Loans Not Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	920
Construction
Financing Receivable, Past Due [Line Items]
Financing receivable	141,604	138,887
Commercial mortgages, other
Financing Receivable, Past Due [Line Items]
Financing receivable	1,004,198	984,038
Home equity lines and loans
Financing Receivable, Past Due [Line Items]
Financing receivable	87,608	87,056
Indirect consumer loans
Financing Receivable, Past Due [Line Items]
Financing receivable	204,081	210,423
Direct consumer loans
Financing Receivable, Past Due [Line Items]
Financing receivable	9,238	9,872
Commercial Mortgages
Financing Receivable, Past Due [Line Items]
Financing receivable	1,145,802	1,122,925
Commercial Mortgages | Construction
Financing Receivable, Past Due [Line Items]
Financing receivable	141,604	138,887
Nonaccrual with No Allowance for Credit Losses	2,207	2,209
Nonaccrual	2,207	2,209
Loans Past Due 90 Days or More and Still Accruing	0	0
Commercial Mortgages | Construction | Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	2,207	4,371
Commercial Mortgages | Construction | 30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	0	2,164
Commercial Mortgages | Construction | 60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	0	0
Commercial Mortgages | Construction | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	2,207	2,207
Commercial Mortgages | Construction | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	139,397	134,516
Commercial Mortgages | Commercial mortgages, other
Financing Receivable, Past Due [Line Items]
Financing receivable	1,004,198	984,038
Nonaccrual with No Allowance for Credit Losses	1,734	3,732
Nonaccrual	1,758	3,760
Loans Past Due 90 Days or More and Still Accruing	0	0
Commercial Mortgages | Commercial mortgages, other | Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	3,425	1,386
Commercial Mortgages | Commercial mortgages, other | Total Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable		277
Commercial Mortgages | Commercial mortgages, other | 30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	1,012	1,022
Commercial Mortgages | Commercial mortgages, other | 30 - 59 Days Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable		0
Commercial Mortgages | Commercial mortgages, other | 60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	2,238	103
Commercial Mortgages | Commercial mortgages, other | 60 - 89 Days Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable		0
Commercial Mortgages | Commercial mortgages, other | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	175	261
Commercial Mortgages | Commercial mortgages, other | 90 Days or More Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable		0
Commercial Mortgages | Commercial mortgages, other | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	1,000,773	982,652
Commercial Mortgages | Commercial mortgages, other | Loans Not Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable		277
Residential Mortgages
Financing Receivable, Past Due [Line Items]
Financing receivable	277,246	277,992
Nonaccrual with No Allowance for Credit Losses	1,118	1,315
Nonaccrual	1,118	1,315
Loans Past Due 90 Days or More and Still Accruing	0	0
Residential Mortgages | Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	2,712	3,030
Residential Mortgages | 30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	1,529	2,244
Residential Mortgages | 60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	594	201
Residential Mortgages | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	589	585
Residential Mortgages | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	274,534	274,962
Consumer Loans
Financing Receivable, Past Due [Line Items]
Financing receivable	300,927	307,351
Consumer Loans | Home equity lines and loans
Financing Receivable, Past Due [Line Items]
Financing receivable	87,608	87,056
Nonaccrual with No Allowance for Credit Losses	496	508
Nonaccrual	496	508
Loans Past Due 90 Days or More and Still Accruing	0	0
Consumer Loans | Home equity lines and loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	994	914
Consumer Loans | Home equity lines and loans | Total Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	116
Consumer Loans | Home equity lines and loans | 30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	612	461
Consumer Loans | Home equity lines and loans | 30 - 59 Days Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	0
Consumer Loans | Home equity lines and loans | 60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	100	87
Consumer Loans | Home equity lines and loans | 60 - 89 Days Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	0
Consumer Loans | Home equity lines and loans | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	282	366
Consumer Loans | Home equity lines and loans | 90 Days or More Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	0
Consumer Loans | Home equity lines and loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	86,614	86,142
Consumer Loans | Home equity lines and loans | Loans Not Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	116
Consumer Loans | Indirect consumer loans
Financing Receivable, Past Due [Line Items]
Financing receivable	204,081	210,423
Nonaccrual with No Allowance for Credit Losses	631	687
Nonaccrual	631	687
Loans Past Due 90 Days or More and Still Accruing	0	0
Consumer Loans | Indirect consumer loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	1,821	3,400
Consumer Loans | Indirect consumer loans | 30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	1,063	2,473
Consumer Loans | Indirect consumer loans | 60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	379	501
Consumer Loans | Indirect consumer loans | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	379	426
Consumer Loans | Indirect consumer loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	202,260	207,023
Consumer Loans | Direct consumer loans
Financing Receivable, Past Due [Line Items]
Financing receivable	9,238	9,872
Nonaccrual with No Allowance for Credit Losses	8	2
Nonaccrual	8	2
Loans Past Due 90 Days or More and Still Accruing	0	0
Consumer Loans | Direct consumer loans | Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	44	22
Consumer Loans | Direct consumer loans | 30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	18	2
Consumer Loans | Direct consumer loans | 60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	20	20
Consumer Loans | Direct consumer loans | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	6	0
Consumer Loans | Direct consumer loans | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	9,194	9,850
Commercial and Agricultural Sector | Commercial and industrial
Financing Receivable, Past Due [Line Items]
Financing receivable	279,414	264,140
Nonaccrual with No Allowance for Credit Losses	23	76
Nonaccrual	1,615	1,904
Loans Past Due 90 Days or More and Still Accruing	8	10
Commercial and Agricultural Sector | Commercial and industrial | Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	1,102	1,237
Commercial and Agricultural Sector | Commercial and industrial | Total Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	129
Commercial and Agricultural Sector | Commercial and industrial | 30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	181	1,196
Commercial and Agricultural Sector | Commercial and industrial | 30 - 59 Days Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	0
Commercial and Agricultural Sector | Commercial and industrial | 60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	238	31
Commercial and Agricultural Sector | Commercial and industrial | 60 - 89 Days Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	0
Commercial and Agricultural Sector | Commercial and industrial | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	683	10
Commercial and Agricultural Sector | Commercial and industrial | 90 Days or More Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	675
Commercial and Agricultural Sector | Commercial and industrial | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	278,312	262,903
Commercial and Agricultural Sector | Commercial and industrial | Loans Not Past Due | Restructured Debt
Financing Receivable, Past Due [Line Items]
Financing receivable	804
Commercial and Agricultural Sector | Agricultural
Financing Receivable, Past Due [Line Items]
Financing receivable	221	256
Nonaccrual with No Allowance for Credit Losses	0	0
Nonaccrual	2	26
Loans Past Due 90 Days or More and Still Accruing	0	0
Commercial and Agricultural Sector | Agricultural | Total Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	0	0
Commercial and Agricultural Sector | Agricultural | 30 - 59 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	0	0
Commercial and Agricultural Sector | Agricultural | 60 - 89 Days Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	0	0
Commercial and Agricultural Sector | Agricultural | 90 Days or More Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	0	0
Commercial and Agricultural Sector | Agricultural | Loans Not Past Due
Financing Receivable, Past Due [Line Items]
Financing receivable	$ 221	$ 256

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Collateral Dependent (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	$ 5,711	$ 8,035
Related Allowance	20,471	22,517	$ 20,075	$ 19,659
Commercial and Agricultural
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	1,746	2,067
Related Allowance	4,516	5,055	4,053	3,373
Commercial Mortgages
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	3,965	5,968
Related Allowance	10,367	12,026	10,983	11,576
Commercial Mortgages | Construction
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	2,207	2,209
Related Allowance	0	0
Consumer Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	0	0
Related Allowance	3,526	3,242	$ 3,147	$ 2,865
Collateral Pledged
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	4,248	6,347
Related Allowance	225	267
Commercial Real Estate And Business Assets | Commercial and Agricultural | Commercial and industrial
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	282	353
Related Allowance	200	214
Business Assets | Commercial and Agricultural
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	2	26
Related Allowance	1	26
Commercial Real Estate and Residential Real Estate | Commercial Mortgages | Commercial mortgages, other
Financing Receivable, Allowance for Credit Loss [Line Items]
Amortized Cost Basis	1,757	3,759
Related Allowance	$ 24	$ 27

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Average Amortized Cost Basis
Average recorded investment, total	$ 6,873	$ 6,836
Interest Income Recognized
Total	4	18
Residential Mortgages
Average Amortized Cost Basis
With no related allowance recorded	0	715
Interest Income Recognized
With no related allowance recorded	0	9
Construction | Commercial Mortgages
Average Amortized Cost Basis
With no related allowance recorded	2,208	0
Interest Income Recognized
With no related allowance recorded	0	0
Commercial mortgages, other | Commercial Mortgages
Average Amortized Cost Basis
With no related allowance recorded	2,733	4,053
With an allowance recorded	25	36
Interest Income Recognized
With no related allowance recorded	0	7
With an allowance recorded	0	0
Home equity lines and loans | Consumer Loans
Average Amortized Cost Basis
With no related allowance recorded	0	254
Interest Income Recognized
With no related allowance recorded	0	0
Commercial and Agricultural Sector | Commercial and industrial
Average Amortized Cost Basis
With no related allowance recorded	49	729
With an allowance recorded	1,844	1,049
Interest Income Recognized
With no related allowance recorded	1	0
With an allowance recorded	3	2
Commercial and Agricultural Sector | Agricultural
Average Amortized Cost Basis
With no related allowance recorded	0	0
With an allowance recorded	14	0
Interest Income Recognized
With no related allowance recorded	0	0
With an allowance recorded	$ 0	$ 0

XML

LOANS AND ALLOWANCE FOR CREDIT LOSSES - Credit Quality Indicator (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	$ 45,642		$ 307,790
2023	310,315		553,730
2022	549,478		302,467
2021	297,902		218,500
2020	212,684		114,216
Prior	440,662		343,382
Revolving Loans Amortized Cost	142,772		128,225
Revolving Loans Converted to Term	4,155		4,354
Total loans, net of deferred loan fees and costs	2,003,610		1,972,664
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		188
2023	104		422
2022	127		223
2021	29		127
2020	24		30
Prior	81		381
Revolving Loans Amortized Cost	2		12
Revolving Loans Converted to Term	0		0
Total	367	$ 383	1,383
Construction
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	1,076		46,951
2023	48,500		68,483
2022	77,995		19,066
2021	9,686		0
2020	0		2,235
Prior	3,865		1,671
Revolving Loans Amortized Cost	482		481
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	141,604		138,887
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total	0		0
Construction | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	1,076		46,951
2023	48,500		68,483
2022	77,995		19,066
2021	9,686		0
2020	0		28
Prior	1,658		1,669
Revolving Loans Amortized Cost	482		481
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	139,397		136,678
Construction | Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	0		0
Construction | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		2,207
Prior	2,207		2
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	2,207		2,209
Construction | Doubtful
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	0		0
Commercial mortgages, other
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	13,784		111,136
2023	119,647		264,403
2022	261,652		170,392
2021	179,521		116,829
2020	115,009		57,782
Prior	306,618		257,435
Revolving Loans Amortized Cost	7,225		5,294
Revolving Loans Converted to Term	742		767
Total loans, net of deferred loan fees and costs	1,004,198		984,038
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total	0		0
Commercial mortgages, other | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	13,784		110,864
2023	117,235		260,763
2022	258,049		161,858
2021	171,090		113,198
2020	111,407		57,782
Prior	296,080		244,211
Revolving Loans Amortized Cost	5,127		5,197
Revolving Loans Converted to Term	742		767
Total loans, net of deferred loan fees and costs	973,514		954,640
Commercial mortgages, other | Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		2,533
2022	2,522		8,189
2021	8,092		2,609
2020	2,590		0
Prior	8,082		8,642
Revolving Loans Amortized Cost	2,001		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	23,287		21,973
Commercial mortgages, other | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		272
2023	2,412		1,107
2022	1,081		345
2021	339		1,022
2020	1,012		0
Prior	2,432		4,555
Revolving Loans Amortized Cost	97		97
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	7,373		7,398
Commercial mortgages, other | Doubtful
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	24		27
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	24		27
Home equity lines and loans
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	3,298		13,552
2023	12,904		16,461
2022	16,038		5,821
2021	5,577		3,134
2020	3,009		2,867
Prior	12,785		10,693
Revolving Loans Amortized Cost	32,859		33,300
Revolving Loans Converted to Term	1,138		1,228
Total loans, net of deferred loan fees and costs	87,608		87,056
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	11		0
Revolving Loans Amortized Cost	0		6
Revolving Loans Converted to Term	0		0
Total	11		6
Home equity lines and loans | Not rated
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	3,298		13,552
2023	12,904		16,384
2022	15,846		5,821
2021	5,577		3,134
2020	3,009		2,867
Prior	12,494		10,400
Revolving Loans Amortized Cost	32,773		33,275
Revolving Loans Converted to Term	1,095		1,115
Total loans, net of deferred loan fees and costs	86,996		86,548
Home equity lines and loans | Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0
2023	0
2022	116
2021	0
2020	0
Prior	0
Revolving Loans Amortized Cost	0
Revolving Loans Converted to Term	0
Total loans, net of deferred loan fees and costs	116
Home equity lines and loans | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		77
2022	76		0
2021	0		0
2020	0		0
Prior	291		293
Revolving Loans Amortized Cost	86		25
Revolving Loans Converted to Term	43		113
Total loans, net of deferred loan fees and costs	496		508
Indirect consumer
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	11,861		72,383
2023	67,540		98,254
2022	90,621		23,150
2021	20,552		9,240
2020	7,701		3,906
Prior	5,806		3,490
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	204,081		210,423
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		184
2023	104		375
2022	127		215
2021	29		121
2020	24		21
Prior	54		55
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total	338		971
Indirect consumer | Not rated
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	11,861		72,264
2023	67,401		98,008
2022	90,413		23,015
2021	20,411		9,192
2020	7,652		3,870
Prior	5,712		3,387
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	203,450		209,736
Indirect consumer | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		119
2023	139		246
2022	208		135
2021	141		48
2020	49		36
Prior	94		103
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	631		687
Direct consumer
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	700		3,005
2023	2,622		2,745
2022	2,391		785
2021	612		258
2020	176		53
Prior	332		324
Revolving Loans Amortized Cost	2,402		2,697
Revolving Loans Converted to Term	3		5
Total loans, net of deferred loan fees and costs	9,238		9,872
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		4
2023	0		15
2022	0		8
2021	0		6
2020	0		0
Prior	0		54
Revolving Loans Amortized Cost	2		6
Revolving Loans Converted to Term	0		0
Total	2		93
Direct consumer | Not rated
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	700		3,005
2023	2,622		2,745
2022	2,391		785
2021	607		256
2020	174		53
Prior	332		324
Revolving Loans Amortized Cost	2,401		2,697
Revolving Loans Converted to Term	3		5
Total loans, net of deferred loan fees and costs	9,230		9,870
Direct consumer | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	5		2
2020	2		0
Prior	0		0
Revolving Loans Amortized Cost	1		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	8		2
Commercial & industrial
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	10,909		42,110
2023	39,100		45,196
2022	43,488		22,733
2021	22,158		17,670
2020	16,492		31,256
Prior	45,253		16,459
Revolving Loans Amortized Cost	99,742		86,388
Revolving Loans Converted to Term	2,272		2,328
Total loans, net of deferred loan fees and costs	279,414		264,140
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		9
Prior	0		272
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total	0		281
Commercial & industrial | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	10,885		41,925
2023	39,011		40,564
2022	34,108		21,742
2021	21,370		13,541
2020	12,349		31,233
Prior	39,698		10,523
Revolving Loans Amortized Cost	92,497		77,176
Revolving Loans Converted to Term	1,643		1,662
Total loans, net of deferred loan fees and costs	251,561		238,366
Commercial & industrial | Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		185
2023	0		4,608
2022	9,159		0
2021	0		4,020
2020	4,060		0
Prior	4,586		4,690
Revolving Loans Amortized Cost	7,223		9,137
Revolving Loans Converted to Term	453		482
Total loans, net of deferred loan fees and costs	25,481		23,122
Commercial & industrial | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	89		24
2022	221		991
2021	788		109
2020	83		23
Prior	205		456
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	176		161
Total loans, net of deferred loan fees and costs	1,562		1,764
Commercial & industrial | Doubtful
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	24		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	764		790
Revolving Loans Amortized Cost	22		75
Revolving Loans Converted to Term	0		23
Total loans, net of deferred loan fees and costs	810		888
Agricultural
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	2		15
2022	14		150
2021	143		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	62		65
Revolving Loans Converted to Term	0		26
Total loans, net of deferred loan fees and costs	221		256
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total	0		0
Agricultural | Pass
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		15
2022	14		150
2021	143		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	62		65
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	219		230
Agricultural | Special mention
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	0		0
Agricultural | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	2		0
2022	0		0
2021	0		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		26
Total loans, net of deferred loan fees and costs	2		26
Agricultural | Doubtful
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		0
2022	0		0
2021	0		0
2020	0		0
Prior	0		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	0		0
Commercial and Agricultural
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	279,635		264,396
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
Total	0	190
Commercial and Agricultural | Commercial & industrial
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	279,414		264,140
Commercial and Agricultural | Agricultural
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	221		256
Commercial Mortgages
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	1,145,802		1,122,925
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
Total	0	0
Commercial Mortgages | Construction
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	141,604		138,887
Commercial Mortgages | Commercial mortgages, other
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	1,004,198		984,038
Residential Mortgages
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	4,014		18,653
2023	20,000		58,173
2022	57,279		60,370
2021	59,653		71,369
2020	70,297		16,117
Prior	66,003		53,310
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	277,246		277,992
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
2024	0		0
2023	0		32
2022	0		0
2021	0		0
2020	0		0
Prior	16		0
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total	16	0	32
Residential Mortgages | Not rated
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	4,014		18,653
2023	20,000		58,098
2022	57,204		60,024
2021	59,311		71,369
2020	70,050		15,948
Prior	65,549		52,585
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	276,128		276,677
Residential Mortgages | Substandard
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
2024	0		0
2023	0		75
2022	75		346
2021	342		0
2020	247		169
Prior	454		725
Revolving Loans Amortized Cost	0		0
Revolving Loans Converted to Term	0		0
Total loans, net of deferred loan fees and costs	1,118		1,315
Consumer Loans
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	300,927		307,351
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss, Writeoff, by Origination Year [Abstract]
Total	351	$ 193
Consumer Loans | Home equity lines and loans
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	87,608		87,056
Consumer Loans | Indirect consumer
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	204,081		210,423
Consumer Loans | Direct consumer
Financing Receivable, Excluding Accrued Interest, before Allowance for Credit Loss, by Origination Year [Abstract]
Total loans, net of deferred loan fees and costs	$ 9,238		$ 9,872

XML

FAIR VALUE - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Financial Assets:
Total	$ 566,028	$ 583,993
Derivative assets	25,806	23,942
Financial Liabilities:
Derivative liabilities	25,811	23,981
Recurring
Financial Assets:
U.S. Treasury notes and bonds	55,162	55,332
Mortgage-backed securities, residential	389,707	403,824
Obligations of states and political subdivisions	38,145	38,686
Corporate bonds and notes	20,932	20,669
SBA loan pools	62,082	65,482
Total	566,028	583,993
Equity investments, at fair value	2,600	2,552
Derivative assets	25,806	23,942
Financial Liabilities:
Derivative liabilities	25,811	23,981
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring
Financial Assets:
U.S. Treasury notes and bonds	55,162	55,332
Mortgage-backed securities, residential	0	0
Obligations of states and political subdivisions	0	0
Corporate bonds and notes	0	0
SBA loan pools	0	0
Total	55,162	55,332
Equity investments, at fair value	2,600	2,552
Derivative assets	0	0
Financial Liabilities:
Derivative liabilities	0	0
Significant Other Observable Inputs (Level 2) | Recurring
Financial Assets:
U.S. Treasury notes and bonds	0	0
Mortgage-backed securities, residential	389,707	403,824
Obligations of states and political subdivisions	38,145	38,686
Corporate bonds and notes	13,211	13,139
SBA loan pools	62,082	65,482
Total	503,145	521,131
Equity investments, at fair value	0	0
Derivative assets	25,806	23,942
Financial Liabilities:
Derivative liabilities	25,811	23,981
Significant Unobservable Inputs (Level 3) | Recurring
Financial Assets:
U.S. Treasury notes and bonds	0	0
Mortgage-backed securities, residential	0	0
Obligations of states and political subdivisions	0	0
Corporate bonds and notes	7,721	7,530
SBA loan pools	0	0
Total	7,721	7,530
Equity investments, at fair value	0	0
Derivative assets	0	0
Financial Liabilities:
Derivative liabilities	$ 0	$ 0

XML

FAIR VALUE - Narrative (Details)	3 Months Ended
	Mar. 31, 2023 investment
Fair Value Disclosures [Abstract]
Number of investments transferred	8

XML

FAIR VALUE - Unobservable Inputs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 7,530	$ 0
Included in other comprehensive income	191	(1,289)
Transfers into Level 3	0	9,955
Transfers out of Level 3	0
Ending balance	$ 7,721	$ 8,666

XML

FAIR VALUE - Quantitative Information (Details) $ in Thousands	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Corporate bonds and notes	$ 7,721	$ 7,530	$ 8,666	$ 0
Market discount rate | Corporate Bonds And Notes | Discounted cash flow | Minimum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Financial asset, measurement input	0.1250
Market discount rate | Corporate Bonds And Notes | Discounted cash flow | Maximum
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Financial asset, measurement input	0.1250
Market discount rate | Corporate Bonds And Notes | Discounted cash flow | Weighted Average
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Financial asset, measurement input	0.1250

XML

FAIR VALUE - Carrying Amounts and Estimated Fair Values of Other Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Financial assets:
Cash and due from financial institutions	$ 22,984	$ 22,247
Interest-earning deposits in other financial institutions	71,878	14,600
Debt Securities, Available-for-Sale	566,028	583,993
Securities held to maturity	785	785
Loans, net and loans held for sale	1,983,139	1,950,147
Derivative assets	25,806	23,942
Deposits [Abstract]
FHLBNY overnight advances	0	31,920
FRB term advance	50,000	0
Derivative liabilities	25,811	23,981
Recurring
Financial assets:
Debt Securities, Available-for-Sale	566,028	583,993
Derivative assets	25,806	23,942
Deposits [Abstract]
Derivative liabilities	25,811	23,981
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets:
Debt Securities, Available-for-Sale	55,162	55,332
Derivative assets	0	0
Deposits [Abstract]
Derivative liabilities	0	0
Recurring | Significant Other Observable Inputs (Level 2)
Financial assets:
Debt Securities, Available-for-Sale	503,145	521,131
Derivative assets	25,806	23,942
Deposits [Abstract]
Derivative liabilities	25,811	23,981
Recurring | Significant Unobservable Inputs (Level 3)
Financial assets:
Debt Securities, Available-for-Sale	7,721	7,530
Derivative assets	0	0
Deposits [Abstract]
Derivative liabilities	0	0
Recurring | Carrying Amount
Financial assets:
Cash and due from financial institutions	22,984	22,247
Interest-earning deposits in other financial institutions	71,878	14,600
Equity investments	3,093	3,046
Debt Securities, Available-for-Sale	566,028	583,993
Securities held to maturity	785	785
FHLBNY and FRBNY stock	4,071	5,498
Loans, net and loans held for sale	2,003,706	1,972,664
Derivative assets	25,806	23,942
Deposits [Abstract]
Demand, savings, and insured money market deposits	1,851,412	1,817,162
Time deposits	629,360	612,265
FHLBNY overnight advances	0	31,920
FRB term advance	50,000
Derivative liabilities	25,811	23,981
Recurring | Estimated Fair Value
Financial assets:
Cash and due from financial institutions	22,984	22,247
Interest-earning deposits in other financial institutions	71,878	14,600
Equity investments	3,093	3,046
Debt Securities, Available-for-Sale	566,028	583,993
Securities held to maturity	785	785
Loans, net and loans held for sale	1,896,266	1,875,390
Derivative assets	25,806	23,942
Deposits [Abstract]
Demand, savings, and insured money market deposits	1,851,412	1,817,162
Time deposits	626,423	609,863
FHLBNY overnight advances	0	31,925
FRB term advance	49,828
Derivative liabilities	25,811	23,981
Recurring | Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial assets:
Cash and due from financial institutions	22,984	22,247
Interest-earning deposits in other financial institutions	71,878	14,600
Equity investments	3,093	3,046
Debt Securities, Available-for-Sale	55,162	55,332
Securities held to maturity	0	0
FHLBNY and FRBNY stock	0	0
Loans, net and loans held for sale	0	0
Derivative assets	0	0
Deposits [Abstract]
Demand, savings, and insured money market deposits	1,851,412	1,817,162
Time deposits	0	0
FHLBNY overnight advances	0	0
FRB term advance	0
Derivative liabilities	0	0
Recurring | Estimated Fair Value | Significant Other Observable Inputs (Level 2)
Financial assets:
Cash and due from financial institutions	0	0
Interest-earning deposits in other financial institutions	0	0
Equity investments	0	0
Debt Securities, Available-for-Sale	503,145	521,131
Securities held to maturity	0	0
FHLBNY and FRBNY stock	0	0
Loans, net and loans held for sale	0	0
Derivative assets	25,806	23,942
Deposits [Abstract]
Demand, savings, and insured money market deposits	0	0
Time deposits	626,423	609,863
FHLBNY overnight advances	0	31,925
FRB term advance	49,828
Derivative liabilities	25,811	23,981
Recurring | Estimated Fair Value | Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and due from financial institutions	0	0
Interest-earning deposits in other financial institutions	0	0
Equity investments	0	0
Debt Securities, Available-for-Sale	7,721	7,530
Securities held to maturity	785	785
FHLBNY and FRBNY stock	0	0
Loans, net and loans held for sale	1,896,266	1,875,390
Derivative assets	0	0
Deposits [Abstract]
Demand, savings, and insured money market deposits	0	0
Time deposits	0	0
FHLBNY overnight advances	0	0
FRB term advance	0
Derivative liabilities	$ 0	$ 0

XML

LEASES - Narrative (Details)	3 Months Ended
	Mar. 31, 2024 USD ($) lease	Mar. 31, 2023 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease, weighted average remaining lease term (years)	7 years 6 months 21 days
Operating lease, weighted average discount rate	3.51%
Operating lease not yet commenced | lease	1
Finance lease, weighted average remaining lease term (years)	9 years 1 month 6 days
Finance lease, weighted average discount rate	3.42%
Finance lease not yet commenced	$ 0
Operating lease, rent expense	300,000
2 Rush Street, Schenectady, New York | Director
Lessee, Lease, Description [Line Items]
Monthly rent and common area maintenance expense	9,000
Operating lease, rent expense	$ 27,000	$ 26,000

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LEASES - Leased Branch Properties (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Leases [Abstract]
Operating lease right-of-use asset	$ 5,648	$ 6,449
Less: accumulated amortization	(200)	(801)
Less: lease termination	0	0
Add: new lease agreement and modifications	570	0
Operating lease right-of-use assets	$ 6,018	$ 5,648

XML

LEASES - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Leases [Abstract]
2024	$ 717
2025	959
2026	965
2027	977
2028	845
2027 and thereafter	2,590
Total minimum lease payments	7,053
Less: amount representing interest	(856)
Present value of net minimum lease payments	$ 6,197	$ 5,827

XML

LEASES - Premises and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Leases [Abstract]
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Premises and equipment, net	Premises and equipment, net
Buildings	$ 5,572	$ 5,572
Less: accumulated depreciation	(2,955)	(2,872)
Net book value	$ 2,617	$ 2,700

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LEASES - Future Minimum Lease Payment Obligations Under Finance Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Leases [Abstract]
2024	$ 293
2025	409
2026	425
2027	428
2028	428
2027 and thereafter	1,560
Total minimum lease payments	3,543
Less: amount representing interest	(564)
Present value of net minimum lease payments	$ 2,979	$ 3,050

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GOODWILL AND INTANGIBLE ASSETS - Changes in Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Goodwill [Roll Forward]
Beginning of year	$ 21,824	$ 21,824
Acquired goodwill	0	0
Ending balance	$ 21,824	$ 21,824

XML

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 0	$ 0
Goodwill impairment charges			$ 0

XML

COMMITMENTS AND CONTINGENCIES - Contractual Amounts of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Commitments to make loans | Fixed Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	$ 14,387	$ 23,809
Commitments to make loans | Variable Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	61,128	78,790
Unused lines of credit | Fixed Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	2,249	3,387
Unused lines of credit | Variable Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	327,681	332,439
Standby letters of credit | Fixed Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	0	0
Standby letters of credit | Variable Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Contractual amounts of financial instruments with off-balance sheet risk	$ 18,201	$ 11,317

XML

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Allowance for credit losses	$ 20,471	$ 22,517	$ 20,075	$ 19,659
Unfunded Loan Commitment
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Allowance for credit losses	$ 743	$ 919	$ 1,048	$ 0
Minimum | Fixed Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Interest rate on fixed-rate commitments to make loans	5.63%
Maturity period of fixed-rate commitments to make loans (years)	4 years
Commitments period to make fixed-rate commercial draw notes (months)	3 months
Interest rate on fixed-rate commitments to make commercial draw notes (in hundredths)	2.79%
Maximum
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Commitments period to make real estate and home equity loans (days)	60 days
Maximum | Fixed Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Interest rate on fixed-rate commitments to make loans	7.38%
Maturity period of fixed-rate commitments to make loans (years)	30 years
Commitments period to make fixed-rate commercial draw notes (months)	24 months
Interest rate on fixed-rate commitments to make commercial draw notes (in hundredths)	8.17%

XML

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Summary of Changes in Accumulated Other Comprehensive Income or Loss by Component (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Changes in accumulated other comprehensive income or loss by component, net of tax [Roll Forward]
Beginning balance	$ 195,241	$ 166,388
Other comprehensive income before reclassification	(4,070)	5,775
Amounts reclassified from accumulated other comprehensive income	5	9
Total other comprehensive income (loss)	(4,065)	5,784
Ending balance	197,128	177,341
Total
Changes in accumulated other comprehensive income or loss by component, net of tax [Roll Forward]
Beginning balance	(66,013)	(75,257)
Total other comprehensive income (loss)	(4,065)	5,784
Ending balance	(70,078)	(69,473)
Unrealized Gains and Losses on Securities Available for Sale
Changes in accumulated other comprehensive income or loss by component, net of tax [Roll Forward]
Beginning balance	(62,800)	(71,296)
Other comprehensive income before reclassification	(4,070)	5,775
Amounts reclassified from accumulated other comprehensive income	0	0
Total other comprehensive income (loss)	(4,070)	5,775
Ending balance	(66,870)	(65,521)
Defined Benefit and Other Benefit Plans
Changes in accumulated other comprehensive income or loss by component, net of tax [Roll Forward]
Beginning balance	(3,213)	(3,961)
Other comprehensive income before reclassification	0	0
Amounts reclassified from accumulated other comprehensive income	5	9
Total other comprehensive income (loss)	5	9
Ending balance	$ (3,208)	$ (3,952)

XML

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Details about Accumulated Other Comprehensive Income Components (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Tax effect	$ (2,038)	$ (1,987)
Total reclassification for the period, net of tax	7,050	7,270
Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassification for the period, net of tax	5	9
Prior service costs
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pension and other employee benefits	0	0
Actuarial losses
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Pension and other employee benefits	7	12
Defined Benefit and Other Benefit Plans | Reclassification out of Accumulated Other Comprehensive Income
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Tax effect	(2)	(3)
Total reclassification for the period, net of tax	$ 5	$ 9

XML

REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Changes in fair value of equity investments	$ 101	$ 72
Income from bank owned life insurance	9	10
Other non-interest income	5,657	5,423
Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Other non-interest income	212	192
Overdraft fees
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	710	714
Other
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	239	227
Interchange revenue from debit card transactions
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	1,063	1,133
WMG fee income
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	2,703	2,580
CFS fee and commission income
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	228	241
Net gains on sales of loans
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	32	5
Loan servicing fees
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	36	36
Income from bank-owned life insurance
Disaggregation of Revenue [Line Items]
Income from bank owned life insurance	9	10
Other
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	536	405
Core Banking | Operating Segments
Disaggregation of Revenue [Line Items]
Changes in fair value of equity investments	117	78
Other non-interest income	2,742	2,651
Core Banking | Overdraft fees | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	710	714
Core Banking | Other | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	239	227
Core Banking | Interchange revenue from debit card transactions | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	1,063	1,133
Core Banking | WMG fee income | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
Core Banking | CFS fee and commission income | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
Core Banking | Net gains on sales of loans | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	32	5
Core Banking | Loan servicing fees | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	36	36
Core Banking | Income from bank-owned life insurance | Operating Segments
Disaggregation of Revenue [Line Items]
Income from bank owned life insurance	9	10
Core Banking | Other | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	536	448
WMG | Operating Segments
Disaggregation of Revenue [Line Items]
Changes in fair value of equity investments	0	0
Other non-interest income	2,703	2,580
WMG | Overdraft fees | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
WMG | Other | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
WMG | Interchange revenue from debit card transactions | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
WMG | WMG fee income | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	2,703	2,580
WMG | CFS fee and commission income | Operating Segments
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
WMG | Net gains on sales of loans | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	0	0
WMG | Loan servicing fees | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	0	0
WMG | Income from bank-owned life insurance | Operating Segments
Disaggregation of Revenue [Line Items]
Income from bank owned life insurance	0	0
WMG | Other | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	0	0
Holding Company, CFS, and CRM | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Changes in fair value of equity investments	(16)	(6)
Other non-interest income	212	192
Holding Company, CFS, and CRM | Overdraft fees | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
Holding Company, CFS, and CRM | Other | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
Holding Company, CFS, and CRM | Interchange revenue from debit card transactions | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
Holding Company, CFS, and CRM | WMG fee income | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	0	0
Holding Company, CFS, and CRM | CFS fee and commission income | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenues from contracts with customer	228	241
Holding Company, CFS, and CRM | Net gains on sales of loans | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	0	0
Holding Company, CFS, and CRM | Loan servicing fees | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	0	0
Holding Company, CFS, and CRM | Income from bank-owned life insurance | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Income from bank owned life insurance	0	0
Holding Company, CFS, and CRM | Other | Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Revenue not from contact with customer	$ 0	$ (43)

XML

COMPONENTS OF QUARTERLY AND YEAR TO DATE NET PERIODIC BENEFIT COSTS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Qualified Pension Plan
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost, benefits earned during the period	$ 0	$ 0
Interest cost on projected benefit obligation	378	396
Expected return on plan assets	(629)	(596)
Amortization of unrecognized transition obligation	0	0
Amortization of unrecognized prior service cost	0	0
Amortization of unrecognized net loss	0	6
Net periodic pension benefit	(251)	(194)
Supplemental Pension Plan
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost, benefits earned during the period	0	0
Interest cost on projected benefit obligation	11	12
Expected return on plan assets	0	0
Amortization of unrecognized prior service cost	0	0
Amortization of unrecognized net loss	3	2
Net periodic pension benefit	14	14
Postretirement Plan, Medical and Life
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost, benefits earned during the period	0	0
Interest cost on projected benefit obligation	1	1
Expected return on plan assets	0	0
Amortization of unrecognized prior service cost	0	0
Amortization of unrecognized net loss	4	5
Net periodic pension benefit	$ 5	$ 6

XML

SEGMENT REPORTING - Narrative (Details)	3 Months Ended
	Mar. 31, 2024 segment
Segment Reporting [Abstract]
Number of primary business segments	2

XML

SEGMENT REPORTING - Reconciliation of Segment Net Income Loss and Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Reportable segments and reconciliation to consolidated results [Abstract]
Interest and dividend income	$ 31,219	$ 26,230
Interest expense	13,130	6,283
Net interest income	18,089	19,947
Provision for credit losses	(2,040)	277
Net interest income after provision for credit losses	20,129	19,670
Other non-interest income	5,657	5,423
Other non-interest expenses	16,698	15,836
Income before income tax expense	9,088	9,257
Income tax expense (benefit)	2,038	1,987
Net income	7,050	7,270
Assets	2,784,890	2,654,183	$ 2,710,529
Operating Segments | Core Banking
Reportable segments and reconciliation to consolidated results [Abstract]
Interest and dividend income	31,211	26,203
Interest expense	13,130	6,283
Net interest income	18,081	19,920
Provision for credit losses	(2,040)	277
Net interest income after provision for credit losses	20,121	19,643
Other non-interest income	2,742	2,651
Other non-interest expenses	14,539	13,696
Income before income tax expense	8,324	8,598
Income tax expense (benefit)	1,870	1,831
Net income	6,454	6,767
Assets	2,778,785	2,644,158
Operating Segments | WMG
Reportable segments and reconciliation to consolidated results [Abstract]
Interest and dividend income	0	0
Interest expense	0	0
Net interest income	0	0
Provision for credit losses	0	0
Net interest income after provision for credit losses	0	0
Other non-interest income	2,703	2,580
Other non-interest expenses	1,895	1,798
Income before income tax expense	808	782
Income tax expense (benefit)	182	177
Net income	626	605
Assets	2,898	2,538
Intersegment Eliminations
Reportable segments and reconciliation to consolidated results [Abstract]
Interest and dividend income	8	27
Interest expense	0
Net interest income	8	27
Provision for credit losses	0	0
Net interest income after provision for credit losses	8	27
Other non-interest income	212	192
Other non-interest expenses	264	342
Income before income tax expense	(44)	(123)
Income tax expense (benefit)	(14)	(21)
Net income	(30)	(102)
Assets	$ 3,207	$ 1,714

XML

STOCK COMPENSATION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Restricted Stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Granted (in shares)	12,088	13,069
Weighted-average period for recognition (in years)	3 years 9 months 21 days
Vesting period	1 year
Total unrecognized compensation cost related to nonvested shares granted under the Plan	$ 2.1
Total fair value of shares vested	$ 0.6	$ 0.6
2021 Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of shares authorized (in shares)	170,000
Weighted-average period for recognition (in years)	1 year
Vesting period	5 years
Expenses related to stock based compensation recognized	$ 0.3	$ 0.4

XML

STOCK COMPENSATION - Restricted Stock Activity For Officers And Employees (Details) - Restricted Stock - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Shares
Nonvested, beginning balance (in shares)	62,984
Granted (in shares)	12,088	13,069
Vested (in shares)	(13,208)
Forfeited or cancelled (in shares)	0
Nonvested, ending balance (in shares)	61,864
Weighted–Average Grant Date Fair Value
Nonvested, beginning balance (in dollars per share)	$ 45.87
Granted (in dollars per share)	48.11
Vested (in dollars per share)	45.86
Forfeitures or cancelled (in dollars per share)	0
Nonvested, ending balance (in dollars per share)	$ 46.31

XML

Label	Element	Value
Accounting Standards Update [Extensible Enumeration]	us-gaap_AccountingStandardsUpdateExtensibleList	Accounting Standards Update 2016-13 [Member]