UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): October 31, 2012
Chemung Financial Corporation
(Exact Name of Registrant as Specified in Charter)
| New York | 0-13888 | 16-1237038 | ||
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| One Chemung Canal Plaza, P.O. Box 1522, Elmira, NY14901 |
| (Address of Principal Executive Offices) (Zip Code) |
(607) 737-3711
(Registrant's telephone number including area code)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
On October 31, 2012, Chemung Financial Corporation issued a press release describing its results of operations for the third quarter of 2012. The press release is furnished as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
Exhibit No.
99.1
Press Release of Chemung Financial Corporation dated October 31, 2012
SIGNATURE
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 hereunto duly authorized.
| October 31, 2012 | Chemung Financial Corporation |
|
| By: | /s/ MARK SEVERSON Mark Severson Executive Vice President, Chief Financial Officer & Treasurer |
|
EXHIBIT 99.1
ELMIRA, N.Y., Oct. 31, 2012 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (OTCBB:CHMG) the parent company of Chemung Canal Trust Company, reported year-to-date and quarter ended September 30, 2012, net income and earnings per share. Highlights for the current year and quarter include:
Ronald M. Bentley, President and CEO stated, "We are very pleased with the results for the first nine months and third quarter of 2012. We have been extremely diligent in holding the net interest margin in the 4.00% range in the current historically low interest rate environment. At the same time, our efforts to tightly manage credit quality have proven to be successful with a non-performing assets ratio of 1.10% as of September 30, 2012. Also, the acquisition of Capital Bank in the Albany region has been highly profitable for us and has significantly increased the value of our banking franchise."
Mr. Bentley continued, "Our expansion into the Albany region has given us an excellent opportunity for loan and deposit growth. We believe we have seized upon this opportunity in the past year by experiencing strong growth in our Albany region lending portfolios."
Summary:
Chemung Financial Corporation reported net income of $8.9 million for the nine months ended September 30, 2012, an increase of $1.3 million, or 17.4%, compared with $7.6 million for the nine months ended September 30, 2011. The improvement was attributable to an increase of $3.3 million in net interest income, partially offset by increases of $0.9 million in non-interest expense and $0.8 million in income taxes, and a reduction of $0.3 million in non-interest income. Earnings per share for the nine months ended September 30, 2012, was $1.92 compared with $1.76 for the nine months ended September 30, 2011. Return on average assets and return on average equity for the nine months ended September 30, 2012, were 0.95% and 9.12%, respectively, compared with 0.88% and 8.66%, respectively, for the same period in the prior year.
Year-to-date earnings improved significantly due primarily to an increase in net interest income and a $2.2 million decrease in pre-tax one-time merger transaction costs, both related to the Capital Bank acquisition in April 2011. In addition, we recognized $0.8 million in pre-tax casualty gains from insurance reimbursements related to the September 2011 flooding of our Owego and Tioga offices.
Net income for the third quarter 2012 was $2.8 million compared with third quarter 2011 results of $3.3 million, a decrease of $0.5 million or 13.9%. The decline was attributable to an increase of $0.8 million in non-interest expense and a reduction of $0.4 million in net gain on securities transactions. These items were partially offset by reductions of $0.4 million in the provision for loan losses and $0.3 million in income taxes. Earnings per share for the current quarter totaled $0.61 compared with $0.71 for the same period in the prior year. Return on average assets and return on average equity for the current quarter were 0.89% and 8.53%, respectively, compared with 1.05% and 10.18%, respectively, for the third quarter of 2011.
Net income of $2.8 million for the quarter ended September 30, 2012, represents an increase of $0.4 million, or 16.0%, from net income of $2.4 million for the preceding quarter ended June 30, 2012. The increase in net income was primarily due to an increase of $0.4 million in net interest income and a reduction of $0.5 million in non-interest expense. These items were partially offset by increases of $0.2 million in the provision for loan losses and $0.3 million in income taxes. Earnings per share for the current quarter totaled $0.61 compared with $0.53 for the preceding quarter. Return on average assets and return on average equity for the current quarter were 0.89% and 8.53%, respectively, compared with 0.78% and 7.55%, respectively, for the preceding quarter.
Net Interest Income:
Net interest income for the nine months ended September 30, 2012, totaled $35.2 million compared with $31.8 million for the same period in the prior year, an increase of $3.3 million, or 10.4%. Net interest margin increased to 4.10% for the nine months ended September 30, 2012, from 4.02% for the same period in the prior year. The increase in net interest margin was primarily due to the cost of interest-bearing liabilities decreasing at a faster rate than the yield on interest-earning assets and an increase in average earning assets. The increase in average earning assets was principally the result of the Capital Bank acquisition in April 2011.
Net interest income for the third quarter of 2012 was $11.8 million, level with the same quarter in the prior year. Net interest margin declined to 4.04% for the current quarter from 4.11% for the same quarter in the prior year. The decline in net interest margin was primarily due to yields on interest-earning assets decreasing at a faster rate than the cost of interest-bearing liabilities. The decrease in yield on interest-earning assets was attributable to lower loan yields as loans continue to reprice at current market rates.
Compared with the preceding quarter ended June 30, 2012, net interest income increased by $0.4 million, primarily due to a 7 basis point increase in the net interest margin. The improvement in the net interest margin was due to a 7 basis point decrease in the cost of interest-bearing liabilities and a slight increase in average earning assets.
Non-Interest Income:
Non-interest income for the nine months ended September 30, 2012, was $13.1 million compared with $13.4 million for the same period in the prior year, a decrease of $0.3 million, or 2.5%. The decline was primarily due to decreases of $0.8 million in net gain on securities transactions and $0.5 million in revenue from our equity investment in Cephas Capital Partners, L.P. These items were partially offset by $0.8 million in casualty gains from insurance reimbursements related to the September 2011 flooding of our Owego and Tioga offices and an increase in net gain on sale of loans held for sale.
Non-interest income for the third quarter of 2012 was $4.1 million, level with the preceding quarter and down $0.3 million compared with the same quarter in the prior year. The decrease from the year-ago quarter was primarily due to a decrease of $0.4 million in net gain on securities transactions.
Non-Interest Expense:
Non-interest expense for the nine months ended September 30, 2012, was $34.2 million compared with $33.3 million for the same period in the prior year, an increase of $0.9 million, or 2.8%. Excluding $2.2 million in merger related expenses from the prior year, non-interest expense increased $3.2 million, or 10.2% for the nine months ended September 30, 2012. This increase was primarily due to increases of $1.2 million in salaries and wages, $0.8 million in pension and other employee benefits, $0.4 million in data processing expenses and $0.2 million in other real estate owned expenses. The increase in salaries and wages was primarily due to the operation of the Capital Bank division for nine months during 2012 compared with six months during 2011, and additional compensation related to merit increases and incentive compensation. The increase in pension and other employee benefits was primarily due to higher pension costs, health benefits and payroll taxes. The increase in data processing expenses was primarily due to higher hardware and software maintenance fees and check card processing costs that included conversion costs for a new processor.
Non-interest expense for the third quarter of 2012 was $11.4 million compared with $10.6 million for the same quarter in the prior year, an increase of $0.8 million, or 7.3%. The increase was primarily due to increases of $0.4 million in salaries and wages, $0.2 million in pension and other employee benefits and $0.1 million in other real estate owned expenses. The increase in salaries and wages was primarily due to an increase in employees in the Capital Bank region of our New York franchise, and additional compensation related to merit increases and incentive compensation. The increase in pension and other employee benefits was primarily due to higher pension costs and health benefits. The increase in other real estate owned expense was due to the write-down of a commercial property. Compared with the preceding quarter ended June 30, 2012, non-interest expense decreased $0.5 million, or 4.1%. The decrease was primarily due to lower data processing expenses.
Asset Quality:
Non-performing loans totaled $13.3 million at September 30, 2012, or 1.51% of total loans, down $7.6 million from $20.9 million, or 2.62%, at December 31, 2011. Non-performing assets which are comprised of non-performing loans and other real estate owned, totaled $14.2 million at September 30, 2012, or 1.10% of total assets, down $7.6 million from $21.8 million, or 1.79%, at December 31, 2011. Excluding $4.6 million in accruing loans that are 90 days or more past their stated maturity dates, the non-performing assets to total assets ratio was 0.75%.
Management performs an ongoing assessment of the adequacy of the allowance for loan losses based upon a number of factors including an analysis of historical loss factors, collateral evaluations, recent charge-off experience, credit quality of the loan portfolio, current economic conditions and loan growth. Based on this analysis, the provision for loan losses for the nine months ended September 30, 2012, was $0.8 million, level with the prior year. Net recoveries for the nine months ended September 30, 2012, were $0.3 million compared with net charge-offs of $0.7 million for the same period in the prior year.
For the third quarter of 2012, the provision for loan losses was $0.2 million compared with $0.1 million for the preceding quarter and $0.6 million for the same quarter in the prior year. Net recoveries for the current quarter were $0.2 million compared with net recoveries of $0.1 million for the preceding quarter and net charge-offs of $0.7 million for the same quarter in the prior year.
At September 30, 2012, the allowance for loan losses was $10.8 million compared with $10.4 million at June 30, 2012, and $9.7 million at December 31, 2011. The allowance for loan losses was 81.66% of non-performing loans at September 30, 2012, compared with 69.24% at June 30, 2012, and 46.18% at December 31, 2011. The ratio of the allowance for loan losses to total loans was 1.24% at September 30, 2012, compared with 1.21% at June 30, 2012, and December 31, 2011. Excluding acquired loans, the ratio of the allowance for loan losses on Legacy loans to Legacy loans was 1.38% at September 30, 2012, level with June 30, 2012, and down from 1.47% at December 31, 2011.
Balance Sheet Activity:
Assets totaled $1.287 billion at September 30, 2012, compared with $1.216 billion at December 31, 2011, an increase of $70.7 million, or 5.8%. The growth was primarily due to increases of $79.4 million, or 10.0%, in total portfolio loans and $28.3 million in cash and cash equivalents, partially offset by a decrease of $30.1 million in investment securities. The increase in portfolio loans was due to strong growth of $37.7 million in commercial loans and $42.3 million in consumer loans.
Deposits totaled $1.083 billion at September 30, 2012, compared with $998.5 million at December 31, 2011, an increase of $84.7 million, or 8.5%. The growth was primarily due to increases of $70.7 million in money market accounts, $43.7 million in non-interest-bearing demand deposits and $34.6 million in NOW accounts. These items were partially offset by decreases of $36.2 million in savings accounts and $28.0 million in certificates of deposit.
Total equity was $132.9 million at September 30, 2012, compared with $125.9 million at December 31, 2011. The total equity to total assets ratio was 10.32% at September 30, 2012, a slight decrease from 10.35% at December 31, 2011. The tangible equity to tangible assets ratio was 8.39% at September 31, 2012, up from 8.23% at December 31, 2011. As of September 30, 2012, both the Corporation's and the Bank's capital ratios were in excess of those required to be considered well-capitalized under regulatory capital standards.
About Chemung Financial Corporation:
Chemung Financial Corporation is a $1.3 billion financial services holding company headquartered in Elmira, New York and operates 28 retail offices through its principal subsidiary, Chemung Canal Trust Company, a full-service community bank with trust powers. Established in 1833, Chemung Canal Trust Company is the oldest active independent bank in New York State. Chemung Financial Corporation is also the parent of CFS Group, Inc., a financial services subsidiary offering non-traditional services including mutual funds, annuities, brokerage services, tax preparation services and insurance. CFS Group, Inc. was founded in 2001.
This press release may be found at: www.chemungcanal.com under Shareholder Info.
Forward-Looking Statements:
This press release may include forward-looking statements with respect to revenue sources, growth, market risk, corporate objectives and possible losses due to asset quality. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Chemung Financial Corporation assumes no duty, and specifically disclaims any obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, and cautions that these statements are subject to risks and uncertainties that could cause the Corporation's actual operating results to differ materially.
| Chemung Financial Corporation | |||||
| Consolidated Balance Sheets (Unaudited) | |||||
| Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | |
| (Dollars in thousands, except share data) | 2012 | 2012 | 2012 | 2011 | 2011 |
| ASSETS | |||||
| Cash and due from financial institutions | $ 35,324 | $ 33,673 | $ 27,311 | $ 28,205 | $ 30,749 |
| Interest-bearing deposits in other financial institutions | 45,908 | 40,502 | 83,203 | 24,697 | 87,724 |
| Total cash and cash equivalents | 81,232 | 74,175 | 110,514 | 52,902 | 118,473 |
| Trading assets, at fair value | 275 | 252 | 254 | 294 | 249 |
| Securities available for sale | 253,669 | 260,942 | 259,450 | 280,870 | 279,079 |
| Securities held to maturity | 6,163 | 6,334 | 7,447 | 8,312 | 7,586 |
| FHLB and Federal Reserve Bank stocks, at cost | 4,760 | 5,359 | 5,436 | 5,509 | 5,672 |
| Total investment securities | 264,592 | 272,635 | 272,333 | 294,691 | 292,337 |
| Commercial | 444,491 | 436,205 | 414,536 | 406,798 | 397,846 |
| Mortgage | 193,049 | 194,512 | 192,548 | 193,600 | 194,261 |
| Consumer | 238,818 | 225,230 | 195,949 | 196,517 | 196,352 |
| Total loans | 876,358 | 855,947 | 803,033 | 796,915 | 788,459 |
| Allowance for loan losses | (10,828) | (10,392) | (10,283) | (9,659) | (9,677) |
| Loans, net | 865,530 | 845,555 | 792,750 | 787,256 | 778,782 |
| Loans held for sale | 1,165 | 482 | 826 | 395 | 74 |
| Premises and equipment, net | 24,863 | 24,718 | 24,977 | 24,762 | 24,250 |
| Goodwill | 21,824 | 21,824 | 21,824 | 21,984 | 22,157 |
| Other intangible assets, net | 5,382 | 5,642 | 5,906 | 6,191 | 6,479 |
| Other assets | 22,117 | 22,176 | 25,111 | 27,785 | 23,122 |
| Total assets | $ 1,286,980 | $ 1,267,459 | $ 1,254,495 | $ 1,216,260 | $ 1,265,923 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||
| Deposits: | |||||
| Demand deposits (non-interest bearing) | $ 302,509 | $ 297,413 | $ 272,055 | $ 258,836 | $ 261,946 |
| NOW accounts | 108,923 | 88,343 | 88,105 | 74,349 | 97,174 |
| Savings | 174,074 | 174,974 | 203,204 | 210,288 | 209,545 |
| Money market accounts | 248,722 | 232,870 | 212,376 | 178,030 | 168,046 |
| Certificates of deposit | 248,948 | 260,079 | 262,965 | 276,990 | 305,495 |
| Total deposits | 1,083,176 | 1,053,679 | 1,038,705 | 998,493 | 1,042,206 |
| Securities sold under agreements to repurchase | 32,918 | 31,750 | 34,998 | 37,107 | 41,454 |
| FHLB term advances | 28,046 | 41,128 | 43,227 | 43,344 | 43,936 |
| Other liabilities | 9,960 | 10,693 | 8,736 | 11,386 | 9,639 |
| Total liabilities | 1,154,100 | 1,137,250 | 1,125,666 | 1,090,330 | 1,137,235 |
| Shareholders' equity | |||||
| Common stock | 53 | 53 | 53 | 53 | 53 |
| Additional-paid-in capital | 45,538 | 45,525 | 45,556 | 45,583 | 45,710 |
| Retained earnings | 106,092 | 104,402 | 103,100 | 100,629 | 98,808 |
| Treasury stock | (18,731) | (18,915) | (18,734) | (18,894) | (18,948) |
| Accumulated other comprehensive income (loss) | (72) | (856) | (1,146) | (1,441) | 3,065 |
| Total shareholders' equity | 132,880 | 130,209 | 128,829 | 125,930 | 128,688 |
| Total liabilities and shareholders' equity | $ 1,286,980 | $ 1,267,459 | $ 1,254,495 | $ 1,216,260 | $ 1,265,923 |
| Period-end shares outstanding | 4,642,317 | 4,632,014 | 4,639,565 | 4,640,646 | 4,634,963 |
| Chemung Financial Corporation | ||||||
| Consolidated Statements of Income (Unaudited) | ||||||
| Nine Months Ended | Three Months Ended | |||||
| September 30, | Percent | September 30, | Percent | |||
| (Dollars in thousands, except share and per share data) | 2012 | 2011 | Change | 2012 | 2011 | Change |
| Interest and dividend income: | ||||||
| Loans, including fees | $ 34,078 | $ 31,456 | 8.3 | $ 11,374 | $ 11,673 | (2.6) |
| Taxable securities | 4,142 | 4,348 | (4.7) | 1,306 | 1,504 | (13.2) |
| Tax exempt securities | 977 | 1,035 | (5.6) | 300 | 351 | (14.5) |
| Interest-bearing deposits | 123 | 167 | (26.3) | 35 | 65 | (46.2) |
| Total interest and dividend income | 39,320 | 37,006 | 6.3 | 13,015 | 13,593 | (4.3) |
| Interest expense: | ||||||
| Deposits | 2,533 | 3,326 | (23.8) | 775 | 1,138 | (31.9) |
| Securities sold under agreements to repurchase | 763 | 1,056 | (27.7) | 231 | 327 | (29.4) |
| Borrowed funds | 868 | 783 | 10.9 | 234 | 285 | (17.9) |
| Total interest expense | 4,164 | 5,165 | (19.4) | 1,240 | 1,750 | (29.1) |
| Net interest income | 35,156 | 31,841 | 10.4 | 11,775 | 11,843 | (0.6) |
| Provision for loan losses | 754 | 833 | (9.5) | 225 | 583 | (61.4) |
| Net interest income after provision for loan losses | 34,402 | 31,008 | 10.9 | 11,550 | 11,260 | 2.6 |
| Non-interest income: | ||||||
| Wealth management group fee income | 5,170 | 5,131 | 0.8 | 1,668 | 1,747 | (4.5) |
| Service charges on deposit accounts | 3,143 | 3,181 | (1.2) | 1,111 | 1,131 | (1.8) |
| Net gain on securities transactions | 301 | 1,108 | (72.8) | 1 | 429 | (99.8) |
| Net impairment loss recognized in earnings | -- | (67) | N/M | -- | (67) | N/M |
| Net gain on sales of loans held for sale | 270 | 133 | 103.0 | 126 | 54 | 133.3 |
| Casualty gains | 790 | -- | N/M | 10 | -- | N/M |
| Other | 3,414 | 3,934 | (13.2) | 1,144 | 1,034 | 10.6 |
| Total non-interest income | 13,088 | 13,420 | (2.5) | 4,060 | 4,328 | (6.2) |
| Non-interest expense: | ||||||
| Salaries and wages | 13,711 | 12,534 | 9.4 | 4,662 | 4,273 | 9.1 |
| Pension and other employee benefits | 4,138 | 3,297 | 25.5 | 1,381 | 1,172 | 17.8 |
| Net occupancy | 3,849 | 3,663 | 5.1 | 1,269 | 1,230 | 3.2 |
| Furniture and equipment | 1,600 | 1,549 | 3.3 | 504 | 487 | 3.5 |
| Data processing | 3,279 | 2,881 | 13.8 | 972 | 976 | (0.4) |
| Amortization of intangible assets | 808 | 753 | 7.3 | 260 | 288 | (9.7) |
| Marketing and advertising | 916 | 791 | 15.8 | 271 | 308 | (12.0) |
| Other real estate owned expenses | 286 | 86 | 232.6 | 154 | 38 | 305.3 |
| FDIC insurance | 615 | 737 | (16.6) | 205 | 295 | (30.5) |
| Merger related expenses | 30 | 2,244 | (98.7) | 22 | 21 | 4.8 |
| Other | 4,968 | 4,727 | 5.1 | 1,693 | 1,529 | 10.7 |
| Total non-interest expense | 34,200 | 33,262 | 2.8 | 11,393 | 10,617 | 7.3 |
| Income before income tax expense | 13,290 | 11,166 | 19.0 | 4,217 | 4,971 | (15.2) |
| Income tax expense | 4,397 | 3,590 | 22.5 | 1,383 | 1,680 | (17.7) |
| Net income | $ 8,893 | $ 7,576 | 17.4 | $ 2,834 | $ 3,291 | (13.9) |
| Basic and diluted earnings per share | $ 1.92 | $ 1.76 | $ 0.61 | $ 0.71 | ||
| Cash dividends declared per share | 0.75 | 0.75 | 0.25 | 0.25 | ||
| Average basic and diluted shares outstanding | 4,639,985 | 4,297,777 | 4,641,547 | 4,637,392 | ||
| N/M – Not meaningful. | ||||||
| Chemung Financial Corporation | |||||||
| Consolidated Financial Highlights (Unaudited) | |||||||
| As of or for the | |||||||
| As of or for the Three Months Ended | Nine Months Ended | ||||||
| Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | |
| (Dollars in thousands, except share and per share data) | 2012 | 2012 | 2012 | 2011 | 2011 | 2012 | 2011 |
| RESULTS OF OPERATIONS | |||||||
| Interest income | $ 13,015 | $ 12,765 | $ 13,540 | $ 13,642 | $ 13,593 | $ 39,320 | $ 37,006 |
| Interest expense | 1,240 | 1,400 | 1,524 | 1,634 | 1,750 | 4,164 | 5,165 |
| Net interest income | 11,775 | 11,365 | 12,016 | 12,008 | 11,843 | 35,156 | 31,841 |
| Provision for loan losses | 225 | 52 | 477 | 125 | 583 | 754 | 833 |
| Net interest income after provision for loan losses | 11,550 | 11,313 | 11,539 | 11,883 | 11,260 | 34,402 | 31,008 |
| Non-interest income | 4,060 | 4,131 | 4,897 | 4,044 | 4,328 | 13,088 | 13,420 |
| Non-interest expense | 11,393 | 11,885 | 10,922 | 11,522 | 10,617 | 34,200 | 33,262 |
| Income before income tax expense | 4,217 | 3,559 | 5,514 | 4,405 | 4,971 | 13,290 | 11,166 |
| Income tax expense | 1,383 | 1,115 | 1,899 | 1,443 | 1,680 | 4,397 | 3,590 |
| Net income | $ 2,834 | $ 2,444 | $ 3,615 | $ 2,962 | $ 3,291 | $ 8,893 | $ 7,576 |
| Basic and diluted earnings per share | $ 0.61 | $ 0.53 | $ 0.78 | $ 0.64 | $ 0.71 | $ 1.92 | $ 1.76 |
| Average basic and diluted shares outstanding | 4,641,547 | 4,636,395 | 4,642,012 | 4,638,042 | 4,637,392 | 4,639,985 | 4,297,777 |
| PERFORMANCE RATIOS | |||||||
| Return on average assets | 0.89% | 0.78% | 1.18% | 0.95% | 1.05% | 0.95% | 0.88% |
| Return on average equity | 8.53% | 7.55% | 11.34% | 9.06% | 10.18% | 9.12% | 8.66% |
| Return on average tangible equity (a) | 10.76% | 9.58% | 14.47% | 11.60% | 13.17% | 11.57% | 10.85% |
| Efficiency ratio | 70.16% | 74.75% | 62.85% | 69.88% | 63.62% | 69.06% | 71.63% |
| Non-interest expense to average assets | 3.59% | 3.82% | 3.56% | 3.68% | 3.38% | 3.65% | 3.86% |
| Loans to deposits | 80.91% | 81.23% | 77.31% | 79.81% | 75.65% | 80.91% | 75.65% |
| YIELDS / RATES | |||||||
| Yield on loans | 5.21% | 5.39% | 5.90% | 5.85% | 5.90% | 5.49% | 5.82% |
| Yield on investments | 2.23% | 2.13% | 2.27% | 2.22% | 2.13% | 2.21% | 2.21% |
| Yield on interest-earning assets | 4.46% | 4.46% | 4.83% | 4.76% | 4.72% | 4.58% | 4.68% |
| Cost of interest-bearing deposits | 0.40% | 0.44% | 0.50% | 0.54% | 0.59% | 0.45% | 0.63% |
| Cost of borrowings | 2.85% | 3.02% | 2.96% | 2.84% | 2.80% | 2.95% | 3.07% |
| Cost of interest-bearing liabilities | 0.60% | 0.67% | 0.74% | 0.77% | 0.81% | 0.67% | 0.87% |
| Interest rate spread | 3.86% | 3.79% | 4.09% | 3.99% | 3.91% | 3.91% | 3.81% |
| Net interest margin | 4.04% | 3.97% | 4.28% | 4.19% | 4.11% | 4.10% | 4.02% |
| CAPITAL | |||||||
| Total equity to total assets at end of period | 10.32% | 10.27% | 10.27% | 10.35% | 10.17% | 10.32% | 10.17% |
| Tangible equity to tangible assets at end of period (a) | 8.39% | 8.29% | 8.24% | 8.23% | 8.09% | 8.39% | 8.09% |
| Book value per share | $ 28.62 | $ 28.11 | $ 27.77 | $ 27.14 | $ 27.76 | $ 28.62 | $ 27.76 |
| Tangible book value per share | 22.76 | 22.18 | 21.79 | 21.07 | 21.59 | 22.76 | 21.59 |
| Period-end market value per share | 23.77 | 25.50 | 25.40 | 22.70 | 23.00 | 23.77 | 23.00 |
| Dividends declared per share | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.75 | 0.75 |
| AVERAGE BALANCES | |||||||
| Loans (b) | $ 867,971 | $ 823,754 | $ 796,035 | $ 795,450 | $ 785,193 | $ 829,395 | $ 722,583 |
| Earning assets | 1,160,479 | 1,150,073 | 1,128,047 | 1,138,120 | 1,142,802 | 1,146,252 | 1,058,299 |
| Total assets | 1,262,648 | 1,252,461 | 1,235,453 | 1,241,144 | 1,246,612 | 1,250,232 | 1,152,771 |
| Deposits | 1,055,510 | 1,037,576 | 1,018,035 | 1,017,116 | 1,022,276 | 1,037,108 | 947,682 |
| Total equity | 132,186 | 130,254 | 128,194 | 129,767 | 128,305 | 130,218 | 117,009 |
| Tangible equity (a) | 104,827 | 102,635 | 100,465 | 101,279 | 99,116 | 102,650 | 93,385 |
| ASSET QUALITY | |||||||
| Net charge-offs (recoveries) | $ (210) | $ (58) | $ (23) | $ 143 | $ 662 | $ (291) | $ 654 |
| Non-performing loans | 13,260 | 15,009 | 15,137 | 20,915 | 21,488 | 13,260 | 21,488 |
| Non-performing assets | 14,194 | 15,979 | 16,117 | 21,813 | 22,149 | 14,194 | 22,149 |
| Allowance for loan losses | 10,828 | 10,392 | 10,283 | 9,659 | 9,677 | 10,828 | 9,677 |
| Annualized net charge-offs to average loans | (0.10)% | (0.03)% | (0.01)% | 0.07% | 0.33% | (0.05)% | 0.12% |
| Non-performing loans to total loans | 1.51% | 1.75% | 1.88% | 2.62% | 2.73% | 1.51% | 2.73% |
| Non-performing assets to total assets | 1.10% | 1.26% | 1.28% | 1.79% | 1.75% | 1.10% | 1.75% |
| Allowance for loan losses to total loans | 1.24% | 1.21% | 1.28% | 1.21% | 1.23% | 1.24% | 1.23% |
| Allowance for Legacy loans to Legacy loans (c) | 1.38% | 1.38% | 1.48% | 1.47% | 1.51% | 1.38% | 1.51% |
| Allowance for loan losses to non-performing loans | 81.66% | 69.24% | 67.93% | 46.18% | 45.03% | 81.66% | 45.03% |
| (a) See the GAAP to Non-GAAP reconciliations. | |||||||
| (b) Loans include loans held for sale. Loans do not reflect the allowance for loan losses. | |||||||
| (c) Legacy loans represent total loans excluding acquired loans. | |||||||
Chemung Financial Corporation
GAAP to Non-GAAP Reconciliations (Unaudited)
The table below shows computations of tangible equity and tangible assets and certain related ratios, all of which are considered to be non-GAAP financial measures. The tangible equity to tangible assets ratio has become a focus of some investors and management believes this ratio may assist in analyzing the Corporation's capital position, absent the effects of intangible assets. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of results reported under GAAP. Because not all companies use identical calculations, the non-GAAP measures presented in the following table may not be comparable to those reported by other companies.
| As of or for the | |||||||
| As of or for the Three Months Ended | Nine Months Ended | ||||||
| Sept. 30, | June 30, | March 31, | Dec. 31, | Sept. 30, | Sept. 30, | Sept. 30, | |
| (Dollars in thousands, except per share data) | 2012 | 2012 | 2012 | 2011 | 2011 | 2012 | 2011 |
| TANGIBLE EQUITY AND TANGIBLE ASSETS | |||||||
| (PERIOD END) | |||||||
| Total shareholders' equity (GAAP) | $ 132,880 | $ 130,209 | $ 128,829 | $ 125,930 | $ 128,688 | $ 132,880 | $ 128,688 |
| Less: intangible assets | (27,206) | (27,466) | (27,730) | (28,175) | (28,636) | (27,206) | (28,636) |
| Tangible equity (non-GAAP) | $ 105,674 | $ 102,743 | $ 101,099 | $ 97,755 | $ 100,052 | $ 105,674 | $ 100,052 |
| Total assets (GAAP) | $ 1,286,980 | $ 1,267,459 | $ 1,254,495 | $ 1,216,260 | $ 1,265,923 | $ 1,286,980 | $ 1,265,923 |
| Less: intangible assets | (27,206) | (27,466) | (27,730) | (28,175) | (28,636) | (27,206) | (28,636) |
| Tangible assets (non-GAAP) | $ 1,259,774 | $ 1,239,993 | $ 1,226,765 | $ 1,188,085 | $ 1,237,287 | $ 1,259,774 | $ 1,237,287 |
| Total equity to total assets at end of period (GAAP) | 10.32% | 10.27% | 10.27% | 10.35% | 10.17% | 10.32% | 10.17% |
| Book value per share (GAAP) | $ 28.62 | $ 28.11 | $ 27.77 | $ 27.14 | $ 27.76 | $ 28.62 | $ 27.76 |
| Tangible equity to tangible assets at end of period (non-GAAP) | 8.39% | 8.29% | 8.24% | 8.23% | 8.09% | 8.39% | 8.09% |
| Tangible book value per share (non-GAAP) | $ 22.76 | $ 22.18 | $ 21.79 | $ 21.07 | $ 21.59 | $ 22.76 | $ 21.59 |
| TANGIBLE EQUITY AND TANGIBLE ASSETS | |||||||
| (AVERAGE) | |||||||
| Total shareholders' equity (GAAP) | $ 132,186 | $ 130,254 | $ 128,194 | $ 129,767 | $ 128,305 | $ 130,218 | $ 117,009 |
| Less: intangible assets | (27,359) | (27,619) | (27,729) | (28,488) | (29,189) | (27,568) | (23,624) |
| Tangible equity (non-GAAP) | $ 104,827 | $ 102,635 | $ 100,465 | $ 101,279 | $ 99,116 | $ 102,650 | $ 93,385 |
| Return on average equity (GAAP) | 8.53% | 7.55% | 11.34% | 9.06% | 10.18% | 9.12% | 8.66% |
| Return on average tangible equity (non-GAAP) | 10.76% | 9.58% | 14.47% | 11.60% | 13.17% | 11.57% | 10.85% |
CONTACT: For further information contact:
Mark A. Severson, EVP and CFO
Phone: 607-737-3714