8-K

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): April 21, 2016  

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, Elmira, NY 14901

(Address of Principal Executive Offices) (Zip Code)

(607) 737-3711
(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

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 April 21, 2016, Chemung Financial Corporation (Nasdaq: CHMG) issued a press release describing its results of operations for the three month period ended March 31, 2016.

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 April 21, 2016.

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.

	Chemung Financial Corporation
Date: April 21, 2016	By:	/s/ Karl F. Krebs
		Name: Karl F. Krebs
		Title: Executive Vice President, Chief Financial Officer and Treasurer

EX-99.1 2 exh_991.htm PRESS RELEASE

EXHIBIT 99.1

Chemung Financial Reports First Quarter 2016 Net Income of $2.7 Million, or $0.57 per Share

ELMIRA, N.Y., April 21, 2016 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (Nasdaq:CHMG), the parent company of Chemung Canal Trust Company (“the Bank”), today reported net income for the first quarter of 2016 of $2.7 million, or $0.57 per share, compared to $2.3 million, or $0.48 per share, for the first quarter of 2015.

Ronald M. Bentley, Chemung Financial Corporation CEO stated:

“Funded by stable core deposits, continued growth in our commercial lending portfolio helped provide the impetus for a 5.5% increase in net interest income.  We were also able to capitalize on the sale of U.S. treasuries during the quarter, due to a drop in yields, which resulted in a $908 thousand gain.”

First Quarter Highlights¹

• Loans, net of deferred fees increased $18.3 million, or 1.6%
  
  
• Commercial loans increased $25.9 million, or 3.7%
  
  
• Deposits increased $34.0 million, or 2.4%
  
  
• Net interest income increased $0.7 million, or 5.5%
  
  
• Dividends declared during the quarter were $0.26

A more detailed summary of financial performance follows.

¹ Balance sheet comparisons are calculated for March 31, 2016 versus December 31, 2015.   Income statement comparisons are calculated for the first quarter of 2016 versus prior-year first quarter.

1st Quarter 2016 vs 1st Quarter 2015

Net Interest Income:

Net interest income for the current quarter totaled $13.0 million, an increase of $0.7 million when compared with the same period in the prior year.  Interest and fees from loans increased $0.3 million, while interest and dividend income from securities increased $0.4 million when compared to the same period in the prior year.  Average interest-earning assets increased $77.4 million compared to the same period in the prior year.  Fully taxable equivalent net interest margin was 3.47%, compared with 3.49% for the same period in the prior year.  The yield on interest-earning assets decreased two basis points, while the cost of interest-bearing liabilities remained flat compared to the same period in the prior year. 

Non-Interest Income:

Non-interest income for the quarter was $5.6 million compared with $5.2 million for the same period in the prior year, an increase of $0.4 million, or 8.0%.  The increase was due primarily to the $0.9 million net gain on security transactions when the Bank sold approximately $14.5 million in U.S. Treasuries, which allowed for the pay down of FHLB overnight advances and the funding of additional commercial loans during the quarter.  Offsetting the net gain on security transactions were decreases of $0.1 million in wealth management group fee income and $0.3 million in other non-interest income.  The decrease in wealth management group fee income can be attributed to a decline in assets under management or administration, along with a decline in the market value of assets.  The decrease in other non-interest income can be attributed to a decline in commissions and fees from CFS Group, Inc. (“CFS”) of $0.2 million and a $0.2 million decrease in rental income from OREO properties, due to the sale of OREO properties during the third quarter of 2015.

Non-Interest Expense:

Non-interest expense for the quarter was $14.0 million compared with $13.7 million for the same period in the prior year, an increase of $0.3 million, or 2.0%.  The increase was due primarily to increases of $0.1 million in salaries and wages and $0.2 million in data processing expense, offset by a $0.1 million decrease in pension and other employee benefits.  In addition, the Bank incurred $125 thousand in additional depreciation expense related to the announcement of the closure of the branch office at 202 East State Street in Ithaca, NY at the end of May 2016.  The Bank transferred all accounts associated with 202 East State Street to the remaining three Ithaca branch locations.  Additionally, the Corporation incurred expenses of $83 thousand related to the establishment of a captive insurance subsidiary, which is expected to be completed during the second quarter.

Asset Quality

Non-performing loans totaled $12.8 million at March 31, 2016, or 1.08% of total loans, compared with $12.2 million at December 31, 2015, or 1.05% of total loans.  The increase in non-performing loans at March 31, 2016 was primarily in the residential mortgage and consumer loan segments of the loan portfolio.  Non-performing assets, which are comprised of non-performing loans and other real estate owned, were $14.4 million, or 0.88% of total assets, at March 31, 2016, compared with $13.8 million, or 0.85% of total assets, at December 31, 2015.

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 first quarter of 2016 and 2015 were $0.6 million and $0.4 million, respectively.  Net charge-offs for the first quarter of 2016 were $0.3 million compared with $0.2 million for the same period in the prior year. 

At March 31, 2016 the allowance for loan losses was $14.5 million, compared with $14.3 million at December 31, 2015.  The allowance for loan losses was 113.7% of non-performing loans at March 31, 2016, compared with 116.7% at December 31, 2015.  The ratio of the allowance for loan losses to total loans was 1.22% at March 31, 2016, level with December 31, 2015.

Balance Sheet Activity

Assets totaled $1.643 billion at March 31, 2016 compared with $1.620 billion at December 31, 2015, an increase of $23.3 million, or 1.4%.  The growth was due primarily to increases of $29.7 million in cash and cash equivalents and $18.3 million in the loan portfolio, partially offset by a $20.3 million decrease in securities available for sale. 

The increase in cash and cash equivalents can be attributed to the sale of available for sale securities and an increase in deposits, offset by an increase in total loans and the pay down of FHLB overnight advances.  The increase in total loans can be attributed to increases of $29.2 million in commercial mortgages and $1.0 million in residential mortgages, offset by decreases in indirect consumer of $4.7 million, other consumer of $3.9 million, and commercial and agriculture of $3.3 million.

The decrease in securities available for sale can be mostly attributed to the sale of $14.5 million in U.S. treasuries and $7.5 million in maturities, mostly in mortgage backed securities.

Deposits totaled $1.434 billion at March 31, 2016 compared with $1.400 billion at December 31, 2015, an increase of $34.0 million, or 2.4%.  The growth was mostly attributable to increases of $29.9 million in money market accounts, $10.9 million in interest-bearing demand deposits, and $4.8 million in savings deposits.  Partially offsetting the increases noted above were decreases of $9.1 million in non-interest-bearing demand deposits and $2.5 million in time deposits. The changes in money market accounts and demand deposits can be attributed to the seasonal inflow of deposits from municipal clients.

Total equity was $141.0 million at March 31, 2016 compared with $137.2 million at December 31, 2015, an increase of $3.8 million, or 2.8%.  The increase was primarily due to earnings of $2.7 million, a reduction of $0.6 million in treasury stock, and a decrease of $1.6 million in accumulated other comprehensive loss, offset by $1.2 million in dividends declared during the year.

The total equity to total assets ratio was 8.58% at March 31, 2016 compared with 8.47% at December 31, 2015.  The tangible equity to tangible assets ratio was 7.14% at March 31, 2016 compared with 6.99% at December 31, 2015.  Book value per share increased to $29.64 at March 31, 2016 from $28.96 at December 31, 2015.  As of March 31, 2016, the Bank’s capital ratios were in excess of those required to be considered well-capitalized under regulatory capital guidelines and the Corporation met capital requirements under regulatory guidelines.

Other Items

The market value of total assets under management or administration in our Wealth Management Group was $1.680 billion at March 31, 2016, including $321.1 million of assets under management or administration for the Corporation, compared with $1.856 billion at December 31, 2015, including $304.1 million of assets held under management or administration for the Corporation, a decrease of $175.9 million, or 9.5%.  The decrease can be attributed to the loss of one large non-profit customer, along with a decline in the market value of assets.

About Chemung Financial Corporation

Chemung Financial Corporation is a $1.6 billion financial services holding company headquartered in Elmira, New York and operates 34 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 locally-owned and managed community 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.

This press release may be found at: www.chemungcanal.com under Investor Relations.

Chemung Financial Corporation
Consolidated Balance Sheets (Unaudited)
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
(in thousands)		2016			2015			2015			2015			2015
ASSETS
Cash and due from financial institutions	$	26,471		$	24,886		$	30,800		$	28,014		$	29,643
Interest-bearing deposits in other financial institutions		29,388			1,299			44,449			1,650			55,230
Total cash and cash equivalents		55,859			26,185			75,249			29,664			84,873
Trading assets, at fair value		734			701			636			635			601
Securities available for sale		324,484			344,820			335,571			290,571			266,307
Securities held to maturity		4,577			4,566			4,604			6,045			5,693
FHLB and FRB stocks, at cost		4,179			4,797			4,171			4,873			4,148
Total investment securities		333,240			354,183			344,346			301,489			276,148
Commercial		725,596			699,711			664,505			665,303			652,217
Mortgage		196,751			195,778			197,506			198,469			198,628
Consumer		264,546			273,144			279,926			286,634			292,727
Loans, net of deferred loan fees		1,186,893			1,168,633			1,141,937			1,150,406			1,143,572
Allowance for loan losses		(14,527	)		(14,260	)		(14,022	)		(14,028	)		(13,892	)
Loans, net		1,172,366			1,154,373			1,127,915			1,136,378			1,129,680
Loans held for sale		593			1,076			316			668			628
Premises and equipment, net		28,620			29,397			30,023			30,874			31,548
Goodwill		21,824			21,824			21,824			21,824			21,824
Other intangible assets, net		3,673			3,931			4,201			4,478			4,763
Accrued interest receivable and other assets		26,317			28,294			27,129			27,623			34,707
Total assets	$	1,643,226		$	1,619,964		$	1,631,639		$	1,553,633		$	1,584,772
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing demand deposits	$	393,121		$	402,236		$	392,734		$	385,467		$	376,773
Interest-bearing demand deposits		141,457			130,573			144,097			118,988			127,593
Insured money market accounts		527,578			497,658			503,411			447,360			476,464
Savings deposits		208,555			203,749			196,994			199,437			199,349
Time deposits		163,541			166,079			173,205			180,725			187,951
Total deposits		1,434,252			1,400,295			1,410,441			1,331,977			1,368,130
FHLB overnight advances		-			13,900			-			15,600			-
Securities sold under agreements to repurchase		28,825			28,453			30,358			31,882			31,084
FHLB advances and other debt		19,175			22,076			22,140			22,201			22,259
Accrued interest payable and other liabilities		19,928			17,998			29,985			15,453			27,006
Total liabilities		1,502,180			1,482,722			1,492,924			1,417,113			1,448,479
Shareholders' equity
Common stock		53			53			53			53			53
Additional-paid-in capital		45,652			45,537			45,545			45,468			45,477
Retained earnings		120,460			118,973			118,057			116,817			115,450
Treasury stock, at cost		(15,781	)		(16,379	)		(16,654	)		(16,704	)		(16,900	)
Accumulated other comprehensive income (loss)		(9,338	)		(10,942	)		(8,286	)		(9,114	)		(7,787	)
Total shareholders' equity		141,046			137,242			138,715			136,520			136,293
Total liabilities and shareholders' equity	$	1,643,226		$	1,619,964		$	1,631,639		$	1,553,633		$	1,584,772
Period-end shares outstanding		4,759			4,739			4,724			4,720			4,712

Chemung Financial Corporation
Consolidated Statements of Income (Unaudited)
	Three Months Ended
	March 31,					Percent
(in thousands, except per share data)		2016			2015	Change
Interest and dividend income:
Loans, including fees	$	12,246		$	11,903		2.9
Taxable securities		1,437			1,089		32.0
Tax exempt securities		254			219		16.0
Interest-bearing deposits		12			23		(47.8	)
Total interest and dividend income		13,949			13,234		5.4
Interest expense:
Deposits		507			486		4.3
Securities sold under agreements to repurchase		211			209		1.0
Borrowed funds		206			197		4.6
Total interest expense		924			892		3.6
Net interest income		13,025			12,342		5.5
Provision for loan losses		595			390		52.6
Net interest income after provision for loan losses		12,430			11,952		4.0
Non-interest income:
Wealth management group fee income		2,012			2,126		(5.4	)
Service charges on deposit accounts		1,135			1,138		(0.3	)
Interchange revenue from debit card transactions		893			809		10.4
Net gains on securities transactions		908			50	N/M
Net gains on sales of loans held for sale		61			52		17.3
Net gains (losses) on sales of other real estate owned		(5	)		78	N/M
Income from bank owned life insurance		18			18		0.0
Other		579			915		(36.7	)
Total non-interest income		5,601			5,186		8.0
Non-interest expense:
Salaries and wages		5,183			5,100		1.6
Pension and other employee benefits		1,675			1,729		(3.1	)
Net occupancy		1,906			1,850		3.0
Furniture and equipment		772			733		5.3
Data processing		1,714			1,561		9.8
Professional services		341			269		26.8
Amortization of intangible assets		258			304		(15.1	)
Marketing and advertising		222			235		(5.5	)
Other real estate owned expense		52			84		(38.1	)
FDIC insurance		294			286		2.8
Loan expense		112			140		(20.0	)
Other		1,479			1,445		2.4
Total non-interest expense		14,008			13,736		2.0
Income before income tax expense		4,023			3,402		18.3
Income tax expense		1,316			1,126		16.9
Net income	$	2,707		$	2,276		18.9
Basic and diluted earnings per share	$	0.57		$	0.48
Cash dividends declared per share		0.26			0.26
Average basic and diluted shares outstanding		4,750			4,707
N/M - Not meaningful

Chemung Financial Corporation
Consolidated Financial Highlights (Unaudited)
	As of or for the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
(in thousands, per share data)		2016			2015			2015			2015			2015
RESULTS OF OPERATIONS
Interest income	$	13,949		$	13,896		$	13,595		$	13,519		$	13,234
Interest expense		924			934			904			872			892
Net interest income		13,025			12,962			12,691			12,647			12,342
Provision for loan losses		595			615			307			259			390
Net interest income after provision for loan losses		12,430			12,347			12,384			12,388			11,952
Non-interest income		5,601			5,023			4,912			5,326			5,186
Non-interest expense		14,008			14,234			13,634			13,823			13,736
Income before income tax expense		4,023			3,136			3,662			3,891			3,402
Income tax expense		1,316			1,007			1,211			1,314			1,126
Net income	$	2,707		$	2,129		$	2,451		$	2,577		$	2,276
Basic and diluted earnings per share	$	0.57		$	0.45		$	0.52		$	0.55		$	0.48
Average basic and diluted shares outstanding		4,750			4,731			4,722			4,717			4,707
PERFORMANCE RATIOS
Return on average assets		0.67	%		0.52	%		0.62	%		0.66	%		0.59	%
Return on average equity		7.73	%		6.05	%		7.05	%		7.52	%		6.79	%
Return on average tangible equity (a)		9.45	%		7.42	%		8.71	%		9.32	%		8.45	%
Efficiency ratio (b)		76.89	%		77.35	%		75.25	%		75.83	%		76.26	%
Non-interest expense to average assets (c)		3.48	%		3.49	%		3.44	%		3.55	%		3.57	%
Loans to deposits		82.75	%		83.46	%		80.96	%		86.37	%		83.59	%
YIELDS / RATES - Fully Taxable Equivalent
Yield on loans		4.21	%		4.20	%		4.22	%		4.26	%		4.28	%
Yield on investments		2.07	%		1.98	%		1.89	%		1.91	%		1.83	%
Yield on interest-earning assets		3.72	%		3.66	%		3.70	%		3.74	%		3.74	%
Cost of interest-bearing deposits		0.20	%		0.20	%		0.20	%		0.21	%		0.20	%
Cost of borrowings		2.66	%		2.99	%		3.03	%		2.64	%		2.74	%
Cost of interest-bearing liabilities		0.35	%		0.35	%		0.35	%		0.34	%		0.35	%
Interest rate spread		3.37	%		3.10	%		3.35	%		3.40	%		3.39	%
Net interest margin, fully taxable equivalent		3.47	%		3.42	%		3.45	%		3.50	%		3.49	%
CAPITAL
Total equity to total assets at end of period		8.58	%		8.47	%		8.50	%		8.79	%		8.60	%
Tangible equity to tangible assets at end of period (a)		7.14	%		6.99	%		7.02	%		7.22	%		7.04	%
Book value per share	$	29.64		$	28.96		$	29.36		$	28.92		$	28.92
Tangible book value per share		24.28			23.53			23.85			23.35			23.28
Period-end market value per share		26.35			27.50			28.03			26.48			28.30
Dividends declared per share		0.26			0.26			0.26			0.26			0.26
AVERAGE BALANCES
Loans (d)	$	1,175,051		$	1,151,469		$	1,142,402		$	1,141,412		$	1,132,473
Earning assets		1,527,656			1,522,176			1,474,098			1,462,842			1,450,249
Total assets		1,620,547			1,617,322			1,570,818			1,563,346			1,558,919
Deposits		1,404,487			1,410,017			1,367,853			1,353,895			1,338,913
Total equity		140,864			139,697			137,855			137,386			135,974
Tangible equity (a)		115,240			113,812			111,693			110,945			109,219
ASSET QUALITY
Net charge-offs	$	327		$	377		$	313		$	123		$	184
Non-performing loans (e)		12,774			12,223			12,368			12,862			10,419
Non-performing assets (f)		14,416			13,753			14,744			15,238			12,925
Allowance for loan losses		14,527			14,260			14,022			14,028			13,892
Annualized net charge-offs to average loans		0.11	%		0.13	%		0.11	%		0.04	%		0.07	%
Non-performing loans to total loans		1.08	%		1.05	%		1.08	%		1.12	%		0.91	%
Non-performing assets to total assets		0.88	%		0.85	%		0.90	%		0.98	%		0.82	%
Allowance for loan losses to total loans		1.22	%		1.22	%		1.23	%		1.22	%		1.21	%
Allowance for loan losses to non-performing loans		113.72	%		116.67	%		113.37	%		109.07	%		133.33	%
(a)  See the GAAP to Non-GAAP reconciliations.
(b)  Efficiency ratio is non-interest expense less merger and acquisition expenses less amortization of intangible assets less legal settlement divided by the total of fully taxable equivalent net interest income plus non-interest income less net gains on securities transactions less gain from bargain purchase less gain on liquidation of trust preferred securities.
(c)  For the non-interest expense to average assets ratio, non-interest expense does not include legal settlement expense.
(d)  Loans include loans held for sale.  Loans do not reflect the allowance for loan losses.
(e)  Non-performing loans include non-accrual loans only.
(f)  Non-performing assets include non-performing loans plus other real estate owned.

Chemung Financial Corporation
GAAP to Non-GAAP Reconciliations (Unaudited)

The Corporation prepares its Consolidated Financial Statements in accordance with GAAP; these financial statements appear on pages 4-5. That presentation provides the reader with an understanding of the Corporation’s results that can be tracked consistently from period-to-period 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 its competitors. 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 new rules, although we are unable to state with certainty that the SEC would so regard them.

Fully Taxable Equivalent Net Interest Income, Net Interest Margin, and Efficiency Ratio

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.

The efficiency ratio is a non-GAAP financial measures 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.

	As of or for the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
(in thousands, except per share data)		2016			2015			2015			2015			2015
NET INTEREST MARGIN - FULLY TAXABLE EQUIVALENT
AND EFFICIENCY RATIO
Net interest income (GAAP)	$	13,025		$	12,962		$	12,691		$	12,647		$	12,342
Fully taxable equivalent adjustment		164			149			136			133			136
Fully taxable equivalent net interest income (non-GAAP)	$	13,189		$	13,111		$	12,827		$	12,780		$	12,478
Non-interest income (GAAP)	$	5,601		$	5,023		$	4,912		$	5,326		$	5,186
Less:  net gains (losses) on security transactions		(908	)		(81	)		11			(252	)		(50	)
Adjusted non-interest income (non-GAAP)	$	4,693		$	4,942		$	4,923		$	5,074		$	5,136
Non-interest expense (GAAP)	$	14,008		$	14,234		$	13,634		$	13,823		$	13,736
Less:  amortization of intangible assets		(258	)		(270	)		(277	)		(285	)		(304	)
Adjusted non-interest expense (non-GAAP)	$	13,750		$	13,964		$	13,357		$	13,538		$	13,432
Average interest-earning assets (GAAP)	$	1,527,656		$	1,522,176		$	1,474,098		$	1,462,842		$	1,450,249
Net interest margin - fully taxable equivalent (non-GAAP)		3.47	%		3.42	%		3.45	%		3.50	%		3.49	%
Efficiency ratio (non-GAAP)		76.89	%		77.35	%		75.25	%		75.83	%		76.26	%

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 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.

	As of or for the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
(in thousands, except per share and ratio data)		2016			2015			2015			2015			2015
TANGIBLE EQUITY AND TANGIBLE ASSETS
(PERIOD END)
Total shareholders' equity (GAAP)	$	141,046		$	137,242		$	138,715		$	136,520		$	136,293
Less:  intangible assets		(25,497	)		(25,755	)		(26,025	)		(26,302	)		(26,587	)
Tangible equity (non-GAAP)	$	115,549		$	111,487		$	112,690		$	110,218		$	109,706
Total assets (GAAP)	$	1,643,226		$	1,619,964		$	1,631,639		$	1,553,633		$	1,584,772
Less:  intangible assets		(25,497	)		(25,755	)		(26,025	)		(26,302	)		(26,587	)
Tangible assets (non-GAAP)	$	1,617,729		$	1,594,209		$	1,605,614		$	1,527,331		$	1,558,185
Total equity to total assets at end of period (GAAP)		8.58	%		8.47	%		8.50	%		8.79	%		8.60	%
Book value per share (GAAP)	$	29.64		$	28.96		$	29.36		$	28.92		$	28.92
Tangible equity to tangible assets at end of period (non-GAAP)		7.14	%		6.99	%		7.02	%		7.22	%		7.04	%
Tangible book value per share (non-GAAP)	$	24.28		$	23.53		$	23.85		$	23.35		$	23.28

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.

	As of or for the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
(in thousands, except ratio data)		2016			2015			2015			2015			2015
TANGIBLE EQUITY (AVERAGE)
Total average shareholders' equity (GAAP)	$	140,864		$	139,697		$	137,855		$	137,386		$	135,974
Less:  average intangible assets		(25,624	)		(25,885	)		(26,162	)		(26,441	)		(26,755	)
Average tangible equity (non-GAAP)	$	115,240		$	113,812		$	111,693		$	110,945		$	109,219
Return on average equity (GAAP)		7.73	%		6.05	%		7.05	%		7.52	%		6.79	%
Return on average tangible equity (non-GAAP)		9.45	%		7.42	%		8.71	%		9.32	%		8.45	%

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.

	As of or for the Three Months Ended
	March 31,			Dec. 31,			Sept. 30,			June 30,			March 31,
(in thousands, except per share and ratio data)		2016			2015			2015			2015			2015
CORE NET INCOME
Reported net income (GAAP)	$	2,707		$	2,129		$	2,451		$	2,577		$	2,276
Net gains (losses) on security transactions (net of tax)		(565	)		(50	)		7			(156	)		(31	)
Core net income (non-GAAP)	$	2,142		$	2,079		$	2,458		$	2,421		$	2,245
Average basic and diluted shares outstanding		4,750			4,731			4,722			4,717			4,707
Reported basic and diluted earnings per share (GAAP)	$	0.57		$	0.45		$	0.52		$	0.55		$	0.48
Reported return on average assets (GAAP)		0.67	%		0.52	%		0.62	%		0.66	%		0.59	%
Reported return on average equity (GAAP)		7.73	%		6.05	%		7.05	%		7.52	%		6.79	%
Core basic and diluted earnings per share (non-GAAP)	$	0.45		$	0.44		$	0.52		$	0.51		$	0.48
Core return on average assets (non-GAAP)		0.53	%		0.51	%		0.62	%		0.62	%		0.58	%
Core return on average equity (non-GAAP)		6.12	%		5.90	%		7.07	%		7.07	%		6.70	%

Forward-Looking Statements:

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act, and the Private Securities Litigation Reform Act of 1995.  The Corporation intends its forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in this press release.  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 promise 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, difficulties in managing the Corporation’s growth, competition, changes in law or the regulatory environment, including the Dodd-Frank Act, and changes in general business and economic trends.  Information concerning these and other factors can be found in the Corporation’s periodic filings with the Securities and Exchange Commission (“SEC”), including the 2014 Annual Report on Form 10-K.  These filings are available publicly on the SEC's website at http://www.sec.gov, on the Corporation's website 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.

For further information contact:
Karl F. Krebs, EVP and CFO
kkrebs@chemungcanal.com
Phone:  607-737-3714

EX-99.1

EdgarFiling