EXHIBIT 99.1

Chemung Financial Corporation Reports Second Quarter 2017 Net Income of $3.0 Million, or $0.62 per Share

ELMIRA, N.Y., July 20, 2017 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (the “Corporation”) (Nasdaq:CHMG), the parent company of Chemung Canal Trust Company (the “Bank”), today reported net income of $3.0 million, or $0.62 per share, for the second quarter of 2017, compared to $1.6 million, or $0.34 per share, for the second quarter of 2016.

Anders M. Tomson, Chemung Financial Corporation CEO, stated:

“We continue to see solid growth in revenues, earnings, loans and deposits.  Our return on average equity for the second quarter improved to 7.90%, compared to 4.57% for the same period in the prior year.  The efficiency ratio has also improved year over year, improving from 77.00% to 69.28%.  As part of our plan to improve profitability, we completed the relocation of our 120 Genesee Street branch in Auburn, NY to 110 Genesee Street, which allowed us to downsize our space by nearly two thirds and will generate future cost savings for us.  I am excited for the remainder of the year and working with our employees to continue delivering long-term value for our shareholders, customers and the communities we serve.”

Second Quarter Highlights¹

• Loans, net of deferred fees, increased $52.4 million, or 4.4%
• Commercial loans increased $49.0 million, or 6.6%
• Deposits increased $68.7 million, or 4.7%
• Net interest income increased $1.0 million, or 7.6%   
• Non-interest expense decreased $1.2 million, or 8.0%
• Dividends declared during the quarter were $0.26

A more detailed summary of financial performance follows.

¹ Balance sheet comparisons are calculated for June 30, 2017 versus December 31, 2016.   Income statement comparisons are calculated for the second quarter of 2017 versus second quarter of 2016.

2nd Quarter 2017 vs 2nd Quarter 2016

Net Interest Income:

Net interest income for the current quarter totaled $14.0 million compared with $13.0 million for the same period in the prior year, an increase of $1.0 million, or 7.6%.  Interest and fees from loans increased $0.5 million and interest from investments, including interest-bearing deposits, increased $0.3 million while interest expense on borrowed funds and securities sold under agreements to repurchase both decreased $0.1 million when compared to the same period in the prior year.  Fully taxable equivalent net interest margin was 3.47%, compared with 3.36% for the same period in the prior year.  Average interest-earning assets increased $61.6 million compared to the same period in the prior year.  The yield on interest-earning assets increased five basis points, while the cost of interest-bearing liabilities decreased nine basis points compared to the same period in the prior year.  The increase in the yield on interest-earning assets can be mostly attributed to a 20 basis point increase in the yield on investments due to the reinvestment of maturing securities into higher yielding mortgage-backed and municipal securities.  The decline in the cost of interest-bearing liabilities can be attributed to a 34 basis point decline in the cost of borrowings due to the maturity of one $10.0 million FHLB term advance (4.60% rate) in December 2016 and one $10.0 million repurchase agreement (4.54% rate) in March 2017.

Non-Interest Income:

Non-interest income for the current quarter was $5.0 million compared with $5.2 million for the same period in the prior year, a decrease of $0.2 million, or 3.7%.  The decrease was due primarily to a $0.2 million decline in other non-interest income related to rent income from other real estate owned and swap fees.

Non-Interest Expense:

Non-interest expense for the current quarter was $14.3 million compared with $15.6 million for the same period in the prior year, a decrease of $1.3 million, or 8.0%.  The decrease was due primarily to decreases of $0.4 million in pension and other employee benefits, $0.4 million in legal reserve, $0.2 million in net occupancy and furniture and equipment expenses, and $0.2 million in marketing and advertising expenses.  The decrease in pension and other employee benefits can be attributed to a $0.7 million decrease due to the freezing of accruals for the pension and post-retirement healthcare plans during the fourth quarter of 2016, offset by increases of $0.1 million in 401(k) expense and $0.3 million in healthcare costs.  Please refer to page four under “Other Items” for further discussion of the legal reserve.  The decrease in net occupancy and furniture and equipment expenses can be attributed to the closure of the branch at 202 East State Street in Ithaca, NY at the end of May 2016, along with a decrease in exit costs for the branch at 120 Genesee Street in Auburn, NY in 2017, compared to exit costs for the closure of the branch at 202 East State Street.  The decrease in marketing and advertising expenses can be mostly attributed to timing.

2nd Quarter 2017 vs 1st Quarter 2017

Net Interest Income:

Net interest income for the current quarter totaled $14.0 million compared with $13.5 million for the prior quarter, an increase of $0.5 million, or 3.4%.  Interest and fees from loans increased $0.3 million while interest expense on securities sold under agreements to repurchase decreased $0.1 million when compared to the prior quarter.  Fully taxable equivalent net interest margin was 3.47%, compared with 3.45% for the prior quarter.  Average interest-earning assets increased $29.5 million compared to the prior quarter.  The yield on interest-earning assets decreased one basis point, while the cost of interest-bearing liabilities decreased four basis points compared to the prior quarter.  The decline in the yield on interest-earning assets can be mostly attributed to a two basis point decline in the yield on loans offset by a one basis point increase in the yield on investments.

Non-Interest Income:

Non-interest income for the current quarter was $5.0 million compared with $4.8 million for the prior quarter, an increase of $0.2 million, or 3.6%.  The increase was due to a $0.2 million increase in Wealth Management Group fee income.

Non-Interest Expense:

Non-interest expense for the current quarter was $14.3 million compared with $13.0 million for the prior quarter, an increase of $1.3 million, or 9.9%.  The increase was due primarily to an increase in the legal reserve by an additional $0.9 million, and increases of $0.2 million in net occupancy and furniture and equipment expenses, $0.1 million in salaries and wages and in professional fees, offset by a decrease of $0.1 million in marketing and advertising expense.  Please refer to page four under “Other Items” for further discussion of the legal reserve.  The increase in net occupancy and furniture and equipment expenses was due primarily to exit costs for the branch at 120 Genesee Street in Auburn, NY during the second quarter of 2017.  The decrease in marketing and advertising expenses can be mostly attributed to timing.

Asset Quality

Non-performing loans totaled $15.2 million at June 30, 2017, or 1.21% of total loans, compared with $12.0 million at December 31, 2016, or 1.00% of total loans.  The increase in non-performing loans at June 30, 2017 was primarily in the commercial mortgage segment and related to one large commercial loan, offset by decreases in the residential mortgage and consumer segments.  Non-performing assets, which are comprised of non-performing loans and other real estate owned, were $15.5 million, or 0.90% of total assets, at June 30, 2017, compared with $12.4 million, or 0.75% of total assets, at December 31, 2016.  As noted above, the increase in non-performing assets was primarily due to the commercial mortgage segment of the loan portfolio.

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 second quarter of 2017 was $0.4 million, level with the same period in the prior year.  Net charge-offs for the second quarter of 2017 were $0.3 million, consistent with $0.2 million for the second quarter of 2016.

The allowance for loan losses was $15.1 million as of June 30, 2017 and $14.3 million as of December 31, 2016.  The allowance for loan losses was 99.32% of non-performing loans at June 30, 2017 compared with 118.35% at December 31, 2016.  The decline was due to an increase in non-performing loans as noted above.  The ratio of the allowance for loan losses to total loans was 1.21% at June 30, 2017 compared with 1.19% at December 31, 2016.

Balance Sheet Activity

Assets totaled $1.719 billion at June 30, 2017 compared with $1.657 billion at December 31, 2016, an increase of $61.4 million, or 3.7%.  The growth was due primarily to increases of $20.9 million in securities available for sale and $52.4 million in the loan portfolio, offset by a decrease of $9.6 million in cash and cash equivalents.  

The increase in total loans can be mostly attributed to increases of $36.2 million in commercial mortgages, $12.8 million in commercial and agriculture loans, $2.1 million in residential mortgages and $1.2 million in indirect consumer loans.  The increase in securities available for sale can be mostly attributed to additional purchases of mortgage-backed and municipal securities.  The decrease in cash and cash equivalents can be attributed to an increase in deposits, offset by an increase in securities available for sale and total loans.

Deposits totaled $1.525 billion at June 30, 2017 compared with $1.456 billion at December 31, 2016, an increase of $68.7 million, or 4.7%.  The growth was attributable to increases of $18.2 million in non-interest bearing demand deposits, $7.4 million in interest-bearing demand deposits, $42.8 million in money market accounts and $11.6 million in savings deposits.  Partially offsetting the increases noted above was a decrease of $11.3 million in time deposits.  The changes in money market accounts and demand deposits can be attributed to new municipal clients, along with the seasonal inflow of deposits from existing municipal clients.

Total equity was $152.0 million at June 30, 2017 compared with $143.7 million at December 31, 2016, an increase of $8.3 million, or 5.7%.  The increase was primarily due to earnings of $5.9 million, a reduction of $0.6 million in treasury stock, and a decrease of $3.8 million in accumulated other comprehensive loss, mostly attributable to the increase in the fair market value of the securities portfolio, offset by $2.4 million in dividends declared during the year.

The total equity to total assets ratio was 8.84% at June 30, 2017 compared with 8.67% at December 31, 2016.  The tangible equity to tangible assets ratio was 7.53% at June 30, 2017 compared with 7.29% at December 31, 2016.  Book value per share increased to $31.67 at June 30, 2017 from $30.07 at December 31, 2016.  As of June 30, 2017, 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 $1.826 billion at June 30, 2017, including $323.9 million of assets under management or administration for the Corporation, compared to $1.721 billion at December 31, 2016, including $294.9 million of assets under management or administration for the Corporation, an increase of $104.6 million, or 6.1%.

As previously disclosed on July 6, 2017, the Corporation on June 29, 2017, received Notice of Entry of the decision and Order of the New York Appellate Division, Third Department, in the matter of Fane v. Chemung Canal Trust Company, involving claims by the owner of the leased premises at 202 East State Street, Ithaca, New York against Chemung Canal Trust Company, the bank subsidiary of the Corporation. The Court affirmed the State of New York Supreme Court for the County of Tompkins’ decision in favor of the plaintiff with damages to be determined at a later proceeding.  The Bank established an additional legal reserve in the amount of $0.9 million, in connection with this case, during the second quarter of 2017.  The Bank’s total reserve with respect to this matter, as of June 30, 2017, now stands at $2.3 million, including $0.2 million accrued for related expenses not yet paid.

About Chemung Financial Corporation

Chemung Financial Corporation is a $1.7 billion financial services holding company headquartered in Elmira, New York and operates 33 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, and Chemung Risk Management, Inc., a captive insurance company based in the State of Nevada.

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

Chemung Financial Corporation
Consolidated Balance Sheets (Unaudited)
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,
(in thousands)		2017			2017			2016			2016			2016
ASSETS
Cash and due from financial institutions	$	26,684		$	26,275		$	28,205		$	35,345		$	27,233
Interest-bearing deposits in other financial institutions		37,862			99,410			45,957			100,159			80,121
Total cash and cash equivalents		64,546			125,685			74,162			135,504			107,354
Trading assets, at fair value		877			826			774			720			767
Securities available for sale		324,293			302,581			303,402			303,259			300,277
Securities held to maturity		4,928			3,721			4,705			4,504			3,518
FHLB and FRB stocks, at cost		3,764			3,597			4,041			4,491			4,491
Total investment securities		332,985			309,899			312,148			312,254			308,286
Commercial		794,175			780,687			745,217			759,675			742,874
Mortgage		200,629			198,020			198,493			197,665			196,200
Consumer		257,843			255,544			256,580			259,226			262,082
Loans, net of deferred loan fees		1,252,647			1,234,251			1,200,290			1,216,566			1,201,156
Allowance for loan losses		(15,104	)		(14,960	)		(14,253	)		(15,325	)		(14,668	)
Loans, net		1,237,543			1,219,291			1,186,037			1,201,241			1,186,488
Loans held for sale		386			20			412			119			809
Premises and equipment, net		27,836			28,206			28,923			29,084			29,706
Goodwill		21,824			21,824			21,824			21,824			21,824
Other intangible assets, net		2,506			2,719			2,945			3,183			3,428
Accrued interest receivable and other assets		30,069			27,630			29,954			24,936			25,270
Total assets	$	1,718,572		$	1,736,100		$	1,657,179		$	1,728,865		$	1,683,932
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest-bearing demand deposits	$	436,017		$	432,062		$	417,812		$	424,243		$	408,846
Interest-bearing demand deposits		144,239			154,848			136,826			149,527			126,305
Money market accounts		591,751			597,547			548,963			579,211			562,028
Savings deposits		220,227			219,180			208,636			207,544			212,086
Time deposits		132,803			140,614			144,106			148,419			158,655
Total deposits		1,525,037			1,544,251			1,456,343			1,508,944			1,467,920
Securities sold under agreements to repurchase		11,937			15,215			27,606			30,002			28,778
FHLB advances and other debt		13,658			13,736			13,815			23,893			23,970
Accrued interest payable and other liabilities		15,978			14,641			15,667			21,214			19,855
Total liabilities		1,566,610			1,587,843			1,513,431			1,584,053			1,540,523
Shareholders' equity
Common stock		53			53			53			53			53
Additional-paid-in capital		45,966			45,901			45,603			45,724			45,639
Retained earnings		127,585			125,860			124,111			122,382			120,860
Treasury stock, at cost		(14,670	)		(14,801	)		(15,265	)		(15,542	)		(15,608	)
Accumulated other comprehensive (loss)		(6,972	)		(8,756	)		(10,754	)		(7,805	)		(7,535	)
Total shareholders' equity		151,962			148,257			143,748			144,812			143,409
Total liabilities and shareholders' equity	$	1,718,572		$	1,736,100		$	1,657,179		$	1,728,865		$	1,683,932
Period-end shares outstanding		4,799			4,794			4,781			4,768			4,762

Chemung Financial Corporation
Consolidated Statements of Income (Unaudited)
	Three Months Ended								Six Months Ended
	June 30,						Percent		June 30,					Percent
(in thousands, except per share data)		2017			2016		Change			2017		2016		Change
Interest and dividend income:
Loans, including fees	$	12,817		$	12,321		4.0		$	25,316	$	24,567		3.0
Taxable securities		1,398			1,281		9.1			2,820		2,718		3.8
Tax exempt securities		276			240		15.0			514		494		4.0
Interest-bearing deposits		193			83		132.5			348		95		266.3
Total interest and dividend income		14,684			13,925		5.5			28,998		27,874		4.0
Interest expense:
Deposits		549			539		1.9			1,087		1,046		3.9
Securities sold under agreements to repurchase		95			211		(55.0	)		288		422		(31.8	)
Borrowed funds		90			207		(56.5	)		179		413		(56.7	)
Total interest expense		734			957		(23.3	)		1,554		1,881		(17.4	)
Net interest income		13,950			12,968		7.6			27,444		25,993		5.6
Provision for loan losses		421			388		8.5			1,461		983		48.6
Net interest income after provision for loan losses		13,529			12,580		7.5			25,983		25,010		3.9
Non-interest income:
Wealth management group fee income		2,269			2,201		3.1			4,378		4,213		3.9
Service charges on deposit accounts		1,225			1,285		(4.7	)		2,409		2,420		(0.5	)
Interchange revenue from debit card transactions		964			939		2.7			1,884		1,832		2.8
Net gains on securities transactions		12			-		N/M			12		908		(98.7	)
Net gains on sales of loans held for sale		53			97		(45.4	)		122		158		(22.8	)
Net gains (losses) on sales of other real estate owned		(9	)		(11	)	N/M			8		(16	)	(150.0	)
Income from bank owned life insurance		18			18		0.0			35		36		(2.8	)
Other		490			687		(28.7	)		1,021		1,266		(19.4	)
Total non-interest income		5,022			5,216		(3.7	)		9,869		10,817		(8.8	)
Non-interest expense:
Salaries and wages		5,422			5,182		4.6			10,697		10,365		3.2
Pension and other employee benefits		1,207			1,646		(26.7	)		2,425		3,321		(27.0	)
Net occupancy		1,702			1,878		(9.4	)		3,308		3,784		(12.6	)
Furniture and equipment		780			829		(5.9	)		1,462		1,601		(8.7	)
Data processing		1,587			1,720		(7.7	)		3,191		3,434		(7.1	)
Professional services		417			575		(27.5	)		717		916		(21.7	)
Legal accruals and settlements		850			1,200		(29.2	)		850		1,200		(29.2	)
Amortization of intangible assets		213			245		(13.1	)		439		503		(12.7	)
Marketing and advertising		118			325		(63.7	)		367		547		(32.9	)
Other real estate owned expense		12			57		(78.9	)		31		109		(71.6	)
FDIC insurance		309			277		11.6			634		571		11.0
Loan expense		166			188		(11.7	)		282		300		(6.0	)
Other		1,549			1,448		7.0			2,974		2,927		1.6
Total non-interest expense		14,332			15,570		(8.0	)		27,377		29,578		(7.4	)
Income before income tax expense		4,219			2,226		89.5			8,475		6,249		35.6
Income tax expense		1,263			605		108.8			2,540		1,921		32.2
Net income	$	2,956		$	1,621		82.4		$	5,935	$	4,328		37.1
Basic and diluted earnings per share	$	0.62		$	0.34				$	1.24	$	0.91
Cash dividends declared per share		0.26			0.26					0.52		0.52
Average basic and diluted shares outstanding		4,797			4,760					4,793		4,754
N/M - Not meaningful

Chemung Financial Corporation
Consolidated Financial Highlights (Unaudited)
																As of or for the
	As of or for the Three Months Ended															Six Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
(in thousands, per share data)		2017			2017			2016			2016			2016			2017			2016
RESULTS OF OPERATIONS
Interest income	$	14,684		$	14,314		$	14,269		$	14,025		$	13,925		$	28,998		$	27,874
Interest expense		734			820			973			985			957			1,554			1,881
Net interest income		13,950			13,494			13,296			13,040			12,968			27,444			25,993
Provision for loan losses		421			1,040			404			1,050			388			1,461			983
Net interest income after provision for loan losses		13,529			12,454			12,892			11,990			12,580			25,983			25,010
Non-interest income		5,022			4,847			4,897			5,435			5,216			9,869			10,817
Non-interest expense		14,332			13,045			13,561			13,471			15,570			27,377			29,578
Income before income tax expense		4,219			4,256			4,228			3,954			2,226			8,475			6,249
Income tax expense		1,263			1,277			1,274			1,209			605			2,540			1,921
Net income	$	2,956		$	2,979		$	2,954		$	2,745		$	1,621		$	5,935		$	4,328
Basic and diluted earnings per share	$	0.62		$	0.62		$	0.62		$	0.58		$	0.34		$	1.24		$	0.91
Average basic and diluted shares outstanding		4,797			4,790			4,773			4,765			4,760			4,793			4,754
PERFORMANCE RATIOS
Return on average assets		0.69	%		0.71	%		0.69	%		0.65	%		0.39	%		0.70	%		0.53	%
Return on average equity		7.90	%		8.24	%		8.20	%		7.55	%		4.57	%		8.06	%		6.14	%
Return on average tangible equity (a)		9.43	%		9.90	%		9.92	%		9.14	%		5.55	%		9.66	%		7.48	%
Efficiency ratio (a) (b)		69.28	%		69.25	%		72.63	%		71.28	%		77.00	%		69.27	%		76.95	%
Non-interest expense to average assets		3.34	%		3.12	%		3.18	%		3.20	%		3.75	%		3.23	%		3.61	%
Loans to deposits		82.14	%		79.93	%		82.42	%		80.62	%		81.83	%		82.14	%		81.83	%
YIELDS / RATES - Fully Taxable Equivalent
Yield on loans		4.18	%		4.19	%		4.16	%		4.16	%		4.17	%		4.18	%		4.19	%
Yield on investments		2.01	%		2.00	%		1.75	%		1.73	%		1.81	%		2.01	%		1.94	%
Yield on interest-earning assets		3.65	%		3.66	%		3.57	%		3.58	%		3.60	%		3.65	%		3.66	%
Cost of interest-bearing deposits		0.20	%		0.20	%		0.21	%		0.21	%		0.21	%		0.20	%		0.20	%
Cost of borrowings		2.82	%		3.04	%		3.13	%		3.15	%		3.16	%		2.94	%		2.89	%
Cost of interest-bearing liabilities		0.26	%		0.30	%		0.35	%		0.36	%		0.35	%		0.28	%		0.35	%
Interest rate spread		3.39	%		3.36	%		3.22	%		3.22	%		3.25	%		3.37	%		3.31	%
Net interest margin, fully taxable equivalent		3.47	%		3.45	%		3.33	%		3.33	%		3.36	%		3.46	%		3.41	%
CAPITAL
Total equity to total assets at end of period		8.84	%		8.54	%		8.67	%		8.38	%		8.52	%		8.84	%		8.52	%
Tangible equity to tangible assets at end of period (a)		7.53	%		7.23	%		7.29	%		7.03	%		7.12	%		7.53	%		7.12	%
Book value per share	$	31.67		$	30.93		$	30.07		$	30.37		$	30.12		$	31.67		$	30.12
Tangible book value per share		26.60			25.81			24.89			25.13			24.81			26.60			24.81
Period-end market value per share		40.88			39.50			36.35			28.99			29.35			40.88			29.35
Dividends declared per share		0.26			0.26			0.26			0.26			0.26			0.52			0.52
AVERAGE BALANCES
Loans and loans held for sale (c)	$	1,237,189		$	1,215,445		$	1,210,922		$	1,199,367		$	1,192,786		$	1,226,377		$	1,183,919
Earning assets		1,634,955			1,605,460			1,607,287			1,577,348			1,573,306			1,620,290			1,550,481
Total assets		1,723,664			1,694,199			1,699,059			1,674,492			1,669,654			1,709,014			1,647,121
Deposits		1,532,819			1,495,724			1,483,348			1,456,622			1,457,173			1,514,374			1,430,840
Total equity		150,155			146,642			143,388			144,631			142,746			148,408			141,795
Tangible equity (a)		125,720			121,988			118,502			119,504			117,374			123,864			116,297
ASSET QUALITY
Net charge-offs	$	277		$	333		$	1,476		$	393		$	247		$	610		$	575
Non-performing loans (d)		15,208			12,914			12,043			12,903			12,429			15,208			12,429
Non-performing assets (e)		15,545			13,251			12,431			13,270			12,822			15,545			12,822
Allowance for loan losses		15,104			14,960			14,253			15,325			14,668			15,104			14,668
Annualized net charge-offs to average loans		0.09	%		0.11	%		0.48	%		0.13	%		0.08	%		0.10	%		0.10	%
Non-performing loans to total loans		1.21	%		1.05	%		1.00	%		1.06	%		1.03	%		1.21	%		1.03	%
Non-performing assets to total assets		0.90	%		0.76	%		0.75	%		0.77	%		0.76	%		0.90	%		0.76	%
Allowance for loan losses to total loans		1.21	%		1.21	%		1.19	%		1.26	%		1.22	%		1.21	%		1.22	%
Allowance for loan losses to non-performing loans		99.32	%		115.84	%		118.35	%		118.77	%		118.01	%		99.32	%		118.01	%
(a)  See the GAAP to Non-GAAP reconciliations.
(b)  Efficiency ratio is non-interest expense less amortization of intangible assets less legal reserve 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)  Loans and loans held for sale do not reflect the allowance for loan losses.
(d)  Non-performing loans include non-accrual loans only.
(e)  Non-performing assets include non-performing loans plus other real estate owned.

Chemung Financial Corporation
Average Consolidated Balance Sheets & Net Interest Income Analysis and Rate/Volume Analysis of Net Interest Income (Unaudited)
	QTD - June 30, 2017								QTD - June 30, 2016								QTD - June 30, 2017 vs. June 30, 2016
	Average Balance			Interest			Yield / Rate		Average Balance			Interest			Yield / Rate		Total Change			Due to Volume			Due to Rate
Earning assets:
Commercial loans	$	779,218		$	8,357		4.30	%	$	732,265		$	7,893		4.34	%	$	464		$	533		$	(69	)
Mortgage loans		201,093			1,867		3.72	%		196,502			1,916		3.92	%		(49	)		46			(95	)
Consumer loans		256,878			2,658		4.15	%		264,019			2,562		3.90	%		96			(69	)		165
Taxable securities		275,275			1,400		2.04	%		269,434			1,283		1.92	%		117			30			87
Tax-exempt securities		51,027			401		3.15	%		45,665			347		3.06	%		54			43			11
Interest-bearing deposits		71,464			193		1.08	%		65,421			83		0.51	%		110			8			102
Total earning assets		1,634,955			14,876		3.65	%		1,573,306			14,084		3.60	%		792			591			201
Non-earnings assets:
Cash and due from banks		24,446								26,500
Premises and equipment, net		28,205								30,316
Other assets		54,033								51,414
Allowance for loan losses		(15,060	)							(14,647	)
AFS valuation allowance		(2,915	)							2,765
Total assets	$	1,723,664							$	1,669,654
Interest-bearing liabilities:
Interest-bearing checking	$	142,892		$	33		0.09	%	$	134,938		$	37		0.11	%		(4	)		2			(6	)
Savings and money market		822,989			394		0.19	%		756,674			353		0.19	%		41			41			-
Time deposits		137,502			122		0.36	%		161,921			149		0.37	%		(27	)		(23	)		(4	)
FHLB advances and repos		26,341			185		2.82	%		53,137			418		3.16	%		(233	)		(192	)		(41	)
Total int.-bearing liabilities		1,129,724			734		0.26	%		1,106,670			957		0.35	%		(223	)		(172	)		(51	)
Non-interest-bearing liabilities:
Demand deposits		429,436								403,640
Other liabilities		14,349								16,598
Total liabilities		1,573,509								1,526,908
Shareholders' equity		150,155								142,746
Total liabilities and shareholders' equity	$	1,723,664							$	1,669,654
Fully taxable equivalent net interest income					14,142								13,127				$	1,015		$	763		$	252
Net interest rate spread (1)							3.39	%							3.25	%
Net interest margin, fully taxable equivalent (2)							3.47	%							3.36	%
Taxable equivalent adjustment					(192	)							(159	)
Net interest income				$	13,950							$	12,968
(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.

Chemung Financial Corporation
Average Consolidated Balance Sheets & Net Interest Income Analysis and Rate/Volume Analysis of Net Interest Income (Unaudited)
YTD - June 30, 2017								YTD - June 30, 2016								YTD - June 30, 2017 vs. June 30, 2016
(in thousands)	Average Balance			Interest			Yield / Rate		Average Balance			Interest			Yield / Rate		Total Change			Due to Volume			Due to Rate
Earning assets:
Commercial loans	$	770,267		$	16,387		4.29	%	$	720,903		$	15,650		4.37	%	$	737		$	1,033		$	(296	)
Mortgage loans		199,740			3,754		3.79	%		196,551			3,856		3.95	%		(102	)		60			(162	)
Consumer loans		256,370			5,300		4.17	%		266,465			5,161		3.89	%		139			(207	)		346
Taxable securities		273,935			2,823		2.08	%		281,876			2,722		1.94	%		101			(81	)		182
Tax-exempt securities		47,910			747		3.14	%		46,902			713		3.06	%		34			15			19
Interest-bearing deposits		72,068			348		0.97	%		37,784			95		0.51	%		253			127			126
Total earning assets		1,620,290			29,359		3.65	%		1,550,481			28,197		3.66	%		1,162			947			215
Non-earnings assets:
Cash and due from banks		25,161								26,588
Premises and equipment, net		28,429								29,758
Other assets		53,994								52,266
Allowance for loan losses		(14,706	)							(14,496	)
AFS valuation allowance		(4,154	)							2,524
Total assets	$	1,709,014							$	1,647,121
Interest-bearing liabilities:
Interest-bearing checking	$	147,895		$	67		0.09	%	$	138,528		$	75		0.11	%	$	(8	)	$	5		$	(13	)
Savings and money market		803,269			771		0.19	%		730,641			672		0.18	%		99			64			35
Time deposits		139,366			250		0.36	%		163,250			299		0.37	%		(49	)		(41	)		(8	)
FHLB advances and repos		31,973			466		2.94	%		58,114			835		2.89	%		(369	)		(383	)		14
Total int.-bearing liabilities		1,122,503			1,554		0.28	%		1,090,533			1,881		0.35	%		(327	)		(355	)		28
Non-interest-bearing liabilities:
Demand deposits		423,844								398,421
Other liabilities		14,259								16,372
Total liabilities		1,560,606								1,505,326
Shareholders' equity		148,408								141,795
Total liabilities and shareholders' equity	$	1,709,014							$	1,647,121
Fully taxable equivalent net interest income					27,805								26,316				$	1,489		$	1,302		$	187
Net interest rate spread (1)							3.37	%							3.31	%
Net interest margin, fully taxable equivalent (2)							3.46	%							3.41	%
Taxable equivalent adjustment					(361	)							(323	)
Net interest income				$	27,444							$	25,993
(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.

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

The Corporation prepares its Consolidated Financial Statements in accordance with GAAP.  See the Corporation’s unaudited consolidated balance sheets and statements of income contained within this press release. 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 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.

																As of or for the
	As of or for the Three Months Ended															Six Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
(in thousands, except per share data)		2017			2017			2016			2016			2016			2017			2016
NET INTEREST MARGIN - FULLY TAXABLE EQUIVALENT
AND EFFICIENCY RATIO
Net interest income (GAAP)	$	13,950		$	13,494		$	13,296		$	13,040		$	12,968		$	27,444		$	25,993
Fully taxable equivalent adjustment		192			169			154			154			159			361			323
Fully taxable equivalent net interest income (non-GAAP)	$	14,142		$	13,663		$	13,450		$	13,194		$	13,127		$	27,805		$	26,316
Non-interest income (GAAP)	$	5,022		$	4,847		$	4,897		$	5,435		$	5,216		$	9,869		$	10,817
Less:  net (gains) losses on security transactions		(12	)		-			(4	)		(75	)		-			(12	)		(908	)
Adjusted non-interest income (non-GAAP)	$	5,010		$	4,847		$	4,893		$	5,360		$	5,216		$	9,857		$	9,909
Non-interest expense (GAAP)	$	14,332		$	13,045		$	13,561		$	13,471		$	15,570		$	27,377		$	29,578
Less:  amortization of intangible assets		(213	)		(226	)		(238	)		(245	)		(245	)		(439	)		(503	)
Less:  legal reserve		(850	)		-			-			-			(1,200	)		(850	)		(1,200	)
Adjusted non-interest expense (non-GAAP)	$	13,269		$	12,819		$	13,323		$	13,226		$	14,125		$	26,088		$	27,875
Average interest-earning assets (GAAP)	$	1,634,955		$	1,605,460		$	1,607,287		$	1,577,348		$	1,573,306		$	1,620,290		$	1,550,481
Net interest margin - fully taxable equivalent (non-GAAP)		3.47	%		3.45	%		3.33	%		3.33	%		3.36	%		3.46	%		3.41	%
Efficiency ratio (non-GAAP)		69.28	%		69.25	%		72.63	%		71.28	%		77.00	%		69.27	%		76.95	%

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
	As of or for the Three Months Ended															Six Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
(in thousands, except per share and ratio data)		2017			2017			2016			2016			2016			2017			2016
TANGIBLE EQUITY AND TANGIBLE ASSETS
(PERIOD END)
Total shareholders' equity (GAAP)	$	151,962		$	148,257		$	143,748		$	144,812		$	143,409		$	151,962		$	143,409
Less:  intangible assets		(24,330	)		(24,543	)		(24,769	)		(25,007	)		(25,252	)		(24,330	)		(25,252	)
Tangible equity (non-GAAP)	$	127,632		$	123,714		$	118,979		$	119,805		$	118,157		$	127,632		$	118,157
Total assets (GAAP)	$	1,718,572		$	1,736,100		$	1,657,179		$	1,728,865		$	1,683,932		$	1,718,572		$	1,683,932
Less:  intangible assets		(24,330	)		(24,543	)		(24,769	)		(25,007	)		(25,252	)		(24,330	)		(25,252	)
Tangible assets (non-GAAP)	$	1,694,242		$	1,711,557		$	1,632,410		$	1,703,858		$	1,658,680		$	1,694,242		$	1,658,680
Total equity to total assets at end of period (GAAP)		8.84	%		8.54	%		8.67	%		8.38	%		8.52	%		8.84	%		8.52	%
Book value per share (GAAP)	$	31.67		$	30.93		$	30.07		$	30.37		$	30.12		$	31.67		$	30.12
Tangible equity to tangible assets at
end of period (non-GAAP)		7.53	%		7.23	%		7.29	%		7.03	%		7.12	%		7.53	%		7.12	%
Tangible book value per share (non-GAAP)	$	26.60		$	25.81		$	24.89		$	25.13		$	24.81		$	26.60		$	24.81

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
	As of or for the Three Months Ended															Six Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
(in thousands, except ratio data)		2017			2017			2016			2016			2016			2017			2016
TANGIBLE EQUITY (AVERAGE)
Total average shareholders' equity (GAAP)	$	150,155		$	146,642		$	143,388		$	144,631		$	142,746		$	148,408		$	141,795
Less:  average intangible assets		(24,435	)		(24,654	)		(24,886	)		(25,127	)		(25,372	)		(24,544	)		(25,498	)
Average tangible equity (non-GAAP)	$	125,720		$	121,988		$	118,502		$	119,504		$	117,374		$	123,864		$	116,297
Return on average equity (GAAP)		7.90	%		8.24	%		8.20	%		7.55	%		4.57	%		8.06	%		6.14	%
Return on average tangible equity (non-GAAP)		9.43	%		9.90	%		9.92	%		9.14	%		5.55	%		9.66	%		7.48	%

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
	As of or for the Three Months Ended															Six Months Ended
	June 30,			March 31,			Dec. 31,			Sept. 30,			June 30,			June 30,			June 30,
(in thousands, except per share and ratio data)		2017			2017			2016			2016			2016			2017			2016
NON-GAAP NET INCOME
Reported net income (GAAP)	$	2,956		$	2,979		$	2,954		$	2,745		$	1,621		$	5,935		$	4,328
Net (gains) losses on security transactions (net of tax)		(7	)		-			(2	)		(47	)		-			(7	)		(565	)
Legal reserve		528			-			-			-			747			528			747
Non-GAAP net income	$	3,477		$	2,979		$	2,952		$	2,698		$	2,368		$	6,456		$	4,510
Average basic and diluted shares outstanding		4,797			4,790			4,773			4,765			4,760			4,793			4,754
Reported basic and diluted earnings per share (GAAP)	$	0.62		$	0.62		$	0.62		$	0.58		$	0.34		$	1.24		$	0.91
Reported return on average assets (GAAP)		0.69	%		0.71	%		0.69	%		0.65	%		0.39	%		0.70	%		0.53	%
Reported return on average equity (GAAP)		7.90	%		8.24	%		8.20	%		7.55	%		4.57	%		8.06	%		6.14	%
Core basic and diluted earnings per share (non-GAAP)	$	0.72		$	0.62		$	0.62		$	0.57		$	0.50		$	1.35		$	0.95
Core return on average assets (non-GAAP)		0.81	%		0.71	%		0.69	%		0.64	%		0.57	%		0.76	%		0.55	%
Core return on average equity (non-GAAP)		9.29	%		8.24	%		8.19	%		7.42	%		6.67	%		8.77	%		6.40	%

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 2016 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