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Chemung Financial profit doubles in 2nd quarter

By Journal Staff

Date:

The Chemung Canal Trust branch office on Route 5 in Auburn. (ADAM ROMBEL/ BJNN FILE PHOTO)

ELMIRA — Chemung Financial Corp. (NASDAQ: CHMG), parent company of Chemung Canal Trust Company, reported that its net income jumped to $5 million, or $1.02 per share, in the second quarter, from $2.5 million, or 52 cents a share, in the year-ago quarter.

“We are very pleased to report another quarter of strong earnings for 2019. Our results are a direct reflection of our focused approach to managing interest rate sensitivity, liquidity, and efficiency while positioning the balance sheet for the remainder of 2019 and into 2020,” Anders M. Tomson, Chemung Financial CEO, said in the banking company’s earnings report. “Our net interest margin remains steady, even though there is downward pressure due to the increasing costs of obtaining deposits. We are looking forward to the benefits of a stronger balance sheet and capital ratios that will provide us with the opportunity to support continued growth.”

Chemung Financial’s net interest income in the latest quarter edged up to $15.1 million from $15 million in the year-prior period.

The banking company’s fully taxable equivalent net interest margin dipped to 3.69 percent in the second quarter from 3.73 percent in the year-ago quarter. 

Non-interest income at Chemung Financial declined 4.5 percent in the second quarter to $5.1 million from $5.3 million for the year-earlier period. The decrease was mostly attributed to a fall of about $400,000 in other non-interest income such as swap fees, offset by an increase of about $200,000 in Wealth Management Group fee (WMG) income, such as fees from terminating trusts.

The banking company’s non-interest expense for the latest quarter was $13.8 million, down almost 8 percent from $15 million in the prior-year period.

A decrease of $1 million in legal accruals and settlements, attributed to the settlement agreement in the case of Fane vs. Chemung Canal Trust Company in the second quarter of 2018, was a big factor in the non-interest expense decline. The closure of two branches in 2019 also trimmed some expenses. 

Chemung Financial’s income-tax expense in the second quarter was $1.2 million, up from $0.5 million in the year-ago quarter. That increase was due primarily to rise of $3.2 million in income before income-tax expense in the second quarter, compared to the year-earlier quarter. The banking company’s effective income-tax rate increased from 16.1 percent in the second quarter of 2018 to 19.8 percent in this year’s second quarter.

Chemung Financial is a $1.8 billion financial-services holding company headquartered in Elmira, which operates 33 branches through its main subsidiary, Chemung Canal Trust Company, a full-service community bank with trust powers. Established in 1833, Chemung Canal Trust says it is the oldest locally-owned and managed community bank in New York state. Chemung Financial 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., an insurance company based in Nevada.       

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