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Item 5. Market for Registrant’s Common Equity

2022-03-23 compared with 2021-03-24 · 6 added, 121 removed, 36 unchanged (78% of the section changed)

26 unchanged sentences

Quarter ended 12/31/2021 8,465 $ 44.88 8,465 215,079

On March 18, 2020, the Corporation’s Board of Directors approved a stock repurchase plan which replaced the previously authorized repurchase program.

Under this repurchase program, the Corporation repurchased 250,000 shares of its common stock, or approximately 5% of its outstanding shares.

On October 30, 2020 the stock repurchase plan was completed.

A total of 250,000 shares were repurchased at an average cost of $29.40 per share.

On January 8, 2021 the Corporation announced that the Board of Directors approved a new stock repurchase program whereby the Corporation may repurchase up to 250,000 shares of its common stock, or approximately 5% of its outstanding shares.

2 unchanged sentences

STOCK PERFORMANCE GRAPH

The following graph compares the yearly change in the cumulative total shareholder return on the Corporation’s common stock against the cumulative total return of the NASDAQ Stock Market (U.S.

Companies), NASDAQ Bank Stocks Index, SNL U.S.

Bank NASDAQ, and SNL $1B - $5B Bank Index for the period of five years commencing December 31, 2015.

The following graph compares the yearly change in the cumulative total shareholder return on the Corporation’s common stock against the cumulative total return of the NASDAQ Composite Index, KBW NASDAQ Bank Index, and S&P U.S.

SmallCap Banks Index for the period of five years commencing December 31, 2016.

Period Ending

1 unchanged sentence

Chemung Financial Corporation 100.00 135.66 119.28 125.57 104.08 146.29

NASDAQ Composite 100.00 108.87 141.13 137.12 187.44 271.64

Bank NASDAQ 100.00 138.65 145.97 123.04 154.47 132.56

SNL Bank $1B-$5B 100.00 143.87 153.37 134.37 163.35 138.81

NASDAQ Composite Index 100.00 129.64 125.96 172.18 249.51 304.85

KBW NASDAQ Bank Index 100.00 118.59 97.58 132.84 119.14 164.80

SmallCap Banks Index 100.00 104.33 87.06 109.22 99.19 138.09

The cumulative total return includes (1) dividends paid and (2) changes in the share price of the Corporation’s common stock and assumes that all dividends were reinvested.

The above graph assumes that the value of the investment in Chemung Financial Corporation and each index was $100 on December 31, 2016.

The Total Returns Index for NASDAQ Composite and SNL bank stocks indices were obtained from S&P Global Market Intelligence, New York, NY.

SELECTED FINANCIAL DATA

The following tables present selected financial data as of and for the years ended December 31, 2020, 2019, 2018, 2017 and 2016.

The selected financial data at December 31, 2020, and 2019 and for the three year period ended December 31, 2020 is derived from our audited consolidated financial statements that appear in this annual report on Form 10-K.

The other years presented in these tables are derived from audited consolidated financial statements that do not appear in this annual report on Form 10-K.

The selected financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements and related notes.

SUMMARIZED BALANCE SHEET DATA AT DECEMBER 31 ,

(in thousands) 2020 2019 2018 2017 2016

Total assets $ 2,279,451 $ 1,787,827 $ 1,755,343 $ 1,707,620 $ 1,657,179

Loans, net of deferred fees 1,536,463 1,309,219 1,311,906 1,311,824 1,200,290

AFS and HTM securities 557,080 287,205 247,133 296,872 308,107

Operating lease right-of-use assets 7,145 8,001 — — —

FHLBNY and FRBNY stock 3,150 3,099 3,138 5,784 4,041

Deposits 2,037,774 1,572,138 1,569,237 1,467,446 1,456,343

Securities sold under agreements to repurchase — — — 10,000 27,606

FHLBNY advances — — — 59,700 9,093

Operating lease liabilities 7,264 8,084 — — —

Long term finance lease obligation 3,849 4,085 4,304 4,517 4,722

Shareholders' equity 199,699 182,627 165,029 149,813 143,748

SUMMARIZED EARNINGS DATA FOR THE YEARS ENDED DECEMBER 31,

(in thousands) 2020 2019 2018 2017 2016

Net interest income $ 62,919 $ 60,611 $ 60,480 $ 56,987 $ 52,329

Provision for loan losses 4,239 5,945 3,153 9,022 2,437

Net interest income after provision for loan losses 58,680 54,666 57,327 47,965 49,892

Wealth management group fee income 9,492 9,503 9,317 8,804 8,316

Service charges on deposit accounts 3,134 4,460 4,727 4,961 5,089

Interchange revenue from debit card transactions 4,068 4,104 4,040 3,761 4,027

Securities gains, net — 19 — 109 987

Change in fair value of equity investments 89 81 2,004 80 43

Other non-interest income 4,341 1,906 2,986 2,776 2,687

Total non-interest income 21,124 20,073 23,074 20,491 21,149

Legal accruals and settlements — — 989 850 1,200

Other non-interest expenses 55,935 55,696 55,777 52,914 55,410

Total non-interest expenses 55,935 55,696 56,766 53,764 56,610

Income before income tax expense 23,869 19,043 23,635 14,692 14,431

Income tax expense 4,607 3,434 4,009 7,262 4,404

Net income $ 19,262 $ 15,609 $ 19,626 $ 7,430 $ 10,027

SELECTED PER SHARE DATA ON SHARES OF COMMON STOCK AT OR FOR THE YEARS ENDED DECEMBER 31,

2020 2019 2018 2017 2016 % Change 2019

2020 Compounded Annual Growth 5 Years

Earnings per share (1) $ 4.01 $ 3.21 $ 4.06 $ 1.55 $ 2.11 24.9 % 14.9 %

Dividends declared 1.04 1.04 1.04 1.04 1.04 — % — %

Tangible book value (2) (4) 37.83 32.74 29.22 26.14 24.89 15.5 % 10.0 %

Book Value 42.53 37.35 33.99 31.10 30.07 13.9 % 8.0 %

Market price at December 31, 33.95 42.50 41.31 48.10 36.35 (20.1) % 4.3 %

Common shares outstanding at year end (in thousands) (3) 4,695 4,889 4,855 4,817 4,781 (4.0) % (0.2) %

Weighted average shares outstanding (in thousands) 4,802 4,869 4,832 4,800 4,762 (1.4) % 0.3 %

(1) Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding.

There is no difference between basic and diluted earnings per share.

(2) Tangible book value is total shareholders’ equity less goodwill and other intangible assets divided by common shares outstanding.

(3) All issuable shares including those related to directors’ restricted stock units and directors’ stock compensation.

(4) See the GAAP to Non-GAAP reconciliations starting at pages 75-78.

SELECTED RATIOS AT OR FOR THE YEARS ENDED DECEMBER 31,

2020 2019 2018 2017 2016

Return on average assets 0.94 % 0.88 % 1.14 % 0.43 % 0.60 %

Return on average equity 9.94 % 8.86 % 12.76 % 4.91 % 7.02 %

Dividend yield at year end 3.06 % 2.45 % 2.52 % 2.16 % 2.86 %

Dividend payout ratio 25.73 % 32.28 % 25.42 % 66.30 % 48.76 %

Total capital to risk adjusted assets (4) 13.62 % 13.98 % 13.14 % 11.82 % 12.14 %

Tier I capital to risk adjusted assets (4) 12.37 % 12.73 % 11.89 % 10.56 % 10.94 %

Common equity tier I capital (4) 12.37 % 12.73 % 11.89 % 10.56 % 10.94 %

Tier I leverage ratio (4) 7.90 % 9.35 % 8.79 % 8.02 % 7.81 %

Average equity to average assets 9.47 % 9.98 % 8.96 % 8.83 % 8.57 %

Year-end equity to year-end assets ratio 8.76 % 10.22 % 9.40 % 8.77 % 8.67 %

Loans to deposits 75.40 % 83.28 % 83.60 % 89.40 % 82.42 %

Allowance for loan losses to total loans 1.36 % 1.79 % 1.44 % 1.61 % 1.19 %

Allowance for loan losses to non-performing loans 210.25 % 130.38 % 154.59 % 122.14 % 118.35 %

Non-performing loans to total loans 0.65 % 1.38 % 0.93 % 1.32 % 1.00 %

Non-performing assets to total assets 0.45 % 1.04 % 0.73 % 1.13 % 0.75 %

Net interest rate spread 3.14 % 3.45 % 3.59 % 3.47 % 3.26 %

Net interest margin 3.25 % 3.64 % 3.72 % 3.56 % 3.37 %

Efficiency ratio (unadjusted) (1) 66.56 % 69.03 % 67.94 % 69.39 % 77.04 %

Efficiency ratio (adjusted) (2) (3) 65.71 % 67.95 % 67.22 % 66.60 % 74.43 %

(1) Efficiency ratio (unadjusted) is non-interest bearing expense divided by the total of net interest income plus non-interest income.

(2) Efficiency ratio (adjusted) is non-interest expense 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 gain on securities transactions.

(3) See the GAAP to Non-GAAP reconciliations starting at page 75-78.

(4) Consolidated capital ratios.

Please see Note 20 for Bank only ratios.

The following tables summarize the Corporation’s unaudited net income and basic earnings per share at each quarter end for the years 2020 and 2019:

(in thousands, except per share data) Quarter Ended

UNAUDITED QUARTERLY DATA Mar.

31 June 30 Sept.

Interest and dividend income $ 16,384 $ 16,472 $ 16,714 $ 17,337

Interest expense 1,322 881 845 940

Net interest income 15,062 15,591 15,869 16,397

Provision for loan losses (1) 3,050 260 679 250

Net interest income after provision for loan losses 12,012 15,331 15,190 16,147

Total non-interest income 4,730 5,080 5,339 5,975

Total non-interest expenses 13,749 13,227 13,362 15,597

Income before income tax expense 2,993 7,184 7,167 6,525

Income tax expense 502 1,357 1,456 1,292

Net income $ 2,491 $ 5,827 $ 5,711 $ 5,233

Basic and diluted earnings per share

$ 0.51 $ 1.20 $ 1.19 $ 1.11

(1) The quarter ended March 31, 2020 included a $2.7 million provision for probable incurred credit losses related to the COVID-19 pandemic.

(in thousands, except per share data) Quarter Ended

UNAUDITED QUARTERLY DATA Mar.

31 June 30 Sept.

Interest and dividend income $ 16,665 $ 16,682 $ 16,808 $ 16,777

Interest expense 1,498 1,581 1,666 1,576

Net interest income 15,167 15,101 15,142 15,201

Provision for loan losses (1) 1,093 150 4,441 261

Net interest income after provision for loan losses 14,074 14,951 10,701 14,940

Total non-interest income 4,925 5,086 4,956 5,106

Total non-interest expenses 13,497 13,823 13,525 14,851

Income before income tax expense 5,502 6,214 2,132 5,195

Income tax expense 1,034 1,233 176 991

Net income $ 4,468 $ 4,981 $ 1,956 $ 4,204

Basic and diluted earnings per share

$ 0.92 $ 1.02 $ 0.40 $ 0.87

(1) The quarter ended September 30, 2019 included a $4.2 million specific impairment related to a participating interest in a commercial credit.

The Total Returns Index for NASDAQ Composites, KBW NASDAQ Bank Index, and S&P SmallCap Bank Indices were obtained from S&P Global Market Intelligence, New York, NY.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity