What changed in this filing

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Item 1. Business

2026-03-13 compared with 2025-03-14 · 38 added, 45 removed, 382 unchanged (18% of the section changed)

6 unchanged sentences

The Corporation established a financial services subsidiary, CFS, in September 2001 which offers non-banking financial services such as mutual funds, annuities, brokerage services, insurance, and tax preparation services.

CRM, a wholly-owned subsidiary of the Corporation, was formed and began operations on May 31, 2016 as a Nevada-based captive insurance company.

During the fourth quarter of 2023, CRM was dissolved by the Corporation effective December 6, 2023.

The dissolution of CRM did not have a significant impact to financial results for the year ended December 31, 2023.

The Corporation’s Board of Directors has concluded that expansion of the franchise’s geographic footprint, an increase in the Bank’s interest-earning assets, and the generation of new sources of non-interest income are important components of its strategic plan.

The Corporation’s Board of Directors has concluded that expansion of the franchise’s geographic footprint, an increase in the Bank’s interest-earning assets and deposits, as well as the generation of new sources of non-interest income are important components of its strategic plan.

Over the past two decades, the Corporation has completed two whole bank acquisitions, including of Canton, Pennsylvania based Canton Bancorp, Inc.

in 2009 and Albany, New York based Fort Orange Financial Corp., in 2011, as well as branch acquisitions involving offices in Broome, Cayuga, Cortland, Seneca, Tioga, and Tompkins counties of New York.

Additionally, in 2021 the Corporation expanded its geographic footprint into Western New York with the opening of a de novo branch office in Erie County, and established the “Canal Bank, a division of Chemung Canal Trust Company” brand in 2024, concurrent with the opening of a new regional banking center in Erie County, located in Williamsville, New York.

Additionally, in 2021 the Corporation expanded its geographic footprint into Western New York with the opening of a de novo branch office in Erie County, and established the “Canal Bank, a division of Chemung Canal Trust Company” brand in 2024, concurrent with the opening of a regional banking center in Erie County, located in Williamsville, New York.

As a result of these transactions and organic growth, the Corporation had $2.710 billion in consolidated assets, $2.270 billion in loans, $2.271 billion in deposits, and $254.7 million in shareholders’ equity as of December 31, 2025.

16 unchanged sentences

The Corporation seeks to have a diversified loan portfolio consisting of commercial and industrial loans, commercial mortgages, residential mortgages, home equity lines of credit and home equity term loans, direct consumer loans, and indirect automobile loans.

The Bank operates with a traditional community bank model where the relationship manager possesses credit skills and is significantly involved in the credit decisions.

This creates value since clients and prospects know they are dealing with a decision maker.

The Bank operates with a traditional community bank model where the relationship manager possesses credit skills and is significantly involved in credit decisions.

This creates value as clients and prospects know they are working directly with decision makers.

Lending Authority

14 unchanged sentences

Further, the collateral securing the loans may depreciate over time, may be difficult to appraise, and may fluctuate in value.

The credit risk related to commercial loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any.

Commercial mortgage loans generally have larger balances and involve a greater degree of risk than residential mortgage loans, and they, therefore, pose higher potential losses on an individual customer basis.

The credit risk related to commercial and industrial loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any.

Loan repayment is often dependent on the successful operation and management of the properties and/or the businesses occupying the properties, as well as on the collateral securing the loan.

2 unchanged sentences

These swaps allow the Bank to originate a mortgage based on short-term SOFR rates and allow the borrower to swap into a longer term fixed rate.

The Bank enters into mirroring swaps with a Domestic Systemically Important Bank (D-SIBs) to manage it's interest rate risk.

The swap agreements are free-standing derivatives and are recorded at fair value in the Bank's Consolidated Balance Sheets.

The Bank enters into mirroring swaps with a Domestic Systemically Important Bank (D-SIBs) to manage its interest rate risk.

The swap agreements are free-standing derivatives and are recorded at fair value in the Corporation's Consolidated Balance Sheets.

The Bank offers fixed-rate and adjustable-rate residential mortgage loans to individuals with maturities of up to 30 years that are fully amortizing with monthly loan payments.

5 unchanged sentences

Residential mortgage loans are generally made on the basis of the borrower’s ability to make repayment from his or her employment and other income, and are secured by real property whose value tends to be more easily ascertainable.

Credit risk for these types of loans is generally influenced by general economic conditions, the characteristics of individual borrowers, and the nature of the loan collateral.

Credit risk for these types of loans is generally influenced by general economic conditions, the characteristics of individual borrowers, and the nature of the collateral.

The consumer loan segment includes home equity lines of credit and home equity loans, which exhibit many of the same risk characteristics as residential mortgages.

6 unchanged sentences

The Corporation’s deposit strategy is to fund the Bank, subject to market conditions, with stable, low-cost deposits, primarily checking account deposits and low interest-bearing deposit accounts.

In the current environment, the Corporation supplemented this strategy with certificate of deposit campaigns.

A checking account is the driver of a banking relationship and consumers consider the bank where they have their checking account as their primary bank.

These customers will typically turn to their primary bank first when in need of other financial services.

The Corporation also considers brokered deposits to be an element of its deposit strategy and anticipates that it will continue the use of brokered deposits as a secondary source of funding to support growth.

In the current environment, the Corporation supplements this strategy with targeted certificate of deposit campaigns.

The Corporation also considers brokered deposits to be an element of its deposit strategy and anticipates that it may continue using brokered deposits as a secondary source of funding to support growth.

Borrowings may be used on a short-term basis for liquidity purposes or on a long-term basis to fund asset growth.

3 unchanged sentences

Contractual loan and securities payments are a relatively stable source of funds, while deposit inflows and outflows and loan prepayments are significantly influenced by general market interest rates and economic conditions.

During the year ended December 31, 2025, the Corporation issued $45.0 million of ten-year subordinated notes as an additional source of funding.

The Corporation considers core deposits, consisting of non interest-bearing and interest-bearing checking accounts, savings accounts, and insured money market deposits, to be a significant component of its deposits.

1 unchanged sentence

The Bank is currently not limited with respect to the rates that it may offer on deposit products.

The Bank believes it is competitive in the types of accounts and interest rates it has offered on its deposit products.

The Bank regularly evaluates the internal cost of funds, surveys rates offered by competitors, reviews cash flow requirements for lending and liquidity, and executes rate changes when necessary as part of its asset/liability management, profitability and growth strategies.

The flow of deposits is influenced significantly by general economic conditions, changes in prevailing interest rates and competition.

The Bank believes it is competitive in the types of accounts and interest rates it offers on its deposit products.

The Bank regularly evaluates the internal cost of funds, surveys rates offered by competitors, reviews cash flow requirements for lending and liquidity, and executes rate changes when necessary as part of its asset and liability management, profitability and growth strategies.

The flow of deposits is influenced significantly by general and regional economic conditions, changes in prevailing interest rates, and competition.

The Bank’s deposits are obtained predominantly from the areas in which its retail offices are located.

7 unchanged sentences

Investment decisions are made in accordance with the Bank's investment policy and include consideration of risk, return, duration, and portfolio concentrations.

The Bank utilizes its investment portfolio as the main source of collateral for its municipal depositors, allowing for excess liquidity to fund loans.

The Bank also utilizes its investment portfolio as the main source of collateral for its municipal depositors.

Derivative Financial Instruments

4 unchanged sentences

The Bank may receive an upfront fee for participating in the credit exposure of the interest rate swap associated with the commercial loan in which it is a participant and the fee received is recognized immediately in other non-interest income.

The Bank is exposed to its share of the credit loss equal to the fair value of the interest rate swap in the event of nonperformance by the counterparty of the interest rate swap.

The Bank is exposed to its share of the credit loss equal to the fair value of the lead bank's interest rate swap in the event of nonperformance by the counterparty of the lead bank's interest rate swap.

The Bank has a policy for managing its derivative financial instruments, and the policy and program activity are overseen by the ALCO.

11 unchanged sentences

The Bank also operates under the names “Capital Bank, a division of Chemung Canal Trust Company,” with branch offices in Albany, Saratoga, and Schenectady counties in New York, and “Canal Bank, a division of Chemung Canal Trust Company,” with a branch office in Erie County, New York.

According to the FDIC's annual Summary of Deposits – Market Share Report as of June 30, 2024, the Bank held a majority of market deposits in Chemung County, where it is headquartered, with 61.22% of total market deposits, which included the Bank’s $69.5 million in brokered deposits.

According to the FDIC's annual Summary of Deposits – Market Share Report as of June 30, 2025, the Bank held a majority of market deposits in Chemung County, where it is headquartered, with 64.56% of total market deposits.

Overall, the Bank's legacy market, consisting of the counties operating under the Chemung Canal Trust Company brand as described in the preceding paragraph, comprised 13.2% of the market's $14.8 billion in total deposits.

The Bank's Capital Bank division and newly-established Canal Bank divisions comprised 1.97% and 0.01% of their respective markets total deposits of $26.3 billion and $58.0 billion.

The Bank's Capital Bank and Canal Bank divisions comprised 1.81% and 0.06% of their respective markets' total deposits of $26.9 billion and $57.5 billion.

Albany, Saratoga, and Schenectady counties rely heavily on business related to New York State government activities, the nanotechnology industry, and colleges located within these counties.

The Capital region of New York has become a hub for both private and public investment in semiconductor-related activity, recently highlighted by the announcement of a $10 billion partnership to establish the only publicly-owned EUV lithography research facility in North America.

Major partners in the initiative include Applied Materials, Micron, IBM, and Tokyo Electron, and the facility aims to compliment the existing semiconductor supply chain presence of companies such as ASML and GlobalFoundries, as well as enhance the research capabilities of local universities such as Rensselaer Polytechnic Institute and SUNY Polytechnic.

Regeneron announced the purchase of a 1.1 million square foot site in Saratoga Springs, New York for its warehouse and production support activities with the potential for other operations.

The Capital region of New York has become a hub for both private and public investment in semiconductor-related activity, highlighted by the announcement of a $10 billion partnership to establish the only publicly-owned EUV lithography research facility in North America, which is anticipated to be completed by the end of 2026.

Major partners in the initiative include Applied Materials, Micron, IBM, and Tokyo Electron, and the facility aims to complement the existing semiconductor supply chain presence of companies such as ASML and GlobalFoundries, as well as enhance the research capabilities of local universities such as Rensselaer Polytechnic Institute and SUNY Polytechnic.

Regeneron announced an investment of over $2 billion to establish a major new manufacturing facility in Saratoga Springs, New York, creating 1,000 new full-time jobs.

Tompkins County is dominated by the presence of Cornell University and Ithaca College.

2 unchanged sentences

Bradford County's largest employers are a combination of service and small manufacturing businesses, along with the natural gas industry.

During 2021, the Corporation entered a new market in the Buffalo Metropolitan Area.

During 2021, the Corporation entered the Buffalo Metropolitan Area market.

After New York City, this region is the second largest population center in New York State.

Erie County has a diverse mix of industrial, light manufacturing, high technology and service-oriented private sector companies.

The region also has reliance on higher education with the University at Buffalo, Buffalo State University, as well as several private colleges.

The region also has reliance on higher education with the University at Buffalo, Buffalo State University, and several private colleges.

The region's largest employers are affiliated with the healthcare industry, primarily located in the medical corridor, as well as financial institutions.

2 unchanged sentences

Many of these competitors are not subject to regulation as extensive as that affecting the Bank and, as a result, may have a competitive advantage over the Bank in certain respects.

This is particularly true of credit unions because their pricing structure is not encumbered by the payment of income taxes and not subject to certain regulations such as CRA.

This is particularly true of credit unions because their pricing structure is not encumbered by the payment of income taxes and are not subject to certain regulations such as CRA.

Similarly, the competition for the Bank's wealth management services is primarily from local offices of national brokerage firms, independent investment advisors, national and regional banks, as well as internet based brokerage and advisory firms.

11 unchanged sentences

Total Rewards

We offer a competitive total rewards package for all employees, including competitive base pay, incentive plans for all employees, a 401(k) match, a non-discretionary company 401(k) contribution, health, dental, and vision insurance, life insurance, company contributions to a health savings account, paid time off, family leave, flexible work schedules, tuition reimbursement, and the opportunity to volunteer in the community during work hours.

We offer a competitive total rewards package for all employees, including competitive base pay, incentive plans for all employees, a 401(k) match, a non-discretionary company 401(k) contribution, health, dental, and vision insurance, life insurance, company contributions to a health savings account, paid time off, family leave, flexible work schedules, tuition reimbursement and student loan repayment assistance, and the opportunity to volunteer in the community during work hours.

Health and Safety

The health, safety and well-being of our employees is paramount to the success of our business.

In addition to our insurance offerings and leave programs, we offer an employee assistance program, along with welfare programs, fitness reimbursement, and an on-site flu-shot clinic.

In addition to our insurance offerings and leave programs, we offer an employee assistance program, along with welfare programs, fitness reimbursements, and an on-site flu-shot clinic.

We believe investing in our employees not only helps with retention, but also keeps employees engaged and focused.

28 unchanged sentences

The Interstate MOU established the regulatory responsibilities of the respective state banking regulators regarding bank regulatory examinations and is intended to reduce the regulatory burden on state-chartered banks branching within the region by elimination of duplicative host state compliance exams.

Under the Interstate MOU, the activities of branches the Bank established in Pennsylvania would be governed by New York state law to the same extent that the Federal law governs the activities of the branch of an out-of-state national bank in such host states.

Under the Interstate MOU, the activities of branches the Bank operates in Pennsylvania would be governed by New York state law to the same extent that the Federal law governs the activities of the branch of an out-of-state national bank in such host states.

Issues regarding whether a particular host state law is preempted are to be determined in the first instance by the NYSDFS.

11 unchanged sentences

(ii) disclosure regarding any potential conflict of interest of any compensation consultants of the Corporation;

(iii) disclosure regarding audit and compensation committee independence and experience, qualifications, skills and diversity of its directors and any director nominees;

(iii) disclosure regarding audit and compensation committee independence and experience, qualifications, and skills of its directors and any director nominees;

(iv) “say-on-pay” disclosure;

3 unchanged sentences

The final rule directed national securities exchanges, including Nasdaq, to require listed companies to develop and implement clawback policies to recover erroneously awarded incentive-based compensation from current or former executive officers in the event of a required accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws, and to disclose their clawback policies and any actions taken under these policies.

Nasdaq amended its proposed listing standards relating to clawbacks to provide that listed companies had until December 1, 2023 to adopt a compliant clawback policy.

The Corporation met such requirement.

The Corporation has met such requirements.

Sarbanes-Oxley

26 unchanged sentences

The Bank is a commercial bank chartered under the laws of New York State and is supervised by the NYSDFS.

The Bank also is a member bank of the FRB and, therefore, the FRBNY serves as its primary federal regulator.

The Bank is also a member bank of the FRB and, therefore, the FRBNY serves as its primary federal regulator.

The FDIC insures the Bank’s deposit accounts up to applicable limits.

59 unchanged sentences

Tier 2 capital is comprised of capital instruments and related surplus meeting specific requirements, and may include cumulative preferred stock, long-term perpetual preferred stock, mandatory convertible securities, subordinated debt and intermediate preferred stock.

Also included in Tier 2 capital is the allowance for credit losses limited to a maximum of 1.25% of risk-weighted assets and, for institutions like the Bank that have exercised an opt-out election regarding the treatment of accumulated other comprehensive income (AOCI), up to 45% of net unrealized gains on available-for-sale equity securities with readily determinable fair market values.

Also included in Tier 2 capital is the allowance for credit losses limited to a maximum of 1.25% of risk-weighted assets.

Additionally, a bank that retains credit risk in connection with an asset sale may be required to maintain additional regulatory capital because of the recourse back to the bank.

11 unchanged sentences

As of December 31, 2025, the Bank exceeded all regulatory capital ratios necessary to be considered well capitalized.

On October 29, 2019, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporations (collectively, the "Federal Agencies") adopted a final rule (the "Final Rule") to simplify the regulatory capital requirements for eligible community banks and holding companies that opt into the Community Bank Leverage Ratio ("CBLR") framework, as required by Section 201 of the Economic Growth, Relief and Consumer Protection Act of 2018.

On October 29, 2019, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporations (collectively, the " Agencies") adopted a final rule (the "Final Rule") to simplify the regulatory capital requirements for eligible community banks and holding companies that opt into the Community Bank Leverage Ratio ("CBLR") framework, as required by Section 201 of the Economic Growth, Relief, and Consumer Protection Act of 2018.

Under the Final Rule, a depository institution or holding company that satisfies certain qualifying criteria, including having less than $10 billion in average total consolidated assets and a leverage ratio of greater than 9%, would be considered a "qualifying community banking organization" and may elect (but is not required) to use the CBLR framework.

If this election is made, the qualifying community banking organization would be considered to have satisfied the Federal Agencies' generally applicable risk-weighted and leverage capital requirements (the "Basel III capital framework") and would be considered to be well-capitalized under the Federal Agencies' prompt corrective action ("PCA") rules.

Under the CBLR framework, a qualifying community banking organization would satisfy the regulatory capital requirements by

calculating and reporting a single leverage ratio, i.e., the CBLR, which would require significantly less data than needed to calculate the capital ratios, under the Basel III capital framework and eliminate the time consuming need to risk-weight assets.

The Final Rule took effect on January 1, 2020.

If this election is made, the qualifying community banking organization would be considered to have satisfied the Agencies' generally applicable risk-weighted and leverage capital requirements (the "Basel III capital framework") and would be considered to be well capitalized under the Agencies' prompt corrective action ("PCA") rules.

Under the CBLR framework, a qualifying community banking organization would satisfy the regulatory capital requirements by calculating and reporting a single leverage ratio, i.e., the CBLR, which would require significantly less data than needed to calculate the capital ratios, under the Basel III capital framework and eliminate the time consuming need to risk-weight assets.

In November 2025, the federal banking agencies issued a proposed rule to lower the community bank leverage ratio to 8%.

The proposed rule was not effective as of December 31, 2025.

As of December 31, 2025, the Bank has not elected to use the community bank leverage ratio.

33 unchanged sentences

The Bank received a “satisfactory” rating for CRA on its last performance evaluations which were conducted by the NYSDFS as of March 31, 2023, and the FRB as of September 25, 2023.

On October 24, 2023, the FRB issued a final rule to strengthen and modernize the federal CRA regulations.

Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The FRB will evaluate large banks under four performance tests:

the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test.

As of March, 2024, a preliminary injunction was granted by a federal court, effectively staying the implementation of the CRA Final Rule due to a lawsuit filed by several banking and trade associations.

Fair Lending and Consumer Protection Laws

57 unchanged sentences

Banking organizations are required to notify their primary federal regulator as soon as possible and no later than 36 hours of determining that a “computer-security incident” that arises to the level of a “notification incident” has occurred.

A notification incident is a “computer-security incident” that has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to deliver services to a material portion of its customer base, jeopardize the viability of key operations of the banking organization, or impact the stability of the financial sector.

Bank service providers are also required to notify any affected bank to or on behalf of which the service provider provides services “as soon as possible” after determining that it has experienced an incident that materially disrupts or degrades, or is reasonably likely to materially disrupt or degrade, covered services provided to such bank for four or more hours.

9 unchanged sentences

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 1. Business