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Item 9A. Controls and Procedures

2026-03-13 compared with 2025-03-14 · 344 added, 343 removed, 1961 unchanged (26% of the section changed)

13 unchanged sentences

Based on the assessment, we assert that the Corporation maintained effective internal control over financial reporting as of December 31, 2025 based on the specified criteria.

Crowe LLP, an independent registered public accounting firm, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, as stated in their report dated March 13, 2026, included in Part IV, Item 15 of this Annual Report.

During the fourth quarter of 2024, there have been no changes in the Corporation’s internal control over financial reporting that have materially affected, or that are reasonably likely to material affect, the Corporation’s internal control over financial reporting.

During the fourth quarter of 2025, there have been no changes in the Corporation’s internal control over financial reporting that have materially affected, or that are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.

/s/ Anders M.

9 unchanged sentences

The Corporation believes that its Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, as well as applicable listing standards.

A copy of the Corporation's insider trading policy is filed as Exhibit 19 to this report.

A copy of the Corporation's insider trading policy is filed as Exhibit 19 to the Annual Report on Form 10-K for the year ended December 31, 2024.

EXECUTIVE COMPENSATION

27 unchanged sentences

4.2 Description of Common Stock Registered Under Section 12 of the Securities Exchange Act of 1934, filed herewith (as incorporated by reference to Exhibit 4.2 to Registrant's Form 10-K for the year ended December 31, 2019 and filed with the Commission on March 12, 2020).

4.3 Form of 7.75% Fixed-to-Floating Rate Subordinated Note due 2035 of Chemung Financial Corporation (incorporated as Exhibit 4.1 to Registrant's Form 8-K and filed with the Commission on June 10, 2025).

10.1 Chemung Financial Corporation 2014 Omnibus Plan and Component Plans (Chemung Financial Corporation Restricted Stock Plan, Chemung Financial Corporation Incentive Compensation Plan, Chemung Financial Corporation Directors’ Compensation Plan and Chemung Financial Corporation/Chemung Canal Trust Company Directors’ Deferred Fee Plan) (filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to Registrant’s Form S-8 filed with the Commission on January 27, 2015 and incorporated herein by reference).

16 unchanged sentences

McKim, III, Executive Vice President, Chief Financial Officer and Treasurer, (filed as Exhibit 10.1 to Registrant's Form 8-K filed with the Commission on June 2, 2023 and incorporated herein by reference).

19 Policy Related to Insider Trading, filed herewith.*

10.14 Chemung Financial Corporation 2025 Equity Incentive Plan (incorporated by reference to Appendix A to the proxy statement for the Annual Meeting of Shareholders of Chemung Financial Corporation, filed under the Exchange Act on April 23, 2025).

10.15 Form of Incentive Stock Option Award Agreement (filed as Exhibit 10.2 to Registrant's Registration Statement on Form S-8 (333-288125) filed with the Commission on June 18, 2025 and incorporated herein by reference).

10.16 Form of Non-Qualified Stock Option Award Agreement (filed as Exhibit 10.3 to Registrant's Registration Statement on Form S-8 (333-288125) filed with the Commission on June 18, 2025 and incorporated herein by reference).

10.17 Form of Restricted Stock Award Agreement (filed as Exhibit 10.4 to Registrant's Registration Statement on Form S-8 (333-288125) filed with the Commission on June 18, 2025 and incorporated herein by reference).

10.18 Form of Subordinated Note Purchase Agreement, dated as of June 10, 2025, by and between Chemung Financial Corporation and the several Purchasers (incorporated as Exhibit 10.1 to Registrant's Form 8-K filed with the commission on June 10, 2025).

19 Policy Related to Insider Trading (as incorporated by reference to Exhibit 19 to Registrant's Form 10-K for the year ended December 31, 2024 and filed with the Commission on March 14, 2025).

21 Subsidiaries of the Registrant.*

4 unchanged sentences

32.2 Certification of Treasurer and Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 19 U.S.C.

97 Policy Relating to Recovery of Erroneously Awarded Compensation, incorporated herein by reference.

97 Policy Relating to Recovery of Erroneously Awarded Compensation (filed as Exhibit 97 to Registrant's Annual Report on Form 10-K filed with the Commission on March 13, 2024 and incorporated herein by reference).

101.INS Instance Document

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As of December 31, 2025, the balance of the Allowance for Credit Losses (“ACL”) on Loans was $24.2 million.

Management employees a process and methodology to estimate the ACL on Loans collectively analyzed for impairment including both quantitative and qualitative components.

Management employs a process and methodology to estimate the ACL on Loans collectively analyzed for impairment including both quantitative and qualitative components.

The methodology for evaluating the quantitative component includes pooling loans into portfolio segments based on the risk profile of each instrument.

27 unchanged sentences

Equity investments, at fair value 3,765 3,235

Securities available for sale, at estimated fair value (amortized cost of $ 617,271 , net of allowance for credit losses on securities of $ 0 as of December 31, 2024;

and amortized cost of $ 669,092 , net of allowance for credit losses on securities of $ 0 as of December 31, 2023)

Securities available for sale, at estimated fair value (amortized cost of $ 327,888 , net of allowance for credit losses of $ 0 as of December 31, 2025;

and amortized cost of $ 617,271 , net of allowance for credit losses of $ 0 as of December 31, 2024)

280,598 531,442

Securities held to maturity, (estimated fair value of $ 808 as of December 31, 2024 and $ 785 as of December 31, 2023 net allowance for credit losses of $ 0 as of December 31, 2024 and December 31, 2023, respectively)

Securities held to maturity, (estimated fair value of $ 640 as of December 31, 2025 and $ 808 as of December 31, 2024 net of allowance for credit losses of $ 0 as of December 31, 2025 and December 31, 2024)

FHLBNY and FRBNY Stock, at cost 9,466 9,117

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FHLBNY overnight advances 87,110 109,110

Subordinated debt, net of issuance costs of $ 972 and $ 0 , respectively

Long-term finance lease obligation 3,444 3,779

Operating lease liabilities 4,937 5,629

Dividends payable — 1,469

Interest rate swap liabilities 17,412 23,851

41 unchanged sentences

Total non-interest income 7,945 23,230

Non-Interest Expenses:

Non-Interest Expense:

Salaries and wages 30,569 28,457

1 unchanged sentence

Other components of net periodic pension cost (benefit) ( 452 ) ( 909 )

Net occupancy expenses 5,832 5,637

Furniture and equipment expenses 1,659 1,728

Net occupancy expense 5,812 5,832

Furniture and equipment expense 1,702 1,659

Data processing expense 10,048 10,093

1 unchanged sentence

Marketing and advertising expense 1,248 1,182

Other real estate owned expenses 157 ( 20 )

Other real estate owned expense 23 157

FDIC insurance 1,518 2,120

1 unchanged sentence

Other 7,516 7,041

Total non-interest expenses 67,250 64,243

Total non-interest expense 70,729 67,250

Income before income tax expense 19,936 30,085

10 unchanged sentences

Other comprehensive income (loss):

Unrealized holding gain (loss) on securities available for sale ( 730 ) 11,524

Reclassification adjustment (losses) realized in net income — ( 14 )

Unrealized holding gains (losses) on securities available for sale 21,041 ( 730 )

Reclassification adjustment for losses realized in net income 17,498 —

Net unrealized gain (loss) 38,539 ( 730 )

13 unchanged sentences

Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive (Loss) Total

Balances as of December 31, 2022 $ 53 $ 47,331 $ 211,859 $ ( 17,598 ) $ ( 75,257 ) $ 166,388

Cumulative effect of accounting change (a) — — ( 1,076 ) — — ( 1,076 )

Balances as of January 1, 2024 53 47,773 229,930 ( 16,502 ) ( 66,013 ) 195,241

9 unchanged sentences

— ( 217 ) — 217 — —

Sale of 14,994 shares of treasury stock (b)

Sale of 9,322 shares of treasury stock (a)

— 161 — 269 — 430

Repurchase of 6,541 shares of common stock

Repurchase of 6,821 shares of common stock (b)

— — — ( 344 ) — ( 344 )

14 unchanged sentences

— ( 222 ) — 222 — —

Sale of 9,322 shares of treasury stock (b)

Sale of 10,785 shares of treasury stock (a)

— 222 — 314 — 536

Repurchase of 6,821 shares of common stock

Repurchase of 7,308 shares of common stock (b)

— — — ( 396 ) — ( 396 )

2 unchanged sentences

Balances as of December 31, 2025 $ 53 $ 49,547 $ 256,484 $ ( 15,322 ) $ ( 36,053 ) $ 254,709

(a) Implementation of ASC 326.

See Adoption of New Accounting Standards" discussion in Note 1.

(b) All treasury stock sales were completed at the prevailing market price with the Chemung Canal Trust Company Profit Sharing, Savings, and Investment Plan which is a defined contribution plan sponsored by the Bank.

(a) All treasury stock sales were completed at the prevailing market price with the Chemung Canal Trust Company Profit Sharing, Savings, and Investment Plan which is a defined contribution plan sponsored by the Bank.

(b) Repurchased shares of common stock represent shares repurchased to cover employee taxes on vesting shares.

See accompanying notes to consolidated financial statements.

6 unchanged sentences

Amortization of right-of-use assets 771 202

Amortization of intangible assets — —

Deferred income tax (benefit) expense ( 2,673 ) 1,121

Provision for credit losses ( 46 ) 3,425

Loss (gain) on disposal of fixed assets ( 39 ) 3

Provision (credit) for credit losses 4,437 ( 46 )

Gains on disposal of fixed assets ( 640 ) ( 39 )

Depreciation and amortization of fixed assets 1,895 1,814

3 unchanged sentences

Loans originated and held for sale ( 13,867 ) ( 11,653 )

Net (gains) on sale of other real estate owned 18 ( 37 )

Write-downs on OREO 45 3

Net change in fair value of equity investments ( 179 ) ( 103 )

Net purchases of equity investments ( 10 ) ( 113 )

Net (gains) on interest rate swaps ( 17 ) ( 16 )

(Increase) in other assets ( 2,653 ) ( 1,298 )

Increase in accrued interest payable 487 2,115

(Gains) losses on sale of other real estate owned, net ( 2 ) 18

Write-downs on other real estate owned — 45

Change in fair value of equity investments, net ( 211 ) ( 179 )

Losses on securities transactions, net 17,498 —

Purchases of equity investments, net ( 319 ) ( 10 )

Amortization of deferred costs on subordinated debt 56 —

Losses (gains) on interest rate swaps, net 110 ( 17 )

Income from bank owned life insurance ( 32 ) ( 38 )

Decrease (increase) in accrued interest receivable 361 ( 486 )

Decrease (increase) in other assets 4,533 ( 2,167 )

Increase (decrease) in accrued interest payable ( 1,630 ) 487

Increase (decrease) in other liabilities 4,143 2,119

Payments on operating leases ( 772 ) ( 198 )

Expense related to restricted stock units for directors' deferred compensation plan 23 21

Expense related to employee restricted stock awards 1,446 1,238

Payments on operating leases ( 198 ) ( 1,594 )

Increase (decrease) in other liabilities 2,119 ( 1,271 )

Income from bank owned life insurance ( 38 ) ( 43 )

Net cash provided by operating activities 45,499 29,815

10 unchanged sentences

Net (increase) in loans ( 202,078 ) ( 100,464 )

Net cash (used by) provided by investing activities ( 57,723 ) ( 82,381 )

Net cash (used in) provided by investing activities 68,320 ( 57,723 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Net (decrease) in demand, interest-bearing demand, savings, and insured money market deposits ( 44,191 ) ( 107,681 )

Net increase in time deposits 11,647 209,881

Net change in FHLBNY overnight advances 77,190 ( 63,890 )

Net increase (decrease) in demand, interest-bearing demand, savings, and insured money market deposits 34,087 ( 44,191 )

Net increase (decrease) in time deposits ( 160,296 ) 11,647

Net increase (decrease) in FHLBNY overnight advances ( 22,000 ) 77,190

Increases in (payments on) finance leases ( 335 ) 729

Proceeds from subordinated debt issuance 45,000 —

Payment of subordinated debt issuance costs ( 1,028 ) —

Purchase of treasury stock ( 396 ) ( 344 )

12 unchanged sentences

Supplemental disclosure of non-cash activity:

Transfer of portfolio loans to loans held for sale $ 2,064 $ —

Transfer of loans to other real estate owned — 552

Dividends declared, not yet paid $ — $ 1,469

Transfer of fixed assets held for sale — 671

Right-of-use assets obtained through finance lease liabilities — 935

Right-of-use assets obtained through operating leases liabilities 80 570

See accompanying notes to consolidated financial statements.

5 unchanged sentences

The Corporation is subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory agencies.

Chemung Risk Management, Inc., (CRM), a wholly-owned subsidiary of the Corporation, was a Nevada-based captive insurance company which insured against certain risks unique to the operations of the Corporation and its subsidiaries and for which insurance may not have been currently available or economically feasible in today's insurance marketplace.

CRM was dissolved by the Corporation, effective December 6, 2023.

BASIS OF PRESENTATION

5 unchanged sentences

Cash and cash equivalents include cash and amounts due from banks and demand interest-bearing deposits with other financial institutions.

On the Consolidated Statements of Cash Flow, net cash flows are reported for customer loan and deposit transactions and short-term borrowings with original maturities of 90 days or less.

EQUITY INVESTMENTS

10 unchanged sentences

Available for sale securities in a loss position that do not meet either of the aforementioned criteria, are reviewed by management to determine whether the unrealized loss is due to credit-related factors or other non-credit related factors.

In making this determination, management evaluates a range of variables including the extent to which fair value is less than amortized cost, existing conditions that may adversely impact the issuer, changes to the credit rating of either the issuer or the specific security, among other considerations.

In making this determination, management evaluates a range of variables including the extent to which fair value is less than amortized cost, existing conditions that may adversely impact the issuer, and changes to the credit rating of either the issuer or the specific security, among other considerations.

An allowance for credit losses is established for securities when upon evaluation, management has determined that a portion of unrealized losses are due at least in part to credit-related factors.

36 unchanged sentences

LOAN MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY

Effective January 1, 2023, the Corporation adopted ASU 2022-02 Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings (TDR) and Vintage Disclosures, which superseded existing TDR measurement and disclosures, and added additional disclosure requirements related to modifications made on loans to borrowers experiencing financial difficulty.

Under prior guidance, a TDR was deemed to have occurred when the Corporation modified a loan to a borrower experiencing financial difficulty, and where a concession was made by the Corporation.

Under ASU 2022-02, the Corporation evaluates loan modifications to borrowers experiencing financial difficulty on the basis and extent of their direct impact on contractual cash flows.

The Corporation evaluates loan modifications to borrowers experiencing financial difficulty on the basis and extent of their direct impact on contractual cash flows.

Modifications under this guidance include principal forgiveness, interest rate reductions, more than insignificant payment delays, term extensions, or a combination thereof.

6 unchanged sentences

The allowance for credit losses is an amount management believes will be adequate to absorb estimated lifetime credit losses inherent in its various portfolios of loans.

The Corporation adopted ASC 326 - Financial Instruments-Credit Losses effective January 1, 2023.

The allowance is estimated using the Corporation's CECL methodology, which utilizes historical information, current conditions, and reasonable and supportable economic forecasts to estimate expected lifetime credit losses as of the measurement date.

In November 2019, the FASB adopted an amendment to postpone the effective date of ASU 2016-13 to January 2023 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies.

As a smaller reporting company, the Corporation was eligible for and elected delayed adoption.

The Corporation adopted the standard, effective January 1, 2023, and recognized a one-time cumulative adjustment to retained earnings as of January 1, 2023 to reflect the change in methodology.

The cumulative-effect adjustment did not have an impact on prior year results.

Retained earnings was reduced by $ 1.5 million, or $ 1.1 million, net of tax, effective January 1, 2023.

The $ 1.5 million adjustment was reflective of the establishment of an allowance for credit losses on unfunded commitments, totaling $ 1.1 million, and a $ 0.4 million addition to the allowance for credit losses on loans, reflecting the change in methodology.

Under the Corporation's CECL methodology, loans are analyzed on either a pooled (collective) basis or an individual basis, based on an assessment of risk factors.

12 unchanged sentences

This portfolio largely consists of commercial construction loans, as well as a limited number of residential single family construction-to-permanent loans.

Construction loans are typically evaluated using an "as-stabilized" or "as completed" appraisal valuation, and the Corporation seeks sponsors who can provide sufficient equity and project inception or who have a proven track record of successfully completing similar projects.

Construction loans are typically evaluated using an "as-stabilized" or "as completed" appraisal valuation, and the Corporation seeks sponsors who can provide sufficient equity at project inception or who have a proven track record of successfully completing similar projects.

Specific risks associated with construction lending include fluctuations in market conditions prior to completion of the construction phase, work quality, cost overruns, and the realization of borrower assurances related to pre-sales, tenant contracts, and financial covenants, among others.

41 unchanged sentences

This methodology provides a structured framework for management to apply qualitative adjustments consistently over time.

Loans determined to require individual analysis are primarily valued and measured for credit loss based on collateral, using the collateral-dependent practical expedient as prescribed in ASC 326.

Loans determined to require individual analysis are primarily valued and measured for credit loss based on collateral, using the collateral-dependent practical expedient as prescribed in ASC 326 - Financial Instruments - Credit Losses .

Measurement is performed based on the most recently available appraisal and it is the Corporation's policy to obtain updated appraisals by independent third parties on loans secured by real estate at the time a loan is determined to require individual analysis.

3 unchanged sentences

To the extent a loan's book balance exceeds the present value of cash flows, a specific allocation to the allowance for credit losses is made.

The Corporation established an allowance for credit losses on unfunded commitments, effective January 1, 2023 as part of its adoption of ASC 326.

The Corporation records an allowance for credit losses on unfunded commitments utilizing a methodology consistent with its methodology for estimating lifetime credit losses on its portfolio of outstanding loans.

10 unchanged sentences

The Bank typically retains the right to service these mortgages upon sale.

From time to time, the intent of loans originated and held for investment changes and the Bank will transfer loans held for investment to loans held for sale.

During the year ended December 31, 2025, the Bank transferred commercial credit card balances from loans held for investment to loans held for sale.

Loans held for sale are recorded at the lower of cost or fair value in the aggregate and are regularly evaluated for changes in fair value.

4 unchanged sentences

The implicit discount rate used to determine lease liabilities is based upon incremental borrowing rates the Corporation could access for similar terms as of the commencement or remeasurement date.

The Corporation records operating leases on the balance sheet as a lease liability equal to the present value of future minimum payments under the lease terms, and a right-of-use asset equal to the lease liability.

The Corporation records operating leases on the Corporation's Consolidated Balance Sheets as a lease liability equal to the present value of future minimum payments under the lease terms, and a right-of-use asset equal to the lease liability, adjusted for initial direct costs and lease incentives.

The lease term is also used to calculate straight-line rent expense.

The Corporation's leases do not contain residual value guarantees or material variable lease payments that may impact the Corporation's ability to pay dividends or cause the Corporation to incur additional financial obligations.

Rent expense and variable lease expense are included in net occupancy expenses on the Corporation's Consolidated Statements of Income.

Finance leases are recorded at the lesser of the present value of future cash outlays using a discounted cash flow, or fair value at the beginning of the lease term.

Initially, a finance lease is recorded as a building asset, and is depreciated over the shorter of the term of the lease or the estimated life of the asset.

A corresponding long term lease obligation is recorded, which amortizes as payments are made on the lease.

Rent expense and variable lease expense are included in net occupancy expense on the Corporation's Consolidated Statements of Income.

Finance leases are initially recorded on the Corporation's Consolidated Balance Sheets as a long-term lease obligation equal to the present value of future minimum lease payments with a corresponding right-of-use asset equal to the long-term lease obligation, adjusted for initial direct costs and lease incentives.

The long-term lease obligation amortizes as payments are made on the lease.

Interest expense is incurred utilizing the discount rate used to establish the value of the long-term lease obligation.

4 unchanged sentences

Amortization of leasehold improvements and leased equipment is recognized using the straight-line method over the shorter of the lease term or the estimated life of the asset.

Leases of branch offices, which have been capitalized, are included within buildings and depreciated on the straight-line method over the shorter of the lease term or the estimated life of the asset.

Leases of branch offices, which have been designated as finance lease right-of- use assets, are included within buildings and amortized on a straight-line basis over the shorter of the lease term or the estimated life of the asset.

BANK OWNED LIFE INSURANCE

5 unchanged sentences

Subsequent adjustments to the carrying values of such properties arising from declines in fair value result in the establishment of a valuation allowance and are charged to operations in the period in which the declines occur.

Vehicles repossessed by the Corporation are derecognized as loans receivable at the earlier of of physical possession or legal title of the vehicle, and are recorded in other assets on the Corporation's Consolidated Balance Sheets at fair value.

Vehicles repossessed by the Corporation are derecognized as loans receivable at the earlier of physical possession or legal title of the vehicle, and are recorded in other assets on the Corporation's Consolidated Balance Sheets at fair value.

Write downs to fair value at the time of repossession are charged against the allowance for credit losses.

12 unchanged sentences

Wealth Management Group income is recognized on the accrual method as earned based on contractual rates applied to the balances of individual trust accounts.

The audited market value of trust assets under administration total $ 2.212 billion, including $ 301.9 million of assets held under management or administration for the Corporation, as of December 31, 2024 and $ 2.242 billion, including $ 381.3 million of assets held under management or administration for the Corporation, as of December 31, 2023.

The market value of trust assets under administration total $ 2.338 billion, including $ 301.8 million of assets held under management or administration for the Corporation, as of December 31, 2025 and $ 2.212 billion, including $ 301.9 million of assets held under management or administration for the Corporation, as of December 31, 2024.

POSTRETIREMENT BENEFITS

19 unchanged sentences

Government securities, corporate bonds and notes, and mutual funds.

The plan’s expense is the amount of non-discretionary and matching contributions and is charged to non-interest expenses in the Consolidated Statements of Income.

The plan’s expense is the amount of non-discretionary and matching contributions and is charged to non-interest expense in the Consolidated Statements of Income.

Defined Benefit Health Care Plan:

2 unchanged sentences

Employees who retired after July 1, 2006, and become Medicare eligible will only have access to the Medicare Blue PPO plan.

The cost of the plan is based on actuarial computations of current and future benefits for employees, and is charged to non-interest expenses in the consolidated Statements of Income.

The cost of the plan is based on actuarial computations of current and future benefits for employees, and is charged to non-interest expense in the Consolidated Statements of Income.

On October 20, 2016, the Corporation amended its defined benefit health care plan to not allow any new retirees into the plan, effective January 1, 2017.

17 unchanged sentences

Under the terms of the 2025 Plan, the Compensation and Personnel Committee may approve discretionary grants of restricted shares of the Corporation’s common stock to or for the benefit of employees selected to participate in the 2025 Plan, the chief executive officer, and members of the Board of Directors.

Awards are based on the performance, responsibility, and contributions of the individual and are targeted at the median of the peer group.

Awards are based on the performance, responsibility, and contributions of the individual and are targeted at an average of the peer group.

The maximum number of shares of the Corporation’s common stock that may be awarded as restricted shares related to the 2025 Plan may not exceed 160,000 , upon which time the 2025 Plan will be amended, presented and approved by the Corporation's shareholders to include additional shares of the Corporation's common stock.

1 unchanged sentence

Compensation expense for shares granted will be recognized over the vesting period of the award based upon the fair value of shares granted as of the grant date.

A Directors Deferred Fee Plan, an addendum to the 2021 Plan, for non-employee directors of the Corporation or the Bank, provides that directors may elect to defer receipt of all or any part of their fees.

On June 3, 2025, the Corporation's shareholders approved the 2025 Plan, replacing the Corporation's 2021 Equity Incentive Plan (the "2021 Plan").

No further awards will be granted under the 2021 Plan, but it shall remain in existence for the purpose of administering outstanding grants.

A Directors Deferred Fee Plan for non-employee directors of the Corporation or the Bank provides that directors may elect to defer receipt of all or any part of their fees.

Deferrals are either credited with interest compounded quarterly at the applicable Federal rate for short-term debt instruments or converted to units, which appreciate or depreciate, as would an actual share of the Corporation’s common stock purchased on the deferral date.

1 unchanged sentence

Units will be paid in shares of common stock.

All directors’ fees are charged to non-interest expenses in the Consolidated Statements of Income.

See Note 14 for further details.

All directors’ fees are charged to non-interest expense in the Consolidated Statements of Income.

Non-qualified Deferred Compensation Plan:

6 unchanged sentences

The income from investments is recorded in dividend income and non-interest income in the Consolidated Statements of Income.

The cost of the plan is recorded in non-interest expenses in the Consolidated Statements of Income.

The cost of the plan is recorded in non-interest expense in the Consolidated Statements of Income.

GOODWILL AND INTANGIBLE ASSETS

3 unchanged sentences

The Corporation has selected December 31 as the date to perform the annual impairment test.

Goodwill is the only intangible asset with an indefinite life on the Corporation's balance sheet.

Goodwill is the only intangible asset with an indefinite life on the Corporation's Consolidated Balance Sheets.

Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values.

29 unchanged sentences

The Corporation has identified separate operating segments and internal financial information is primarily reported and aggregated in two lines of business, banking and wealth management services.

See Note 21 for enhanced segment reporting disclosures resulting from the adoption of ASU 2023-07.

RECLASSIFICATION

2 unchanged sentences

RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , enhancing disclosure requirements for reportable segments, focusing on significant segment expenses, the identification of a segment's chief decision making officer, and the metrics used by the chief decision making officer in evaluating segment-level operating performance.

The ASU was effective for fiscal years beginning after December 15, 2023.

The Corporation adopted ASU 2023-07 for its fiscal year ended December 31, 2024.

See Note 21 for enhancements to segment reporting disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

1 unchanged sentence

Additionally, disclosure of income taxes paid by jurisdiction is required for each jurisdiction in which income taxes paid represented at least 5% of total income taxes paid.

The ASU is effective for all public business entities for annual periods beginning after December 31, 2024.

The adoption of this standard is expected to impact the Corporation's income tax disclosures, as presented in Note 12.

USE OF ANALOGOUS ACCOUNTING STANDARDS

GAAP, there is no specific guidance related to government assistance received by a for-profit entity that is not in the form of a loan, income tax credit, or revenue from a contract with a customer.

Therefore, the Corporation must rely upon analogous accounting standards to determine appropriate treatment when such circumstances arise.

During 2023, the Corporation accounted for the recognition of the Employee Retention Tax Credit (ERTC) using ASC 958-605, Revenue Recognition for Not-for-Profit entities.

ASC 958-10-15-1 specifies that certain Subtopics within ASC 958-605 also apply to business entities.

In November 2023, the FASB added a project relating to receipt of government grants by business entities to its technical agenda, and in November 2024 issued Proposed ASU 2024-ED700, Government Grants (Topic 832):

Accounting for Government Grants by Business Entities.

The ERTC is within the scope of this proposed ASU, however retroactive application of the standard is not required, as proposed, and the Corporation understands recognition of the ERTC through earnings during 2023 to constitute grant completion for recognition purposes.

The Corporation considers the recognition of the ERTC to be analogous to the stipulations for "conditional contributions" under ASC 958-605-20.

Conditional contributions have at least one barrier needing to be overcome before the recipient is entitled to the assets transferred or promised;

there must be a right-of-return to the contributor;

and barriers to the condition should be measurable.

The Corporation recognized the gross amount of the ERTC through non-interest income during the period in which the barrier was overcome, identified as the period during which amended tax returns were filed.

The Corporation incurred and recognized additional income tax expense during 2023 in relation to its amended tax returns.

The Corporation adopted ASU 2023-09 for its fiscal year ended December 31, 2025, using the prospective method.

See Note 12 for enhancements to the Corporation's income tax disclosures.

(2) RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS

10 unchanged sentences

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Allowance for Credit Losses Estimated Fair Value

treasury notes and bonds $ 59,880 $ — $ 2,974 $ — $ 56,906

Mortgage-backed securities, residential $ 295,595 $ 76 $ 45,296 $ — $ 250,375

Collateralized mortgage obligations 2,990 — 59 — 2,931

Obligations of states and political subdivisions 10,553 — 243 — 10,310

Corporate bonds and notes 18,750 — 1,768 — 16,982

SBA loan pools 53,391 35 2,345 — 51,081

Total $ 327,888 $ 76 $ 47,366 $ — $ 280,598

7 unchanged sentences

Total $ 617,271 $ 49 $ 85,878 $ — $ 531,442

Proceeds from and the gross realized gains and losses on sales and calls of securities available for sale for the year ended December 31, 2025 are presented below (in thousands).

Proceeds from sales $ 227,305

Gross realized gains $ 14

Gross realized (losses) $ ( 17,512 )

Tax expense (benefit) $ ( 4,261 )

There were no proceeds from sales and calls of securities resulting in gains or losses during the year ended December 31, 2024.

Proceeds from the sale of available for sale securities for the year ended December 31, 2023 were $ 1.2 million, and a gross loss of $ 14 thousand was realized on these sales.

The sales were executed by Chemung Risk Management, Inc., which served as a wholly owned captive insurance company based in the State of Nevada, until dissolution by the Corporation effective December 6, 2023.

The tax benefit related to these net realized losses was $ 4 thousand for the year ended December 31, 2023.

The amortized cost and estimated fair value of debt securities available for sale are shown below by contractual maturity.

Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Securities not due at a single maturity date are shown separately (in thousands):

December 31, 2024

Amortized Cost Estimated Fair Value

Within one year $ 4,633 $ 4,522

After one, but within five years 73,487 69,676

After five, but within ten years 43,336 39,075

After ten years 1,233 1,154

Mortgage-backed securities, residential 441,191 365,934

SBA loan pools 53,391 51,081

Total $ 617,271 $ 531,442

Amortized cost and estimated fair value of securities held to maturity as of December 31, 2025 and 2024 are as follows (in thousands):

5 unchanged sentences

Obligations of states and political subdivisions $ 808 $ — $ — $ — $ 808

There were no proceeds from sales of securities held to maturity during the year ended December 31, 2024.

Proceeds from the sale of held to maturity securities for the year ended December 31, 2023 were $ 1.0 million, and a gross loss of $ 25 thousand was realized on these sales.

The contractual maturity of securities held to maturity was as follows as of December 31, 2024 (in thousands):

There were no proceeds from sales of securities held to maturity during the years ended December 31, 2025 and 2024.

The amortized cost and estimated fair value of debt securities are shown below by contractual maturity.

Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Securities not due at a single maturity date are shown separately (in thousands):

December 31, 2025

Available for Sale Held to Maturity

Amortized Cost Estimated Fair Value Amortized

Within one year $ 992 $ 988 $ — $ —

2 unchanged sentences

After ten years 150 144 — —

$ 29,303 $ 27,292 $ 640 $ 640

Mortgage-backed securities, residential 295,595 250,375 — —

Collateralized mortgage obligations 2,990 2,931 — —

Total $ 327,888 $ 280,598 $ 640 $ 640

The following tables summarize the investment securities available for sale with unrealized losses, for which an allowance for credit losses has not been recorded as of December 31, 2024, and December 31, 2023 aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

The following tables summarize the investment securities available for sale with unrealized losses, for which an allowance for credit losses has not been recorded as of December 31, 2025 and 2024, aggregated by major security type and length of time in a continuous unrealized loss position (in thousands):

Less than 12 months 12 months or longer Total

2 unchanged sentences

Losses Fair Value Unrealized

treasury notes and bonds $ — $ — $ 56,906 $ 2,974 $ 56,906 $ 2,974

Mortgage-backed securities, residential $ — $ — $ 245,329 $ 45,296 $ 245,329 $ 45,296

Collateralized mortgage obligations 2,931 59 — — 2,931 59

Obligations of states and political subdivisions — — 9,845 243 9,845 243

Corporate bonds and notes 984 16 15,998 1,752 16,982 1,768

SBA loan pools 564 1 46,018 2,344 46,582 2,345

Total $ 3,915 $ 75 $ 271,172 $ 47,291 $ 275,087 $ 47,366

23 unchanged sentences

Declines in fair value were attributable to changes in interest rates and market liquidity, not credit quality.

All mortgage-backed securities in the available for sale securities portfolio as of December 31, 2024 were issued by FHLMC, FNMA, or GNMA.

The Corporation considers these obligations to carry zero credit loss estimates, and therefore has not recorded an allowance for credit losses as of December 31, 2024.

The Corporation does not have the intent, and is not likely to be required, to sell these securities prior to anticipated recovery.

Due to affiliations with U.S.

governmental agencies and or enterprises, the Corporation considers these obligations to carry zero loss estimates, and has not recorded an allowance for credit losses as of December 31, 2025.

Corporate bonds and notes :

5 unchanged sentences

Therefore, the Corporation considers the potential credit risk of the issuers to be immaterial, and has not recorded an allowance for credit losses as of December 31, 2025.

Equity Method Investments

The Corporation holds a non-qualified deferred compensation plan to allow a select group of management and employees the opportunity to defer all or a portion of their annual compensation, and treats assets held under this plan as equity method investments.

Equity Investments

The fair value of investments held in relation to the deferred compensation plan was $ 3.2 million and $ 2.6 million as of December 31, 2025 and 2024, respectively.

The Corporation also held $ 0.6 million of marketable securities as equity method investments for each of the years ended December 31, 2024 and 2023, respectively.

The Corporation also held $ 0.6 million of marketable securities as equity investments for each of the years ended December 31, 2025 and 2024.

(4) LOANS AND ALLOWANCE FOR CREDIT LOSSES

3 unchanged sentences

Construction 120,418 94,943

Commercial mortgages, other 1,122,061 984,038

Owner occupied commercial real estate 178,620 142,279

Non-owner occupied commercial real estate 1,110,689 979,782

Residential mortgages 286,885 274,979

8 unchanged sentences

The concentrations of credit risk with standby letters of credit, committed lines of credit and commitments to originate new loans generally follow the loan classifications in the table above.

Accrued interest receivable on loans was $ 8.0 million as of December 31, 2024 and $ 7.8 million as of December 31, 2023.

Accrued interest receivable on loans totaled $ 8.9 million as of December 31, 2025 and $ 8.0 million as of December 31, 2024.

Accrued interest receivable on loans is included in the accrued interest receivable and other assets line item on the Corporation's Consolidated Balance Sheets, and is excluded from the amortized cost basis of loans and estimate of the allowance for credit losses, as presented in this Note.

Commercial and industrial loans includes agricultural loans which totaled $ 0.3 million as of December 31, 2024 and 2023.

Agricultural loans were previously presented as a standalone loan category.

Prior period information included in this Note reflects agricultural loans as a component of commercial and industrial loans.

Deferred loan costs, net of deferred loan fees, included in the amortized cost basis of loans as presented in the table above, totaled $ 4.1 million as of December 31, 2025 and $ 4.7 million as of December 31, 2024.

Owner occupied commercial real estate and non-owner occupied commercial real estate were previously presented as a combined loan category, "commercial mortgages, other".

Prior period information included in this Note has been disaggregated to reflect these standalone categories.

The previously presented commercial mortgages, other loan category totaled $ 1.29 billion and $ 1.12 billion as of December 31, 2025 and December 31, 2024, respectively.

The Corporation had no residential mortgages held for sale as of December 31, 2025 and December 31, 2024.

When the Corporation has loans classified as held for sale, they are not included in the table above.

When the Corporation has residential mortgages classified as held for sale, they are not included in the table above.

During the year ended December 31, 2025, the Corporation transferred commercial credit card balances from loans held for investment to loans held for sale, following management's decision to pursue a sale of its commercial credit card receivables.

These balances were previously included in the commercial and industrial loan category, as presented in the table above, and are included in the loans held for sale line item on the Corporation's Consolidated Balance Sheets.

As of December 31, 2025, loans held for sale included $ 2.1 million in commercial credit card balances.

Residential mortgage and home equity loans totaling $ 255.1 million as of December 31, 2025 and $ 244.6 million as of December 31, 2024 were pledged under a blanket collateral agreement for the Corporation's line of credit with the FHLBNY.

13 unchanged sentences

Beginning balance, January 1, 2024 $ 5,055 $ 12,026 $ 2,194 $ 3,242 $ 22,517

Cumulative effect adjustment for the adoption of ASC-326 909 ( 695 ) ( 16 ) 176 374

Beginning balance after cumulative effect adjustment, January 1, 2023 4,282 10,881 1,829 3,041 20,033

( 302 ) — ( 21 ) ( 1,550 ) ( 1,873 )

6 unchanged sentences

Unfunded Commitments

The allowance for credit losses on unfunded commitments represents the amount held against credit exposures which are not represented on the Consolidated Balance Sheets.

The allowance for credit losses on unfunded commitments represents amounts held against credit exposures which are not represented on the Consolidated Balance Sheets.

The allowance is recognized as a liability, a component of other liabilities on the Consolidated Balance Sheets, with adjustments to the allowance recognized in the provision for credit losses line item on the Consolidated Statements of Income.

The Corporation established an allowance for credit losses on unfunded commitments in conjunction with its adoption of ASC 326- Financial Instruments-Credit Losses .

The following table presents the activity in the allowance for credit losses on unfunded commitments for the years ended December 31, 2025 and 2024:

2 unchanged sentences

Beginning balance $ 842 $ 919

Impact of adoption of ASC-326 — 1,082

Provision for credit losses on unfunded commitments ( 77 ) ( 163 )

Provision (credit) for credit losses on unfunded commitments ( 256 ) ( 77 )

Ending balance $ 586 $ 842

3 unchanged sentences

Provision for credit losses on loans $ 4,693 $ 31

Provision for credit losses on unfunded commitments ( 77 ) ( 163 )

Provision (credit) for credit losses on unfunded commitments ( 256 ) ( 77 )

Total provision (credit) for credit losses $ 4,437 $ ( 46 )

27 unchanged sentences

Modifications to Loans Made to Borrowers Experiencing Financial Difficulty

Effective January 1, 2023, the Corporation adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326)-Troubled Debt Restructurings and Vintage Disclosures, on a prospective basis.

The Corporation may occasionally make modifications to loans where the borrower is considered to be experiencing financial difficulty.

The Corporation may occasionally make modifications to loans where the borrower is considered to be experiencing financial difficulty, and which may require disclosure in accordance with Financial Instruments-Credit Losses (Topic 326)-Troubled Debt Restructurings and Vintage Disclosures.

Types of modifications considered under ASU 2022-02 include principal reductions, interest rate reductions, term extensions, significant payment delays, or a combination thereof.

2 unchanged sentences

Loans modified under ASU 2022-02 Principal Reduction Interest Rate Reduction Term Extension Payment Delay Combination Total (%) of Loan Class (1)

Commercial & industrial $ — $ — $ 384 $ — $ — $ 384 0.13 %

Commercial mortgages:

Commercial mortgages, other — — — 376 — 376 0.03 %

Non-owner occupied commercial real estate $ — $ — $ 950 $ 3,408 $ 446 $ 4,804 0.43 %

Residential mortgages — — — 170 — 170 0.06 %

3 unchanged sentences

Loans modified under ASU 2022-02 Principal Reduction Interest Rate Reduction Term Extension Payment Delay Combination Total (%) of Loan Class (1)

Commercial & industrial $ — $ — $ 1,011 $ — $ — $ 1,011 0.38 %

Commercial and industrial $ — $ — $ 384 $ — $ — $ 384 0.13 %

Commercial mortgages:

Commercial mortgages, other — — 272 1,878 — 2,150 0.22 %

Consumer loans:

Home equity lines and loans — — 116 — — 116 0.13 %

Owner occupied commercial real estate — — — 376 — 376 0.26 %

Residential mortgages — — — 440 — 440 0.16 %

Total $ — $ — $ 384 $ 816 $ — $ 1,200

5 unchanged sentences

(in months) Weighted-average payment delay

Commercial & industrial $ — — % 60 months 0 months

Commercial mortgages:

Commercial mortgages, other $ — — % 0 months 101 months

Non-owner occupied commercial real estate $ — — % 9 months 6 months

Residential mortgages $ — — % 0 months 6 months

December 31, 2024

Principal Reduction (in thousands) Weighted average interest rate reduction (%) Weighted average term extension

Effect of loan modifications under ASU 2022-02 Principal Reduction (in thousands) Weighted average interest rate reduction (%) Weighted average term extension

(in months) Weighted average payment delay

Commercial & industrial — — % 12 months 0 months

Commercial and industrial — — % 60 months 0 months

Commercial mortgages:

Commercial mortgages, other — — % 60 months 4 months

Consumer loans:

Home equity lines and loans — — % 180 months 0 months

The Corporation closely monitors the performance of loans that have been modified in accordance with ASU 2022-02 in order to gauge the effectiveness of its modifications, and to determine the degree to which borrowers continue to demonstrate financial weakness following modification.

Owner occupied commercial real estate — — % 0 months 101 months

Residential mortgages — — % 0 months 6 months

The Corporation closely monitors the performance of loans that have previously been modified under ASU 2022-02 in order to gauge the effectiveness of modifications, and to determine the degree to which borrowers continue to demonstrate financial weakness following modification.

The following tables present the performance of such loans that were modified in the twelve month periods preceding December 31, 2025 and 2024 (in thousands):

2 unchanged sentences

30-59 Days Past Due 60-89 Days Past Due Greater Than 89 Days Past Due Loans Not Past Due Total

Commercial and industrial $ — $ — $ — $ 384 $ 384

Commercial mortgages:

Commercial mortgages, other — — — 376 376

Non-owner occupied commercial real estate — — — 4,804 4,804

Residential mortgages (1)

1 unchanged sentence

Total $ — $ — $ — $ 4,974 $ 4,974

(1) The residential mortgage included in the above table was contractually past due as of December 31, 2024, but was otherwise performing on its modified terms.

Twelve Months Ended December 31, 2024

3 unchanged sentences

Commercial mortgages:

Commercial mortgages, other — — — 2,150 2,150

Consumer loans:

Home equity lines and loans — — — 116 116

Owner occupied commercial real estate — — — 376 376

Residential mortgages — — 440 — 440

Total $ — $ — $ 440 $ 760 $ 1,200

There was one commercial and industrial loan modified to a borrower experiencing financial difficulty during 2023 which sustained a payment default on its modified terms during the year ended December 31, 2024.

Allocations totaling $ 0.7 million and $ 0.9 million were included for this loan in the allowance for credit losses as of December 31, 2024 and 2023, respectively.

The Corporation had no outstanding commitments to lend additional amounts to borrowers for which modifications subject to ASU 2022-02 were made during the years ended December 31, 2025 and 2024.

Collateral-Dependent Individually Analyzed Loans

As of December 31, 2024 and 2023, the amortized cost basis of individually analyzed loans was $ 6.5 million and $ 8.0 million respectively, of which $ 5.1 million and $ 6.3 million respectively were considered collateral-dependent.

For collateral-dependent loans where the borrower is experiencing financial difficulty and repayment is likely to be substantially provided through the sale or operation of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan, as of the measurement date.

As of December 31, 2025 and 2024, the amortized cost basis of individually analyzed loans was $ 4.2 million, of which $ 2.2 million were considered collateral-dependent, and as of December 31, 2024, the amortized cost basis of individually analyzed loans was $ 6.5 million, of which $ 5.1 million were considered collateral-dependent.

For collateral-dependent loans where the borrower is experiencing financial difficulty and repayment is likely to be substantially provided through the sale or operation of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date.

Certain assets held as collateral may be exposed to future deterioration in fair value, particularly due to changes in real estate markets or usage.

The Corporation closely monitors trends in real estate values throughout its market area to determine whether collateral values, after appropriate discounting, are likely to be sufficient to extinguish existing borrower indebtedness.

The following table presents the amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral-dependent as of December 31, 2025 and 2024 (in thousands):

2 unchanged sentences

Commercial and industrial (2)

Commercial and industrial (1) (2)

$ 50 $ — $ 130 $ 65

Commercial mortgages:

Construction (1)

Commercial mortgages, other (1) (2) (3)

Owner occupied commercial real estate (1) (2)

629 4 1,377 15

Non-owner occupied commercial real estate (1)

1,167 199 3,582 91

Consumer loans:

Home equity lines and loans (3)

Total $ 2,173 $ 203 $ 5,089 $ 171

2 unchanged sentences

(3) Secured by residential real estate

The following table presents the average amortized basis in and interest income recognized on loans individually analyzed, by class, as of December 31, 2024 and 2023 (in thousands):

December 31, 2024 December 31, 2023

With no related allowance recorded:

Average Amortized Cost Basis Interest Income Recognized (1)

Commercial and industrial $ 102 $ 4 $ 431 $ —

Commercial mortgages:

Construction 1,753 — 443 103

Commercial mortgages 2,876 — 3,988 5

Residential mortgages — — 288 —

Consumer loans:

Home equity lines & loans — — 99 —

With an allowance recorded:

Commercial and industrial 1,797 8 1,339 55

Commercial mortgages:

Construction — — — —

Commercial mortgages 379 — 33 —

Consumer loans:

Home equity lines and loans — — 25 —

Total $ 6,907 $ 12 $ 6,646 $ 163

(1) Cash basis interest income approximates interest income recognized.

The following table presents the amortized cost basis of nonaccrual loans with no related specific allocation in the allowance for credit losses, total nonaccrual loans, and loans pasts due 90 days or greater which were still accruing, by class of loans, as of December 31, 2024 and 2023 (in thousands):

The following table presents the amortized cost basis of nonaccrual loans without an associated allocation in the allowance for credit losses, total nonaccrual loans, and loans pasts due 90 days or greater which were still accruing, by class of loans, as of December 31, 2025 and 2024 (in thousands):

Nonaccrual with No Allowance for Credit Losses Nonaccrual Loans Past Due 90 Days or More and Still Accruing

2 unchanged sentences

Commercial mortgages:

Construction — 2,209 — 2,209 — —

Commercial mortgages 3,981 3,732 4,959 3,760 — —

Owner occupied commercial real estate 625 1,362 629 1,377 — —

Non-owner occupied commercial real estate 23 2,619 2,538 3,582 — —

Residential mortgages 1,753 1,372 1,753 1,372 — —

10 unchanged sentences

Construction — — — — 120,418 120,418

Commercial mortgages 1,032 — 3,258 4,290 1,117,771 1,122,061

Owner occupied commercial real estate 105 — 96 201 178,419 178,620

Non-owner occupied commercial real estate — — 2,538 2,538 1,108,151 1,110,689

Residential mortgages 1,277 693 901 2,871 284,014 286,885

9 unchanged sentences

Construction — — — — 94,943 94,943

Commercial mortgages 1,022 103 261 1,386 982,652 984,038

Owner occupied commercial real estate 82 — 96 178 142,101 142,279

Non-owner occupied commercial real estate 950 — 3,162 4,112 975,670 979,782

Residential mortgages 1,529 662 696 2,887 272,092 274,979

26 unchanged sentences

2025 2024 2023 2022 2021 Prior

Commercial & Industrial

Commercial and industrial

Pass $ 52,419 $ 25,663 $ 22,131 $ 25,382 $ 11,367 $ 15,765 $ 135,641 $ 2,726 $ 291,094

10 unchanged sentences

Gross charge-offs — — — — — — — — —

Commercial mortgages

Owner occupied commercial real estate

Pass 48,350 23,186 17,531 23,050 12,966 31,441 590 39 157,153

4 unchanged sentences

Gross charge-offs — — — — — — — — —

Non-owner occupied commercial real estate

Pass 162,357 102,759 99,585 242,886 133,385 279,901 9,102 726 1,030,701

Special Mention — — 15,301 18,852 13,006 27,806 — — 74,965

Substandard 2,039 — 2,515 — — 469 — — 5,023

Doubtful — — — — — — — — —

Total 164,396 102,759 117,401 261,738 146,391 308,176 9,102 726 1,110,689

Gross charge-offs — — — — — 6 — — 6

Residential mortgages

Not rated 38,892 24,307 17,590 50,866 50,380 102,421 — — 284,456

Special Mention — — — — 426 — — — 426

Substandard — — 69 295 309 1,330 — — 2,003

22 unchanged sentences

2024 2023 2022 2021 2020 Prior

Commercial & Industrial

Commercial and industrial

Pass $ 44,130 $ 32,157 $ 34,862 $ 16,787 $ 8,326 $ 27,452 $ 108,819 $ 1,380 $ 273,913

10 unchanged sentences

Gross charge-offs — — — — — — — — —

Commercial mortgages

Owner occupied commercial real estate

Pass 23,196 23,185 26,945 20,979 9,513 31,222 97 55 135,192

4 unchanged sentences

Gross charge-offs — — — — — — — — —

Non-owner occupied commercial real estate

Pass 97,155 109,354 267,280 141,864 97,828 233,084 6,696 777 954,038

Special Mention — — 5,935 7,793 — 7,833 — — 21,561

Substandard — 2,148 146 — 1,014 875 — — 4,183

Doubtful — — — — — — — — —

Total 97,155 111,502 273,361 149,657 98,842 241,792 6,696 777 979,782

Gross charge-offs — — — — — — — — —

Residential mortgages

5 unchanged sentences

Not rated 13,833 10,657 14,094 4,879 2,503 10,259 35,015 1,252 92,492

Special Mention — — 115 — — — — — 115

Substandard — 24 63 — — 195 116 215 613

28 unchanged sentences

As of December 31, 2024, $ 0.7 million was included in the line item premises and equipment, net, on the Corporation’s Consolidated Balance Sheets related to this held for sale asset.

During the fourth quarter of 2024, the Corporation entered into an agreement with a third party to sell the property, with a targeted closing date in the first half of 2025.

Management determined there was no impairment of the disposal group during the year ended December 31, 2024.

The proceeds from the sale totaled $ 1.3 million, resulting in the recognition of a $ 0.6 million gain during the year ended December 31, 2025.

Finance Leases

3 unchanged sentences

Buildings $ 6,507 $ 6,507

Accumulated depreciation ( 3,236 ) ( 2,872 )

Accumulated amortization ( 3,615 ) ( 3,236 )

Net book value $ 2,892 $ 3,271

10 unchanged sentences

accumulated amortization ( 771 ) ( 772 )

lease termination — —

lease modifications 80 570

5 unchanged sentences

Present value of net minimum lease payments $ 4,937

As of December 31, 2024, the Corporation had one operating lease that was signed, for which the extension had not yet commenced.

As of December 31, 2025, the Corporation had no operating leases that were signed, but had not yet commenced.

Finance Leases

10 unchanged sentences

As of December 31, 2025, the Corporation had no finance leases that were signed, but had not yet commenced.

Subsequent to December 31, 2025, the Corporation signed lease agreements for a branch in West Seneca and a representative office in Buffalo.

(7) GOODWILL AND INTANGIBLE ASSETS

3 unchanged sentences

End of year $ 21,824 $ 21,824

The Corporation's goodwill in the core banking segment arose from multiple acquisitions over the past three decades:

Owego National Bank (1995);

three branches of M&T Bank (2008);

Canton Bancorp, Inc.

(2009) and Fort Orange Financial Corporation (2011).

Acquired intangible assets were as follows as of December 31, 2024 and 2023 (in thousands):

As of December 31, 2024 As of December 31, 2023

Balance Acquired Accumulated Amortization Balance Acquired Accumulated Amortization

Core deposit intangibles $ 5,975 $ 5,975 $ 5,975 $ 5,975

Other customer relationship intangibles 5,633 5,633 5,633 5,633

Total $ 11,608 $ 11,608 $ 11,608 $ 11,608

As of December 31, 2025 and 2024, all acquired intangible assets, $ 6.0 million of core deposit intangibles and $ 5.6 million of other customer relationship intangibles, were fully amortized.

There is no aggregate amortization expense for 2025 and 2024.

8 unchanged sentences

Brokered deposits (1)

92,159 142,776

Other time deposits (2)

5 unchanged sentences

In general, the equivalent of the customers' original deposited funds comes back to the Corporation and are carried within the time deposits category.

The Bank may also utilize one way brokered deposits as a component of its wholesale funding strategy, allowing for additional liquidity without increasing concentration risk.

Scheduled maturities of time deposits as of December 31, 2025, are summarized as follows (in thousands):

Year Maturities

2026 $ 445,122

2031 and thereafter 18

Total $ 463,616

1 $ 80.0 million of 2025 maturities represent brokered deposits.

2 $ 9.5 million of 2027 maturities represent brokered deposits which are callable by the Corporation, monthly.

Time deposits that meet or exceed the FDIC Insurance limit of $250 thousand as of December 31, 2025 and 2024 were $ 102.1 million and $ 107.6 million, respectively.

(9) FEDERAL HOME LOAN BANK TERM ADVANCES AND OVERNIGHT ADVANCES

(9) FEDERAL HOME LOAN BANK TERM ADVANCES AND OTHER BORROWINGS

FHLBNY overnight advances totaled $ 87.1 million and $ 109.1 million as of December 31, 2025 and 2024, respectively.

2 unchanged sentences

The carrying amount includes the advance balance (in thousands):

Amount Rate Maturity Date Amount Rate Maturity Date

$ 109,110 4.69 % January 2, 2025 $ 31,920 5.64 % January 2, 2024

Amount Rate Amount Rate

$ 87,110 3.96 % $ 109,110 4.69 %

The Bank has pledged $ 255.1 million and $ 244.6 million of residential mortgage and home equity loans under a blanket lien arrangement as of December 31, 2025 and 2024, respectively, as collateral for future borrowings.

Based on this collateral and additional securities held, the Bank's unused borrowing capacity at the FHLBNY was $ 112.0 million as of December 31, 2024.

Based on this collateral, the Bank's unused borrowing capacity at the FHLBNY was $ 91.4 million as of December 31, 2025.

The Bank had $ 65.0 million in total capacity under unsecured federal funds lines of credit with four correspondent financial institutions as of December 31, 2025, none of which was utilized as of December 31, 2025.

Federal funds purchased from correspondent banks mature in one business day and reprice daily based on the federal funds rate.

The following table summarizes the Corporation's subordinated notes outstanding as of December 31, 2025 (in thousands):

Amount Rate Maturity Date

$ 44,028 7.75 % June 15, 2035

On June 10, 2025, the Corporation issued $ 45.0 million of 7.75 % fixed-to-floating rate subordinated notes due June 15, 2035 in a private offering (the "Notes").

The Notes bear interest at a fixed rate of 7.75 % per year, payable semi-annually, for the first five years.

From June 15, 2030 to the June 15, 2035 maturity date, the interest rate will adjust to a floating rate equal to a benchmark rate which is expected to be the then-current three-month term SOFR plus 415 basis points, payable quarterly.

If the then three-month term SOFR is below zero, the three-month term SOFR for the note will be deemed zero.

The Notes constitute unsecured and subordinated obligations of the Corporation and rank junior in right of payment to any senior indebtedness and obligations to general and secured creditors.

Subject to limited exceptions, the Corporation cannot redeem the Notes before the fifth anniversary of the issuance date.

Proceeds, net of debt issuance costs of $ 1.0 million, were $ 44.0 million.

The Notes qualify at the holding company level as Tier 2 capital under the capital guidelines of the Federal Reserve Board, when applicable.

Total interest expense on the Corporation's subordinated debt for the year ended December 31, 2025 totaled $ 2.0 million.

(10) REVENUE FROM CONTRACTS WITH CUSTOMERS

4 unchanged sentences

Revenue by Operatin g Se g ment:

Core Banking WMG Holding Company and CFS Total

Core Banking (b)

WMG Holding Company and CFS Total

Non-interest income

7 unchanged sentences

Net gains on sales of loans (a)

Net gains on sales of securities (a)

Net (losses) on sales of securities (a)

( 17,498 ) — — ( 17,498 )

Loan servicing fees (a)

Change in fair value of equity securities (a)

203 — ( 24 ) 179

Income from bank-owned life insurance (a)

2 unchanged sentences

(a) Not within scope of ASC 606.

(b) The Holding Company and CFS, column above includes amounts to eliminate transactions between segments.

(b) The Core Banking column above includes amounts to eliminate transactions between segments.

Year ended December 31, 2024

Revenue by Operatin g Se g ment:

Core Banking WMG Holding Company, CFS, and CRM (b)(c)

Core Banking (b)

WMG Holding Company and CFS Total

Non-interest income

7 unchanged sentences

Net gains on sales of loans (a)

Net gains on sales of securities (a)

( 39 ) — — ( 39 )

Loan servicing fees (a)

5 unchanged sentences

(a) Not within scope of ASC 606.

(b) The Holding Company, CFS, and CRM column above includes amounts to eliminate transactions between segments.

(CRM) was dissolved December 6, 2023.

(b) The Core Banking column above includes amounts to eliminate transactions between segments.

A description of the Corporation's revenue streams accounted for under ASC 606 follows:

23 unchanged sentences

(11) DERIVATIVES

As part of the Corporation's product offerings, the Corporation acts as an interest rate swap counterparty for certain commercial borrowers in the normal course of servicing our customers.

As part of the Corporation's product offerings, the Corporation acts as an interest rate swap counterparty for certain commercial borrowers in the normal course of providing services to customers.

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

26 unchanged sentences

Total 107 $ 703,222 $ ( 22 )

There was an immaterial off-balance sheet exposure for the risk participation agreements as of December 31, 2024, and December 31, 2023.

There was $ 0.4 million and $ 0.1 million of off-balance sheet exposure for the risk participation agreements as of December 31, 2025 and 2024, respectively.

Amounts included in the Consolidated Statements of Income related to derivatives not designated as hedging instruments were as follows:

17 unchanged sentences

State ( 556 ) 92

Establishment of valuation allowance 821 —

Total deferred ( 2,673 ) 1,121

Income tax expense $ 4,832 $ 6,414

The Corporation had no income taxes in foreign jurisdictions for the years ended December 31, 2025 and 2024.

Income tax expense differed from the amounts computed by applying the U.S.

Federal statutory income tax rate to income before income tax expense as follows (in thousands):

Federal statutory income tax rate to income before income tax expense as follows (in thousands, except percentages):

Amounts Percentages

Income taxes at the U.S.

federal statutory tax rate $ 4,187 21.0 %

State and local income taxes, net of federal income tax impact (a) 134 0.7 %

Changes in valuation allowances 745 3.7 %

Nontaxable or nondeductible items

Municipal interest income ( 360 ) ( 1.8 ) %

Other 91 0.5 %

Other adjustments 35 0.1 %

Total $ 4,832 24.2 %

(a) State taxes in New York made up the majority (greater than 50 percent) of the tax effect in this category.

Income tax expense differed from the amounts computed by applying the U.S.

Federal statutory income tax rate to income before income tax expense as follows (in thousands) in accordance with the guidance prior to the adoption of ASU 2023-09:

Statutory federal tax rate 21 %

2 unchanged sentences

Tax-exempt income ( 528 )

831(b) premium adjustment — ( 202 )

Dividend exclusion ( 10 )

4 unchanged sentences

Effective tax rate 21.3 %

The lower tax expense in 2024 when compared to 2023 can be attributed to a decrease in pretax income.

For the year ended December 31, 2025, the Corporation made the following income tax payments, net of refunds received:

federal taxes $ 5,950

State and local taxes

Total income taxes paid $ 6,348

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31, 2025 and 2024, are presented below (in thousands):

9 unchanged sentences

Accrued expense 52 74

Capital loss carryforward 2,694 —

Other items, net 114 135

10 unchanged sentences

Total gross deferred tax liabilities 10,024 9,949

Valuation allowance 821 —

Net deferred tax asset $ 16,259 $ 23,668

2 unchanged sentences

In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax assets, the level of historical taxable income and projected future taxable income over the periods in which the temporary differences comprising the deferred tax assets will be deductible.

Based on its assessment, management determined that no valuation allowance is necessary.

The sale of available for sale securities during the second quarter of 2025 resulted in a net loss of $ 17.5 million and occurred at the Bank, as well as the Corporation's REIT Entity.

Under IRC Sec.

582(c)(1), in the case of banks, the sale or exchange of a bond, debenture, note or certificate or other evidence of indebtedness shall not be considered a sale or exchange of a capital asset.

Therefore, the loss from the sale of securities at the Bank is considered ordinary in nature.

However, the REIT is not considered a "bank" under IRC Sec.

582(c) and therefore, a sale of securities at the REIT are considered capital in nature.

The capital loss amount of $ 11.5 million (gross) attributable to the REIT and represented a $ 2.7 million deferred tax asset subject to

a 5-year carryforward limitation.

Based on its assessment during the fourth quarter of 2025, management determined to establish a valuation allowance against its deferred tax asset associated with the capital loss in the amount of $ 821 thousand.

The Corporation’s current tax planning strategies include the planned sale of appreciated investment securities and loans from the REIT entity.

These transactions are intended to generate future capital gains sufficient to utilize the capital loss carryforward prior to its expiration.

Management has demonstrated both the ability and intent to execute these strategies in a timely and economically feasible manner.

After detailed review, including various scenarios of changes in market interest rates, while the Corporation’s management has demonstrated the ability and intent to implement these prudent and reasonable actions, management determined that it is more likely than not that a portion of the deferred assets, including the capital loss carryforward, will not be realized.

Further, management will continue to monitor all available positive and negative evidence on at least a quarterly basis, consistent with ASC 740, and will promptly adjust the valuation allowance assessment if facts and circumstances change materially.

As of December 31, 2025 and 2024, the Corporation did no t have any unrecognized tax benefits.

34 unchanged sentences

The accumulated benefit obligation as of December 31, 2025 and 2024 was $ 29.4 million and $ 29.2 million, respectively.

Actuarial gains in the Projected Benefit Obligation (PBO) in 2024 were primarily the result of the increase in discount rate.

The increase in discount rate caused the PBO to decrease by $ 1.5 million.

Actuarial losses in the Projected Benefit Obligation (PBO) in 2025 were primarily the result of the decrease in discount rate.

The decrease in discount rate caused the PBO to increase by $ 0.6 million.

Other sources of gain/loss such as plan experience, updated census data and minor adjustments to actuarial assumptions generated a combined loss of approximately 1.0 % of expected year end obligations.

19 unchanged sentences

During 2025, the plan's total unrecognized net loss decreased by $ 0.6 million.

The variance between the actual and expected return on plan assets during 2024 decreased the total unrecognized net loss by $ 0.9 million.

The variance between the actual and expected return on plan assets during 2025 decrease the total unrecognized net loss by $ 1.4 million.

Because the total unrecognized net gain or loss is less than the greater of 10 % of the projected benefit obligation or 10 % of the plan assets, no amortization is necessary.

15 unchanged sentences

The target allocations for plan assets are shown in the table below.

Equity securities primarily include investments in common or preferred shares of both U.S.

Equity securities primarily include investments in common shares of both U.S.

and international companies.

2 unchanged sentences

Corporate bonds.

Other investments may consist of mutual funds, money market funds and cash & cash equivalents.

Other investments may consist of mutual funds, exchange-traded funds, money market funds and cash & cash equivalents.

While no significant changes in the asset allocations are expected during 2026, the Corporation may make changes at any time.

4 unchanged sentences

Mid-cap domestic equities 0 % - 6 %

1 % — % 10.0 %

Small-cap domestic equities 0 % - 5 %

1 % — % 8.8 %

International equities 0 % - 6 %

1 % — % 6.8 %

Emerging market equities 0 % - 5 %

1 % — % 4.2 %

Intermediate fixed income 60 % - 100 %

29 unchanged sentences

companies 2,859 2,859 — —

International companies 107 107 — —

Mutual funds 41,664 41,664 — —

10 unchanged sentences

companies — — — —

International companies — — —

Mutual funds 38,620 38,620 — —

2 unchanged sentences

Corporate bonds — — — —

Foreign bonds, notes & debentures — — — —

Total plan assets $ 48,107 $ 48,107 $ — $ —

9 unchanged sentences

Additionally, beginning January 1, 2017 the Bank began contributing a 50 % match up to 6 % of gross annual wages.

Expense related to these plans totaled $ 1.6 million and $ 1.4 million for the years ended December 31, 2024 and 2023, respectively.

Expense related to these plans totaled $ 1.6 million for the years ended December 31, 2025 and 2024.

The plan's assets as of December 31, 2025 and 2024 include 95,292 and 112,006 shares, respectively, of Chemung Financial Corporation common stock, as well as other common and preferred stocks, U.S.

52 unchanged sentences

Total recognized in net benefit cost and other comprehensive income (loss) (before tax effect) $ 19 $ 45

Actuarial loss for 2024 is primarily the net impact of an increase in discount rate, which decreased the Accumulated Postretirement Benefit Obligation (APBO) by $ 2 thousand, and the reflection of updated data and claims experience, which increased the APBO by $ 43 thousand.

All other sources of gain or loss had a combined net impact of less than $ 1 thousand.

During 2024 the plan's total unrecognized net loss increased by $ 21 thousand.

Actuarial loss for 2025 is primarily the net impact of a decrease in discount rate, which increased the Accumulated Postretirement Benefit Obligation (APBO) by $ 1 thousand, and the reflection of updated data and claims experience, which increased the APBO by $ 14 thousand.

Amongst the data changes reflected was the death during 2025 of one of the five participants in the plan.

During 2025 the plan's total unrecognized net loss decreased by $ 4 thousand.

Because the total unrecognized net gain or loss in the plan exceeds 10 % of the accumulated postretirement benefit obligation, the excess will be amortized over the average future life expectancy of all plan participants.

2 unchanged sentences

The change in unrecognized gain/loss is one measure of the degree to which important assumptions have coincided with actual experience.

During 2024, the unrecognized net loss increased by 27 % of the December 31, 2023 accumulated postretirement benefit obligation.

During 2025, the unrecognized net loss decreased by 5 % of the December 31, 2024 accumulated postretirement benefit obligation.

The Corporation changes important assumptions whenever changing conditions warrant.

39 unchanged sentences

Total before tax effects $ 199 $ 192

Accumulated benefit obligation was $ 0.9 million as of December 31, 2024 and 2023, respectively.

Accumulated benefit obligation was $ 0.8 million and $ 0.9 million as of December 31, 2025 and 2024, respectively.

Weighted-average assumption for disclosure as of December 31:

13 unchanged sentences

Total recognized in net benefit cost and other comprehensive income (loss) (before tax effect) $ 63 $ 44

During 2024, there was a $ 30 thousand decrease in the projected benefit obligation as a result of the increase in discount rate.

Offsetting this was a $ 30 thousand increase in PBO due to participant mortality (longevity) experience.

During 2025, there was a $ 11 thousand increase in the projected benefit obligation as a result of the decrease in discount rate.

There was also a $ 7 thousand increase in PBO due to participant mortality (longevity) experience.

There were no other significant sources of gain or loss during 2025.

During 2024, the plan's total unrecognized net loss decreased by $ 10 thousand.

During 2025, the plan's total unrecognized net loss increased by $ 7 thousand.

Because the total unrecognized net gain or loss exceeds the greater of 10 % of the projected benefit obligation or 10 % of the plan assets, the excess will be amortized over the average future life expectancy of all participants.

7 unchanged sentences

The change in unrecognized net gain or loss is one measure of the degree to which important assumptions have coincided with actual experience.

During 2024 the unrecognized net loss decreased 1.1 % of the December 31, 2023 projected benefit obligation.

During 2025 the unrecognized net loss increased 0.8 % of the December 31, 2024 projected benefit obligation.

The following table presents the estimated benefit payments for each of the next five years and the aggregate amount expected to be paid in years six through ten for the Supplemental Pension Plan (in thousands):

12 unchanged sentences

On June 3, 2025, the Corporation's shareholders approved the Corporation's 2025 Equity Incentive Plan (the "2025 Plan") which provides for the grant of stock-based awards to officers, employees and directors of the Corporation and the Bank.

A Form S-8 Registration Statement was filed with the SEC on June 18, 2021 registering shares to be awarded under the 2021 Plan.

The 2021 Plan provides officers, employees and directors of the Corporation and the Bank with additional incentives to promote the growth and performance of the Corporation.

The prior plan shall remain in existence solely for the purpose of administering outstanding grants.

Under the terms of the 2021 Plan, the Corporation may make discretionary grants of restricted shares of the Corporation’s common stock to or for the benefit of employees selected to participate in the 2021 Plan, including the Chief Executive Officer, other executive officers, and members of the Board of Directors.

Compensation expense is recognized over the vesting period of the awards based on the fair value of the common stock at issue date.

Two grants have been issued under the 2025 Plan.

The Corporation's prior plans shall remain in existence solely for the purpose of administering outstanding grants.

Pursuant to the 2025 Plan, the Corporation may make discretionary grants of restricted shares of the Corporation’s common stock to or for the benefit of employees selected to participate in the 2025 Plan, the Chief Executive Officer and members of the Board of Directors.

Awards are based on the performance, responsibility, and contributions of the individual and are targeted at an average of the peer group.

The maximum number of shares of the Corporation’s common stock that may be awarded as restricted shares related to the 2021 Plan may not exceed 170,000 .

Awards under the 2021 Plan may generally be vested no earlier than the first anniversary of the date on which the award is granted.

Shares fully vest on the fifth anniversary of the grant date for employees, and on the first anniversary of the grant date for the Chief Executive Officer and members of the Board of Directors.

Compensation expense for shares granted is recognized over the vesting period of the award based on the closing price of the Corporation's stock on the grant date.

Total compensation expense related to the 2021 Plan was $ 1.2 million in both 2024 and 2023.

The maximum number of shares of the Corporation’s common stock that may be awarded as restricted shares related to the 2025 Plan may not exceed 160,000 , upon which time a new plan may be created.

Total expense related to stock compensation was $ 1.4 million and $ 1.2 million in 2025 and 2024, respectively.

During 2025 and 2024, a total of 35,455 and 14,396 shares, respectively, were re-issued from treasury to fund stock compensation.

Effective for the 2024 fiscal year and thereafter, annual stock compensation is expected to be awarded the second month after the close of the fiscal year for the Corporation's employees and Chief Executive Officer.

Annual stock compensation is expected to be awarded the first month after the close of the fiscal year for the members of the Board of Directors.

The expense related to these grants is recognized over a one or a five year vesting period.

A summary of restricted stock activity as of December 31, 2025, and changes during the year ended is presented below:

5 unchanged sentences

Nonvested as of December 31, 2025 55,200 $ 48.97

As of December 31, 2024, there was $ 1.7 million of total unrecognized compensation cost related to nonvested shares granted under the prior plan and the 2021 Plan.

As of December 31, 2025, there was $ 1.9 million of total unrecognized compensation cost related to nonvested shares granted under the Corporation's equity incentive plans.

The cost is expected to be recognized over a weighted-average period of 2.54 years.

7 unchanged sentences

Repayments ( 604 ) ( 820 )

Effect of change in participation 3,114 —

Balance at end of year $ 28,618 $ 25,413

Deposits from principal officers, directors, and their affiliates as of December 31, 2025 and 2024 were $ 37.9 million and $ 43.1 million, respectively.

The Corporation issued $ 3.5 million of its subordinated notes to principal officers, directors, and their affiliates during the year ended December 31, 2025.

Interest paid on those notes totaled $ 139 thousand for the year ended December 31, 2025 and the interest expense on the notes totaled $ 151 thousand for the year ended December 31, 2025.

The Bank leases its branch located at 2 Rush Street, Schenectady, New York, under a lease agreement through February, 2033 from a member of the Corporation's Board of Directors with monthly rent and CAM expense totaling $ 9 thousand per month for each of the years ended December 31, 2025 and 2024.

Rent and CAM paid to this Board member totaled $ 110 thousand and $ 118 thousand for the years ended December 2024 and 2023, respectively.

Rent and CAM paid to this Board member totaled $ 110 thousand for each of the years ended December 2025 and 2024.

WMG provided trust services to members of the Board of Directors, certain Corporation officers, and their immediate families directly, or through entities in which they are principal owners.

WMG fee income for the trust services provided totaled $ 0.3 million and $ 0.2 million for the years ended December 31, 2024 and 2023, respectively.

WMG fee income for the trust services provided totaled $ 0.3 million for the years ended December 31, 2025 and 2024.

(16) COMMITMENTS AND CONTINGENCIES

8 unchanged sentences

Standby letters of credit $ — $ 18,952 $ — $ 19,180

Commitments to make real estate and home equity loans are generally made for periods of sixty days or less.

As of December 31, 2024, the fixed rate real estate and home equity commitments to make loans have interest rates ranging from 5.88 % to 7.38 % and maturities ranging from five years to thirty years .

Commitments to make residential real estate and home equity loans are generally made for periods of sixty days or less.

As of December 31, 2025, the fixed rate residential real estate and home equity commitments to make loans have interest rates ranging from 5.88 % to 7.38 % and maturities ranging from fifteen years to thirty years .

Commitments to fund commercial draw notes are generally made for periods of three months to twenty-four months .

1 unchanged sentence

Because many commitments and almost all standby letters of credit expire without being funded in whole or in part, the contract amounts are not estimates of future cash flows.

Loan commitments and unused lines of credit have off-balance sheet credit risk because only origination fees are recognized on the Consolidated Balance Sheet until commitments are fulfilled or expire.

Loan commitments and unused lines of credit have off-balance sheet credit risk because only origination fees are recognized on the Corporation's Consolidated Balance Sheets until commitments are fulfilled or expire.

The credit risk amounts are equal to the contractual amounts, assuming the amounts are fully advanced and collateral or other security is of no value.

1 unchanged sentence

These commitments also have off-balance sheet interest rate risk in that the interest rate at which these commitments were made may not be at market rates on the date the commitments are fulfilled.

In conjunction with the Corporation's adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic 326 ), an allowance for credit losses on unfunded commitments was established as of January 1, 2023.

The allowance is based on the same methodology as the allowance for credit losses on loans and utilizes credit conversion factors to determine balance sheet equivalents.

The Corporation maintains an allowance for credit losses on unfunded commitments in accordance with ASU 2016-13, Financial Instruments-Credit Losses (Topic 326).

The allowance is based on the same methodology as the Corporation's allowance for credit losses on loans and utilizes credit conversion factors to determine balance sheet equivalents.

As of December 31, 2025 and 2024, the allowance for credit losses on unfunded commitments was $ 0.6 million and $ 0.8 million, respectively.

7 unchanged sentences

Corporation policies governing loan collateral apply to standby letters of credit at the time of credit extension.

The carrying amount and fair value of the Corporation's standby letters of credit as of December 31, 2024 was not significant.

As of December 31, 2025, there were no outstanding amounts under its standby letters of credit.

In the normal course of business, there are various outstanding claims and legal proceedings involving the Corporation or its subsidiaries.

6 unchanged sentences

Investment in subsidiary - CFS Group, Inc.

Dividends receivable from subsidiary bank — 1,469

Equity investments, at fair value 189 180

2 unchanged sentences

Liabilities and shareholders' equity:

Dividends payable $ — $ 1,469

Subordinated debt, net $ 44,028 $ —

Other liabilities 194 259

6 unchanged sentences

Interest and dividend income 8 35

Interest expense 2,003 —

Non-interest income 9 ( 24 )

Non-interest expenses 296 345

Non-interest expense 377 296

Income before impact of subsidiaries' undistributed earnings 3,962 1,190

1 unchanged sentence

Equity in undistributed earnings of CFS Group, Inc.

Distributed earnings of Chemung Risk Management, Inc.

Income before income tax 14,445 23,566

1 unchanged sentence

Net income $ 15,104 $ 23,671

1 Chemung Risk Management, Inc.

was dissolved effective December 6, 2023.

STATEMENTS OF CASH FLOWS - YEARS ENDED DECEMBER 31 2025 2024

5 unchanged sentences

( 102 ) ( 32 )

Distributed earnings of Chemung Risk Management, Inc.

Change in dividend receivable — 1,469

Amortization of deferred costs on subordinated debt 56 —

Change in other assets ( 816 ) ( 127 )

Change in other liabilities ( 65 ) 235

Expense related to restricted stock units directors' deferred compensation plan 21 20

Expense related to employee restricted stock awards 1,238 1,139

Net change in fair value of equity investments ( 9 ) 24

Net cash provided by operating activities 3,787 2,896

Cash flow from investing activities:

Proceeds from dissolution of Chemung Risk Management, Inc.

Downstream of subordinated debt ( 37,000 ) —

Net cash provided by investing activities ( 37,000 ) —

1 unchanged sentence

Cash dividends paid ( 6,325 ) ( 7,365 )

Proceeds from subordinated debt issuance, net 45,000 —

Payment of subordinated debt issuance costs ( 1,028 ) —

Purchase of treasury stock ( 396 ) ( 344 )

4 unchanged sentences

Cash and cash equivalents at end of year $ 6,826 $ 2,252

1 Chemung Risk Management, Inc.

was dissolved effective December 6, 2023.

(18) FAIR VALUES

13 unchanged sentences

The fair value of equity investments is determined by quoted market prices (Level 1 inputs).

Individually Analyzed Loans:

At the time a loan becomes individually analyzed, it is valued at the lower of amortized cost or fair value.

Individually analyzed loans carried at fair value have been partially charged-off or receive specific allocations as part of the allowance for credit losses.

Collateral-Dependent Loans :

Individually analyzed loans which receive a specific allocation as part of the allowance for credit losses or have been partially charged-off and are considered collateral-dependent are carried at fair value.

For collateral-dependent loans, fair value is commonly based on real estate appraisals.

4 unchanged sentences

These loans are analyzed on a quarterly basis for additional credit loss and adjusted accordingly.

Other Real Estate Owned (OREO) :

Assets acquired through or in lieu of loan foreclosures are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.

16 unchanged sentences

Although the Corporation has determined the majority of inputs used to value its derivatives are considered Level 2 inputs, credit valuation adjustments are based on credit default rate assumptions, which are considered Level 3 inputs.

As of December 31, 2025, the Corporation evaluated the effect of credit valuation adjustments on the fair value of its derivative positions, and determined their impact was not significant;

accordingly, the Corporation classifies the entirety of its derivative valuations within Level 2 of the hierarchy.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

6 unchanged sentences

(Level 2) Significant Unobservable Inputs

treasury notes and bonds $ 56,906 $ 56,906 $ — $ —

Mortgage-backed securities, residential $ 250,375 $ — $ 250,375 $ —

Collateralized mortgage obligations 2,931 — 2,931 —

Obligations of states and political subdivisions 10,310 — 10,310 —

Corporate bonds and notes 16,982 — 12,620 4,362

SBA loan pools 51,081 — 51,081 —

Total available for sale securities $ 280,598 $ — $ 276,236 $ 4,362

22 unchanged sentences

There were no transfers between Level 1 and Level 2 of the hierarchy during the years ended December 31, 2025 and 2024.

There were six corporate subordinated debt issuances transferred into Level 3 during the year ended December 31, 2024, with a total fair value of $ 5.9 million as of the transfer date and a fair value of $ 5.9 million as of December 31, 2024 due to a lack of observable data for the specific issuances.

There was one corporate subordinated debt issuance with a fair value of $ 1.9 million as of December 31, 2024 which was transferred out of Level 3 and into Level 2 during the year ended December 31, 2024 based on the availability of observable market data for the issuance, which was subsequently transferred back into Level 3 during the fourth quarter of 2024.

There were six corporate subordinated debt issuances transferred into Level 3 during the year ended December 31, 2023.

This transfer was due to illiquidity in new issuances of comparable bonds and the size of issuances, leading to pricing difficulties during 2023, which persisted in 2024 for the majority of the effected issuances.

Two of these issuances, with a combined fair value of $ 1.3 million as of December 31, 2023, were transferred back to Level 2 during the third quarter of 2023, based on increased availability of market data relevant to these issuances.

During the year ended December 31, 2025, the Corporation transferred its investment in seven corporate subordinated debt issuances into Level 3 from Level 2, with a total fair value of $ 9.6 million as of the transfer date, due to the lack of available observable market data for the issuances or issuances of similar size and structure.

Each of these transfers occurred during the three‑month period ended March 31, 2025.

During the year ended December 31, 2025, the Corporation transferred its investment in 13 corporate subordinated debt issuances out of Level 3 and into Level 2, with a total fair value of $ 16.0 million as of the transfer date, including each of the seven issuances that were transferred into Level 3 earlier in the year, each occuring during the three months ended June 30, 2025.

The transfers out of Level 3 were primarily due to improved availability of observable market data for the issuances or issuances of similar size and structure, attributable to increased issuance activity for subordinated debt and an improvement in general market liquidity.

During the year ended December 31, 2024, the Corporation transferred its investment in six corporate subordinated debt issuances into Level 3 from Level 2, with a total fair value of $ 5.9 million as of the transfer date, due to the lack of available observable market data for the specific issuances, all of which were transferred during the three months ended December 31, 2024.

During the year ended December 31, 2024, the Corporation transferred its investment in one corporate subordinated debt issuance out of Level 3 and into Level 2, with a fair value of $ 1.9 million as of the transfer date, based on the availability of observable market data for the issuance, which was transferred during the three months ended June 30, 2024.

This issuance was subsequently transferred back into Level 3 during the three months ended December 31, 2024.

The tables below present a reconciliation of assets measured at fair value on a recurring basis using unobservable inputs (Level 3) and qualitative information regarding Level 3 significant unobservable inputs for the years ended December 31, 2025 and 2024.

3 unchanged sentences

Included in other comprehensive income 1,631 420

Repayments, calls, and maturities ( 3,000 ) —

Transfers into Level 3 9,629 5,931

14 unchanged sentences

(Level 2) Significant Unobservable Inputs

Individually analyzed loans:

Commercial and industrial $ 11 $ — $ — $ 11

Collateral-dependent loans:

Commercial mortgages:

Commercial mortgages, other 873 — — 873

Total individually analyzed loans $ 884 $ — $ — $ 884

Other real estate owned:

Residential mortgages $ 126 $ — $ — $ 126

Consumer loans:

Home equity lines and loans 285 — — 285

Total other real estate owned, net $ 411 $ — $ — $ 411

The fair value of other real estate owned is presented net of a $ 32 thousand valuation allowance as of December 31, 2024.

Non-owner occupied commercial real estate $ 945 $ — $ — $ 945

Total collateral-dependent loans $ 945 $ — $ — $ 945

Fair Value Measurement as of December 31, 2024 Using

3 unchanged sentences

(Level 2) Significant Unobservable Inputs

Individually analyzed loans:

Collateral-dependent loans:

Commercial and industrial $ 11 $ — $ — $ 11

Total individually analyzed loans $ 62 $ — $ — $ 62

Commercial mortgages:

Non-owner occupied commercial real estate 873 — — 873

Total collateral-dependent loans $ 884 $ — $ — $ 884

Other real estate owned:

3 unchanged sentences

Total other real estate owned, net $ 411 $ — $ — $ 411

There were no valuation allowances established for other real estate owned as of December 31, 2023.

The fair value of other real estate owned is presented net of a $ 32 thousand valuation allowance as of December 31, 2024.

The following tables present quantitative information regarding Level 3 significant unobservable inputs for assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2025 and 2024 (in thousands):

Description Fair Value as of December 31, 2024 Valuation Technique Unobservable Inputs Range

[Weighted Average]

as of December 31, 2024

Individually analyzed loans:

Commercial and industrial $ 11 Net present value Discount rate 41.29 % - 41.29 %

Description Fair Value as of December 31, 2025 Valuation Technique Unobservable Inputs Range [Weighted Average] at December 31, 2025

Collateral-dependent loans:

Commercial mortgages:

Commercial mortgages, other 873 Income approach Adjustment to appraised value 16.86 % - 16.86 %

Total individually analyzed loans $ 884

Other real estate owned:

Residential mortgages $ 126 Sales comparison Adjustment to appraised value 20.80 % - 20.80 %

Consumer loans:

Home equity lines and loans 285 Sales comparison Adjustment to appraised value 20.80 % - 20.80 %

Total other real estate owned, net $ 411

Description Fair Value as of December 31, 2023 Valuation Technique Unobservable Inputs Range

[Weighted Average]

as of December 31, 2023

Individually analyzed loans:

Non-owner occupied commercial real estate $ 945 Income approach Adjustment to appraised value 10.00 % - 10.00 %

Total collateral-dependent loans $ 945

Description Fair Value as of December 31, 2024 Valuation Technique Unobservable Inputs Range [Weighted Average] at December 31, 2024

Collateral-dependent loans:

Commercial and industrial $ 11 Net present value Discount rate 41.29 % - 41.29 %

Total individually analyzed loans $ 62

Commercial mortgages:

Non-owner occupied commercial real estate 873 Income approach Adjustment to appraised value 16.86 % - 16.86 %

Total collateral-dependent loans $ 884

Other real estate owned:

26 unchanged sentences

FHLBNY overnight advances 87,110 — 87,126 — 87,126

Subordinated debt, net of issuance costs 44,028 — 46,350 — 46,350

Derivative liabilities 17,412 — 17,412 — 17,412

11 unchanged sentences

Cash and due from financial institutions $ 26,224 $ 26,224 $ — $ — $ 26,224

Interest-bearing deposits in other financial institutions

14,600 14,600 — — 14,600

Interest-earning deposits in other financial institutions 20,811 20,811 — — 20,811

Equity investments 3,235 3,235 — — 3,235

32 unchanged sentences

Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies.

Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net income, combined with the retained net income of the preceding two years , subject to the capital requirements in the table below.

Under these regulations, the

amount of dividends that may be paid in any calendar year is limited to the current year’s net income, combined with the retained net income of the preceding two years , subject to the capital requirements in the table below.

During 2026, the Bank could, without prior approval, declare dividends of approximately $ 51.0 million plus any 2026 net income retained to the date of the dividend declaration.

38 unchanged sentences

Balance as of December 31, 2025 $ ( 34,803 ) $ ( 1,250 ) $ ( 36,053 )

Unrealized Gains and Losses on Securities Available for Sale Defined Benefit and Other Benefit Plans Total

Balance as of January 1, 2024 $ ( 62,800 ) $ ( 3,213 ) $ ( 66,013 )

9 unchanged sentences

Realized gains (losses) on securities available for sale $ ( 17,498 ) $ — Net gains (losses) on securities transactions

Tax effect — 4 Income tax expense

Tax effect 4,261 — Income tax benefit (expense)

Net of tax ( 13,237 ) —

1 unchanged sentence

Actuarial losses (a) 30 30 Other components of net periodic pension and postretirement benefits

Tax effect ( 8 ) ( 16 ) Income tax expense

Tax effect ( 8 ) ( 8 ) Income tax benefit (expense)

Net of tax 22 22

13 unchanged sentences

Income taxes are allocated based on the separate taxable income of each entity and indirect overhead expenses are allocated based on reasonable and equitable allocations applicable to the reportable segment.

The Holding Company, CFS, and CRM columns below includes income and expenses related to insurance products, mutual funds, brokerage services, and captive insurance (in thousands).

The Holding Company and CFS columns below includes income and expenses related to insurance products, mutual funds, and brokerage services (in thousands).

Year ended December 31, 2025 Core Banking WMG Holding Company and CFS Inter-Segment Eliminations Consolidated Totals

5 unchanged sentences

Non-interest income ( 5,171 ) 11,945 1,185 ( 14 ) 7,945

Non-interest expenses:

Non-interest expense:

Compensation expense 31,949 6,124 931 — 39,004

2 unchanged sentences

Data processing & software expense 8,786 1,238 24 — 10,048

Other non-interest expenses 13,080 546 409 — 14,035

Other non-interest expense 13,164 577 422 — 14,163

Total non-interest expense 61,060 8,267 1,416 ( 14 ) 70,729

5 unchanged sentences

Capital expenditures $ 1,392 $ 295 $ — $ — $ 1,687

$ 3,626 $ — $ — $ — $ 3,626

Depreciation expense 1

$ 1,837 $ 58 $ — $ — $ 1,895

1 Includes expenditures related to ATM fleet replacement across footprint and the addition of a new branch.

1 Included in net occupancy and furniture and equipment expense in the table above.

Year ended December 31, 2023 Core Banking WMG Holding Company, CFS,CRM 1

Inter-Segment Eliminations Consolidated Totals

Year ended December 31, 2024 Core Banking WMG Holding Company and CFS Inter-Segment Eliminations Consolidated Totals

Interest and dividend income $ 127,534 $ — $ 36 $ ( 6 ) $ 127,564

4 unchanged sentences

Non-interest income 10,633 11,573 1,030 ( 6 ) 23,230

Non-interest expenses:

Non-interest expense:

Compensation expense 29,131 5,672 828 — 35,631

2 unchanged sentences

Data processing & software expense 8,954 1,120 19 — 10,093

Other non-interest expenses 13,569 428 468 ( 951 ) 13,514

Other non-interest expense 13,080 546 409 — 14,035

Total non-interest income 58,290 7,681 1,285 ( 6 ) 67,250

2 unchanged sentences

Segment net income (loss) $ 20,761 $ 3,059 $ ( 149 ) $ — $ 23,671

Supplemental Information:

Total assets as of December 31, 2024 $ 2,746,344 $ 2,882 $ 215,366 $ ( 188,445 ) $ 2,776,147

Capital expenditures 1

$ 3,626 $ — $ — $ — $ 3,626

Depreciation expense 2

$ 1,797 $ 17 $ — $ — $ 1,814

1 Chemung Risk Management, Inc.

(CRM) was dissolved December 6, 2023.

1 Includes expenditures related to ATM fleet replacement across footprint and the addition of a new branch.

2 Included in net occupancy and furniture and equipment expense in the table above.

49 unchanged sentences

3.3 Certificate of Amendment to the Certificate of Incorporation of Chemung Financial Corporation, dated May 13, 1998 (as incorporated by reference to Exhibit 3.4 to Registrant’s Form 10-K for the year ended December 31, 2005 and filed with the Commission on March 15, 2006).

3.4 Amended and Restated Bylaws of Chemung Financial Corporation, as amended August 17, 2022 (as incorporated by reference to Exhibit 3.2 to Registrant’s Form 8-K and filed with the Commission on August 17, 2022).

3.4 Amended and Restated Bylaws of Chemung Financial Corporation, as amended August 17, 2022 (as incorporated by reference to Exhibit 3.

1 to Registrant’s Form 8-K and filed with the Commission on August 1 9 , 2022).

4.1 Specimen Stock Certificate (filed as Exhibit 4.1 to Registrant's Form 10-K for the year ended December 31, 2002 and incorporated herein by reference).

10.1 Chemung Financial Corporation 2014 Omnibus Plan and Component Plans (Chemung Financial Corporation Restricted Stock Plan, Chemung Financial Corporation Incentive Compensation Plan, Chemung Financial Corporation Directors’ Compensation Plan and Chemung Financial Corporation/Chemung Canal Trust Company Directors’ Deferred Fee Plan) (filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to Registrant’s Form S-8 filed with the Comm i ssion on January 27, 2015 and incorporated herein by reference).

4.3 Form of 7.75 % Fixed-to-Floating Rate Subordinated Note due 2035 of Chemung Financial Corporation (incorporated as Exhibit 4.1 to Registrant's Form 8-K and filed with the Commission on June 10, 2025).

10.2 Change of Control Agreement dated December 19, 2018 between Chemung Canal Trust Company and Anders M.

15 unchanged sentences

19 Policy Related to Insider Trading, filed herewith.*

19 Policy Related to Insider Trading (as incorporated by reference to Exhibit 19 to Registrant's Form 10-K for the year ended December 31, 2024 and filed with the Commission on March 14, 2025) .

21 Subsidiaries of the Registrant.*

3 unchanged sentences

32.1 Certification of President and Chief Executive Officer of the Registrant pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 19 U.S.C.

32.2 Ce rtification of Treasurer and Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 19 U.S.C.

97 Policy Relating to Recovery of Erroneously Awarded Compensation, incorporated herein by reference.

32.2 Certification of Treasurer and Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 19 U.S.C.

101.INS Instance Document

6 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 9A. Controls and Procedures