Chemung Financial Corp · NASDAQ:CHMG
Chemung Financial — Investor Presentation (November 2021)
46 slides from Chemung Financial's investor presentation, Nov 10, 2021
Slide 1: Chemung Financial Corporation 2021 Investor Presentation
CHEMUNG FINANCIAL CORPORATION 2021 Investor Presentation
Slide 2: Presenters
Anders Tomson, President and CEO Karl Krebs, CFO Presenters November 11, 2021 2
Slide 3: Executive Management Team
Anders M. Tomson President & Chief Executive Officer Jeffrey Kenefick Regional President Thomas W. Wirth, CFA EVP, Wealth Management Group Daniel D. Fariello President, Capital Bank Division Kimberly A. Hazelton EVP, Senior Banking Officer Peter Cosgrove EVP, Chief Credit Officer, Chief Risk Officer
Slide 4: Our namesake…the Chemung Canal
Our namesake…the Chemung Canal 4
Slide 5: The past decade…a period of significant growth
The past decade…a period of significant growth 5
Slide 6: Forward-looking statements
This presentation contains certain statements that may be considered forward - looking statements within the meaning of Section 27 A of the Securities Act, Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995, which are subject to numerous risk s a nd uncertainti
Slide 7: Company history timeline
1833 – Chemung Canal Bank founded in Elmira, NY by act of NYS Legislature 1834 – First permanent headquarters opens at 413 - 415 E. Water Street in Elmira, NY 1895 – Granted a New York State bank charter 1902 – Merged with Elmira Trust Company 1903 – Name changed to Chemung Canal Trust Company 1920
Slide 8: Our mission
Our mission is to remain a strong and independent financial services organization creating value for shareholders, customers, employees and the communities where we do business, while maintaining the highest standards of business ethics. • Value for shareholders means delivering a competitive return
Slide 9: Company overview
• Oldest locally - owned and managed community bank in NYS, dating to 1833 • NYS chartered bank and Member of the Federal Reserve • Listed on Nasdaq Global Select Market • Assets of $2.42 billion and 333 employees • Operates through a single subsidiary bank, Chemung Canal Trust Company, with 31 reta
Slide 10: Corporate Hierarchy
Corporate Hierarchy Chemung Risk Management, Inc. Bank Divisions Wealth Management Group 10
Slide 11: Markets: Stability and Growth
STABILITY Finger Lakes Region Markets Corning, NY Watkins Glen, NY Albany, NY 11 GROWTH Capital & Western NY Buffalo, NY
Slide 12: CCTC/Capital Market Share
CCTC/Capital Market Share Source: S&P Global, as of June 30, 2021 12 County 2021 Deposits 2021 Share Chemung $726,407,000 53.07% Albany $319,298,000 1.74% Tioga $154,340,000 28.45% Schuyler $191,741,000 70.63% Steuben $165,978,000 12.28% Cayuga $125,346,000 7.54% Tompkins $106,205,000 3.87% Bradford
Slide 13: Growth strategy and community banking model
• Franchise built through acquisitions and organic growth • Three bank acquisitions since 1994 ($38 million to $255 million) • Three branch acquisitions involving twelve branch offices, ranging in deposits of $45 million to $178 million • Steady, stable organic growth in Finger Lakes Region • Higher
Slide 14: Digital Engagement
Digital Engagement We believe digital self - service is the key to engaging and retaining our clients for the future . We strive to deliver a meaningful, secure and frictionless digital platform across all customer delivery channels . Our digital strategy provides our customers the services they hav
Slide 15: Platinum Promise
Platinum Promise ey Te 20d MUTUAL RESPECT OPEN & HONEST ACCEPTING COMMUNICATION RESPONSIBILITY We are committed to treating, We pride ourselves on providing We want to make your banking. our clients and each other with excellent customer service to our _experlence a pleasure instead of ‘the utmost c
Slide 16: Supporting Our Community
Supporting Our Community Arnot Art Museum Achieve | Albany Medical Center | American Cancer Society | American Heart Association Amat Heath | Aubum Publi Thestr | Boy Scouts | Bias Gouty Gaunt Ghaches “| Buddy Walk holar | CareFirst | Career Development Council | Catholic Charities isabled American
Slide 17: Environmental, Social, and Governance Initiatives
Environmental, Social, and Governance Initiatives 17
Slide 18: History of Acquisitions
• Whole Bank Acquisitions • 1974 – Montour National Bank, one branch office • 1995 – Owego National Financial Corporation, one branch office • 2009 – Canton Bancorp, Inc., three branch offices • 2011 – Fort Orange Financial Corporation (Capital Bank), five branch offices • Branch Acquisitions • 1994
Slide 19: Financial Highlights
Financial Highlights ($ Millions) 19 *September 30, 2021 figures unaudited 9/30/2021 2020 2019 2018 Return on Assets 1.11% 0.94% 0.88% 1.14% Return on Equity 13.16% 9.94% 8.86% 12.76% Net Interest Margin 2.83% 3.25% 3.64% 3.72% Charge-off Ratio -0.01% 0.47% 0.11% 0.41% Total Assets $2,418 $2,279 $1,
Slide 20: COVID-19 Response
• Communities and Employees • Complying with local, state, and federal orders to contain the spread of the virus • Implemented social distancing, sanitizing, and face - covering protocols • Limited in - person branch access to appointments and facilitated drive - up and walk - up windows • Allowed e
Slide 21: COVID-19 Financial Assistance
• Funded 1,260 PPP loans totaling $189.8 million in Round 1 • Impacting 19,000 employees of approved businesses in our communities • Average balances were $150,607 and average fees were 3.16% • We are assisting customers with the forgiveness application phase of the program. In our most recent 8 - K
Slide 22: COVID-19 Financial Assistance: PPP Statistics
22 COVID - 19 Financial Assistance : PPP Statistics *September 30, 2021 figures unaudited Loan Tier Fee # of Loans Originated $ Amount of Loans Originated $ Amount of Originated Fees # of Outstanding Loans at 9/30/2021 $ Amount of Outstanding Loans $ Amount of Outstanding Fees <350M 5% 1,146 67,860,
Slide 23: COVID-19 Financial Assistance: Loan Deferrals
23 COVID - 19 Financial Assistance : Loan Deferrals • Outstanding COVID - 19 deferrals: • 9/30/2021 – 11 Loans totaling $3.0 MM had active COVID - 19 deferrals. • 5/31/20 – 1,147 Loans totaling $242.5MM had active COVID - 19 deferrals. *2021 figures unaudited Loan Balances with Active COVID-19 Defer
Slide 24: Asset Growth
Asset Growth Organic • Loans in Capital Region • Growth opportunities in Western NY • New clientele established through PPP lending Asset Growth ($ Millions) 24 *CAGR 12/31/2017 to 09/30/2021 *September 30, 2021 figures unaudited
Slide 25: Summary of Loan Growth
• Total loans: $1.517 billion at September 30, 2021 • Originated $156.1MM in Commercial Loans (w/o PPP) in 2021 • Loan Office in Buffalo has $40MM in loans through 09/30/21 • Funded $189.8 million in PPP Loans through December 31, 2020 • Funded $77.5 million in PPP Second Round Loans through May 31,
Slide 26: Loan Concentrations
Effectively managing portfolio concentration by establishing specific criteria, such as: • % of portfolio for each category • % of capital deployed in each category • Increased use of participations to manage risk and capital Loan Concentrations 26 * CRE ratio was 340% and 352% as of December 31, 20
Slide 27: Commercial Loan Portfolio
Commercial Loan Portfolio 9/30/2021 27 September 30, 2021 figures unaudited NAICS Code / Descriptions Balances ($ Thousands) Percentage Real Estate, Rental & Leasing 680,243$ 65.72% Manufacturing 41,299 3.99% Health Care & Social Assistance 55,061 5.32% Wholesale Trade 25,467 2.46% Construction 32,9
Slide 28: Trends in Non-Performing Assets
Trends in Non - Performing Assets 28 *September 30, 2021 figures unaudited
Slide 29: Trends in Non-Performing Assets
Trends in Non - Performing Assets 29 *September 30, 2021 figures unaudited
Slide 30: Deposits
Deposits 30 *September 30, 2021 figures unaudited 2017 2018 2019 2020 Q3 2021 NOW 0.09% 0.23% 0.40% 0.14% 0.08% Savings and Money Market 0.20% 0.27% 0.42% 0.16% 0.10% Time Deposits 0.35% 0.68% 1.42% 1.16% 0.82% Total Cost of Interest Bearing Deposits 0.14% 0.22% 0.56% 0.26% 0.23%
Slide 31: Deposit Breakdown
Deposit Breakdown 31 *September 30, 2021 figures unaudited *CAGR 12/31/2017 to 09/30/2021
Slide 32: Net Income – Quarterly Trend
Net Income – Quarterly Trend ($ Thousands) 32 *September 30, 2021 figures unaudited 2018 2019 $19.6MM $15.6MM $19.2MM 2020 $20.0MM 2021
Slide 33: Net Interest Margin
• 19% of loan portfolio reprices within the next 90 days (As of September 30, 2021) • 64% of commercial loan portfolio is variable and 28% is subject to reprice over the next 90 days (As of September 30, 2021) Net Interest Margin 33 September 30, 2021 figures unaudited
Slide 34: Investment Portfolio
Investment Portfolio 34 * September 30, 2021 figures unaudited
Slide 35: Wealth Management Group
Wealth Management Group 35 *September 30, 2021 figures unaudited
Slide 36: Non-Interest Income Components
Non - Interest Income Components 36 *September 30, 2021 figures unaudited $20,491 $23,074 $20,073 $21,124 $18,083
Slide 37: Non-Interest Expense Components
Non - Interest Expense Components 37 *September 30, 2021 figures unaudited $53,764 $56,766 $55,696 $55,935 $41,304
Slide 38: Non-Interest Expense
Non - Interest Expense 38 *September 30, 2021 figures unaudited
Slide 39: Expense Management and Control
• Goal is both cost containment and cost savings • Increase efficiency in banking operations (e.g., hub and spoke) • Identify internal best practices • Develop clear action plans to implement best practices across the organization • Cost savings recognized: • Reduction in headcount • Froze pension p
Slide 40: Capital Management
• Grow capital organically through earnings • Continue to remain profitable and pay dividends • Completed buyback of 250,000 shares, October 2020 • Announced another repurchase program of 250,000 shares in January 2021. As of September 30, 2021, 26,456 shares had been repurchased. • Performed well u
Slide 41: Enterprise Risk Management
• ERM is a Board / Executive Management responsibility guided by our Risk Appetite Statement, supported by our Risk Management Policy, and managed through a Board approved Governance, Risk and Compliance framework • Continuous monitoring of 13 major risk categories (i.e., credit; market and interest
Slide 42: Investment Considerations
• Listed on Nasdaq Global Select Market • $2.42B in assets • $211.2 market capitalization • Diversified Revenue Stream – 26% Non - Interest Income • Low risk profile – Nonperforming Assets 0.35% of Total Assets • Dividend yield (TTM) – 2.52% • Price to earnings (TTM) – 8.44x • Price to tangible book
Slide 43: Book Value Per Share
Book Value Per Share 43 *September 30, 2021 figures unaudited
Slide 44: Key Takeaways
• Strategic growth, through acquisitions and organic performance • Actively looking for acquisition opportunities • Stable low cost of deposits • Growth engine in Capital Region • Strong lending pipeline in new Western New York market • Engaged Corporate Board and Advisory Board • Strong capital bas
Slide 45: CHMG Stock at a Glance
Shares Outstanding* 4.7 million Market Capitalization* $211.2M YTD Dividend Per Share^ $0.88 Dividend Yield (TTM)* 2.52% Average Daily Volume^ 15,329 Book Value Per Share* $44.00 Tangible Book Value Per Share* $39.34 Stock Price* $45.30 Price to Earnings (TTM)* 8.44x Price to Tangible Book* 1.15x Re
Slide 46: Contact details
46 Anders M. Tomson Karl F. Krebs President & CEO EVP - Chief Financial Officer 518.433.5803 607.737.3714 atomson@chemungcanal.com kkrebs@chemungcanal.com Kathy McKillip - Investor Relations - 607.737.3746 - kmckillip@chemungcanal.com
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