Chemung Financial Corp · NASDAQ:CHMG
Chemung Financial — Investor Presentation (May 2021)
44 slides from Chemung Financial's investor presentation, May 5, 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 May 5, 2021 2
Slide 3: Executive Management Team
Anders M. Tomson President & Chief Executive Officer Jeffrey Kenefick SVP, 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 Of
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: Oldest locally-owned community bank in NYS
• 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 $ 2.44 billion and 338 employees • Operates through a single subsidiary bank, Chemung Canal Trust Company, with 31 ret
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: SNL Financial, as of June 30, 2020 12 County 2020 Deposits 2020 Share Chemung $726,001,000 54.47% Albany $266,402,000 1.38% Tioga $142,433,000 27.76% Schuyler $136,053,000 56.06% Steuben $118,897,000 9.96% Cayuga $110,046,000 8.17% Tompkins $89,299,000 3.49% Bradfor
Slide 13: Franchise built through acquisitions and organic growth
• 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 $178 million • Steady, stable organic growth in Finger Lakes Region • Higher
Slide 14: Digital Engagement
Digital Engagement We believe digital self - service is the key to engaging and retaining our clients for the future . We strive to deliver a meaningful, secure and frictionless digital platform across all customer delivery channels . Our digital strategy provides our customers the services they hav
Slide 15: Platinum Promise
Platinum Promise eY on 232 MUTUAL RESPECT OPEN & HONEST ACCEPTING LITY to treating 6 our with our the utmost courtesy and ‘clients. If that means meeting ‘an errand, On occasion, we can, respect. within Pe business with us as helpful, sell” approach, or simply giving, Pr In thi we will always take f
Slide 16: Supporting Our Community
Supporting Our Community Achieve | Society | Assocation | ARCs | Amot Ar Museum Amot Health | Auburn Public Theater | Boy Scouts | Broome County Council of Churches | Buddy W. pI i | CareFirst | | le Center | j Disabled i Elmira College | "Pood Bank ofthe Southern Ter | Cit Soouts | Glasstemt | Clov
Slide 17: History of Acquisitions
• Whole Bank Acquisitions • 1974 – Montour National Bank, one branch office • 1995 – Owego National Financial Corporation, one branch office • 2009 – Canton Bancorp, Inc., three branch offices • 2011 – Fort Orange Financial Corporation (Capital Bank), five branch offices • Branch Acquisitions • 1994
Slide 18: Financial Highlights
Financial Highlights ($ Millions) 18 *March 31, 2021 figures unaudited 3/31/2021 2020 2019 2018 Return on Assets 1.12% 0.94% 0.88% 1.14% Return on Equity 13.24% 9.94% 8.86% 12.76% Net Interest Margin 2.86% 3.25% 3.64% 3.72% Charge-off Ratio -0.06% 0.47% 0.11% 0.41% Total Assets $2,442 $2,279 $1,788
Slide 19: 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 • Allow emp
Slide 20: 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 10 -
Slide 21: PPP Statistics
21 COVID - 19 Financial Assistance : PPP Statistics Loan Tier Fee # of Loans $ Amount of Loans <$350M 5% 1,146 67,860,637$ $351M-$2MM 3% 98 69,043,492 >$2MM 1% 16 52,860,910 1,260 189,765,039$ Loan Tier Fee # of Loans $ Amount of Loans 502 9,147,552$ >$50M - $350M 5% 251 35,421,142 >$350M 3% 46 30,4
Slide 22: Loan Deferrals
22 COVID - 19 Financial Assistance : Loan Deferrals • Outstanding COVID - 19 deferrals: • 03/31/21 – 38 Loans totaling $26.3MM had active COVID - 19 deferrals. • 05/31/20 – 1,147 Loans totaling $242.5MM had active COVID - 19 deferrals. *2020 and 2021 figures unaudited Loan Balances with Active COVID
Slide 23: PPP Loans by Industry
23 PPP Loans by Industry *March 31, 2021 figures unaudited Total PPP Loan Balances are a combination of loans from Round 1 and Round 2 4.01% 0.30% 10.65% 13.35% 0.27% 10.46% 16.51% 3.49% 2.75% 7.89% 2.18% 0.35% 1.66% 2.58% 1.37% 22.18% PPP Loans by NAICS Code Real Estate, Rental & Leasing: Agricultu
Slide 24: Asset Growth
Asset Growth Organic • Loans in Capital Region • PPP Loans • Growth opportunities in Western NY Asset Growth ($ Millions) 24 * CAGR 12/31/2017 to 03/31/2021 *March 31, 2021 figures unaudited
Slide 25: Summary of Loan Growth
• Total loans: $ 1.581 billion at March 31, 2021 • Increased $269.1 million since December 31, 2017 • Funded $189.8 million in PPP Loans through December 31, 2020 • Funded $75.1 million in PPP Second Round Loans through April 21, 2021 • Growing market share in the Capital Region • Greater opportunit
Slide 26: Loan Concentrations
Effectively managing portfolio concentration by establishing specific criteria, such as: • % of portfolio for each category • % of capital deployed in each category • Increased use of participations to manage risk and capital Loan Concentrations 26 * CRE ratio was 340% and 338% as of December 31, 20
Slide 27: Commercial Loan Portfolio
Commercial Loan Portfolio 03/31/2021 27 March 31, 2021 figures unaudited NAICS Code / Descriptions Balances ($ Thousands) Percentage Real Estate, Rental & Leasing 631,640$ 57.08% Manufacturing 62,877 5.68% Health Care & Social Assistance 61,322 5.54% Wholesale Trade 32,282 2.92% Construction 54,265
Slide 28: Non-Performing Assets
Non - Performing Assets 28 *March 31, 2021 figures unaudited
Slide 29: Deposits
Deposits 29 *March 31, 2021 figures unaudited
Slide 30: Deposit Breakdown
Deposit Breakdown 30 *March 31, 2021 figures unaudited *CAGR 12/31/2017 to 03/31/2021
Slide 31: Net Income – Quarterly Trend
Net Income – Quarterly Trend ($ Thousands) 31 *March 31, 2021 figures unaudited 2018 2019 $19.6MM $15.6MM $19.2MM 2020 $6.5MM 2021
Slide 32: Net Interest Margin
• 19% of loan portfolio reprices within the next 90 days (As of March 31, 2021) • 60% of commercial loan portfolio is variable and 28% is subject to reprice over the next 90 days (As of March 31, 2021) Net Interest Margin 32 March 31, 2021 figures unaudited
Slide 33: Investment Portfolio
Investment Portfolio 33 * March 31, 2021 figures unaudited
Slide 34: Wealth Management Group
Wealth Management Group 34 *March 31, 2021 figures unaudited
Slide 35: Non-Interest Income Components
Non - Interest Income Components 35 *March 31, 2021 figures unaudited 15.82% 3.81% 19.98% 8.01% 4.75% 47.64% $5.6 Million 03/31/2021 Other CFS Group, Inc. Revenue Interchange Income Overdraft Fees Service Charges on Deposits Wealth Management Revenue nWealth Management Revenue $8,804 $9,317 $9,503 $
Slide 36: Non-Interest Expense Components
Non - Interest Expense Components 36 *March 31, 2021 figures unaudited 1,000 1,500 2,000 2,500 3,000 2.00% 2.50% 3.00% 3.50% 2017 2018 2019 2020 Q1 2021 Non - Interest Expense to Average Assets ($ Millions) Non-Interest Expense / Avg Assets Total assets 22.44% 15.00% 11.41% 8.00% 43.15% $13.4 Millio
Slide 37: 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 38: 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 i n January 2021. As of April 21, 2021, 20,625 shares had been repurchased. • Performed well unde
Slide 39: 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 40: Investment Considerations
• Listed on Nasdaq Global Select Market • $2.44B in assets • $195.0 market capitalization • Diversified Revenue Stream – 25% Non - Interest Income • Low risk profile – Nonperforming Assets 0.39% of Total Assets • Dividend yield – 2.48% • Price to earnings – 7.42x • Price to tangible book – 1.13x Inv
Slide 41: Book Value Per Share
Book Value Per Share 41 *March 31, 2021 figures unaudited
Slide 42: 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 B oard and A dvisory B oard • Strong capital
Slide 43: CHMG Stock at a Glance
Shares Outstanding* 4.7 million Market Capitalization* $195.0M YTD Dividend Per Share^ $0.26 Dividend Yield* 2.48% Average Daily Volume^ 10,262 Book Value Per Share* $41.60 Tangible Book Value Per Share* $36.91 Stock Price* $41.82 Price to Earnings (TTM)* 7.42x Price to Tangible Book* 1.13x Return o
Slide 44: Contact details
44 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