Chemung Financial Corp · NASDAQ:CHMG
Chemung Financial — 2024 KBW Community Bank Investor Conference
47 slides from Chemung Financial's conference presentation, Jul 30, 2024
Slide 1: 2024 KBW Community Bank Investor Conference
2024 KBW Community Bank Investor Conference
Slide 2: With You Today
Chemung Financial Corporation Chemung Financial Corporation With You Today 2 Anders Tomson President & Chief Executive Officer Dale McKim Executive Vice President & Chief Financial Officer
Slide 3: Safe Harbor Statement
Chemung Financial Corporation Safe Harbor Statement Forward - looking Statements: This report contains forward - looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995. The Corporation inte
Slide 4: Key Takeaways
Chemung Financial Corporation Key Takeaways 4 2024 KBW Community Bank Investor Conference Continued strength and momentum in underlying businesses High customer engagement across all business lines and geographies. Stable deposit base and ample liquidity Majority of deposits sourced from stable, leg
Slide 5: About Us
About Us Elmira, NY 5
Slide 6: About Us
Chemung Financial Corporation Oldest locally owned and managed community bank in New York State, dating to 1833. Subsidiary bank - Chemung Canal Trust Company - operates with 31 branches over 14 counties in New York and Pennsylvania. Operating as Capital Bank division in Albany, New York market and
Slide 7: Core Strategies
Chemung Financial Corporation Revenue Growth ▪ Drive growth in Albany and Buffalo with legacy market deposits. ▪ Well positioned to opportunistically acquire when operational model and pricing is right. Seeking wealth management, whole bank or branch opportunities. ▪ Fee and pricing discipline. Oper
Slide 8: Second Quarter 2024 Highlights
Chemung Financial Corporation Second Quarter 2024 Highlights 8 EPS $1.05 Net Income $5.0M ROA 0.73% ROE 10.27% ROTE 11.56% ACL - to - total Loans 1.05% Non - performing loans - to - total loans 0.41% Returns 8 2024 KBW Community Bank Investor Conference
Slide 9: Second Quarter 2024 Highlights
Chemung Financial Corporation Second Quarter 2024 Highlights 9 ▪ Net interest income $17.8 million, or 4.5%, less than second quarter 2023. ▪ Net interest margin 2.66% ▪ Efficiency ratio 69.19% ▪ Tangible common equity to tangible assets improved by 11 basis points from December 31, 2023 to 6.56% ▪
Slide 10: Appendices
Chemung Financial Corporation Appendices 10 Company and Financial Highlights Background Page 11 Corporate Organization Markets and Share Management Team Community Loans Page 17 Loan Growth Portfolio Composition Commercial Portfolio Non - Performers Investments Page 27 Portfolio Composition Yield and
Slide 11: Background
Background 11
Slide 12: Corporate Organization
Chemung Financial Corporation Corporate Organization 12 Trust and Wealth Management services Provides mutual funds, securities and insurance brokerage services through LPL Financial Banking operations in Southern Tier and Finger Lakes of New York Wealth Management Group Banking operations in the Cap
Slide 13: Markets
Chemung Financial Corporation Markets 13 Legacy Markets Long, deep relationships since 1833 provide stable funding and earnings engine. Steady and even economy, powered by large corporations (Corning, Inc.), higher education (Cornell University, SUNY Binghamton) and tourism. Growth Opportunity New Y
Slide 14: Dominant market share of deposits
Chemung Financial Corporation Dominant market share of deposits Legacy Markets Small share of much larger markets; a lot of room to grow. Growth Markets Deployment of lower cost deposits to higher growth markets. Competitive Advantage Share 2023 Deposits County 61.49% $959,331,000 Chemung 1.45% $360
Slide 15: Experienced Management Team
Chemung Financial Corporation President and CEO Industry Experience: 31 years Years with CHMG: 13 years Previously with Citizens Anders Tomson Experienced Management Team 15 EVP & CFO Industry Experience: 28 years Previously with KPMG LLP and Evans Bancorp Dale McKim Regional President Industry Expe
Slide 16: Supporting Our Communities
Chemung Financial Corporation Supporting Our Communities 16 Volunteering Over 8,000 Hours Distributing Nearly $550,000 in Donations and Sponsorships Achieve | Albany Medical Center | American Cancer Society | American Heart Association | ARCs | Arnot Museum | Arnot Health | Auburn Public Theater | B
Slide 17: Loans
Loans 17
Slide 18: Summary of Loan Growth
Chemung Financial Corporation Summary of Loan Growth 18 ▪ Total Loans: $2.011 billion at June 30, 2024 ▪ Originated $100.3MM in Commercial Loans to date in 2024 ▪ Originated $25.7MM in Indirect Loans to date in 2024 ▪ Originated $15.5MM in Home Equity Loans to date in 2024 ▪ Opened Loan Production O
Slide 19: Summary of Loan Growth by Division
Chemung Financial Corporation $658.5 $592.2 $651.5 $665.7 $653.6 $878.0 $879.0 $1,098.1 $1,206.6 $1,244.9 $47.0 $79.8 $100.4 $113.0 Loans by Division ($ Millions) Chemung Capital Buffalo Summary of Loan Growth Q2 2024 2023 2022 2021 2020 32.49% 33.75% 35.60% 39.01% 42.86% Chemung 61.89% 61.16% 60.04
Slide 20: Loan Composition
Chemung Financial Corporation 14.44% 6.39% 51.02% 13.50% 14.65% Portfolio Concentrations to Total Loans June 30, 2024 Commercial & Ind. CRE Owner Occupied CRE Non-Owner Occupied Residential Mort. Consumer Loan Composition 20 ▪ Effectively managing portfolio composition by establishing limits such as
Slide 21: Loan Composition
Chemung Financial Corporation 2020 2021 2022 2023 Q2 2024 C&I 188% 118% 105% 105% 110% CRE OO 45% 43% 44% 49% 49% CRE NOO 321% 327% 372% 397% 390% RRE 122% 119% 119% 110% 103% Consumer 108% 92% 123% 122% 112% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450% Portfolio Composition to Tier 1 Capital & AC
Slide 22: Tier 1 Capital and ACL Growth
Chemung Financial Corporation Loan Composition 22 ▪ Risk management function continually monitors and stress tests CRE exposure consistent with 2006 and 2015 interagency guidance. *June 30, 2024 figures unaudited 2024 KBW Community Bank Investor Conference 7.66% 10.72% 10.27% 5.17% 4.48% $196.1 $217
Slide 23: Commercial Loan Portfolio – June 30, 2024
Chemung Financial Corporation Commercial Loan Portfolio – June 30, 2024 23 *June 30, 2024 figures unaudited 2024 KBW Community Bank Investor Conference 70.36% 2.69% 3.90% 1.49% 3.92% 5.14% 3.08% 9.42% NAICS Descriptions Real Estate, Rental & Leasing Manufacturing Health Care & Social Assistance Whol
Slide 24: Commercial Real Estate
Chemung Financial Corporation 36.49% 17.53% 12.68% 10.47% 7.05% 4.29% 11.49% Multifamily Retail Construction & Land Development Office Warehouse & Storage Hotel Other $1.15 Billion in Total CRE Commercial Real Estate 24 *June 30, 2024 figures unaudited 2024 KBW Community Bank Investor Conference
Slide 25: Trends in Non-Performing Assets
Chemung Financial Corporation 0.32% 0.41% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% Non - Performing Loans and Assets (% of Total) Non-performing assets to total assets Non-performing loans to total loans Trends in Non - Performing Assets 25 *June 30, 2024 figures unaudited. 2024 KBW Community
Slide 26: Trends in Non-Performing Assets
Chemung Financial Corporation $8,195 $8,872 $5,000 $7,500 $10,000 $12,500 $15,000 Non - Performing Loans and Assets ($ Thousands) Non Performing Loans Non Performing Assets Trends in Non - Performing Assets 26 *June 30,2024 figures unaudited. 2024 KBW Community Bank Investor Conference
Slide 27: Investments
Investments 27
Slide 28: Investment Portfolio Composition
Chemung Financial Corporation 7.6% 8.8% 9.5% 10.1% 84.4% 72.9% 68.8% 69.1% 68.9% 7.8% 5.3% 6.1% 6.6% 6.5% 7.8% 14.2% 16.3% 14.8% 14.5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2020 2021 2022 2023 Q2 2024 Securities Available for Sale by Type (%) U.S. Government & Enterprises MBS States & Politica
Slide 29: Investment Portfolio - Yield & Duration
Chemung Financial Corporation Investment Portfolio - Yield & Duration 29 ▪ Utilizing cashflows from principal and interest payments to fund loans and pay down borrowings. ▪ Approximately $5 million a month in cash flows. ▪ Principal cash flows representing over 50% of the portfolio to be received in
Slide 30: Investment Portfolio – Fair Value and AOCI
Chemung Financial Corporation Investment Portfolio – Fair Value and AOCI 30 $ - $ - $60,431 $55,574 $55,000 $225,029 $467,866 $577,361 $435,131 $389,031 $41,265 $43,405 $42,303 $38,892 $36,153 $15,962 $43,340 $111,931 $102,992 $88,820 $1,834 $12,249 $3,383 $(96,609) $(114,833) $(140,000) $(120,000)
Slide 31: Deposits
Deposits 31
Slide 32: Deposit Costs
Chemung Financial Corporation 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2020 2021 2022 2023 Q2 2024 Cost of Deposits NOW Savings and Money Market Time Deposits Brokered Deposits Total Cost of Interest Bearing Deposits Deposit Costs 32 • Cumulative deposit beta for the period of December 2021 through
Slide 33: Deposit Costs
Chemung Financial Corporation 30.4% 34.3% 31.5% 26.8% 25.6% 13.9% 13.3% 11.8% 12.0% 13.6% 29.6% 30.4% 27.5% 25.7% 25.4% 12.1% 13.0% 12.0% 10.3% 10.3% 14.0% 9.0% 14.0% 19.3% 22.2% 3.2% 5.9% 2.9% 2020 2021 2022 2023 Q2 2024 Account Types (%) Non-Interest Bearing DDA Interest Bearing DDA Money Market S
Slide 34: Deposit Composition
Chemung Financial Corporation 53.1% 52.8% 51.2% 50.2% 50.4% 43.8% 45.0% 44.0% 42.0% 43.7% 24.7% 24.1% 26.9% 28.4% 29.4% 34.0% 34.1% 30.1% 28.2% 26.6% 10.4% 9.1% 9.1% 9.1% 8.7% 6.6% 7.5% 6.8% 6.3% 7.8% 3.2% 5.9% 2.9% 11.8% 14.0% 12.8% 12.3% 11.5% 15.6% 13.4% 15.9% 17.6% 19.0% Deposits by Customer (%)
Slide 35: Deposit Composition
Chemung Financial Corporation $1,686.3 $1,738.0 $1,815.5 $1,899.8 $1,976.0 $351.4 $415.6 $435.2 $381.0 $364.0 $73.5 $142.8 $69.5 $1.8 $3.0 $5.8 $6.4 32.0% 33.6% 30.1% 27.0% 26.3% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 2020 2021 20
Slide 36: Liquidity
Chemung Financial Corporation Liquidity 36 Williamsville, New York Branch Remaining Available Outstanding Total Available Dollars in Thousands 191,409 $ 30,000 $ 221,409 $ FHLB Advances 60,000 - 60,000 Correspondent Bank Lines of Credit 206,081 69,500 275,581 Brokered Deposits 206,406 - 206,406 Unen
Slide 37: Performance
Performance 37
Slide 38: Net Income - Quarterly Trend
Chemung Financial Corporation $2,491 $5,827 $5,711 $5,233 $6,530 $6,795 $6,646 $6,454 $6,867 $8,024 $6,453 $7,439 $7,270 $6,280 $7,648 $3,802 $7,050 $4,987 $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net Income - Quart
Slide 39: Net Interest Margin
Chemung Financial Corporation 2020 2021 2022 2023 2024 Q1 3.55% 2.86% 2.87% 3.14% 2.73% Q2 3.26% 2.76% 2.97% 2.87% 2.66% Q3 3.20% 2.88% 3.08% 2.73% Q4 3.06% 2.85% 3.26% 2.69% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% Fully Taxable Equivalent Net Interest Margin (%) Q1 Q2 Q3 Q4 Net Intere
Slide 40: Net Interest Margin
Chemung Financial Corporation 3.25% 2.84% 3.05% 2.85% 2.69% 1.00% 1.40% 1.80% 2.20% 2.60% 3.00% 3.40% 3.80% 2020 2021 2022 2023 YTD 2024 Fully Taxable Equivalent Net Interest Margin (%) Net Interest Margin 40 ▪ Net interest margin impacted by low yielding mortgage - backed securities ▪ No loss trade
Slide 41: Non-Interest Income Components
Chemung Financial Corporation Overdraft Fees 12.69% Service Charges on Deposits 4.31% Interchange Income 19.58% Wealth Management Revenue 49.43% CFS Group, Inc. Revenue 4.27% Net Gains on Sales of Loans 0.63% Change in FV of Equity Securities 1.02% Other 8.07% $11.3 Million 6/30/2024 Overdraft Fees
Slide 42: Non-Interest Expense Components
Chemung Financial Corporation Salaries , 42.04% Data Processing , 14.79% Employee Benefits , 11.23% Net Occupancy , 8.93% FDIC Insurance , 3.32% Professional Services , 3.39% Furniture/Equipment , 2.42% Marketing , 2.23% Other , 11.65% $32.9 Million 6/30/2024 Salaries Data Processing Employee Benefi
Slide 43: Expense Management and Control
Chemung Financial Corporation 67.22 67.95 65.71 61.71 61.71 66.20 69.64 56.00 58.00 60.00 62.00 64.00 66.00 68.00 70.00 72.00 2018 2019 2020 2021 2022 2023 Q2 2024 Efficiency Ratio (%)** Expense Management and Control 43 Goal is both cost containment and cost savings ▪ Increase efficiency in banking
Slide 44: Capital Management
Chemung Financial Corporation 7.90% 8.06% 8.23% 8.62% 8.85% 12.37% 12.96% 11.54% 12.08% 12.28% 13.62% 14.21% 12.57% 13.26% 13.35% 7.87% 7.91% 5.51% 6.45% 6.56% 4% 6% 8% 10% 12% 14% 16% Chemung Financial Corporation - Capital Ratios (%) Tier 1 Leverage Tier 1 Capital / CET1 Total Capital TCE Ratio Ca
Slide 45: Capital Management
Chemung Financial Corporation Capital Management 45 ▪ Continue to remain profitable and pay dividends ▪ Announced share repurchase program of 250,000 shares in January 2021 ▪ As of June 30, 2024: 49,184 shares had been repurchased 2024 KBW Community Bank Investor Conference 2020 2021 2022 2023 Q2 20
Slide 46: CHMG Stock At a Glance
Chemung Financial Corporation 4.8 million Shares Outstanding* $229.0M Market Capitalization* $0.62 YTD Dividend Per Share^ 2.58% Dividend Yield (TTM)* 7,478 Average Daily Volume^ $42.17 Book Value Per Share* $37.59 Tangible Book Value Per Share* $48.00 Stock Price* 9.43x Price to Earnings (TTM)* 1.2
Slide 47: Get In Touch
Chemung Financial Corporation One Chemung Canal Plaza Elmira, New York 14901 Anders Tomson 607 737 - 3756 atomson@chemungcanal.com Get In Touch Chemung Financial Corporation is a $2.8 billion financial services holding company headquartered in Elmira, New York and operates 31 retail offices through
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