Chemung Financial Corp · NASDAQ:CHMG
Chemung Financial — Investor Presentation (October 2015)
35 slides from Chemung Financial's investor presentation, Oct 1, 2015
Slide 1: Chemung Financial Corporation 2015 Investor Presentation
CHEMUNG FINANCIAL CORPORATION 2015 Investor Presentation “a TRUST COMPANY spn CANAL TRUSTS mn A 7) ‘ ra A i | ' yi pane oy (Bj Shemung Canal ment lar ‘¢ iG
Slide 2: Presenters
Presenters Ronald Bentley, CEO Chemung Financial Corporation Anders Tomson, President and COO October 1, 2015 New York, NY Karl Krebs, CFO
Slide 3: Executive Management Team
Executive Management Team Karl F. Krebs EVP, Chief Financial Officer & Treasurer 2013-Current: Chief Financial Officer Prior: EVP and CFO at Financial Institutions, Inc. Ronald M. Bentley =a | Chief Executive Officer 2015-Current: CEO I 2007-2015: President & CEO AMM 2006: President & coo Prior: Pre
Slide 4: Our namesake...the Chemung Canal
Our namesake...the Chemung Canal
Slide 5: The past decade...a period of significant growth
The past decade...a period of significant growth Welcome to Albany Capital of New York State |AN ALL ~ AMERICA CITY
Slide 6: Safe Harbor Statement
Safe Harbor Statement This p contains certain that may be forward-looking as defined in the Private Securities Litigation Reform ‘Act of 1995, which are subject to numerous risks and - Forward looking can be by words such as val "believes," " ” "feels', "expects," " " “seeks,” "strives," “plans,” "i
Slide 7: History
History 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
Slide 8: Mission
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
Slide 9: About Chemung Financial Corporation
About Chemung Financial Corporation Oldest locally-owned and managed community bank in NYS, dating to 1833 NYS chartered bank and Member of the Federal Reserve Listed on Nasdaq Stock Market, LLC Assets of $1.6B and 390 employees Operates through a single subsidiary bank, Chemung Canal Trust Company,
Slide 10: Corporate Hierarchy
Corporate Hierarchy ‘Chemung Financial fi) Chemung Canal Trust Company Building relationships since 1833 ‘Chemung Canal rl c] my CAPITALTD 1833 aa Bank Divisions
Slide 11: Growth and Stability: Capital Region and Finger Lakes
CATALY GROWTH Capital Region Corning, WY STABILITY Finger Lakes Region ic} Chemung Canal Trust Company
Slide 12: CCTC/Capital Market Share
CCTC/Capital Market Share County 2014 Deposits Schuyler $102,894,000 ‘Chemung $516,051,000 Tioga $104,001,000 Steuben $95,724,000 Cayuga $79,498,000 Bradford (PA) $79,093,000 Tompkins ‘$92,525,000 Seneca $25,743,000 Cortland $13,046,000 Broome $42,161,000 Albany $142,267,000 Saratoga $19,597,000 Tot
Slide 13: Core Strategies
Core Strategies * 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 Regio
Slide 14: CanalCare / CapitalCare
CanalCare / CapitalCare CanalCare is a pledge from every one of us at Chemung Canal Trust Company to do everything within our power to make your business with us as helpful, friendly, prompt and courteous as possible. If it means meeting with you outside normal business hours or on a weekend, we’ll
Slide 15: History of Acquisitions
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 * Br
Slide 16: CHMG Return
CHMG Return (Chemung Financial Corporation - Price Change (%) 4 is g E = \— 44 vy ‘ ri en = r pata Thousands 6/30/15 Stock Price $26.48 Price to Earnings 12.75x Price to Book 0.92x Price to Tangible Book 1.13% jpportunities * Trading at a discount to book value + Price to earnings remains below peer
Slide 17: Financial Highlights (millions)
Financial Highlights (millions) Pras zoe Return on Assets 0.63% 0.54% Return on Equity 7.16% 5.74% Net Interest Margin 3.50% 3.59% Charge-off Ratio 0.05% 0.29% Total Assets $1,554 $1,525 Assets Under Management or Admin. $1,917 $1,956 Nonperforming Loans/Total Loans 1.12% 0.69% Nonperforming Assets/
Slide 18: Asset Growth
Asset Growth —_——_ | $1,216 12/31/2011 $1,248 12/31/2012 $1,476 12/31/2013 $1,525 12/31/2014 $1,554 6/30/2015 Asset Growth Organic * Loans in Capital Region * Municipal Deposits Acquisitions * Bank of America Branches (2013) © Capital Bank (2011)
Slide 19: Five-Year Summary of Loan Growth
Five-Year Summary of Loan Growth * Total loans: $1.28 at June 30, 2015 * Increase: $536.7M since December 31, 2010 CAGR: 13.4% since 2010 * Growing market share in the Capital Region * Greater opportunity due to ongoing economic development in the region * Low unemployment due to state government an
Slide 20: Loan Concentrations
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 Portfolio Concentrations to Total Loans June 30, 2015
Slide 21: Commercial Loan Portfolio
Commercial Loan Portfolio Balances NAICS Descriptions (S thousands) Percentage Real Estate, Rental, & Leasing 443,493 66.7% Manufacturing 43,859 6.6% Health Care & Social Assistance 30,224 45% Wholesale Trade 23,556 3.5% Construction 20,075 3.0% Accomodation & Food Senice 17,666 27% Arts, Entertainm
Slide 22: Asset Quality
Asset Quality $4,500 $4,000 $3,500 $3,000 $2,500 § $2,000 £ $1,500 $1,000 $500 Raion w/o wp pO 6207015 =@ Provision (YTD 6/30/15) ‘=®-Non-performing assets to total assets ‘=®Non-performing loans to total loans + Stable, high quality loan portfolio * — Non-performing loans mainly driven by remaining
Slide 23: Deposits
Deposits Cost of Deposits 1.50% 1.00% 0.50% oo oS wren ps2 w/AY;2013_A2/s/1 6/30/2015, <@Now -@-Savings and Money Market ~®=Time Deposits Division (Millions) MICCTC (excl. BofA) mI CCTC (BofA) Capital Bank susono siz000 | —____ 510000 sin00 1000 sin00 sin00 seo a 12/31/2011 12/31/2012 12/31/2013 12/
Slide 24: Net Income — Quarterly Trend (thousands)
Net Income — Quarterly Trend (thousands) $5,500 $4,500 $3,500 $2,500 $1,500 $50 3 $(500) $4,482 sya $2,655 $2,577 = $2,179 $2,064 4.939 $2,276 | ‘| | | | | a a @ a a a BR a a aa $(319) [os tti(té
Slide 25: Net Interest Margin
Net Interest Margin Net Interest Margin Net Interest Income (thousands) 420% 4.13% 414% 3.91% 49,568 4.00% 3.80% 3.60% 3.59% 3.40% 3.20% 3.00% rou 2012, 2018, 2018 201120122013, 2018S TD 6/30/2015 6/30/2015 Challenging given the low interest rate environment Lower yi Id on loans due to slope of yiel
Slide 26: Investment Portfolio
Investment Portfolio MUS. Government & Enterprises Securities Available for Sale by Type (%) 12/31/2011 32/31/2012 MBS &.CMO states & 12/31/2013 12/31/2014 1 mother Sec. 0.6% 6/30/2015 ved 1.95% 1.90% 1.35% 1.80% 175% 1.70% 1.65% 1.60% 3.08 1.86% Janta Feb-14 Marsa Aprad May-14 Investment Portfolio
Slide 27: Noninterest Income Components
Noninterest Income Components Noninterest Income (thousands) $10.5 million YTD 6/30/2015 $20,000 $25,000 $20.00 $15,000 $10,000 $5,000 s acid ETO wie eso we | vowons uMorignge Sle Gains) 179, a4 Ea) 201 50 sin on Food tou. 730, st Wealth Management Revenue See Gains 08 301 oo so ‘Check Card/Credit C
Slide 28: Noninterest Expense Components
Noninterest Expense Components $27.6 million YTD 6/30/2015 Noninterest Expense (thousands) utNet Occupancy Employee Benefits Data Processing st Equip T Services MORE/Loan Expense {FDIC Insurance Other
Slide 29: Expense Management and Control
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 ¢ Improved budgeting process for fisca
Slide 30: Capital Management
Capital Management * Continue to remain profitable and pay dividend * Board authorized share buyback, up to 121,000 * Performed well under rigorous stress test at 3/31/15 $3 CFC - Capital Ratios (%) a —tTier LLeverage | -t+Tier 1 Capital /CET1 —s-Total Capital 2 a 3 Fae baa aie 3 To 3 iRion i 3 a 2
Slide 31: Enterprise Risk Management
Enterprise Risk Management * ERM is Board / Executive Management responsibility guided by our Risk Appetite Statement and Supported by our Risk Management Policy * Board approved Risk Governance framework * Continuous monitoring of eight major risk categories (i.e., credit, interest rate, operationa
Slide 32: Investment Considerations
Investment Considerations* * Listed on Nasdaq Stock Market, LLC * $1.6B in assets * $123.3M market capitalization (6/30/15) * Diversified Revenue Stream — 30% Non-Interest Income * Low risk profile —- Nonperforming Assets 0.98% of Total Assets * Dividend yield — 3.93% * Price to earnings — 12.75x *
Slide 33: CHMG Stock at a Glance
CHMG Stock at a Glance Shares Outstanding* 4.7 million Market Capitalization* $123.3 million Annual Dividend Per Share** $1.04 YTD Dividend Per Share* $0.52 Dividend Yield* 3.93% Average Daily Volume* 3,500 Book Value Per Share* $28.92 Tangible Book Value Per Share* $23.35 Stock Price* $26.48 Price
Slide 34: Key Takeaways
Key Takeaways * Growth, through acquisitions and organic means * Actively looking for acquisition opportunities * Well positioned for margin improvement and higher earnings during an increasing interest rate environment * Stable low cost deposits * Growth engine in Capital Region * Engaged corporate
Slide 35: Foulan sentey
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