Chemung Financial Corp · NASDAQ:CHMG
Chemung Financial — Shareholder Meeting (May 2020)
62 slides from Chemung Financial's shareholder meeting presentation, May 12, 2020
Slide 1: Annual Meeting of Shareholders, May 13, 2020
Annual Meeting of Shareholders Wednesday , May 13, 2020 1
Slide 2: Anders M. Tomson and David J. Dalrymple
Anders M. Tomson President & CEO David J. Dalrymple Chairman of the Board 2
Slide 3: Forward-Looking Statement
Forward - Looking Statement This discussion contains forward - looking statements within the meaning of Section 27 A of the Securities Act and Section 21 E of the Exchange Act . The Corporation intends its forward - looking statements to be covered by the safe harbor provisions for forward - looking
Slide 4: Board of Directors
Board of Directors David J. Dalrymple Anders M. Tomson Larry H. Becker Bruce W. Boyea Ronald M. Bentley David M. Buicko Stephen M. Lounsberry III Robert H. Dalrymple Denise V. Gonick Richard W . Swan G. Thomas Tranter Jr. Jeffrey B. Streeter Thomas R . Tyrrell 4
Slide 5: Thank you Retiring Directors!
Thank you Retiring Directors! Bruce W. Boyea Kevin B. Tully 5
Slide 6: Executive Management
Executive Management Mary Meisner Senior Vice President Regulatory Risk Kathy McKillip Assistant Vice President Corporate Secretary Karl Krebs Executive Vice President Chief Financial Officer Tom Wirth Executive Vice President Wealth Management Group Mike Wayne Senior Vice President Director of Mark
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Slide 8: Annual Meeting of Shareholders Agenda
Annual Meeting of Shareholders Agenda Given these exceptional times, today’s presentation will be a little different than in years past: • 2019 Overview and Results • Corporate Response to the COVID - 19 Pandemic 8
Slide 9: Shareholders
Shareholders Chemung Financial Corporation Colleagues
Slide 10: Year Ending 12/31/2019 Key Balances
Year Ending: 12/31/2019 Total Assets $1.8 billion Total Loans $1.3 billion Total Deposits $1.6 billion Total Shareholders’ Equity $183 million 10
Slide 11: Total Shareholders' Equity
10.7% $182.6 12/31/2019 $165.0 12/31/2018 Total Shareholders’ Equity (In millions) 11
Slide 12: Capital Growth
Capital Growth (In millions) 12 $137.20 $143.70 $149.80 $165.00 $182.60 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00 $120.00 $140.00 $160.00 $180.00 $200.00 Dec-31-2015 Dec-31-2016 Dec-31-2017 Dec-31-2018 Dec-31-2019
Slide 13: Capital Ratios (Consolidated)
Capital Ratios (Consolidated) 13 8.47% 8.67% 8.77% 9.40% 10.22% 7.83% 7.81% 8.02% 8.79% 9.35% 12.20% 12.14% 11.82% 13.14% 13.98% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% 13.00% 14.00% 15.00% Dec-31-2015 Dec-31-2016 Dec-31-2017 Dec-31-2018 Dec-31-2019 Equity to Assets Ratio Tier 1 Leverage Ratio
Slide 14: 2019 Financial Results
NET INCOME: $15.6 million EPS: $3.21 Year Ending: 12/31/2019 2019 Financial Results : 14
Slide 15: Return on Average Assets and Equity
0.88% 8.86% Year Ending: 12/31/2019 Return on Average Assets Return on Average Equity 15
Slide 16: Year-end Stock Price
2.9% $ 42.50 12/31/2019 $41.31 12/31/2018 Year - end Stock Price 16
Slide 17: Dividends Declared
$5.0 million $1.04 per share Year Ending: 12/31/2019 Dividends Declared 17
Slide 18: 2019 Strategic Initiatives
• Loan Origination Activity • Commercial Lending • Risk Management • Interest Rate Management • Operating Efficiencies • Continued Tradition of Community Investment 2019 Strategic Initiatives 18
Slide 19: Loan Origination Activity
Loan Origination Activity Commercial 65% Residential 5% Home Equity 6% Indirect 22% Direct 2% Commercial 59% Residential 14% Home Equity 6% Indirect 19% Direct 2% 2019 Total: $267,599 *Does not include loans originated and sold into the secondary mortgage market 2018 Total: $299,072 Year Ending: 12/
Slide 20: Commercial Loan Portfolio
1.7% $ 879,086 12/31/2019 $864,024 12/31/2018 Total Balances $15,062 Commercial Loan Portfolio (In thousands) 20
Slide 21: Commercial Loans
Commercial Loans 2017 $693.8 $149.6 2018 $711.5 $152.5 2019 $688.8 $190.2 Year Ending: 12/31 Commercial & Industrial / Other Commercial Real Estate Related (In millions) 21
Slide 22: Non-Performing Assets
44.4% $18,525 12/31/2019 $12,828 12/31/2018 Non - Performing Assets (In thousands) 22
Slide 23: Credit Quality Initiatives
Credit Quality Initiatives • Restructured Credit and Risk Departments • Recruited Chief Credit Officer • Strengthened and streamlined credit p rocess • Restructured credit review, collection and risk management 23
Slide 24: Deposit Growth
Deposit Growth: $2.9 million 0.2% Year Ending: 12/31/2019 Deposit Growth 24
Slide 25: Net Interest Margin
Net Interest Margin 3.46% 3.37% 3.56% 3.72% 3.64% 3.10% 3.20% 3.30% 3.40% 3.50% 3.60% 3.70% 3.80% 2015 2016 2017 2018 2019 Year Ending: 12/31 25
Slide 26: Cost of Funds vs Peer Group
CCTC 0.33% Peer Group 1.02% CCTC 0.26% Peer Group 0.79% Year Ending: 12/31/2018 Year Ending: 12/31/2019 Cost of Funds 26 Obtained from S&P Global Market Intelligence. The percentage is the total interest expense as a percent of the sum of average interest bearing liabilities and average noninterest
Slide 27: Net Interest Income
$50,642 $52,329 $56,987 $60,480 $60,611 $44,000 $46,000 $48,000 $50,000 $52,000 $54,000 $56,000 $58,000 $60,000 $62,000 2015 2016 2017 2018 2019 Net Interest Income (In thousands) Year Ending: 12/31 27
Slide 28: Wealth Management Group
$1.9 Billion Assets Under Management & Administration $9.5 Million Fee Income Year Ending: 12/31/2019 Wealth Management Group 28
Slide 29: Wealth Management Fee Income
Wealth Management Fee Income (In thousands) Year Ending: 12/31 29 $8,522 $8,316 $8,804 $9,317 $9,503 $7,600 $7,800 $8,000 $8,200 $8,400 $8,600 $8,800 $9,000 $9,200 $9,400 $9,600 2015 2016 2017 2018 2019
Slide 30: Non-Interest Expense
1.9% $ 55.7 million 12/31/2019 $56.8 million 12/31/2018 Non - Interest Expense 30
Slide 31: Employees, Full-Time Equivalent
Employees, Full - Time Equivalent Year Ending: 12/31 377 368 371 374 362 350 355 360 365 370 375 380 2015 2016 2017 2018 2019 31
Slide 32: Distribution Strategy
Distribution Strategy Opened in 2018 • Schenectady • Wilton Consolidated in 2019 • Johnson City • Painted Post Closed in April 2020 • Towanda 32
Slide 33: Enhancing Our Digital Platform
▪ Continued Focus on our Digital Future ▪ Core System Conversion - Improved Efficiencies & Cost Savings ▪ Robotic Process Automation ▪ Online Account Origination ▪ Upgrades to Mobile Applications ▪ Introduced Zelle - Secure P2P Payment Option in Mobile Banking Enhancing Our Digital Platform 33
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Slide 35: COVID-19 Pandemic
COVID-19 Pandemic CORONAVIRUS Ape OUTBREAK A ge 8 ie . - Saree in x = 54 + Belee as 43 "
Slide 36: COVID-19 Pandemic Topics
▪ Our Foundation ▪ Pandemic Timeline ▪ Challenges & Uncertainties ▪ Our Operating Agenda ▪ Relief Efforts COVID - 19 Pandemic 36
Slide 37: Our Foundation
▪ Strong Capital & Liquidity Positions ▪ Refined Risk Practices ▪ Deep Client & Community Relationships Our Foundation 37
Slide 38: COVID-19 Pandemic Timeline Response
COVID-19 Pandemic: Timeline Response 12/31/19: ‘Wuhan, China confirms: cluster cases of unknown cause JANUARY MARCH 3/1/20: DECEMBER First confirmed case in NY State 121/20: United States (SEG? reports first case of disease
Slide 39: Timeline Response - March 2020
COVID-19 Pandemic: Timeline Response - March 2020 3/2/2020: First CCTC/CB 3/11/20: meeting held Weekly IRT regarding response Meetings start MD 6D ©. _——» BANK'S. 3/7/20: BANK'S 3/11/20: RESPONSE | Gtoredinnygtad RESPONSE | Covissopandemic
Slide 40: Timeline Response - March 2020
COVID-19 Pandemic: Timeline Response - March 2020 3/17/20: First temporary branch closures ©! BANK'S 3/13/20: BANK'S RESPONSE [ese lariat RESPONSE Emergency 3/12/2020: First mass customer ‘communication
Slide 41: Timeline Response - March 2020
COVID-19 Pandemic: Timeline Response - March 2020 3/22/20: Third set of branch revisions announced 3/27/20: CARES Actis signed into law
Slide 42: Timeline Response - April 2020
COVID-19 Pandemic: Timeline Response - April 2020 4/10/20: 416120: Bank begins PPP loans; Consumer Relief options revisions announced ener ri
Slide 43: Market Challenges & Uncertainties
▪ Federal Reserve Bank’s Rate Cuts (March 2020) ▪ COVID - 19 Pandemic Impact - Health - Care Crisis - Economic Impact of New York on PAUSE - Increased Unemployment - Elevated Credit Risk - Reduced Consumer Spending - Reopening Plans Market Challenges & Uncertainties 43
Slide 44: COVID-19 Pandemic Response: Operating Agenda
▪ Our Operating Agenda: - Open for Essential Banking Services - Safe Banking Environment - Employee Support - Transparent Communications - Sound Banking Practices COVID - 19 Pandemic Response 44
Slide 45: Shareholders
Shareholders Chemung Financial Corporation Colleagues
Slide 46: Open for Essential Banking Services
▪ Streamlined distribution network ▪ Drive - up windows and new walk - up lanes ▪ Lines of business open by appointment ▪ New accounts opened ▪ New loans funded Open for Essential Banking Services 46
Slide 47: Safe Banking Environment
▪ Followed CDC and DOH guidelines ▪ 39.5% of staff working remotely ▪ Upgraded maintenance & janitorial services ▪ Critical functions separated and redeployed to less - populated facilities ▪ Expansion of video conferencing system Safe Banking Environment 47
Slide 48: Employee Support
Employee Support ▪ Supported Our Colleagues - 5 additional PTO days - 0 % short - term employee loan - Procured masks for all employees - Identified at - risk employees - Social distancing - Closing of common areas ▪ Regular guidance regarding hygiene, revised protocols, cleaning, and physical/menta
Slide 49: Transparent Communications Internal
Transparent Communications Internal ▪ Daily emails from the CEO to staff ▪ Weekly All Employee Conference Call - Staff can submit anonymous questions - Open forum for “live” employee questions ▪ Video messages from CEO to staff 49
Slide 50: Transparent Communications External
▪ Regularly updated info center on website - Relief Options - Fraud Awareness - Branch Availability ▪ Regular use of eBlasts and Social Media ▪ Interviews with local TV and newspapers ▪ Office signage ▪ Video message to customers from CEO Transparent Communications External 50
Slide 51: Retail Client Relief Efforts
▪ Hardship waivers - ATM Fees - Overdraft & NSF fees - Early CD withdrawal penalties, up to balances of $25,000 ▪ Deferrals up to 90 days for residential mortgages, home e quity and consumer loan borrowers COVID - 19 Pandemic Response Retail Client Relief Efforts 51
Slide 52: Client Relief Efforts
COVID - 19 Pandemic Response Client Relief Efforts Information as of April 30, 2020 52 ▪ Consumer Deposit Fee Waivers $15,332 ▪ Consumer Loan Modifications 806 Loan Clients ▪ Commercial Loan Modifications 170 Loan Clients
Slide 53: Commercial Client Relief Efforts: PPP
▪ Participation in the Payroll Protection Program - Created through the CARES Act - Administered by the US SBA - $350 Billion eligible, in Phase 1 - $ 310 Billion eligible, in Phase 2 COVID - 19 Pandemic Response Commercial Client Relief Efforts 53
Slide 54: Commercial Client Relief Efforts: PPP Phases
▪ Phase 1 - Funding depleted in nine days - 405 applications funded for $145.4 million - Impacted 18,000 employees ▪ Phase 2 - 590 applications totaling $36.0 million submitted to SBA COVID - 19 Pandemic Response Commercial Client Relief Efforts Information as of April 30, 2020 54
Slide 55: Wealth Management Client Relief Efforts
▪ CARES Act for Retirement Plan Participants & Sponsors ▪ Required Minimum Distributions Waived ▪ Hardship distributions up to $ 100,000 ▪ Consulted on 401(k) strategies ▪ Provided advice in a volatile market COVID - 19 Pandemic Response Wealth Management Client Relief Efforts 55
Slide 56: Reopening Considerations
COVID - 19 Pandemic Response Reopening Considerations ▪ Establishing a multi - phased plan with a focus on regional considerations ▪ Maintaining employee & customer safety is our top priority ▪ Implementing guidance from g overnment, CDC and state & local departments of health ▪ Remaining flexible t
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Slide 58: Supporting our Community
Supporting our Community Achieve | Albany Medical Center | American Cancer Society | ARCs | Amot Art Museum | Amot Health Auburn Public Theater | Boy Scouts | Broome County Council of Churches Buddy Walk | Capital City Rescue Mission | Capital Region | CareFirst | af 1 | Disabled American Veterans |
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Slide 60: 2019 Retirees
2019 Retirees Pam Tucci (b1959 - d2020 ) Consumer Services Specialist 31 years of service Karen Makowski Executive Vice President Chief Risk Officer 9 years of service Vonne Brewster Contact Center Representative 10 years of service Marcia Boor Business Services Assistant Manager 26 years of service
Slide 61: U CAPITAL BAN
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Slide 62: Annual Meeting of Shareholders, May 13, 2020
Annual Meeting of Shareholders Wednesday , May 13, 2020 62