Chemung Financial Corp · NASDAQ:CHMG
Chemung Financial — Investor Presentation (January 2020)
40 slides from Chemung Financial's investor presentation, Jan 31, 2020
Slide 1: Chemung Financial Corporation 2020 Investor Presentation
CHEMUNG FINANCIAL CORPORATION 2020 Investor Presentation
Slide 2: Presenters
Anders Tomson, President and CEO Karl Krebs, CFO Presenters January 29 - 30, 2020 Scottsdale, AZ 2
Slide 3: Executive Management Team
Anders M. Tomson President & Chief Executive Officer Louis C. DiFabio EVP, Senior Lending Officer 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 Ris
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 c hartered b ank and Member of the Federal Reserve • Listed on Nasdaq Stock Market, LLC • Assets of $1.79 billion and 355 employees • Operates through a single subsidiary bank, Chemung Canal Trust Company, with 33 branc
Slide 10: Corporate Hierarchy
Corporate Hierarchy Chemung Risk Management, Inc. Bank Divisions Wealth Management Group 10
Slide 11: Markets: Growth and Stability
GROWTH Capital Region STABILITY Finger Lakes Region Markets Corning, NY Watkins Glen, NY Albany, NY Albany, NY 11
Slide 12: CCTC/Capital Market Share
CCTC/Capital Market Share County 2019 Deposits 2019 Share Schuyler $134,351,000 57.63% Chemung $535,067,000 49.39% Tioga $126,141,000 27.08% Steuben $108,659,000 9.85% Cayuga $118,770,000 10.80% Bradford (PA) $62,841,000 5.37% Tompkins $99,177,000 4.71% Seneca $19,456,000 3.86% Broome $63,266,000 2.
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 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 do it. Platinum P
Slide 16: Platinum Promise
Platinum Promise eS & MUTUAL RESPECT OPEN & HONEST ACCEPTING COMMUNICATION RESPONSIBILITY We are committed to treating We pride ourselves on providing We want to make your banking four clients and each other with _exeellent customer service to-our _experience a pleasure instead of ‘the utmost courte
Slide 17: Supporting Our Community
Supporting Our Community ‘Achieve | Albany Medical Center | American Cancer Society | American Heart Association | ARCs | Amot Art Museum ‘Arnot Health | Auburn Public Theater | Boy Scouts | Broome County Council of Churches | Buddy Walk Capital City Rescue Mission | Capital Region Sponsor-A-Scholar
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: Stock performance vs. peers
12/31/2019 Stock Price $42.50 Price to Earnings 13.24x Price to Book 1.14x Price to Tangible Book 1.30x Opportunities • Loan / Deposit Ratio • Retail Transformation CHMG Return 19 Indexes • Russell 2000/3000 *December 31, 2019 figures unaudited '17 '18 '19 0 50 0 50,000 100,000 ChemungFinancialCorpo
Slide 20: Financial Highlights
Financial Highlights ($ Millions) 20 *December 31, 2019 figures unaudited December 31, 2019 December 31, 2018 December 31, 2017 Return on Assets 0.88% 1.14% 0.43% Return on Equity 8.86% 12.76% 4.91% Net Interest Margin 3.64% 3.72% 3.56% Charge - off Ratio 0.11% 0.41% 0.17% 2019 2018 2017 Total Asset
Slide 21: Wealth Management Group
Wealth Management Group 21 *December 31,2019 figures unaudited 407.5 519.2 646.1 143.8 198.7 Assets Under Management 12/31/2019 ($ Millions ) Trusts Management Accounts Employee Benefit Custody Accounts Safekeeping
Slide 22: Asset Growth
Asset Growth Organic • Loans in Capital Region • Municipal Deposits Acquisitions • Bank of America Branches (2013) • Capital Bank (2011) Asset Growth ($ Millions) 22 *CAGR: 12/31/13 to 12/31/19 *December 31, 2019 figures unaudited $1,476 $1,525 $1,620 $1,657 $1,708 $1,755 $1,788 $- $200 $400 $600 $8
Slide 23: Summary of Loan Growth
687.2 724.1 683.1 636.8 630.7 603.1 576.4 308.6 397.5 485.5 563.5 681.1 708.8 732.8 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 12/31/19 Loans by Division (Millions) Chemung Canal Trust Company Capital Bank • Total loans: $1.31B a
Slide 24: Loan Concentrations
Effectively managing portfolio concentration by establishing specific criteria, such as: • % of portfolio for each category • % of capital deployed in each category • Increased use of participations to manage risk and capital Loan Concentrations 24 *CRE ratio was 362% and 331% as of December 31, 201
Slide 25: Commercial Loan Portfolio
Commercial Loan Portfolio (12/31/2019) 25 *December 31, 2019 figures unaudited NAICS Code / Descriptions Balances ($ thousands) Percentage Real Estate and Rental & Leasing 578,820 66.6% Manufacturing 30,018 3.5% Health Care & Social Assistance 32,045 3.7% Wholesale Trade 29,889 3.4% Construction 30,
Slide 26: Asset Quality
Asset Quality 26 *December 31, 2019 figures unaudited 5,945 1.04% 1.38% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 Provision ($ Thousands ) Provision Non-performing assets to total assets Non-performing loans to tot
Slide 27: Deposits
Deposits 27 *December 31, 2019 figures unaudited 28.6% 28.7% 28.7% 31.9% 30.9% 29.8% 8.7% 9.3% 9.4% 10.2% 11.4% 12.7% 30.7% 35.5% 37.7% 35.0% 34.3% 33.7% 15.5% 14.6% 14.3% 14.9% 13.8% 13.5% 16.5% 11.9% 9.9% 8.1% 9.6% 10.3% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 12/31/2014 12/31/2015 12/31/2016
Slide 28: Deposit Breakdown
Deposit Breakdown 28 969.2 1,054.5 1,108.1 1,117.9 1,177.9 1,155.9 141.8 147.0 150.7 161.4 160.6 181.0 206.5 202.6 240.6 254.9 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 $1,400.0 $1,600.0 $1,800.0 Deposits by Division ($ Millions ) CCTC (excl. BofA) CCTC (BofA) Capital Bank 150.2 164.7 57.4%
Slide 29: Net Income – Quarterly Trend
$2,707 $1,621 $2,745 $2,954 $2,979 $2,956 $3,654 $(2,159) $4,439 $2,527 $6,930 $5,730 $4,468 $4,981 $1,956 $4,205 $(3,000) $(1,000) $1,000 $3,000 $5,000 $7,000 $9,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $7.4 million $10.0 million $19.6 million $15.6 million Net Income – Quarterly Trend (
Slide 30: Net Interest Margin
• 24% of loan portfolio reprices within the next 90 days* (As of September 30, 2019) • 71% of commercial loan portfolio is variable and 32% is subject to reprice over the next 90 days* (As of September 30, 2019) Net Interest Margin 30 *December 31, 2019 figures unaudited 3.91 3.59 3.46 3.37 3.56 3.7
Slide 31: Investment Portfolio
2.02% 2.49% 3.08 4.8 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 1.60% 1.70% 1.80% 1.90% 2.00% 2.10% 2.20% 2.30% 2.40% 2.50% 2.60% Duration - Years Yield Investment Portfolio Yield Duration - Years Investment Portfolio 31 * Fair Value as of 12/31/2019 was $284 million *December 31, 2019 figures u
Slide 32: Non-Interest Income Components
Non - Interest Income Components 32 *December 31, 2019 figures unaudited 2013 2014 2015 2016 2017 2018 2019 Wealth Management Revenue 7,344 7,747 8,522 8,316 8,804 9,317 9,503 Service Charges on Deposits 1,269 1,471 1,350 1,254 1,168 1,102 1,057 Overdraft Fees 3,437 3,810 3,536 3,835 3,794 3,624 3,4
Slide 33: Non-Interest Expense Components
$55.7 Million 12/31/2019 Non - Interest Expense Components 33 *December 31, 2019 figures unaudited 20.69% 0.00% 1.58% 13.27% 10.94% 10.99% 42.54% Other Legal Settlement M&A Data Processing Net Occupancy Employee Benefits Salaries 2013 2014 2015 2016 2017 2018 2019 Salaries 19,365 21,315 21,223 20,95
Slide 34: 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 35: Capital Management
• Grow capital organically through earnings • Continue to remain profitable and pay dividend • Board authorized share buyback, up to 121,000 • Performed well under rigorous stress test at 09/30/19 8.08% 7.78% 7.83% 7.81% 8.02% 8.79% 9.35% 10.57% 10.59% 11.01% 10.93% 10.56% 11.89% 12.71% 12.10% 11.85
Slide 36: 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, operational, liquidity, compliance, s
Slide 37: Investment Considerations
• Listed on Nasdaq Stock Market, LLC • $1.79B in assets • $206.4M market capitalization (12/31/19) • Diversified Revenue Stream – 23% Non - Interest Income • Low risk profile – Nonperforming Assets 1.04% of Total Assets • Dividend yield – 2.45% • Price to earnings – 13.24x • Price to tangible book –
Slide 38: CHMG Stock at a Glance
Shares Outstanding* 4.9 million Market Capitalization* $206.4 million YTD Dividend Per Share* $1.04 Dividend Yield* 2.45% Average Daily Volume^ 10,305 Book Value Per Share* $37.36 Tangible Book Value Per Share* $32.74 Stock Price* $42.50 Price to Earnings (TTM)* 13.24x Price to Tangible Book* 1.30x
Slide 39: Key Takeaways
• Strategic growth, through acquisitions and organic performance • Actively looking for acquisition opportunities • Stable low cost deposits • Growth engine in Capital Region • Engaged corporate board and advisory board • Strong capital base • Competitive dividend • Opportunities to improve efficien
Slide 40: Contact details
40 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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