UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly period ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-13888
CHEMUNG FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-1237038
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
One Chemung Canal Plaza, Elmira, NY 14902
(Address of principal executive offices) (Zip Code)
(607) 737-3711
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES XX NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of June 30, 1999:
Common Stock, $.01 par value -- outstanding 4,090,954 shares
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements - Unaudited
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Income 2
Condensed Consolidated Statements of Cash Flows 3
Notes to Condensed Consolidated Financial
Statements 4
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 5
Item 3: Quantitative and Qualitative Disclosures about
Market Risk
Information required by this Item is set
forth herein in Management's Discussion
and Analysis of Financial Condition and Results
of Operations under the heading Interest
Rate Risk. 10
Item 4: Submission of matters to a vote of Chemung
Financial Corporation Shareholders 11
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K 12
All other items required by Part II are either
inapplicable or would require an answer which
is negative.
SIGNATURES 13
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
<TABLE>
<CAPTION>
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
June 30 Dec. 31
1999 1998
ASSETS
<S> <C> <C>
Cash and due from banks $22,013,727 $27,515,582
Int.-bearing deposits with other financial
institutions 1,649,445 1,304,207
Securities held to maturity, fair value of
$6,789,155 at June 30, 1999 and $6,660,923
at Dec. 31, 1998 6,789,155 6,660,923
Securities available for sale, at fair value 226,403,315 235,293,736
Loans, net of unearned income
and deferred fees 346,426,520 329,255,342
Allowance for loan losses (4,612,355) (4,509,185)
Loans, net 341,814,165 324,746,157
Bank premises and equipment, net 10,379,752 10,084,608
Intangible assets,
net of accumulated amortization 5,934,677 6,228,328
Other assets 12,163,756 11,826,068
Total assets $627,147,992 $623,659,609
LIABILITIES
Deposits: Non-interest bearing $ 94,103,147 $ 101,908,083
Interest bearing 385,512,443 364,231,279
Total deposits 479,615,590 466,139,362
Securities sold under agreement to repurchase 50,122,652 50,587,369
Federal Home Loan Bank Advances 22,200,000 26,900,000
Other liabilities 9,207,420 13,943,251
Total liabilities 561,145,662 557,569,982
SHAREHOLDERS' EQUITY
Common Stock, $.01 par value per share;
authorized 10,000,000, issued: 4,300,134 43,001 43,001
Surplus 21,864,001 20,851,800
Retained earnings 45,199,320 42,770,991
Treasury stock, at cost (209,180 shares
at June 30, 1999 and 197,380
at Dec. 31, 1998) (3,276,454) (2,970,954)
Accumulated Other Comprehensive Income 2,172,462 5,394,789
Total shareholders' equity 66,002,330 66,089,627
Total liabilities & shareholders' equity $627,147,992 $623,659,609
See Accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
<TABLE>
<CAPTION>
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
6 Months Ended 3 Months Ended
June 30, June 30,
INTEREST AND DIVIDEND INCOME 1999 1998 1999 1998
<S> <C> <C> <C> <C>
Loans $14,120,637 $13,503,936 $ 7,223,280 $ 6,902,141
Securities 6,876,553 6,245,131 3,449,098 3,159,975
Federal funds sold 269,845 263,513 123,955 117,534
Interest bearing deposits 143,023 160,439 58,808 63,125
Total interest and
dividend income 21,410,058 20,173,019 10,855,141 10,242,775
INTEREST EXPENSE
Deposits 7,327,100 7,598,242 3,719,549 3,864,983
Securities sold under
agreement to repurchase
and funds borrowed 1,772,075 952,400 887,380 516,166
Total interest expense 9,099,175 8,550,642 4,606,929 4,381,149
Net interest income 12,310,883 11,622,377 6,248,212 5,861,626
Provision for loan losses 400,000 400,000 200,000 200,000
Net interest income after
provision for loan losses 11,910,883 11,222,377 6,048,212 5,661,626
Realized gains-security
trans., net 150,435 147,395 150,435 10
Other operating income 4,303,688 3,688,786 2,198,002 1,844,188
Total other operating income 4,454,123 3,836,181 2,348,437 1,844,198
Other operating expenses 10,623,095 10,114,083 5,311,619 5,182,464
Income before income taxes 5,741,911 4,944,475 3,085,030 2,323,360
Income tax expense 1,839,615 1,563,800 1,022,371 690,894
Net Income $ 3,902,296 $ 3,380,675 $ 2,062,659 $ 1,632,466
Basic and Diluted
Earnings per Share $0.94 $0.82 $0.50 $0.40
See Accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
<TABLE>
<CAPTION>
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
Six Months Ended
June 30
1999 1998
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 3,902,296 $ 3,380,675
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of intangible assets 293,651 293,651
Provision for loan losses 400,000 400,000
Depreciation and amortization 784,260 751,820
Premium amortization and discount
accretion on securities, net 302,707 92,316
Net Gain on Sales of Securities (150,435) (147,395)
Increase in other assets (337,688) (1,217,594)
Increase (decrease) other liabilities (1,660,489) 192,282
Net cash provided by operating activities 3,534,302 3,745,755
INVESTING ACTIVITIES
Proceeds from maturities of securities - AFS 40,065,272 26,865,482
Proceeds from maturities of securities -HTM 1,503,139 1,708,364
Proceeds from sales of securities - AFS 12,238,695 6,080,902
Purchases of securities - AFS (48,930,999 (57,292,964)
Purchases of securities - HTM (1,631,370 (840,920)
Purchases of premises and equipment, net (1,079,404 (684,923)
Increase in loans, net of repayments
and other reductions (18,206,803) (23,327,584)
Proceeds from sales of student loans 738,795 1,101,984
Net cash used by investing activities (15,302,675) (46,389,659)
FINANCING ACTIVITIES
Net increase in demand deposits,
NOW, savings and insured money
market accounts 2,115,956 486,500
Net increase in certificates of
deposit and individual retirement
accounts 11,360,272 20,231,564
Net increase (decrease) in securities
sold under agreements to repurchase (464,716) 26,858,030
Net decrease in Federal Home Loan
Bank advances (4,700,000) (6,300,000)
Purchase of treasury shares (305,500) (335,033)
Cash dividends paid (1,394,256) (1,280,750)
Net cash provided by financing activities 6,611,756 39,660,311
Net decrease in cash and
cash equivalents (5,156,617) (2,983,593)
Cash and cash equivalents at beginning
of year 28,819,789 34,418,455
Cash and cash equivalents at end of period $23,663,172 $31,434,862
See Accompanying Notes to Condensed Consolidated Financial Statements
</TABLE>
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
Chemung Financial Corporation (the Company) operates as a bank
holding company. Its only subsidiary is Chemung Canal Trust
Company (the Bank). The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiary, the
Bank. All material intercompany accounts and transactions have
been eliminated in the consolidation.
The data in the condensed consolidated balance sheet as of
December 31, 1998 was derived from the Company's 1998 Annual
Report to Shareholders. That data, along with the other interim
financial information presented in the condensed consolidated
balance sheets, statements of income and cash flows should be read
in conjunction with the consolidated financial statements,
including the notes thereto, contained in the 1998 Annual Report
to Shareholders.
The condensed consolidated financial statements included herein
reflect all adjustments which are, in the opinion of management,
of a normal recurring nature and necessary to present fairly the
Company's financial position as of June 30, 1999 and December 31,
1998, and results of operations for the three and six month
periods ended June 30, 1999 and 1998 and cash flows for the six
months ended June 30, 1999 and 1998.
Net Income Per Share
Net income per share was computed by dividing net income by
4,145,996 and 4,123,479 weighted average shares outstanding for
the six month periods ended June 30, 1999 and 1998 and 4,142,243
and 4,123,476 weighted average shares outstanding for the three
month periods ended June 30, 1999 and 1998, respectively.
Issuable shares (such as those related to directors restricted
stock units)are considered outstanding and are included in the
computation of Basic EPS.
In June 1998, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging
activities.
During the second quarter of 1999, the FASB issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133." SFAS
No. 137 defers the effective date of SFAS No. 133 by one year from
fiscal years beginning after June 15, 1999 to fiscal quarters of
fiscal years beginning after June 15, 2000.
Comprehensive Income
Comprehensive income for the six-month periods ended June 30, 1999
and 1998 was $679,969 and $3,928,040, respectively. The following
summarizes the components of other comprehensive income:
<TABLE>
<CAPTION>
Unrealized Gains or Losses on Securities:
<S> <C>
Unrealized holding gains during the
six months ended June 30, 1998,
net of tax (pre-tax amount of $1,058,758) $ 635,890
Reclassification adjustment for gains
realized in net income during the
six months ended June 30, 1998, net of
tax (pre-tax amount of $147,395) (88,525)
Other comprehensive income-six months ended
June 30, 1998 $ 547,365
Unrealized holding losses during the
six months ended June 30, 1999,
net of tax (pre-tax amount of $(5,214,745)) $ (3,131,976)
Reclassification adjustment for gains or
losses realized in net income during the
six months ended June 30, 1999, net of
tax (pre-tax amount of $150,435) (90,351)
Other comprehensive loss -six months ended
June 30, 1999 $(3,222,327)
</TABLE>
Item 2: Management's Discussion and Analysis of Financial Condition
And Results of Operation
The review that follows focuses on the factors affecting the financial
condition and results of operations of Chemung Financial Corporation during
the three month and six month periods ended June 30, 1999, with comparisons
to 1998 as applicable. The consolidated interim financial statements and
related notes, as well as the 1998 Annual Report to Shareholders should
read in conjunction with this review. Amounts in prior period consolidated
interim financial statements are reclassified whenever necessary to conform
to the current periods presentation.
Forward-looking Statements
Statements included in this review and in future filings by Chemung
Financial Corporation with the Securities and Exchange Commission, in
Chemung Financial Corporation press releases, and in oral statements made
with the approval of an authorized executive officer, which are not
historical or current facts, are "forward-looking statements" made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, and are subject to certain risks and uncertainties that could
cause actual results to differ materially from historical earnings and
those presently anticipated or projected. Chemung Financial Corporation
wishes to caution readers not to place undue reliance on any such forward-
looking statements, which speak only as of the date made. The following
important factors, among others, in some cases have affected and in the
future could affect Chemung Financial Corporation's actual results, and
could cause Chemung Financial Corporation's actual financial performance to
differ materially from that expressed in any forward-looking statement: (1)
credit risk, (2) interest rate risk, (3) competition, (4) certain vendors
of critical systems or services failing to comply with Year 2000
programming issues, (5) changes in the regulatory environment, and (6)
changes in general business and economic trends. The foregoing list should
not be construed as exhaustive, and the Company disclaims any obligation to
subsequently revise any forward-looking statements to reflect events or
circumstances after the date of such statements, or to reflect the
occurrence of anticipated or unanticipated events.
Total assets at June 30, 1999 were $627.1 million, an increase of $3.5
million or 0.56% since the beginning of the year. While our total loan
portfolio has grown by $17.1 million, this has been somewhat offset by
decreases in our securities portfolio and cash and due from banks of $8.8
million and $5.5 million respectively.
Financial Condition
The Available for Sale segment of the securities portfolio at June 30,
1999 totaled $226.4 million as compared to $235.3 million at the beginning
of the year, a decrease of 3.78%. At amortized cost, an increase in
Federal Agency Bonds ($7.8 million) was offset primarily by decreases in
Mortgage Backed Securities ($6.9 million), U.S. Treasury Notes ($2.5
million), and Municipal Bonds ($1.9 million). The unrealized gain for
available for sale securities has declined by $5.4 million since year end
1998 reflecting the impact of the higher market interest rates we have seen
in 1999. The Held to Maturity segment of the portfolio consisting
primarily of Municipal Obligations totaled $6.8 million at June 30, 1999
versus $6.7 million at the beginning of the year.
Realized net gains on sales of securities Available for sale for the
six-month period ended June 30, 1999 were $150,435 as compared to $147,395
through June 30, 1998.
Total loans have increased $17.1 million or 5.26% since the beginning
of the year. $13.7 million of this growth has occurred in our commercial
loan portfolio where we have seen strong demand throughout the year. The
total mortgage portfolio has grown by $3.8 million or 4.22%, and we
continue to see steady growth in this area. While total consumer loan
balances are down $250 thousand, we are encouraged by the fact that we have
recently seen an increase in indirect auto financing.
Total deposits at June 30, 1999 were $479.6 million as compared to
$466.1 million at the beginning of the year, an increase of $13.5 million
or 2.89%. Public fund balances were up $11.9 million with personal and non-
personal balances increasing $1.6 million.
Results of Operations
Net income for the second quarter totaled $2.063 million or $0.50 per
share as compared to $1.632 million or $0.40 per share for the second
quarter of 1998. Included in second quarter 1999 earnings is a gain on the
sale of securities totaling $150 thousand, with no securities gains taken
during the second quarter of 1998. This added approximately $90 thousand
to net after tax earnings, or about $0.02 per share. As compared to last
year, the remainder of the earnings improvement is attributed primarily to
a $387 thousand or 6.8% increase in net interest income as well as a $354
thousand or 19.2% increase in non interest income, exclusive of the above
noted securities gains.
Net income for the six month period ended June 30, 1999 was $3.902
million, a $522 thousand or 15.4% increase over last years six month
results. Earnings per share for the 1999 six month period were $0.94
versus $0.82 the prior year. Despite a 29 basis point decline in our net
interest margin, net interest income has increased by $689 thousand or 6.1%
due to an approximate $69 million increase in average earning assets.
Additionally, non interest income is $618 thousand or 16.1% higher than
last year, while operating expenses have increased by $509 thousand or
5.0%.
Liquidity and Capital Resources
As indicated on the Condensed Consolidated Statements of Cash Flows,
cash and cash equivalents have decreased $5.2 million since the beginning
of the year. In addition to cash provided by operating activities ($3.5
million), other primary sources of cash flow during the six month period
ended June 30, 1999 included proceeds from the sale and maturity of
investment securities ($53.8 million), and an increase in deposit balances
($13.5 million). Cash proceeds generated from the above sources have been
used primarily to fund the purchase of investment securities ($50.6
million), an increase in loans, net of repayments ($18.2 million), the
repayment of overnight advances from the Federal Home Loan Bank ($4.7
million), the payment of cash dividends ($1.4 million), and purchases of
premises and equipment, net ($1.1 million).
During the six months ended June 30, 1999, the Company acquired 11,800
treasury shares at an average price of $25.89 per share. No treasury
shares have been sold thus far in 1999. During the quarter, the Company
declared a cash dividend of $0.19 per share, an increase of 11.8% over the
first quarter dividend of $0.17 per share.
Non Performing Loans and Allowance For Loan Losses
Based upon loans outstanding, past experience, as well as an ongoing
review of the risk inherent in our loan portfolio, management has
maintained the loan loss provision for the first six months at $400
thousand which is equal to the amount expensed during the first six months
of 1998. At 108% of non-performing loans and 1.33% of total loans, the
Allowance for Loan Losses is viewed by management as adequate relative to
risk. Non-performing loans at June 30, 1999 constituted 1.23% of total
loans.
Changes in the allowance for loan losses for the six months ended June
30, 1999 is as follows:
<TABLE>
<CAPTION>
June 30, 1999
Amount (000's)
<S> <C> <C>
Balance at beginning of period $ $ 4,509
Charge-offs:
Domestic:
Commercial, financial and agricultural 16
Commercial mortgages 0
Residential mortgages 20
Consumer loans 354 $ 390
Recoveries:
Domestic:
Commercial, financial and agricultural $ 23
Commercial mortgages 0
Residential mortgages 0
Consumer loans 70
$ 93
Net charge-offs $ 297
Provisions charged to operations 400
Balance at end of period $ 4,612
Ratio of net charge-offs during the period
to average loans outstanding during the period .09%
</TABLE>
A loan would be considered impaired when it is probable that after
having considered current information and events regarding the borrower's
ability to repay their obligations, the corporation will be unable to
collect all amounts due according to the contractual terms of the loan
agreement.
Included in the allowance for loan losses at June 30, 1999 is an
allowance for impaired loans of $850 thousand versus $993 thousand at the
beginning of the year. The total recorded investment in these loans at
June 30, 1999 and December 31, 1998 was $3.788 million and $4.569 million
respectively.
A loan is placed on non-accrual when it becomes past due and is
referred to legal counsel, or in the case of a commercial loan which
becomes 90 days delinquent, or in the case of a consumer loan (not
guaranteed by a government agency) or a real estate loan which becomes 120
days delinquent unless, because of collateral or other circumstances, it is
deemed to be collectible. When placed on non-accrual, previously accrued
interest is reversed. Loans may also be placed in non-accrual if
management believes such classification is warranted for other reasons.
At June 30, 1999 and December 31, 1998, the following table summarized
the Company's non-accrual and past due loans:
<TABLE>
<CAPTION>
Amounts (000's)
June 30, 1999 December 31, 1998
<S> <C> <C>
Non-accrual loans $ 4,079 $ 4,457
Accruing loans past due $ 183 $ 357
90 days or more
</TABLE>
At June 30, 1999, the Company has no commercial loans for which
payments are presently current but the borrowers are currently experiencing
severe financial difficulties. At June 30, 1999, no loan concentrations to
borrowers engaged in the same or similar industries exceeded 10% of total
loans and the Corporation has no interest-bearing assets other than loans
that meet the non-accrual, past due, restructured or potential problem loan
criteria.
On June 30, 1999, the Company's consolidated leverage ratio was 9.18%.
The Tier I and Total Risk Adjusted Capital ratios were 15.58% and 16.82%,
respectively.
Significant Issue - Year 2000
In 1997, management advised its Board of Directors of the many issues
surrounding the approach of January 1, 2000. Nearly all computer hardware
and software developed during the current century have been programmed with
two digit reference to each year. Such hardware and software, if not
upgraded by January 1, 2000, may become useless. Management is undergoing
a five-phase project to respond to this issue, with major emphasis on
identifying all applications and databases supporting the Bank's mission-
critical applications. The five phase are awareness, assessment,
renovation, validation and implementation, and will seek to neutralize not
only the Bank's vulnerability, but to determine the financial capacity of
its vendors and evaluate the capacity of its customers to respond to this
challenge. A committee continues to direct the Bank's Year 2000 activities
under the framework of the FFIEC's Five-Step Program. The first phase of
testing of critical applications was substantially completed by year-end
1998, with testing of other non-critical applications completed by March of
1999. The Bank will continue to test applications throughout 1999 to
insure all systems are Year 2000 compliant. The Company has begun
evaluating Year 2000 readiness of its commercial loan applicants as part of
the loan underwriting process and is calling upon major existing borrowers
to assess their readiness and identify potential problems.
In addition, the Bank has formulated a contingency plan for business
continuation in the event of Year 2000 systems failures. This contingency
plan is based upon the Bank's existing disaster recovery plan with
modifications for the Year 2000 risks. The Bank has substantially
completed its systems contingency plan as of June 30, 1999, with further
testing and modifications to occur throughout 1999.
Significant Year 2000 failures in the Bank's systems or in the
system's of third parties (or third parties upon whom they depend) could
have a material adverse effect on the Bank's financial condition and
results of operations. The Bank believes that its reasonably likely worst-
case Year 2000 scenario is (i) a material increase in the Bank's credit
losses due to Year 2000 problems for the Bank's borrowers and obligors, and
(ii) disruption in financial markets causing liquidity stress to the Bank.
The magnitude of these potential credit losses and disruption cannot be
determined at this time.
It is expected that costs associated with Year 2000 readiness
including hardware and software upgrades, as well as costs of testing, will
be approximately $200,000.
Interest Rate Risk
The Company realizes a major source of income by acting as
intermediary between borrowers and savers. The differential or spread
between interest earned on earning assets, primarily loans and investments,
and the interest paid to depositors and on other interest bearing
liabilities is affected with changes to market interest rates.
Additionally, because of assumptions made to the Company's loan and
investment portfolios and to its deposit base, changes in interest rates
can materially affect the projected maturities of these balance sheet
classes and thus alter the Company's sensitivity to future changes in
interest rates.
The Bank's Asset/Liability Committee (ALCO) has the strategic
responsibility for setting the policy guidelines on acceptable interest
rate risk exposure. The ALCO is made up of the chief executive officer,
executive vice presidents, senior lending officer, senior marketing
officer, financial officer and others representing key functions. All
guidelines set by this committee are board approved. The ALCO's primary
focus is on maintaining consistent growth in net interest income with an
acceptable level of volatility as a result of changes to interest rates.
As of June 30, 1999 the exposure to changing interest rates is within the
guidelines established by the ALCO.
The Company uses an industry standard earnings simulation model as its
primary method to identify and manage its interest rate risk profile. The
model is based on projected cash flows using historical data for all
financial instruments. Also incorporated into the model are assumptions of
deposit rates and balances in relation to changes in interest rates. These
assumptions are based on internal historical data. In recent years core
deposits (NOW accounts, Insured Money Market Accounts and Savings accounts)
have not been re-priced with movements of interest rates in the negotiable
securities markets. The ALCO recognizes that the assumptions made are
inherently uncertain.
The ALCO uses static gap analysis as a secondary method of identifying
and managing the Company's interest rate risk profile. Gap analysis
measures the difference between the assets and liabilities re-pricing and
maturing within specific time periods, called buckets. A positive gap
indicates more rate sensitive assets are due to either re-price or mature
than rate sensitive liabilities in a specific bucket. This would indicate
that the Company should have rising earnings in periods of rising interest
rates and falling earnings in periods of falling rates.
The ALCO recognizes the limitations of static gap analysis. Primarily
it does not take into account the effect of interest rate movements and the
competitive market forces on the re-pricing and maturity characteristics of
interest-earning assets and interest-bearing liabilities. For these
reasons, and for the recent practicality of using earnings simulation
models gap analysis has fallen out of favor with the risk management
community.
Lastly, the ALCO monitors the expected fluctuation of the Company's
market value of equity with changes to interest rates. Appropriate risk
limits have been established to protect shareholders in the advent of
adverse changes to interest rates, and as of June 30, 1999 exposure to
changing interest rates is within the risk limits established.
There have been no material changes in the Company's interest rate
risk position since December 31, 1998. Other types of market risk, such as
foreign exchange rate risk and commodity price risk do not arise in the
normal courses of the Company's business activities.
Item 4: Submission of Matters To A Vote of Shareholders
The following matters were submitted to a vote of shareholders at
the Annual Meeting of Shareholders of Chemung Financial
Corporation on May 12, 1999.
1. To elect six directors to serve until the 2002
Annual Meeting of Shareholders listed below:
Robert E. Agan Thomas K. Meier
Donald L. Brooks, Jr. Charles M. Streeter
Stephen M. Lounsberry Nelson Mooers van den Blink
Directors continuing in office with terms expiring
in 2000:
David J. Dalrymple William C. Ughetta
Edward B. Hoffman Jan P. Updegraff
John F. Potter
Directors continuing in office with terms
expiring in 2001:
John W. Bennett Ralph H. Meyer
Robert H. Dalrymple Richard W. Swan
Frederick Q. Falck William A. Tryon
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Applicable Exhibits
(3.1) Certificate of Incorporation is filed as Exhibit 3.1 to
Registrant's Registration Statement on Form S-14,
Registration No. 2-95743, and is incorporated herein by
reference.
Certificate of Amendment to the Certificate of
Incorporation, filed with the Secretary of State of
New York on April 1, 1988, is incorporated herein
by reference to Exhibit A of the registrant's Form
10-K for the year ended December 31, 1988, File
No. 0-13888.
Certificate of Amendment to the Certificate
of Incorporation, filed with the Secretary of State of
New York on May 13, 1998, is incorporated herein
by reference to Exhibit A of the registrant's Form
10-Q for quarter ended March 31, 1999, File No. 0-13888.
(3.2) Bylaws of the Registrant, as amended to December 9, 1998
are incorporated herein by reference to Exhibit B
of the registrant's Form 10-Q for the quarter ended
March 31,1999, File No. 0-13888.
(27) Financial Data Schedule (EDGAR version only)
(b) Reports on Form 8-K
During the quarter ended June 30, 1999, no reports on Form
8-K or amendments to any previously-filed Form 8-K were
filed by the registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there to duly authorized.
CHEMUNG FINANCIAL CORPORATION
DATE: August 10, 1999 Jan P. Updegraff
President & CEO
DATE: August 10, 1999 John R. Battersby Jr.
Treasurer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED QUARTERLY FINANCIAL STATEMENTS AND DISCLOSURES FOR THE
PERIOD ENDED JUNE 30, 1999 AS PRESENTED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS AND DISCLOSURES.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 22,014
<INT-BEARING-DEPOSITS> 1,649
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 226,403
<INVESTMENTS-CARRYING> 6,789
<INVESTMENTS-MARKET> 6,789
<LOANS> 346,427
<ALLOWANCE> 4,612
<TOTAL-ASSETS> 627,148
<DEPOSITS> 479,616
<SHORT-TERM> 52,323
<LIABILITIES-OTHER> 9,207
<LONG-TERM> 20,000
0
0
<COMMON> 43
<OTHER-SE> 65,959
<TOTAL-LIABILITIES-AND-EQUITY> 627,148
<INTEREST-LOAN> 14,121
<INTEREST-INVEST> 6,877
<INTEREST-OTHER> 413
<INTEREST-TOTAL> 21,410
<INTEREST-DEPOSIT> 7,327
<INTEREST-EXPENSE> 9,099
<INTEREST-INCOME-NET> 12,311
<LOAN-LOSSES> 400
<SECURITIES-GAINS> 150
<EXPENSE-OTHER> 10,623
<INCOME-PRETAX> 5,742
<INCOME-PRE-EXTRAORDINARY> 5,742
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,902
<EPS-BASIC> .94
<EPS-DILUTED> .94
<YIELD-ACTUAL> 4.06
<LOANS-NON> 4,079
<LOANS-PAST> 183
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 4,509
<CHARGE-OFFS> 390
<RECOVERIES> 93
<ALLOWANCE-CLOSE> 4,612
<ALLOWANCE-DOMESTIC> 2,891
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,721
</TABLE>
