The Corporation was incorporated on January 2, 1985 under the laws of the State
of New York and is headquartered in Elmira, NY. The Corporation was organized
for the purpose of acquiring the Bank. The Bank was established in 1833 under
the name Chemung Canal Bank, and was subsequently granted a New York State bank
charter in 1895. In 1902, the Bank was reorganized as a New York State trust company
under the name Elmira Trust Company, and its name was changed to Chemung Canal
Trust Company in 1903.
The Corporation became a financial holding company in June 2000. Financial
holding company status provided the Corporation with the flexibility to offer
an array of financial services, such as insurance products, mutual funds, and
brokerage services, which provide additional sources of fee based income and
allow the Corporation to better serve its customers. The Corporation established
a financial services subsidiary, CFS, in September 2001 which offers non-banking
financial services such as mutual funds, annuities, brokerage services, insurance
and tax preparation services.
The Corporation’s growth strategy is to leverage its expanding branch
network in current or new markets to build client relationships and grow loans
and deposits. Consistent with the Corporation’s community banking model,
emphasis is placed on acquiring stable, low-cost deposits, primarily checking
account deposits and other low interest-bearing deposits to fund high-quality
loans. Expanding the branch network involves branch purchases or opening de
novo branches in contiguous markets and acquiring other financial institutions
in the Northeast. The Corporation evaluates acquisition targets based on the
economic viability of the markets they are in, the degree to which they can
be effectively integrated into the Corporation’s current operations and
the degree to which they are accretive to capital and earnings.
The Corporation, through the Bank and CFS, provides a wide range of financial
services, including demand, savings and time deposits, commercial, residential
and consumer loans, interest rate swaps, letters of credit, wealth management
services, employee benefit plans, insurance products, mutual funds and brokerage
services. The Bank derives its income primarily from interest and fees on loans,
interest on investment securities, WMG fee income and fees received in connection
with deposit and other services. The Bank’s operating expenses are interest
expense paid on deposits and borrowings, salaries and employee benefit plans
and general operating expenses.
In order to compete with other financial services companies, the Corporation
relies upon personal relationships established with clients by its officers,
employees and directors. The Corporation has maintained a strong community orientation
by supporting the active participation of officers and employees in local charitable,
civic, school, religious and community development activities. The Corporation
believes that its emphasis on local relationship banking together with a prudent
approach to lending, are important factors in its success and growth.
The Corporation’s objective is to channel deposits gathered locally into
high-quality, market-yielding loans without taking unacceptable credit and/or
interest rate risk. The Corporation seeks to have a diversified loan portfolio
consisting of commercial and agricultural loans, commercial mortgages, residential
mortgages, home equity lines of credit and home equity term loans, consumer
and indirect auto loans. The Bank operates with a traditional community bank
model where the relationship manager possesses credit skills and has significant
influence over credit decisions. This creates value since clients and prospects
know they are dealing with a decision maker.
The Board of Directors establishes the lending policies, underwriting standards
and loan approval limits of the Bank. In accordance with those policies, the
Board of Directors has designated certain officers to consider and approve loans
within their designated authority. These officers exercise substantial authority
over credit and pricing decisions, subject to loan committee approval for larger
credits. The Bank recognizes that exceptions to the lending policies may occasionally
occur and has established procedures for approving exceptions to these policies.
In underwriting loans, primary emphasis is placed on the borrower’s
financial condition, including ability to generate cash flow to support the
debt and other cash expenses. In addition, substantial consideration is given
to collateral value and marketability as well as the borrower’s character,
reputation and other relevant factors. Interest rates charged by the Bank vary
with degree of risk, type, size, complexity, repricing frequency and other relevant
factors associated with the loans. Competition from other financial services
companies also impacts interest rates charged on loans.
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