What are Chemung Financial's Business Segments?
The Corporation’s loan portfolio, including acquired loans, is comprised
of the following segments: (i) commercial and agricultural, (ii) commercial mortgages,
(iii) residential mortgages, and (iv) consumer loans.
Commercial and agricultural loans primarily consist of loans to small to mid-sized
businesses in the Corporation’s market area in a diverse range of industries.
These loans are typically made on the basis of the borrower’s ability
to make repayment from the cash flow of the borrower’s business. Commercial
mortgage loans are generally non-owner occupied commercial properties or owner
occupied commercial real estate with larger balances. Repayment of these loans
is often dependent upon the successful operation and management of the properties
and the businesses occupying the properties, as well as on the collateral securing
the loan. Residential mortgage loans are generally made on the basis of the
borrower’s ability to make repayment from their employment and other income,
but are secured by real property. Consumer loans include home equity lines of
credit and home equity loans, which exhibit many of the same characteristics
as residential mortgages. Indirect and other consumer loans are typically secured
by depreciable assets, such as automobiles or boats, and are dependent on the
borrower’s continuing financial stability.
Interest on loans is accrued and credited to operations using the interest
method. Past due status is based on the contractual terms of the loan. The accrual
of interest is generally discontinued and previously accrued interest is reversed
when loans become 90 days delinquent. Loans may also be placed on non-accrual
status if management believes such classification is otherwise warranted. All
payments received on non-accrual loans are applied to principal. Loans are returned
to accrual status when they become current as to principal and interest and
remain current for a period of six consecutive months or when, in the opinion
of management, the Corporation expects to receive all of its original principal
and interest. Loan origination fees and certain direct loan origination costs
are deferred and amortized over the life of the loan as an adjustment to yield,
using the interest method.
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