Chemung Financial's Business Segments

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.

Chemung Financial Corp offers a diverse range of financial products and services primarily centered around lending, investment, and wealth management. The Corporations loan portfolio includes various segments: commercial and agricultural loans, commercial mortgages, residential mortgages, and consumer loans. Each segment is tailored to meet specific borrower needs, with unique characteristics pertaining to risk assessment and repayment structures.

Loan Portfolio Segments

1. Commercial and Agricultural Loans:
- These loans cater primarily to small to mid-sized businesses operating within Chemung Financial Corps market area.
- Industries served are diverse, encompassing manufacturing, retail, agriculture, healthcare, and more.
- Loans are typically assessed based on the borrowers ability to repay through business cash flow, making cash flow analysis critical during the underwriting process.
- The Corporation may also provide tailored loan products to accommodate the unique circumstances of agricultural enterprises, taking into account factors such as seasonal fluctuations in income.

2. Commercial Mortgages:
- This segment focuses on financing commercial real estate properties, which may include larger non-owner occupied properties or owner-occupied commercial space.
- Loans are generally issued based on the value of the property and the expected revenue from its operation, making robust financial documentation and property appraisals essential.
- Factors such as market trends, property management practices, and occupancy rates also play significant roles in underwriting decisions.
- The repayment of these loans relies on both the operational success of the business occupying the property and the value of collateral securing the loans.

3. Residential Mortgages:
- Residential mortgage loans are designed for individual homeowners, secured by the property being financed.
- Loan approvals hinge on the borrower’s income and creditworthiness, ensuring a stable source of repayment.
- The Corporation offers various mortgage products tailored to different borrower needs, including fixed-rate mortgages, adjustable-rate mortgages, and government-backed loans.
- Additional services may include mortgage refinancing options, assistance with first-time homebuyer programs, and consultations for home equity loans.

4. Consumer Loans:
- This category encompasses a variety of personal lending options, including home equity lines of credit (HELOC) and home equity loans, which allow borrowers to leverage existing home equity.
- HELOCs provide flexibility, functioning similarly to a credit card where borrowers can draw funds as needed, while home equity loans typically involve a lump-sum disbursement.
- Indirect consumer loans, such as those secured by depreciable assets like vehicles, are also vital to Chemung Financial Corps offerings. These loans rely on the value of the collateral and the borrowers financial stability for repayment assurance.
- The Corporation may also provide personal loans for various needs, including debt consolidation, home improvement, and other significant purchases.

Interest Accrual and Loan Management

Chemung Financial Corp employs the interest method for accruing and recognizing loan interest, which directly contributes to its operational revenues. The handling of delinquent loans is carefully structured:

- Loans become past due based on their contractual terms, with the accrual of interest discontinued when delinquency reaches 90 days.
- Management may place loans on non-accrual status if deemed necessary, with all payments received during this period applied to principal rather than interest.
- If a loan returns to accruable status, it must become current for six consecutive months, or management must anticipate the recovery of the full principal and interest.
- The Corporation also practices deferral and amortization of loan origination fees along with direct costs over the loans life to adjust the overall yield effectively.

Additional Services

Beyond lending, Chemung Financial Corp provides an array of supplementary services aimed at enhancing customer experience and financial well-being:

- Wealth Management Services: These services may include investment management, financial planning, and retirement account setup, allowing clients to manage and grow their wealth strategically.
- Business Banking Solutions: For businesses, the Corporation offers checking accounts, treasury services, and cash management solutions tailored to support operational efficiency and liquidity.
- Insurance Products: The Corporation may provide access to various insurance solutions, safeguarding clients and their assets against unforeseen events.

By offering a comprehensive suite of products and services, Chemung Financial Corp aims to meet the varied financial needs of individuals and businesses within its geographic footprint, fostering economic growth and stability in the communities it serves.