ELMIRA — Chemung Financial Corp. (NASDAQ: CHMG) recently reported net income of nearly $3 million, or 62 cents a share, in the first quarter, up 10 percent from $2.7 million, or 57 cents, in the year-ago earnings period.
The parent company of Chemung Canal Trust Company said loan growth and cost cuts were largely behind the profit increase.
“Strong organic growth in our loan portfolio and cost-saving measures implemented in 2016 contributed to our strong growth in earnings of 10 percent year-over-year. Our cost savings initiatives reduced our non-interest expense $1.0 million during the period. We are very encouraged to see our business initiatives translate into higher shareholder returns,” Anders Tomson, CEO of Chemung Financial, said in the earnings report.
Chemung Financial said its loans, net of deferred fees, increased by $34 million, or nearly 3 percent, and commercial loans rose by $35.5 million, or almost 5 percent.
The banking company’s deposits jumped by $87.9 million, or 6 percent.
Chemung Financial attributed the deposit growth to increases of $14.3 million in non-interest bearing demand deposits, $18 million in interest-bearing demand deposits, $48.6 million in money-market accounts, and $10.5 million in savings deposits.
Partially offsetting the deposit increases was a decline of $3.5 million in time deposits.
The changes in money-market accounts and demand deposits can be attributed to new municipal clients, along with the seasonal inflow of deposits from existing municipal clients, according to the report.
The banking company mostly attributed its loan growth to increases of $34.3 million in commercial mortgages and $1.2 million in commercial and agriculture loans, offset by a decrease of $1.3 million in indirect consumer loans.
Chemung Financial’s net interest income for the first quarter totaled $13.5 million, up from $13 million for the same period in 2016 — an increase of 3.6 percent.
Interest and fees from loans increased $0.3 million and interest from interest-bearing deposits increased $0.1 million when compared to the same period in the prior year.
Non-interest income for the banking company’s latest quarter was $4.8 million, compared with $5.6 million for the same period in 2016 — a decrease of
13.5 percent. The decline was due primarily to the $0.9 million net gain on security transactions when the bank sold about $14.5 million in U.S. Treasuries during the prior year, per the earnings report.
Elmira–based Chemung Financial is a $1.7 billion financial-services holding company.
It operates 33 branches through its principal subsidiary, Chemung Canal Trust. Established in 1833, Chemung Canal Trust says it is the oldest locally owned and managed community bank in New York state.
Chemung Financial is also the parent of CFS Group, Inc., a financial-services subsidiary offering non-traditional services including mutual funds, annuities, brokerage services, tax preparation services, and insurance, as well as Chemung Risk Management, Inc., an insurance company based in Nevada.