ELMIRA, N.Y. — Chemung Financial Corp. (NASDAQ: CHMG), the parent company of Chemung Canal Trust Company, recently reported that its profit declined more than 20 percent year over year in the second quarter, as it battled high funding costs.
The Elmira–based banking company reported net income of $4.99 million, or $1.05 per share, in the second quarter, down from $6.28 million, or $1.33 per share, in the same earnings period in 2023.
“Commercial credit pipelines remain robust, especially in our Capital District and western New York markets,” Chemung Financial President/CEO Anders M. Tomson said in the July 18 earnings report. “Funding costs continue to remain challenging, impacting net interest income expansion commensurate with our loan growth.”
Net interest income at Chemung Financial totaled $17.8 million for the quarter, down from $18.6 million for the same quarter last year. The decrease was primarily driven by increases of $4.2 million in interest expense on deposits and $200,000 in interest expense on borrowed funds. That was slightly offset by a $3.7 million increase in interest income on loans including fees.
Non-interest income grew 3.7 percent from $5.4 million in last year’s second quarter to $5.6 million in this year’s second quarter. A $300,000 increase in wealth management group fee income and a $100,000 change in fair value of equity investments drove the rise, Chemung Financial said.
Non-interest expense was $16.2 million, up 1.9 percent from $15.9 million last year for the same quarter. A $300,000 increase in pension and other employee benefits, a $200,000 rise in marketing and advertising, $200,000 increase in non-interest expense, and a $100,000 rise in salaries and wages drove the increase.
“We continue to remain focused on expense management, especially with the rationalization of our branch footprint,” Tomson said. “We recently announced that the bank will be opening its second office in Erie County as well as consolidating its Ithaca Station office with the existing Elmira Road office.”
The banking company reported total deposits of $2.42 billion as of June 30, 2024, up from $2.39 billion on June 30, 2023.
Chemung Financial is a financial services holding company headquartered in Elmira. Its principal subsidiary, Chemung Canal Trust Company, operates 31 branches throughout New York and Pennsylvania.