0001628280-26-017546
SEC filingChemung Financial Corporation reported net income of $15.1 million for FY 2025, a decrease of 36.2% from $23.7 million in FY 2024. This decline was primarily driven by a $17.5 million loss on the sale of available-for-sale securities, which reduced non-interest income to $7.9 million from $23.2 million the prior year. Excluding this nonrecurring loss, adjusted net income was $27.9 million. Net interest income increased 17.7% to $87.2 million, supported by loan growth and a lower cost of funds. The provision for credit losses was $4.4 million, compared to a credit of $46 thousand in FY 2024. Total assets were $2.71 billion, with loans net of $2.25 billion and total deposits of $2.27 billion. Shareholders' equity increased to $254.7 million, and the company maintained a well-capitalized regulatory position.
Chemung Financial Corporation reported FY 2025 net income of $15.1 million, a significant decrease from $23.7 million in FY 2024. This 36.2% decline was primarily attributable to a $17.5 million loss on the sale of available-for-sale securities as part of balance sheet repositioning efforts. Excluding this nonrecurring item and a $0.6 million gain on branch property sale, adjusted net income was $27.9 million, representing 17.8% growth. Net interest income increased 17.7% to $87.2 million, driven by loan growth and a 29 basis point reduction in cost of funds to 1.86%. The net interest margin expanded to 3.26% from 2.76%. Total assets decreased 2.4% to $2.71 billion due to securities sales, while loans grew 9.6% to $2.27 billion.
Total interest and dividend income increased 4.1% to $132.8 million, with loan interest income rising to $120.4 million. Commercial loan growth of $217.4 million (14.3%) was the primary driver, concentrated in commercial real estate which increased $192.7 million (15.8%). Residential mortgages grew $11.9 million (4.3%) due to stronger origination activity, while consumer loans declined $31.2 million (11.1%) as the company prioritized commercial lending. Non-interest income decreased 65.8% to $7.9 million, primarily due to the $17.5 million securities sale loss. Excluding this, non-interest income would have been $24.8 million, representing 6.8% growth. Wealth management group fee income increased 3.2% to $11.9 million.
The net interest margin expanded 50 basis points to 3.26% as the yield on interest-earning assets increased 23 basis points to 4.97% while the cost of interest-bearing liabilities decreased 37 basis points to 2.50%. The efficiency ratio (unadjusted) deteriorated to 74.37% from 69.12% due to the securities loss impact, but the adjusted efficiency ratio improved to 63.00% from 68.89%. Return on average equity decreased to 6.40% from 11.53%, while adjusted return on average equity was 11.81%. The provision for credit losses was $4.4 million compared to a credit of $46 thousand in FY 2024, reflecting loan growth and updated model assumptions.
Net cash provided by operating activities was $45.5 million, primarily from net income and adjustments including $4.4 million provision for credit losses. Investing activities provided $68.3 million in cash, mainly from $227.3 million in securities sale proceeds, partially offset by $202.1 million in net loan growth. Financing activities used $110.8 million in cash, including $126.2 million decrease in deposits and $22.0 million reduction in FHLBNY advances, partially offset by $45.0 million in subordinated debt issuance. The allowance for credit losses increased to $24.2 million, covering 306% of non-performing loans. Shareholders' equity increased 18.3% to $254.7 million, with tangible book value per share rising to $48.43 from $40.55.
Management's strategic actions in FY 2025 included issuing $45.0 million in subordinated debt and selling $244.8 million in available-for-sale securities to reposition the balance sheet and improve regulatory capital ratios. The company plans to use proceeds for general corporate purposes and growth initiatives. Key risks identified include interest rate volatility, commercial real estate concentration (76.4% of loans), economic conditions in upstate New York markets, and cybersecurity threats. The company maintains a well-capitalized regulatory position and targets expansion in Western New York through its Canal Bank division. No specific quantitative guidance was provided for FY 2026.