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Mobile Deposit
Mobile App
Debit Card
Web Banking
Worldwide ATMs
2015 Annual Report
In Person
Financial Highlights
(in thousands, except per share data)
Operating Results – Year Ended December 31
Net interest income
Provision for loan losses
Other operating income:
Securities gains, net
Wealth Management Group fee income
Other income
Other operating expenses:
Merger and acquisition related expenses
Legal settlements
Other expenses
Income tax expense
Net income
At Year End:
Assets
Loans, net
Allowance for loan losses
Deposits
Shareholders’ equity
Employees (full-time equivalent)
Share and Per Share Data:
Net income
Book value, at year end
Tangible book value, at year end
Dividends declared
Shares outstanding (average)
Ratios:
Allowance to total loans
Return on average assets
Return on average equity
Return on average tangible equity
% of
Change
2.17%
(60.54)%
10.00%
(4.84)%
(100.00)%
(100.00)%
(1.22)%
25.59%
15.64%
6.26%
4.20%
4.19%
9.40%
2.70%
(4.07)%
14.94%
1.83%
3.61%
0.77%
2015
$50,642
$1,571
$372
$8,522
$11,553
$55,427
$4,658
$9,433
2014
$49,568
$3,981
$6,869
$7,747
$12,140
$115
$4,250
$56,112
$3,709
$8,157
$1,619,964
$1,168,633
$14,260
$1,400,295
$137,242
377
$1,524,539
$1,121,574
$13,686
$1,280,014
$133,628
393
$2.00
$28.96
$23.53
$1.04
4,719
1.22%
0.60%
6.84%
8.45%
$1.74
$28.44
$22.71
$1.04
4,683
1.22%
0.54%
5.74%
7.12%
Trust Assets Under Administration (market value):
as Fiduciary
as Custodian
$1,392,017
$463,543
$1,855,560
$1,485,236
$470,570
$1,955,806
(6.28)%
(1.49)%
(5.13)%
Common Stock Market Prices & Dividends Paid During Past Two Years
December 31, 2015
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
$28.44
$28.50
$27.68
$28.74
High
Low
Dividends
$26.31
$26.07
$26.01
$26.93
$0.26
$0.26
$0.26
$0.26
December 31, 2014
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
High
Low
Dividends
$30.70
$31.14
$31.20
$35.90
$27.38
$27.00
$27.00
$26.81
$0.26
$0.26
$0.26
$0.26
As of February 29, 2016, there were 1,497 registered holders of record of the Corporation’s stock, which
includes 918 Non-Objecting Beneficial Owners (“NOBO”) shares held in street name.
April 2016
Dear Fellow Shareholders:
Like most banking companies, the challenge to
grow earnings in this historic low interest rate environ-
ment continues. Low interest rates hurt us in many
ways from the yield on new loan originations to margin
compression to the cost of our pension plan (a soft
freeze was instituted in 2010). However, many of our
revenue-enhancement and cost-reduction initiatives
are kicking in, and we saw earnings climb 15.6% in
2015. We will discuss some of these initiatives below.
Financial Results
loans
Commercial
Net income for the year was $9.4 million and earnings
per share (EPS) were $2.00, up from $8.2 million and $1.74
respectively from the prior year. Tangible book value grew to
$23.53, an increase of 3.6% from a year earlier. In 2015,
$4.8 million in dividends were declared, continuing our long
history of uninterrupted dividend payments. Our return on
average assets was 0.60% and our
return on average equity was 6.84%.
increased
$80.7 million, or 13.0%, and con-
sumer and mortgage
loans de-
creased $33.6 million or 6.7% from
year earlier levels, the decrease
driven by a strategic decision to sell
long-term residential mortgages in the secondary market
and to exit the very low rate indirect new car loan business.
Evidenced by the ratio of non-performing assets to total as-
sets, 0.85% at year-end, credit quality remains strong. De-
mand deposits grew $55.7 million or 11.7% while total core
deposits (demand, NOW, savings and money market) grew
$166.0 million or 15.5% from year earlier levels.
“
At December 31, 2015, our balance sheet reflects to-
tal assets of $1.6 billion, total loans of $1.2 billion, total
deposits of $1.4 billion and total shareholders’ equity of
$137.2 million. Our capital ratios exceed the higher mini-
mum regulatory capital requirements for banks under
the new Basel III rules. The market value of total assets
under management or administration in our Wealth Man-
agement Group was $1.9 billion at year-end.
A Tale of Two Cities (Markets)
It is of interest to note that our bank operates in two
different geographies, our legacy Southern Tier/Finger
Letter to Shareholders
R. Bentley
D. Dalrymple
Lakes Region and the Albany/Capital Region. Our lega-
cy region provides stable, low-cost funding, and the Al-
bany region has been the engine for loan growth. Since
we entered the Albany market in 2011, we have en-
joyed compound average loan growth of 24% per year
in that market. Both markets are vitally important to
our success and we believe this platform positions us
well for continued profitable organic growth. We also
believe there are economies of scale in banking and
we plan to grow organically and
through acquisition.
Some banks just talk
about service; we live it.
“
Earnings Improvement
A major focus has been to ratio-
nalize our brick-and-mortar branch
system and to make it more effi-
cient. With new technology reduc-
ing branch traffic, we have been reducing branch staff. We
are also adopting a “hub and spoke” model where branch
managers are responsible for more than one office. The
implementation of a “Universal Banker” model in some
offices is also creating some staffing efficiencies. We are
also looking for opportunities to right-size some locations
when leases expire. You should recognize that changes in
retail banking delivery will be slower for us given the older
demographic we serve and the fact that this segment still
views the branch as its primary channel.
In terms of expense reductions, we expect to realize
savings in our health care expense as more and more
employees migrate to a high-deductible health plan
from the traditional plan. With stabilization of credit
quality, we also expect to see a more normalized provi-
sioning expense in the future.
This past November, we converted our card
brand from Visa to MasterCard®. These debit cards
were issued with an EMV chip, the global standard
1
Letter to Shareholders
today, which provides greater protection for our clients
against identity theft and fraud. It also shifts the re-
sponsibility and cost of data breaches from the bank
to the merchant if they are not equipped to accept the
new EMV embedded chip card. With this change, we
expect to experience a lift in interchange income and
lower fraud losses.
On another positive note, we believe our net interest mar-
gin has stabilized after years of compression. With most of
the asset repricing behind us, growth in our balance sheet
should translate into improvement in net interest income.
The future direction of interest rates, however, is a wild card
and a flat or inverted yield curve, or “negative” interest rates,
would pose a new set of challenges for the industry and us.
Our margin will also benefit from a modest extension of the
duration in our investment securities portfolio.
current storefront location.
To better serve the small business segment, we over-
hauled the way we do business and created a new oper-
ating model—we are already seeing success. This change
comes in recognition that we cannot commit the same re-
sources in making a $50,000 loan that we use in making
a $1 million loan.
If you are a client of the bank (you should be if you are
a shareholder), you probably like the look of our new state-
ments. We began outsourcing the generation of statements
last July, which cut costs and delivered a better product.
Not a day goes by that we don’t look for ways to take
advantage of new technology to make us a more effi-
cient organization.
CanalCare & CapitalCare—
Our Competitive Advantage
Other Accomplishments
Over a year ago, we moved into our new Capital Region
headquarters in downtown Albany. Located at 132 State
Street, our new regional headquarters is steps away from the
Capitol Building. It is exciting to be a part of the revitalization
of the former Wellington Row site, which includes a new 204-
room Renaissance by Marriott and a new Convention Center.
We are also in the process of relocating our Clifton Park, New
York, office to a more convenient, free-standing building with
a two-bay drive-up and ATM a short distance away from our
The consumer banking business has become commod-
itized and the only sustainable competitive advantage is
the quality of our people and the service they provide. Evi-
denced by recent client surveys and other metrics, the qual-
ity of our service is very good. Some banks just talk about
service; we live it.
On the commercial side of our business, CanalCare is
very much alive. We continue to respond quickly with tailored
solutions for each client. This is our value proposition and our
success is clear evidence that we are providing value.
Management Appointments and Retirements
This past July, our board of directors
appointed Anders Tomson President
and Chief Operating Officer of the bank.
In this position, Anders has responsibil-
ity for most functional areas of the bank
and reports to the CEO. For the immedi-
ate future, Anders retains his position as
President of our Capital Bank Division.
A. Tomson
Anders joined our organization in No-
vember of 2010 in anticipation of our ac-
quisition of Capital Bank in Albany. He assumed his duties
as President of the Division in April of 2011 when the merg-
er transaction was consummated. Over the past four years,
Anders has done an outstanding job leading our Capital
Bank team and delivering strong results for our company.
Rick Carr and Melinda Sartori, both Executive Vice Pres-
idents who led major bank divisions, retired on December
31st. These two long-serving executives, Rick for 18 years
2
Letter to Shareholders
board in 2002 coming from Corning Inc. where he held
the position of General Counsel and Senior Vice Presi-
dent. Gene joined the board in connection with the Capi-
tal Bank merger in 2011. We are grateful for their many
contributions to our success and we will miss them in
the boardroom.
In March 2016 we welcomed a new member of the Board,
Kevin B. Tully, a partner in Teal, Becker & Chiaramonte, CPA’s
PC, a regional accounting firm in Albany, NY. Kevin is a Certi-
fied Public Accountant and brings a wealth of experience ad-
vising small and midsized businesses in all areas of tax and
finance accounting. We welcome Kevin and look forward to
the knowledge and input he will bring to the Board.
Some Closing Thoughts
The years following the financial crisis have been a diffi-
cult period for community banks. Low interest rates and an
increased regulatory and compliance burden have buffet-
ed profitability. We are proud to say we have emerged from
this period a healthy and vibrant organization. Indeed, we
are well-positioned for future success. We are thankful for
the continued support of our clients, employees, share-
holders and the communities we serve.
Ronald M. Bentley
Chief Executive Officer
David J. Dalrymple
Chairman of the Board
and Melinda for 21
years, have made sig-
nificant contributions
to our success over
the years. Both have
been key members of
my cabinet and I will
miss them.
A
T. Wirth
L. DiFabio
testament
to
our succession plan-
ning at the bank, Lou DiFabio, Executive Vice President,
was named to lead our Business Client Services Group and
Tom Wirth was promoted to Executive Vice President and
head of our Wealth Management Group.
Also retiring at year-end were Assistant Vice President
Debra Newcomer after 27 years of service and Vice Presi-
dent Susan Smith who joined Chemung Canal in connec-
tion with the Bank of America branch purchase. Susan’s
banking career spanned 43 years.
We wish all of them the very best in retirement.
Our Board of Directors
At our annual
meeting in May, two
of our directors will
retire from the board:
Bill Eggers after 14
years of service and
Gene Sneeringer Jr.
who served on our
board the past five
years. Bill joined our
W. Eggers
E. Sneeringer
In Memory of Bill Clark
Bill Clark from our Facilities Department passed away on September 6, 2015 after a brief illness,
he was 59 years old. A 32-year employee, Bill provided logistical and general maintenance support
throughout our company. He was an avid outdoorsman who loved hunting, fishing and playing golf.
Bill played an active role in branch relocations, expansions and acquisitions over the last several years,
and took great pride in his work. He was proud of the many friendships he developed throughout his
CCTC career. He was quick to lend a hand and tell a story. We will miss his smile, his great sense of
humor and hearing the creative nicknames he gave his co-workers.
We extend our condolences to Bill’s wife Karen, his mother Erma, his children and grandchildren. Rest
in peace, Bill.
B. Clark
3
Executives Retire
Two Long-Time CCTC Executives Retired at Year-End
As was announced early in 2015, Melinda Sartori and Rick
Carr, Executive Vice Presidents of Wealth Management and
Business Client Services retired on December 31, 2015.
Melinda joined Chemung Canal in September 1994 and
served in a variety of departments throughout her years of
service, including: Commercial Lending and Retail Branch
Administration & Sales—before heading into the Wealth Man-
agement (formerly Trust) Division. She was appointed an As-
sistant Vice President in 1996, Vice President in 1997, Senior
Vice President in 1999 and Executive Vice President in 2002.
Rick came to CCTC as a Vice President and Commercial Lend-
er in 1997, he was appointed Senior Vice President in 2004
and Executive Vice President in 2011. His Chemung resume
features a variety of management responsibilities and at the
time of his retirement he was the Division Manager for the
Business Client Services Group.
Thanks to Melinda and Rick for their years of hard work for the
company, and for “setting the table” for a successful future for
our Bank.
Board Chairman Dave Dalrymple and CEO Ron
Bentley present a board proclamation to Melinda
and Rick in recognition of their retirement.
Other Information
Forward-looking Statements: This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange
Act, and the Private Securities Litigation Reform Act of 1995. The Corporation intends its forward-looking statements to be covered by the safe harbor provisions for forward-
looking statements in these sections. All statements regarding the Corporation’s expected financial position and operating results, the Corporation’s business strategy, the
Corporation’s financial plans, forecasted demographic and economic trends relating to the Corporation’s industry and similar matters are forward-looking statements. These
statements can sometimes be identified by the Corporation’s use of forward-looking words such as “may,” “will,” “anticipate,” “estimate,” “expect,” or “intend.” The Corpo-
ration cannot promise that its expectations in such forward-looking statements will turn out to be correct. The Corporation’s actual results could be materially different from
expectations because of various factors, including changes in economic conditions or interest rates, credit risk, difficulties in managing the Corporation’s growth, competition,
changes in law or the regulatory environment, including the Dodd-Frank Act, and changes in general business and economic trends. Information concerning these and other
factors can be found in the Corporation’s periodic filings with the SEC, including the discussion under the heading “Item 1A. Risk Factors” in the Corporation’s 2015 Annual
Report on Form 10-K. These filings are available publicly on the SEC’s website at www.sec.gov, on the Corporation’s website at chemungcanal.com or upon request from the
Corporate Secretary at (607) 737-3746. Except as otherwise required by law, the Corporation undertakes no obligation to publicly update or revise its forward-looking state-
ments, whether as a result of new information, future events or otherwise.
Dividend Reinvestment and Stock Purchase Plan: Registered shareholders of Chemung Financial Corporation, through The Dividend Reinvestment and Stock
Purchase Plan, may reinvest their dividends or make quarterly cash payments to purchase additional stock of the Corporation. Shareholders not enrolled in the
plan may view and print a descriptive brochure and enrollment form at www.amstock.com or receive the plan documents upon written request to the Corpora-
tion’s secretary at the following address: Chemung Financial Corporation, Attn: Corporate Secretary, P.O Box 1522, Elmira, NY 14902-1522.
Form 10-K Annual Report: A copy of the Corporation’s Form 10-K Annual Report is available without charge to shareholders after March 31, 2016, upon written
request to the Corporation’s secretary. A copy is also available on our Transfer Agent, American Stock Transfer & Trust Company’s website at www.astproxyportal.
com/ast/01079.
4
Annual Meeting: The Annual Meeting of Shareholders will be held on Thursday, May 12, 2016, at 2:00 p.m. at the downtown Holiday Inn, Elmira – Riverview.
Board of Directors
Ronald M. Bentley
CEO, Chemung Financial
Corporation, Chemung
Canal Trust Company and
CFS Group, Inc.
David J. Dalrymple
Chairman of the Board, Chemung
Financial Corporation, Chemung
Canal Trust Company, and President,
Dalrymple Gravel & Contracting
Larry H. Becker
COO, Windsor
Development Group, Inc.
Bruce W. Boyea
Chairman, President &
CEO, Security Mutual
Life Insurance Company
of New York
Robert H. Dalrymple
Vice President & Secretary
Dalrymple Holding Corporation
Clover M. Drinkwater
Partner
Sayles & Evans
William D. Eggers
Senior Counsel
Nixon Peabody LLP
Stephen M. Lounsberry III
President, Applied
Technology Manufacturing
John F. Potter
President, Seneca
Beverage Corporation
Eugene M. Sneeringer Jr.
Principal, Sneeringer
Monahan Provost Redgrave
Title Agency, Inc.
Richard W. Swan
Chairman of the Board,
Swan and Sons-Morss
Co., Inc.
G. Thomas Tranter Jr.
President
Corning Enterprises
Thomas R. Tyrrell
Vice President
Rose & Kiernan, Inc.
Capital Bank Division Advisory Board
Denise Gonick
President & Chief Executive Officer
MVP Healthcare
Paul Kasselman
President
Kasselman Electric Inc.
Gerald D. Jennings
Former Mayor
City of Albany
Spencer Jones
President
British American
Development Corp.
Raymond J. Kinley Jr.
Retired President
& Chief Executive Officer
Clough Harbour & Associates
Dr. Lee McElroy
Director of Athletics,
Rensselaer Polytechnic Institute
Jim Menzies
Founder
Leontine Consulting LLC
Gregory Oberting
President
Interstate Commodities, Inc.
Joseph A. Reilly
Former President &
Executive Director,
NYS Broadcasters Assoc. Inc.
Mark J. Rosen
President
Dawn Homes Management
Dean A. Rueckert
President
Rueckert Advertising
and Public Relations
Edward J. Trombly
Partner
Hiscock & Barclay
5
Bank Officers
Executive Management Team
Ronald M. Bentley, Chief Executive Officer | Anders M. Tomson, President & Chief Operating Officer | Louis C. DiFabio, Executive Vice
President, Business Client Services | Karl F. Krebs, Executive Vice President, Chief Financial Officer & Treasurer | Karen R. Makowski,
Executive Vice President, Chief Administrative & Risk Officer | Thomas W. Wirth, CFA, Executive Vice President, Wealth Management
Group (WMG) | Pamela D. Burns, Senior Vice President, Human Resources | Michael J. Crimmins, Senior Vice President, Support
Services | Michael J. Wayne, Senior Vice President, Marketing | Brendan P. McCormick, Senior Vice President & Auditor | Kathleen S.
McKillip, Assistant Treasurer, Corporate Secretary
Senior Vice Presidents
Catherine B. Crandall, WMG Estate Administration | Daniel D. Fariello, Commercial Lending | Marianne T. Kalec, Retail Lending | J.
Edmond Morton IV, WMG Regional Manager | Robert M. Pichette, Commercial Lending | Timothy P. Rubery, Commercial Lending | Joseph
J. Tascone, WMG Investment Services | Thomas J. Whitaker, Finance
Vice Presidents
Yvonne L. Albee, Regulatory Risk | Dawn L. Aubin, Genesee St./Grant Ave. | Judy L. Barton, Bank Operations | Michael J. Battersby, Branch
Administration | Michael D. Blatt, CFA, WMG Investment Services | Marci L. Cartwright, WMG Business Development | Gary K. Earley, WMG
Estate Administration | Mark J. Fife, Commercial Lending | Lucimar Foo-Siam Escudero, Commercial Credit | Yvette M. Francisco, Loan
Review | Thomas E. Funk, Finance | Victoria A. Harkins, WMG Private Banking | Kevin Harrigan, Commercial Lending | James S. Hartle, Branch
Administration | Craig B. Heffner, Commercial Lending | Mary Keefe, Business Services | Christopher K. Kelly, WMG Retirement Services
Group | Mark P. Kenjerska, Ithaca Commons | Christopher Kennedy, Commercial Lending | John T. Kite, Commercial Lending | Michael S.
Lares, WMG Estate Administration | Christopher B. Loughridge, WMG Estate Administration | Eileen M. McCarthy, WMG Support Services |
D. Tavis McKeon, Branch Administration | Mary Anne Narosky, Business Client Services | Ronald W. Poole, Commercial Lending | Robert A.
Roemmelt Jr., Arnot Road/Elmira Heights | Jennifer Sczepanski, Branch Administration | John J. Sentigar, Information Technology | Andrea
L. Seymour, Logistical Support | John E. Shea, WMG Relationship Manager | Michael R. Smith, Cortland/Seneca Falls | Theresa A. Wagner,
Deposit Operations | Sheila A. Washburn, Bank Operations | Kenneth J. Wilson, Business Development
Assistant Vice Presidents
Kimberly A. Bailey, Canton | Lindsay A. Barrile, WMG Estate Administration | Larisa A. Benderskaya, Latham/Slingerlands | David E.
Carlson, Troy | Richard W. Carroll, Horseheads | Alison Conklin-DeVita, MainOffice/Southport | Matthew R. Crabtree, Finance | Joel
A. Crimmins, Commercial Lending | Constance L. English, Corning | Sandra L. Grooms, Ithaca Station | Michael L. Hart, WMG Estate
Administration | Scott T. Heffner, Marketing | Matthew Keefe, Regulatory Risk | Lorri A. Miller, Owego Rt. 17C | Jack D. Narosky,
Business Development | Randi Richer, Commercial Loan Operations | Sheryl J. Scott, Big Flats | Meredith L. Tigue, Regulatory Risk
| David Wakeman, Resource Recovery
Assistant Treasurers
Sherry L. Armstrong, Community Corners | Laura L. Bennett, Real Estate Lending | Marcia L. Boor, Business Services | Gregory J. Bruno,
Clifton Park | Amy S. Chervinsky, Commercial Lending | Elizabeth M. Courtright, Regulatory Risk | Jennifer J. Cruise, WMG Support Services
| Sarah A. Darling, Owego | Cheryl A. DeBlock, Binghamton | Karen A. Dimmick, Westside | Stephanie L. Gibbons, Real Estate Lending |
Matthew T. Howard, Audit | Tara J. Humphrey, Retail Loan Operations | Barbara L. Keller, Indirect Lending | Lashonda R. Love, State Street |
Patrick J. McFarland, Regulatory Risk | Julianne E. Meeker, Computer Operations | Michael J. Novotny, Retail Lending | Aimee G. O’Connor,
Towanda | Christine Perlee, Wolf Road | Brenda S. Praschunus, Montour Falls | Jessica L. Ryan, Watkins Glen | Allison A. Strife, Human
Resources | Todd N. Trencansky, Vestal | Charolette R. Truxal, Oakdale Mall | Devin E. Wandell, WMG Estate Administration | Jennifer L.
White, Bath | Sue A. Williams, Waverly | Jean A. Wise-Wicks, Painted Post | Kristen N. Woodward, Contact Center
CFS Group, Inc.
Sean F. Beliles, Vice President | Joseph M. Cascio, Vice President
6
Effective as of February 17, 2016.
Office Locations
For a complete list of office hours and directions, visit chemungcanal.com or capitalbank.com.
For general information, call our Contact Center at 800.836.3711.
7
Offices Locations
Bradford
CANTON | 5 West Main Street (17724)
TOWANDA | 304 Main Street (18848)
TROY | 159 Canton Street (16947)
Broome
BINGHAMTON | 127 Court Street (13901)
OAKDALE MALL | 601-635 Harry L. Drive (13790)
VESTAL | 100 Rano Boulevard (13850)
Cayuga
120 Genesee Street (13021)
AUBURN
185 Grant Avenue (13021)
Chemung
BIG FLATS | 437 Maple Street (14814)
ELMIRA | One Chemung Canal Plaza (14901)
ELMIRA HEIGHTS | 100 West McCann’s Boulevard (14903)
29 Arnot Road (14845)
HORSEHEADS
602 South Main Street (14845)
SOUTHPORT | 951 Pennsylvania Avenue (14904)
WESTSIDE | 628 West Church Street (14905)
Cortland
CORTLAND | 1094 Highway 222 (13045)
Schuyler
MONTOUR FALLS | 303 West Main Street (14865)
WATKINS GLEN | 318 North Franklin Street (14891)
Seneca
SENECA FALLS | 54 Fall Street (13148)
Steuben
BATH | 410 West Morris Street (14810)
CORNING | 149 West Market Street (14830)
PAINTED POST | 243 North Hamilton Street (14870)
Tioga
203 Main Street (13827)
OWEGO
1054 State Route 17C (13827)
WAVERLY | 405 Chemung Street (14892)
Tompkins
909 Hanshaw Road (14850)
ITHACA
304 Elmira Road (14850)
806 West Buffalo Street (14850)
Capital Region
ALBANY | 132 State Street (12207)
CLIFTON PARK | 25 Park Avenue* (12065)
COLONIE | 65 Wolf Road, Suite 107 (12205)
LATHAM | 581 Loudon Road (12110)
SLINGERLANDS | 1365 New Scotland Road (12159)
8
*Effective April 4, 2016.