Earnings

Chemung Financial Lifts Third-Quarter Profit to $12.7 Million

The Tip Desk · November 8, 2026 · 4 min read

Net interest income reached $25.7 million and the fully taxable equivalent net interest margin widened to 3.74% as commercial loans and loan yields rose.

Chemung Financial Corporation (CHMG), the Elmira, N.Y.-based parent of Chemung Canal Trust Company, National Association, reported net income of $12.7 million, or $2.63 a share, for the third quarter of 2026, up from $8.8 million, or $1.82 a share, in the second quarter.

Net interest income rose $1.0 million, or 4.0%, to $25.7 million from the prior quarter, as interest income on loans increased $1.3 million on higher average balances and yields, partially offset by higher deposit and borrowing interest expense. Fully taxable equivalent net interest margin expanded 7 basis points to 3.74% from 3.67%, as the average yield on interest-earning assets rose 7 basis points to 5.25% and the average cost of interest-bearing liabilities rose 3 basis points to 2.30%. Total cost of funds was unchanged at 1.67%.

Average total loans increased $37.6 million, led by a $41.4 million rise in commercial loans concentrated in commercial real estate from new originations and construction draws. Residential mortgages rose $1.5 million and consumer loans fell $5.2 million on indirect auto paydowns. The average yield on total loans rose 6 basis points, with commercial loan yield up 6 basis points, including $0.2 million of commercial real estate payoff fees and a late-quarter 25 basis point increase in the Federal Funds Target Range Upper Limit, and consumer loan yield up 8 basis points on promotional home equity line repricing.

Average cost of total interest-bearing deposits rose 2 basis points, with savings and money market costs up 5 basis points on larger commercial relationship rates and customer time deposit costs down 2 basis points as higher-cost CD campaigns matured. Average interest-bearing deposit balances fell $12.3 million. Interest expense on borrowed funds increased largely due to a $9.2 million rise in average borrowings; the average cost of total borrowed funds decreased 15 basis points as higher-cost subordinated debt comprised a smaller share.

The provision for credit losses swung to a $2.6 million credit from $0.6 million of expense, producing net recoveries of $2.6 million versus net charge-offs of $0.2 million, after a $2.9 million commercial and industrial litigation recovery and improved FOMC unemployment, GDP and prepayment assumptions. Annualized net recoveries for the third quarter totaled 0.43%, versus net charge-offs of 0.03% in the prior quarter. The allowance for credit losses on loans was $25.2 million at September 30, 2026.

Non-interest income was $6.3 million, down $0.2 million, or 3.1%, from the prior quarter, on a $0.3 million decline in the change in fair value of equity investments, partially offset by a $0.2 million increase in other non-interest income. Non-interest expense fell $1.2 million, or 6.2%, to $18.1 million, on lower other expense, including a $0.3 million legacy equity write-down in the prior quarter, marketing, professional services, loan expense and pension costs, partially offset by a $0.2 million rise in salaries and wages. Income tax expense was $3.8 million, with an effective rate of 23.0%.

Non-performing loans totaled $13.8 million, or 0.57% of total loans, as of September 30, 2026, compared with $7.9 million, or 0.35%, at December 31, 2025, after $7.9 million of commercial loans were placed non-performing in the nine months ended September 30, 2026, partly offset by $2.0 million of commercial real estate transfers to other real estate owned. Non-performing assets were $16.1 million, or 0.56% of total assets. Delinquent loans were $11.2 million, or 0.47% of total loans.

Effective October 1, 2026, the bank completed its conversion from a New York State trust company to a national bank under OCC supervision. The corporation announced its intent to unify three divisional brands under Canal Bank & Trust, N.A., with the rebranding to be introduced in the fourth quarter and rolled out beginning in 2027. The quarterly dividend was raised $0.02 a share, a 5.9% increase, to $0.36 declared in the third quarter.

More on CHMG

September 28, 2026 QBook Stronger demand supports expansion as pricing diverges

CHEMUNG FINANCIAL CORP — all coverage and financials