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Chemung Financial Reports Record Earnings

ELMIRA, N.Y., Jan. 30, 2013 (GLOBE NEWSWIRE) -- Chemung Financial Corporation (Nasdaq:CHMG), the parent company of Chemung Canal Trust Company, reported year-to-date and quarter ended December 31, 2012, net income and earnings per share. Highlights for the current year and quarter include:

  • Net income for the twelve months ended December 31, 2012, was $11.0 million, or $2.38 per share, compared with $10.5 million, or $2.40 per share, for the prior year, an increase of $0.5 million, or 4.6%. Net income for the fourth quarter of 2012 was $2.1 million, or $0.46 per share, compared with $3.0 million, or $0.64 per share, for the same quarter in the prior year.
  • Net interest margin for the twelve months ended December 31, 2012, was 4.07%, level with the prior year. Net interest margin for the fourth quarter of 2012 was 3.98% compared with 4.04% for the preceding quarter and 4.19% for the fourth quarter in the prior year.
  • Non-performing assets to total assets ratio declined to 0.89% at December 31, 2012, from 1.79% at December 31, 2011. Excluding $4.5 million in accruing loans that are 90 days or more past their stated maturity dates, the non-performing assets to total assets ratio was 0.53%.
  • Capital remains strong as the tangible equity to tangible assets ratio was 8.53% at December 31, 2012, compared with 8.23% at December 31, 2011.

Ronald M. Bentley, President and CEO stated, "We set new financial performance records for Chemung Financial Corporation in 2012 while devoting much of our time and attention preparing for the future. We are pleased to report that the Capital Bank merger is delivering as promised and our other business units also performed well."

Mr. Bentley continued, "Credit quality remained strong as the level of both classified and nonperforming loans declined from year-earlier levels. Excluding some performing but past due construction loans acquired in connection with the Capital Bank merger, the ratio of total nonperforming assets to total assets at year end was 0.53%, a level attesting to our solid and stable credit quality and a ratio better than most of our peers."

Summary:

Chemung Financial Corporation reported net income of $11.0 million for the twelve months ended December 31, 2012, an increase of $0.5 million, or 4.6%, compared with $10.5 million for the twelve months ended December 31, 2011. Earnings per share for the twelve months ended December 31, 2012, was $2.38 compared with $2.40 for the twelve months ended December 31, 2011. Return on average assets and return on average equity for the twelve months ended December 31, 2012, were 0.88% and 8.41%, respectively, compared with 0.90% and 8.77%, respectively, for the prior year.

The improvement in 2012 earnings was due primarily to a $2.9 million increase in net interest income and a $2.2 million decrease in pre-tax one-time merger transaction costs, both related to the Capital Bank acquisition in April 2011. In addition, we recognized $0.8 million in pre-tax casualty gains from insurance reimbursements related to the September 2011 flooding of our Owego and Tioga offices. These items were partially offset by increases of $1.8 million in salaries and wages, $0.8 million in pension and other employee benefits, $0.5 million in data processing expenses, $0.5 million in professional services, $0.4 million in income taxes and a $0.8 million reduction in net gains on securities transactions.

Net income for the fourth quarter 2012 was $2.1 million compared with fourth quarter 2011 results of $3.0 million, a decrease of $0.9 million, or 28.1%. The decline was attributable to a decrease of $0.4 million in net interest income and an increase of $1.1 million in non-interest expense, partially offset by a reduction of $0.5 million in income taxes. Earnings per share for the current quarter totaled $0.46 compared with $0.64 for the same period in the prior year. Return on average assets and return on average equity for the current quarter were 0.67% and 6.33%, respectively, compared with 0.95% and 9.06%, respectively, for the fourth quarter of 2011.

Net income of $2.1 million for the quarter ended December 31, 2012, represents a decrease of $0.7 million, or 24.8%, from net income of $2.8 million for the preceding quarter ended September 30, 2012. The decline was primarily due to an increase of $1.2 million in non-interest expense, partially offset by a reduction of $0.4 million in income taxes. Earnings per share for the current quarter totaled $0.46 compared with $0.61 for the preceding quarter. Return on average assets and return on average equity for the current quarter were 0.67% and 6.33%, respectively, compared with 0.89% and 8.53%, respectively, for the preceding quarter.

Net Interest Income:

Net interest income for the twelve months ended December 31, 2012, totaled $46.8 million compared with $43.8 million for the prior year, an increase of $3.0 million, or 6.7%. Net interest margin was 4.07% for the twelve months ended December 31, 2012, level with the prior year. The increase in net interest income was primarily due to an increase in average earning assets. The increase in average earning assets was the result of the Capital Bank acquisition in April 2011, and organic growth during 2012 in the Albany region.

Net interest income for the fourth quarter of 2012 was $11.6 million compared with $12.0 million for the same quarter in the prior year, a decrease of $0.4 million, or 3.2%. Net interest margin declined to 3.98% for the current quarter from 4.19% for the same quarter in the prior year. The decline in net interest margin was primarily due to yields on interest-earning assets decreasing at a faster rate than the cost of interest-bearing liabilities. The decrease in yield on interest-earning assets was attributable to lower loan yields as loans continue to reprice at current market rates.

Compared with the preceding quarter ended September 30, 2012, net interest income decreased by $0.1 million, primarily due to a six basis point decline in the net interest margin. The decrease in the net interest margin was primarily due to a 19 basis point decrease in the yield on loans.

Non-Interest Income:

Non-interest income for the twelve months ended December 31, 2012, was $17.3 million compared with $17.5 million for the prior year, a decrease of $0.2 million, or 1.0%. The decline was primarily due to decreases of $0.8 million in net gain on securities transactions and $0.6 million in revenue from our equity investment in Cephas Capital Partners, L.P. These items were partially offset by $0.8 million in casualty gains from insurance reimbursements related to the September 2011 flooding of our Owego and Tioga offices and an increase of $0.3 million in net gain on sale of loans held for sale.

Non-interest income for the fourth quarter of 2012 was $4.2 million, a slight increase compared with both the preceding quarter and same quarter in the prior year, primarily due to an increase in net gain on sales of loans held for sale.

Non-Interest Expense:

Non-interest expense for the twelve months ended December 31, 2012, was $46.8 million compared with $44.8 million for the prior year, an increase of $2.0 million, or 4.6%. Excluding $2.2 million in merger related expenses from the prior year, non-interest expense increased $4.3 million, or 10.1%, for the twelve months ended December 31, 2012. This increase was primarily due to increases of $1.8 million in salaries and wages, $0.8 million in pension and other employee benefits, $0.5 million in data processing expenses and $0.5 million in professional services. The increase in salaries and wages was primarily due to the operation of the Capital Bank division for twelve months during 2012 compared with nine months during 2011, and additional compensation related to merit increases and incentive compensation. The increase in pension and other employee benefits was primarily due to higher pension costs, health benefits and payroll taxes. The increase in data processing expenses was primarily due to higher hardware and software maintenance fees and check card processing costs that included conversion costs for a new processor. The increase in professional services was due primarily to consultant fees.

Non-interest expense for the fourth quarter of 2012 was $12.6 million compared with $11.5 million for the same quarter in the prior year, an increase of $1.1 million, or 9.7%. The increase was primarily due to increases of $0.6 million in salaries and wages and $0.5 million in professional services. The increase in salaries and wages was primarily due to an increase in employees and additional compensation related to merit increases and incentive compensation. The increase in professional services was due to the reason discussed above. Compared with the preceding quarter ended September 30, 2012, non-interest expense increased $1.2 million, or 10.9%. The increase was primarily due to increases of $0.5 million in salaries and wages and $0.6 million in professional services.

Asset Quality:

Non-performing loans totaled $10.5 million at December 31, 2012, or 1.18% of total loans, down $10.4 million from $20.9 million, or 2.62%, at December 31, 2011. Non-performing assets which are comprised of non-performing loans and other real estate owned, totaled $11.1 million at December 31, 2012, or 0.89% of total assets, down $10.7 million from $21.8 million, or 1.79%, at December 31, 2011. Excluding $4.5 million in accruing loans that are 90 days or more past their stated maturity dates, the non-performing assets to total assets ratio was 0.53%.

Management performs an ongoing assessment of the adequacy of the allowance for loan losses based upon a number of factors including an analysis of historical loss factors, collateral evaluations, recent charge-off experience, credit quality of the loan portfolio, current economic conditions and loan growth. Based on this analysis, the provision for loan losses for the twelve months ended December 31, 2012, was $0.8 million, a decrease of $0.1 million compared with the prior year. Net charge-offs for the twelve months ended December 31, 2012, were $0.2 million compared with $0.8 million for the prior year.

For the fourth quarter of 2012, the provision for loan losses was $0.1 million compared with $0.2 million for the preceding quarter and $0.1 million for the same quarter in the prior year. Net charge-offs for the current quarter were $0.5 million compared with net recoveries of $0.2 million for the preceding quarter and net charge-offs of $0.1 million for the same quarter in the prior year.

At December 31, 2012, the allowance for loan losses was $10.4 million, compared with $10.8 million at September 30, 2012, and $9.7 million at December 31, 2011. The allowance for loan losses was 99.21% of non-performing loans at December 31, 2012, compared with 81.66% at September 30, 2012, and 46.18% at December 31, 2011. The ratio of the allowance for loan losses to total loans was 1.17% at December 31, 2012, compared with 1.24% at September 30, 2012, and 1.21% at December 31, 2011. Excluding acquired loans, the ratio of the allowance for loan losses on originated loans to originated loans was 1.18% at December 31, 2012, compared with 1.38% at September 30, 2012, and 1.47% at December 31, 2011.

Balance Sheet Activity:

Assets totaled $1.248 billion at December 31, 2012, compared with $1.216 billion at December 31, 2011, an increase of $31.9 million, or 2.6%. The growth was primarily due to an increase of $96.6 million, or 12.1%, in total portfolio loans, partially offset by decreases of $44.5 million in investment securities and $13.7 million in interest-bearing deposits in other financial institutions. The increase in portfolio loans was due to strong growth of $47.3 million in commercial loans and $42.5 million in consumer loans.

Deposits totaled $1.045 billion at December 31, 2012, compared with $998.5 million at December 31, 2011, an increase of $46.2 million, or 4.6%. The growth was primarily due to increases of $65.1 million in money market accounts, $41.8 million in non-interest-bearing demand deposits and $16.4 million in NOW accounts. These items were partially offset by decreases of $36.7 million in savings accounts and $40.3 million in certificates of deposit.

Total equity was $131.1 million at December 31, 2012, compared with $125.9 million at December 31, 2011. The total equity to total assets ratio was 10.50% at December 31, 2012, up from 10.35% at December 31, 2011. The tangible equity to tangible assets ratio was 8.53% at December 31, 2012, up from 8.23% at December 31, 2011. As of December 31, 2012, both the Corporation's and the Bank's capital ratios were in excess of those required to be considered well-capitalized under regulatory capital standards.

Other Item:

The market value of total assets under management or administration in our Wealth Management Group was $1.735 billion at December 31, 2012, compared with $1.596 billion at December 31, 2011.

About Chemung Financial Corporation:

Chemung Financial Corporation is a $1.2 billion financial services holding company headquartered in Elmira, New York and operates 28 retail offices through its principal subsidiary, Chemung Canal Trust Company, a full-service community bank with trust powers. Established in 1833, Chemung Canal Trust Company is the oldest locally-owned and managed community bank in New York State. Chemung Financial Corporation 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. CFS Group, Inc. was founded in 2001.

This press release may be found at: www.chemungcanal.com under Shareholder Info.

Forward-Looking Statements:

This press release may include forward-looking statements with respect to revenue sources, growth, market risk, corporate objectives and possible losses due to asset quality. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Chemung Financial Corporation assumes no duty, and specifically disclaims any obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, and cautions that these statements are subject to risks and uncertainties that could cause the Corporation's actual operating results to differ materially.

Chemung Financial Corporation
Consolidated Balance Sheets (Unaudited)
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
(Dollars in thousands, except share data) 2012 2012 2012 2012 2011
ASSETS
Cash and due from financial institutions $ 29,239 $ 35,324 $ 33,673 $ 27,311 $ 28,205
Interest-bearing deposits in other financial institutions 11,002 45,908 40,502 83,203 24,697
Total cash and cash equivalents 40,241 81,232 74,175 110,514 52,902
Trading assets, at fair value 348 275 252 254 294
Securities available for sale 239,686 253,669 260,942 259,450 280,870
Securities held to maturity 5,749 6,163 6,334 7,447 8,312
FHLB and Federal Reserve Bank stocks, at cost 4,710 4,760 5,359 5,436 5,509
Total investment securities 250,145 264,592 272,635 272,333 294,691
Commercial 454,048 444,491 436,205 414,536 406,798
Mortgage 200,476 193,049 194,512 192,548 193,600
Consumer 238,993 238,818 225,230 195,949 196,517
Total loans 893,517 876,358 855,947 803,033 796,915
Allowance for loan losses (10,433) (10,828) (10,392) (10,283) (9,659)
Loans, net 883,084 865,530 845,555 792,750 787,256
Loans held for sale 1,057 1,165 482 826 395
Premises and equipment, net 25,484 24,863 24,718 24,977 24,762
Goodwill 21,824 21,824 21,824 21,824 21,984
Other intangible assets, net 5,144 5,382 5,642 5,906 6,191
Other assets 20,833 22,117 22,176 25,111 27,785
Total assets $ 1,248,160 $ 1,286,980 $ 1,267,459 $ 1,254,495 $ 1,216,260
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand deposits (non-interest bearing) $ 300,610 $ 302,509 $ 297,413 $ 272,055 $ 258,836
NOW accounts 90,730 108,923 88,343 88,105 74,349
Savings 173,589 174,074 174,974 203,204 210,288
Money market accounts 243,115 248,722 232,870 212,376 178,030
Certificates of deposit 236,690 248,948 260,079 262,965 276,990
Total deposits 1,044,734 1,083,176 1,053,679 1,038,705 998,493
Securities sold under agreements to repurchase 32,711 32,918 31,750 34,998 37,107
FHLB term advances 27,225 28,046 41,128 43,227 43,344
Other liabilities 12,375 9,960 10,693 8,736 11,386
Total liabilities 1,117,045 1,154,100 1,137,250 1,125,666 1,090,330
Shareholders' equity
Common stock 53 53 53 53 53
Additional-paid-in capital 45,357 45,538 45,525 45,556 45,583
Retained earnings 107,078 106,092 104,402 103,100 100,629
Treasury stock (18,566) (18,731) (18,915) (18,734) (18,894)
Accumulated other comprehensive income (loss) (2,807) (72) (856) (1,146) (1,441)
Total shareholders' equity 131,115 132,880 130,209 128,829 125,930
Total liabilities and shareholders' equity $ 1,248,160 $ 1,286,980 $ 1,267,459 $ 1,254,495 $ 1,216,260
Period-end shares outstanding 4,649,741 4,642,317 4,632,014 4,639,565 4,640,646
Chemung Financial Corporation
Consolidated Statements of Income (Unaudited)
Twelve Months Ended Three Months Ended
December 31, Percent December 31, Percent
(Dollars in thousands, except share and per share data) 2012 2011 Change 2012 2011 Change
Interest and dividend income:
Loans, including fees $ 45,298 $ 43,181 4.9 $ 11,220 $ 11,725 (4.3)
Taxable securities 5,358 5,874 (8.8) 1,215 1,526 (20.4)
Tax exempt securities 1,268 1,379 (8.0) 292 344 (15.1)
Interest-bearing deposits 153 214 (28.5) 30 47 (36.2)
Total interest and dividend income 52,077 50,648 2.8 12,757 13,642 (6.5)
Interest expense:
Deposits 3,243 4,351 (25.5) 710 1,025 (30.7)
Securities sold under agreements to repurchase 994 1,375 (27.7) 231 319 (27.6)
Borrowed funds 1,059 1,073 (1.3) 190 290 (34.5)
Total interest expense 5,296 6,799 (22.1) 1,131 1,634 (30.8)
Net interest income 46,781 43,849 6.7 11,626 12,008 (3.2)
Provision for loan losses 828 958 (13.6) 74 125 (40.8)
Net interest income after provision for loan losses 45,953 42,891 7.1 11,552 11,883 (2.8)
Non-interest income:
Wealth management group fee income 6,827 6,710 1.7 1,657 1,579 4.9
Service charges on deposit accounts 4,241 4,282 (1.0) 1,098 1,101 (0.3)
Net gain on securities transactions 301 1,108 (72.8) -- -- N/M
Net impairment loss recognized in earnings -- (67) N/M -- -- N/M
Net gain on sales of loans held for sale 484 179 170.4 214 46 365.2
Casualty gains 790 -- N/M -- -- N/M
Other 4,647 5,252 (11.5) 1,233 1,318 (6.4)
Total non-interest income 17,290 17,464 (1.0) 4,202 4,044 3.9
Non-interest expense:
Salaries and wages 18,918 17,136 10.4 5,207 4,602 13.1
Pension and other employee benefits 5,624 4,797 17.2 1,486 1,500 (0.9)
Net occupancy 5,164 5,016 3.0 1,315 1,353 (2.8)
Furniture and equipment 2,205 2,119 4.1 605 570 6.1
Data processing 4,421 3,916 12.9 1,142 1,035 10.3
Professional services 1,443 950 51.9 749 205 265.4
Amortization of intangible assets 1,047 1,041 0.6 238 288 (17.4)
Marketing and advertising 1,068 1,037 3.0 153 246 (37.8)
FDIC insurance 807 967 (16.5) 192 230 (16.5)
Loan expenses 788 608 29.6 240 160 50.0
Other real estate owned expenses 328 105 212.4 42 19 121.1
Merger related expenses 30 2,255 (98.7) -- 11 (100.0)
Other 4,994 4,837 3.2 1,268 1,303 (2.7)
Total non-interest expense 46,837 44,784 4.6 12,637 11,522 9.7
Income before income tax expense 16,406 15,571 5.4 3,117 4,405 (29.2)
Income tax expense 5,384 5,033 7.0 987 1,443 (31.6)
Net income $ 11,022 $ 10,538 4.6 $ 2,130 $ 2,962 (28.1)
Basic and diluted earnings per share $ 2.38 $ 2.40 $ 0.46 $ 0.64
Cash dividends declared per share 1.25 1.00 0.50 0.25
Average basic and diluted shares outstanding 4,640,912 4,382,843 4,643,695 4,638,042
N/M – Not meaningful.
Chemung Financial Corporation
Consolidated Financial Highlights (Unaudited)
As of or for the
As of or for the Three Months Ended Twelve Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands, except share and per share data) 2012 2012 2012 2012 2011 2012 2011
RESULTS OF OPERATIONS
Interest income $ 12,757 $ 13,015 $ 12,765 $ 13,540 $ 13,642 $ 52,077 $ 50,648
Interest expense 1,131 1,240 1,400 1,524 1,634 5,296 6,799
Net interest income 11,626 11,775 11,365 12,016 12,008 46,781 43,849
Provision for loan losses 74 225 52 477 125 828 958
Net interest income after provision for loan losses 11,552 11,550 11,313 11,539 11,883 45,953 42,891
Non-interest income 4,202 4,060 4,131 4,897 4,044 17,290 17,464
Non-interest expense 12,637 11,393 11,885 10,922 11,522 46,837 44,784
Income before income tax expense 3,117 4,217 3,559 5,514 4,405 16,406 15,571
Income tax expense 987 1,383 1,115 1,899 1,443 5,384 5,033
Net income $ 2,130 $ 2,834 $ 2,444 $ 3,615 $ 2,962 $ 11,022 $ 10,538
Basic and diluted earnings per share $ 0.46 $ 0.61 $ 0.53 $ 0.78 $ 0.64 $ 2.38 $ 2.40
Average basic and diluted shares outstanding 4,643,695 4,641,547 4,636,395 4,642,012 4,638,042 4,640,912 4,382,843
PERFORMANCE RATIOS
Return on average assets 0.67% 0.89% 0.78% 1.18% 0.95% 0.88% 0.90%
Return on average equity 6.33% 8.53% 7.55% 11.34% 9.06% 8.41% 8.77%
Return on average tangible equity (a) 7.94% 10.76% 9.58% 14.47% 11.60% 10.63% 11.05%
Efficiency ratio 78.21% 70.16% 74.75% 62.85% 69.88% 71.32% 71.18%
Non-interest expense to average assets 3.98% 3.59% 3.82% 3.56% 3.68% 3.74% 3.81%
Loans to deposits 85.53% 80.91% 81.23% 77.31% 79.81% 85.53% 79.81%
YIELDS / RATES
Yield on loans 5.02% 5.21% 5.39% 5.90% 5.85% 5.37% 5.83%
Yield on investments 2.23% 2.23% 2.13% 2.27% 2.22% 2.22% 2.22%
Yield on interest-earning assets 4.36% 4.46% 4.46% 4.83% 4.76% 4.53% 4.70%
Cost of interest-bearing deposits 0.37% 0.40% 0.44% 0.50% 0.54% 0.43% 0.60%
Cost of borrowings 2.74% 2.85% 3.02% 2.96% 2.84% 2.90% 3.01%
Cost of interest-bearing liabilities 0.55% 0.60% 0.67% 0.74% 0.77% 0.64% 0.85%
Interest rate spread 3.81% 3.86% 3.79% 4.09% 3.99% 3.89% 3.85%
Net interest margin 3.98% 4.04% 3.97% 4.28% 4.19% 4.07% 4.07%
CAPITAL
Total equity to total assets at end of period 10.50% 10.32% 10.27% 10.27% 10.35% 10.50% 10.35%
Tangible equity to tangible assets at end of period (a) 8.53% 8.39% 8.29% 8.24% 8.23% 8.53% 8.23%
Book value per share $ 28.20 $ 28.62 $ 28.11 $ 27.77 $ 27.14 $ 28.20 $ 27.14
Tangible book value per share 22.40 22.76 22.18 21.79 21.07 22.40 21.07
Period-end market value per share 29.89 23.77 25.50 25.40 22.70 29.89 22.70
Dividends declared per share 0.50 0.25 0.25 0.25 0.25 1.25 1.00
AVERAGE BALANCES
Loans (b) $ 888,515 $ 867,971 $ 823,754 $ 796,035 $ 795,450 $ 844,256 $ 740,950
Earning assets 1,162,788 1,160,479 1,150,073 1,128,047 1,138,120 1,150,409 1,078,418
Total assets 1,264,125 1,262,648 1,252,461 1,235,453 1,241,144 1,253,725 1,175,046
Deposits 1,059,463 1,055,510 1,037,576 1,018,035 1,017,116 1,042,727 965,183
Total equity 133,799 132,186 130,254 128,194 129,767 131,119 120,225
Tangible equity (a) 106,703 104,827 102,635 100,465 101,279 103,670 95,375
ASSET QUALITY
Net charge-offs (recoveries) $ 469 $ (210) $ (58) $ (23) $ 143 $ 178 $ 797
Non-performing loans 10,516 13,260 15,009 15,077 20,915 10,516 20,915
Non-performing assets 11,081 14,194 15,979 16,057 21,813 11,081 21,813
Allowance for loan losses 10,433 10,828 10,392 10,283 9,659 10,433 9,659
Annualized net charge-offs to average loans 0.21% (0.10)% (0.03)% (0.01)% 0.07% 0.02% 0.11%
Non-performing loans to total loans 1.18% 1.51% 1.75% 1.88% 2.62% 1.18% 2.62%
Non-performing assets to total assets 0.89% 1.10% 1.26% 1.28% 1.79% 0.89% 1.79%
Allowance for loan losses to total loans 1.17% 1.24% 1.21% 1.28% 1.21% 1.17% 1.21%
Allowance for originated loans to originated loans (c) 1.18% 1.38% 1.38% 1.48% 1.47% 1.18% 1.47%
Allowance for loan losses to non-performing loans 99.21% 81.66% 69.24% 68.20% 46.18% 99.21% 46.18%
(a) See the GAAP to Non-GAAP reconciliations.
(b) Loans include loans held for sale. Loans do not reflect the allowance for loan losses.
(c) Originated loans represent total loans excluding acquired loans.

Chemung Financial Corporation

GAAP to Non-GAAP Reconciliations (Unaudited)

The table below shows computations of tangible equity and tangible assets and certain related ratios, all of which are considered to be non-GAAP financial measures. The tangible equity to tangible assets ratio has become a focus of some investors and management believes this ratio may assist in analyzing the Corporation's capital position, absent the effects of intangible assets. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of results reported under GAAP. Because not all companies use identical calculations, the non-GAAP measures presented in the following table may not be comparable to those reported by other companies.

As of or for the
As of or for the Three Months Ended Twelve Months Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Dec. 31, Dec. 31,
(Dollars in thousands, except per share data) 2012 2012 2012 2012 2011 2012 2011
TANGIBLE EQUITY AND TANGIBLE ASSETS
(PERIOD END)
Total shareholders' equity (GAAP) $ 131,115 $ 132,880 $ 130,209 $ 128,829 $ 125,930 $ 131,115 $ 125,930
Less: intangible assets (26,968) (27,206) (27,466) (27,730) (28,175) (26,968) (28,175)
Tangible equity (non-GAAP) $ 104,147 $ 105,674 $ 102,743 $ 101,099 $ 97,755 $ 104,147 $ 97,755
Total assets (GAAP) $ 1,248,160 $ 1,286,980 $ 1,267,459 $ 1,254,495 $ 1,216,260 $ 1,248,160 $ 1,216,260
Less: intangible assets (26,968) (27,206) (27,466) (27,730) (28,175) (26,968) (28,175)
Tangible assets (non-GAAP) $ 1,221,192 $ 1,259,774 $ 1,239,993 $ 1,226,765 $ 1,188,085 $ 1,221,192 $ 1,188,085
Total equity to total assets at end of period (GAAP) 10.50% 10.32% 10.27% 10.27% 10.35% 10.50% 10.35%
Book value per share (GAAP) $ 28.20 $ 28.62 $ 28.11 $ 27.77 $ 27.14 $ 28.20 $ 27.14
Tangible equity to tangible assets at end of period (non-GAAP) 8.53% 8.39% 8.29% 8.24% 8.23% 8.53% 8.23%
Tangible book value per share (non-GAAP) $ 22.40 $ 22.76 $ 22.18 $ 21.79 $ 21.07 $ 22.40 $ 21.07
TANGIBLE EQUITY AND TANGIBLE ASSETS
(AVERAGE)
Total shareholders' equity (GAAP) $ 133,799 $ 132,186 $ 130,254 $ 128,194 $ 129,767 $ 131,119 $ 120,225
Less: intangible assets (27,096) (27,359) (27,619) (27,729) (28,488) (27,449) (24,850)
Tangible equity (non-GAAP) $ 106,703 $ 104,827 $ 102,635 $ 100,465 $ 101,279 $ 103,670 $ 95,375
Return on average equity (GAAP) 6.33% 8.53% 7.55% 11.34% 9.06% 8.41% 8.77%
Return on average tangible equity (non-GAAP) 7.94% 10.76% 9.58% 14.47% 11.60% 10.63% 11.05%

CONTACT: Mark A. Severson, EVP and CFO Phone: 607-737-3714Source:Chemung Financial Corporation