UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly period ended September 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 0-13888
CHEMUNG FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-1237038
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
One Chemung Canal Plaza, Elmira, NY 14902
(Address of principal executive offices) (Zip Code)
(607) 737-3711
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES XX NO
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of September 30, 1995:
Common Stock, $5 par value -- outstanding 2,086,481 shares
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
Condensed Consolidated Statements of Condition
Condensed Consolidated Statements of Income
Condensed Consolidated Statements of Cash Flow
Notes to Condensed Consolidated Financial Statements
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 5: Other Information
Item 6: Exhibits and Reports on Form 8-K
All other items required by Part II are either
inapplicable or would require an answer which is
negative.
SIGNATURES
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
Sept. 30 Dec 31
1995 1994
ASSETS
Cash and due from Banks $ 40,597,075 $ 24,380,592
Federal Funds Sold 6,800,000 8,000,000
Investment Securities Held to Maturity 17,724,680 15,168,682
(aggregate market value 1995 - $17,834,561
1994 - $15,012,570
Investment Securities Available for Sale 152,046,528 189,123,633
Allowance Valuation - Securities Available for Sale 5,157,734 (295,349)
Total Investment Securities AFS - Adj. to Market 157,204,262 188,828,284
Loans 253,555,967 236,497,448
Less: Allowance for Loan Losses 4,047,150 3,599,968
Loans, Net 249,508,817 232,897,480
Bank Premises and Equipment, Net 9,917,262 8,527,302
Goodwill and deposit base Intangible,
net of accumulated amortization 8,137,062 8,577,540
Other Assets 7,283,968 7,952,438
Total Assets $497,173,126 $494,332,318
LIABILITIES
Deposits: Non-interest Bearing $ 79,052,525 $ 81,135,334
Interest Bearing 346,112,882 351,135,386
Total Deposits 425,165,407 432,270,720
Securities sold under Agreement to Repurchase 11,978,059 10,203,785
Other Liabilities 8,754,484 6,119,067
Total Liabilities 445,897,950 448,593,572
SHAREHOLDERS' EQUITY
Common Stock (Authorized 3,000,000; Issued 2,150,067) 10,750,335 10,750,335
Surplus 10,068,563 10,068,563
Retained Earnings 28,839,319 26,374,590
Cost of Treasury Shares (Deduction) 63,586-1995
56,586-1994 (1,457,799) (1,279,549)
Unrealized G/L Security Valuation-Avail. for Sale 3,074,758 (175,193)
Total Shareholders' Equity 51,275,176 45,738,746
Total Liabilities & Shareholders' Equity $497,173,126 $494,332,318
See Accompanying Notes to Condensed Consolidated Financial Statements
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
9 Months Ended 3 Months Ended
Sept. 30 Sept. 30
INTEREST INCOME 1995 1994 1995 1994
Interest and Fees on Loans $17,719,662 $14,727,486 $6,217,199 $5,042,237
Interest and Dividends on
Investment Securities 8,653,265 6,273,035 2,677,753 2,453,560
Interest on Federal Funds Sold 365,522 323,648 127,640 139,667
Income Interest Bearing Deposits 196,103 137,032 105,919 69,370
Total Interest Income 26,934,552 21,461,201 9,128,511 7,704,834
INTEREST EXPENSE
Deposits 10,048,925 7,022,497 3,379,996 2,646,355
Securities Sold Under Agreements
to Repurchase and Funds Borrowed 571,433 226,321 152,672 82,538
Total Interest Expense 10,620,358 7,248,818 3,532,668 2,728,893
Net Interest Income 16,314,194 14,212,383 5,595,843 4,975,941
Provision for Loan Losses 600,000 375,000 200,000 125,000
Net Interest Income after Provision
for Loan Losses 15,714,194 13,837,383 5,395,843 4,850,941
Realized Gains-Security Transactions 334,010 140,001 8,856 17
Other Operating Income 4,440,960 4,171,377 1,517,903 1,498,310
Total Operating Income 20,489,164 18,148,761 6,922,602 6,349,268
Other Operating Expenses 14,468,081 12,678,765 4,887,858 4,433,990
Income before Taxes 6,021,083 5,469,996 2,034,744 1,915,278
Income Taxes 2,031,302 1,847,605 703,586 640,202
Net Income $3,989,781 $ 3,622,391 $1,334,158 $1,275,076
Net Income per Share $1.91 $1.91 $.64 $.67
See Accompanying Notes to Condensed Consolidated Financial Statements
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months Ended
Sept. 30
1995 1994
OPERATING ACTIVITIES
Net Income $ 3,989,781 $ 3,622,391
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Amortization of Deposit Base Intangible 440,478 132,573
Provision for Loan Losses 600,000 375,000
Provision for Depreciation and Amortization 832,259 702,957
Amortization for Investment Securities, Net (367,058) (700,440)
(Gain) Loss on Investment Security Sales, Net (334,010) (140,001)
(Increase) Decrease in Accrued Interest Receivable
and Other Assets 668,470 (1,322,601)
Increase (Decrease) in Accrued Interest Payable,
Taxes and Other Liabilities 2,569,822 1,095,931
Net Cash Provided by Operating Activities 8,399,742 3,765,810
INVESTING ACTIVITIES
Proceeds from Maturities of Securities - AFS 71,524,712 51,852,150
Proceeds from Maturities of Securities -HTM 6,367,463 4,867,793
Proceeds from Sales of Securities - AFS 5,953,782 10,242,366
Purchases of Securities - AFS (41,886,855) (129,527,669)
Purchases of Securities - HTM (8,940,058) (5,705,655)
Purchases of Bank Premises and Equipment, Net (2,222,219) (829,008)
Loan Originations, Net of Repayments
and Other Reductions (19,806,286) (1,675,213)
Proceeds from Sale of Student Loans 2,594,949 2,220,834
Deposit Acquisition Premium 0 (5,965,793)
Net Cash Used by Investing Activities 13,585,488 (74,520,195)
FINANCING ACTIVITIES
Deposits of Acquired Branches 0 45,628,085
Net Increase (Decrease) in Demand Deposits, NOW,
Savings and Insured Money Market Accounts (14,604,404) 8,703,378
Net Increase (Decrease) in Certificates of Deposit
and Individual Retirement Accounts 7,499,091 1,975,961
Net Increase (Decrease) in Short term Borrowings 1,774,274 (5,813,088)
Sale of Treasury Shares 0 172,500
Purchase of Treasury Shares (178,250) 0
Cash Dividends Paid (1,459,458) (1,295,121)
Net Cash Provided by Financing Activities (6,968,747) 49,371,715
Net Increase (Decrease) in Cash and Cash Equivalents 15,016,483 (21,382,670)
Cash and Cash Equivalents at Beginning of Year 32,380,592 65,055,776
Cash and Cash Equivalents at End of Period $47,397,075 $43,673,106
See Accompanying Notes to Condensed Consolidated Financial Statements
CHEMUNG FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Chemung Financial Corporation, a one-bank holding company, commenced
operations on June 1, 1985 for the purpose of acquiring all the
outstanding shares of the Chemung Canal Trust Company, Elmira, NY. The
Trust Company's stock was acquired through the issuance of 431,498 shares
of the Corporation's stock in a transaction accounted for as a pooling of
interests.
2. The condensed consolidated financial statements included herein reflect
all adjustments which are, in the opinion of management, of a normal
recurring nature and necessary to present fairly the Corporation's
financial position as of September 30, 1995 and December 31, 1994, results
of operations for the three and nine-month periods ending September 30,
1995 and 1994 and changes in cash flow position for the nine-month period
ending September 30, 1995 and 1994.
3. Net income per share for the periods presented have been computed by
dividing net income by 2,089,259 average shares outstanding on September
30, 1995 and 1,899,280 average shares outstanding on September 30, 1994.
4. The Financial Accounting Standards Board issued Statement 114 Accounting
by Creditors for Impairment of a Loan as amended by Statement 118,
Accounting by Creditors for Impairment of a Loan - Income and Disclosure.
These statements prescribe recognition criteria for loan impairment,
generally related to commercial type loans, and measurement methods for
certain impaired loans and all loans whose terms are modified in troubled
debt restructuring subsequent to the adoption of these statements. A loan
is considered impaired when it is probable that the borrower will be
unable to repay the loan according to the original contractual terms of
the loan agreement.
As of January 1, 1995, the Company has adopted the provisions of SFAS No.
114 and SFAS No. 118 and has provided the required disclosures. The
effect of adoption was not material to the consolidated financial
statements. As of January 1, 1995, the company had no in substance
foreclosed assets to be reclassified into impaired loan status as required
by SFAS No. 114. For all prior periods presented, there were no in
substance foreclosures to be reclassified.
As a result of the adoption of SFAS No. 114, the allowance for possible
loan losses related to impaired loans that are identified for evaluation
in accordance with SFAS No. 114 is based on the present value of expected
cash flows discounted at the loan's initial effective interest rate,
except that as a practical expedient, impairment may be measured at the
loan's observable market price, or the fair value of the collateral for
certain loans where repayment of the loan is expected to be provided
solely by the underlying collateral (collateral dependent loans). The
Company considers estimated costs to sell, on a discounted basis, when
determining the fair value of collateral in the measurement of impairment
if those costs are expected to reduce the cash flows available to repay or
otherwise satisfy the loans. Prior to the adoption of SFAS No. 114 and
118, the allowance for possible loan losses related to these loans was
based on estimated undiscounted cash flows or the fair value of the
collateral, less estimated costs to sell for collateral dependent loans.
Other real estate owned included only formally foreclosed, and no
in-substance foreclosed real properties. In accordance with SFAS No. 114,
a loan is classified as an in-substance foreclosure when the Company has
taken possession of the collateral regardless of whether formal
foreclosure proceedings have taken place. Prior to the adoption of SFAS
No. 114 and SFAS No. 118, in-substance foreclosed properties included
those properties where the borrower had little or no remaining equity in
the property considering its fair value remaining equity; where repayment
was only expected to come from the operation or sale of the property; and
where the borrower had effectively abandoned control of the property or it
was doubtful that the borrower would be able to rebuild equity in the
property.
At September 30, 1995, the recorded investment in loans that are
considered to be impaired under SFAS No. 114 totaled $592,243. Included
in this amount is $447,941 of impaired loans for which the related
allowance for credit losses is $247,052. In addition, included in the
total impaired loans at September 30, 1995 is $144,302 of impaired loans
that as a result of the adequacy of collateral values, do not have an
allowance for credit losses determined in accordance with SFAS No. 114.
The average recorded investments in impaired loans during the nine months
ended September 30, 1995 was approximately $661,164.
Impaired loans are included in non-performing loans, generally as
non-accrual loans. Commercial type loans past due greater than 90 days
and still accruing are generally not considered to be impaired as the
Company expects to collect all amounts due, including interest accrued at
the contractual interest rate for the delinquent period. The Company had
no restructured loans prior to the adoption of SFAS No. 114.
In general, interest income on impaired loans is recorded on a cash basis
when collection in full is reasonably expected. If full collection is
uncertain, cash receipts are applied first to principal, then to interest
income.
For the nine months ended September 30, 1995 the Company recognized
interest income on those impaired loans of $8,007 which included $5,328 of
interest income recognized using the cash basis method of income
recognition.
6. Goodwill, which represents the excess of purchase price over the fair
value of identifiable assets acquired, is being amortized over 15 years on
the straight-line method. Deposit base intangible, resulting from the
purchase of deposits by the Corporation's subsidiary from the Resolution
Trust Company in 1994, is being amortized over the expected useful life of
15 years on a straight-line basis. Management periodically reviews the
operating results of these entites to determine that income from
operations continues to support the recoverability of goodwill and
amortizations used by the Corporation. Included in this review are
operating income, asset quality, franchise value, market potential and the
continuity of deposit base of the acquired entites. Likewise,
amortization periods are monitored to determine if any events and
circumstances require such periods to be reduced.
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations
Consolidated total assets at September 30, 1995 were $497.2 million, an
increase of $2.8 million (0.57%) from the beginning of the year. This is
within the expectations of management as the Corporation moved to assimilate
the operations of four branches acquired during 1994. With the loan to deposit
ratio at 54.7% at the beginning of the year, there was little need to
aggressively pursue additional deposits through aggressive interest rate
bidding.
Loan business, in accordance with the Corporation's plan, continues to be
strong in the commercial and consumer loan areas, which have increased 10.7%
and 11.5% respectively since the first of this year. We have also seen renewed
strength in 1-4 family mortgage loans, the outstanding balances of which have
advanced 4.5% since 12/31/94. Total loans at the end of September 1995 were
$253.6 million, up $1 million (0.4%) for the third quarter and $17.1 million
(7.2%) since the beginning of the year.
Total deposits at September 30, 1995 were $425.2 million, up $4.2 million
(1.1%) from the beginning of the quarter and down $7.1 million (1.6%) from
December 31, 1994. Average total deposit balances during the quarter were
about $421 million. The loan to deposit ratio at September 30 was 59.7%.
The Available for Sale segment of the securities portfolio at September
30, 1995 was $157.2 million, compared to $157.6 million at June 30 and $189
million at the beginning of the year. Interest rates continued to trend lower
during the quarter. This, together with an exceptional appreciation in the
common stock portfolio of the Corporation's banking subsidiary caused the
Allowance valuation to increase to $5.1 million at September 30, compared to
$4.9 million at June 30 and $-295 thousand at December 31, 1994.
Amortized cost and fair value, maturity duration, and unrealized gains and
losses for the investment security components in each of the available for sale
and held to maturity categories of the investment portfolio are set forth in
the following tables:
AVAILABLE FOR SALE HELD TO MATURITY
Amortized Fair Amortized Fair
Cost Value Cost Value
U.S. Treasury and other
U.S. Govt. Agencies $133,913,717 $134,751,895 $ - $ -
Obligations of states and
Political subdivisions 12,814,486 13,063,114 16,358,960 16,450,059
Other bonds and notes 2,849,429 2,903,627 1,365,720 1,384,502
Corporate Stocks 2,468,896 6,485,626 - -
$152,046,528 $157,204,262 $ 17,724,680 $ 17,834,561
The amortized cost and weighted average yields by years to maturity for
securities available for sale as of September 30, 1995 are as follows (excluding
corporate stocks):
MATURING
Within One Year After One, Within Five
Amount Yield Amount Yield
U.S. Treasury and other
U.S. Govt. Agencies $ 40,398,382 5.94% $ 84,626,344 6.46%
Obligations of states and
Political subdivisions 3,504,325 5.76% 7,980,058 5.27%
Other bonds and notes 1,499,679 7.60% 1,349,750 8.41%
Total $ 45,402,386 $ 93,956,152
MATURING
After Five, Within Ten After Ten Years
Amount Yield Amount Yield
U.S. Treasury and other
U.S. Govt. Agencies $ 8,888,991 7.61% $ - -
Obligations of states and
Political subdivisions 1,105,103 5.16% 225,000 4.71%
Other bonds and notes - - - -
Total $ 9,994,094 $ 225,000
The amortized cost and weighted average yields by years to maturity for
securities held to maturity as of September 30, 1995 are as follows:
MATURING
Within One Year After One, Within Five
Amount Yield Amount Yield
Obligations of states and
Political subdivisions $ 6,553,066 4.18% $ 7,921,974 4.64%
Other bonds and notes 503,806 7.36% 861,914 7.61%
Total $ 7,056,872 $ 8,783,888
MATURING
After Five, Within Ten After Ten Years
Amount Yield Amount Yield
Obligations of states and
Political subdivisions $ 1,379,754 5.45% $ 504,166 7.50%
Other bonds and notes - - - -
Total $ 1,379,754 $ 504,166
There are no securities of a single issuer (other than securities of the U.S.
Government and its agencies) that exceed 10% of shareholders equity at September
30, 1995 in either the available for sale or held to maturity categories.
Gross unrealized gains and gross unrealized losses on securities available for
sale and held to maturity at September 30, 1995 were as follows:
AVAILABLE FOR SALE HELD TO MATURITY
Unrealized Unrealized Unrealized Unrealized
Gains Losses Gains Losses
U.S. Treasury and other
U.S. Govt. Agencies $ 999,983 $ 161,805 $ - $ -
Obligations of states and
Political subdivisions 281,303 32,675 92,989 1,891
Other bonds and notes 55,971 1,773 19,496 713
Corporate Stocks 4,016,730 - - -
$ 5,353,987 $ 196,253 $ 112,485 $ 2,604
Gross realized gains on sales of securities available for sale as of September
30, 1995 were $334,010.
Included in the Corporate Stocks component in the above tables are 18,778
shares of Student Loan Marketing Association ("SALLIE MAE") at a cost basis of
$6,068 and market value of $1,018,616. These shares were acquired as preferred
shares (an exeption to the U.S. Government regulation banning bank ownership of
equity securities) in the original capitalization of the U.S. Government Agency.
Later, the shares were converted to common stock as SALLIE MAE recapitalized.
Additionally, at 9/30/95, the banking subsidiary's equity portfolio held
marketable investments in listed equities totaling $95,060 at cost with a total
market value of $3,051,075. These shares were acquired prior to the enactment
of the Banking Act of 1933. Other equities included in the bank portfolio are
9,964 shares of Federal Reserve Bank and 14,813 shares of the Federal Home Loan
Bank of New York. They are valued at $498,200 and 1,481,300, respectively.
Management has no current plans for selling these investments.
The Owego acquisition, first discussed in the December, 1994 10-K, was
accounted for on a "purchase" accounting basis, a treatment which resulted in a
good will intangible amounting to $2.71 million at 9/30/95. This intangible is
being amortized on a straight line basis over fifteen years. The amortization
of good will is an after-tax expense. During the fist nine months,
non-recurring expenses associated with the acquisition were approximately $124
thousand.
During the quarter, the Federal Deposit Insurance Corporation's Bank
Insurance Fund ("BIF") became fully capitalized at the required 1.25% of
insured deposits. This resulted in an 82% decline in the annualized premium to
$0.04 per $100 insured deposit. The impact to earnings may result in a $376
thousand reduction in the full year's accrual. The actual rebate during the
quarter just ended was $253 thousand, $108 thousand of which reduced the third
quarter FDIC expense. The accrual adjustment decision is complicated by the
House and Senate Banking Committees reported different approaches to
recapitalizing the Savings Association Insurance Fund ("SAIF"), which insures
most savings and loan associations, and then merging the two funds.
It is probable that there will be a one-time charge to SAIF insured
deposit institutions, which acquired deposits from the Resolution Trust
Company. Management expects that as much as $36.3 million in SAIF insured
deposits may be subject to a yet to be determined special assessment. While it
is possible that an assessment could be imposed during 4th quarter 1995, the
event is more likely to occur in 1996.
During the second and third quarter, the data processing function was
brought in-house from a remote-job-entry system through Mellon Datacenter.
Estimated non-recurring expenses associated with the project amounted to $370
thousand or approximately the same amount as the reduction in total 1995 FDIC
premiums. This investment is viewed by management as a technological
requirement for delivering appropriate service to our market at the most
efficient cost. The annualized reduction in data processing expense is
estimated at $200 thousand.
Consolidated net earnings for the third quarter of 1995 were $1.334
million, up $59 thousand (4.6%) over the third quarter of 1994. Net earnings
per share for the quarter were $0.64 vs $0.67, an decrease of $0.03 (4.5%) on
197 thousand additional shares outstanding. Net earnings for the nine month
period were $3.990 million versus $3.622 (10.14%) or $1.91 vs $1.91 (0.0%) per
share on the additional shares outstanding. Thus, the earnings per share
dilution is about $0.19 per share or 9.05%. Management believes that future
cost efficiencies, together with future steady and sustainable growth in the
Owego market will recapture the goodwill associated with the acquisition.
Proceeds from maturities and sales of securities and student loans
exceeded purchases of securities and loan origination, net of repayments and
other reductions, by $13.6 million during the nine month period. This compares
to 1994 when the figure was minus $74.5 million. The 1994 figure, however, was
distorted by the 1/1/94 adoption of FASB # 115 (Mark to market) and allocation
of securities to the available for sale category. Additionally, in June 1994,
the bank acquired $45.6 million in deposits from the RTC. This event resulted
in unusually high levels of securities purchases.
Net cash provided by financing activities amounted to a negative $6.968
million on 9/30/95 compared to a plus $49.4 million a year earlier, when the
purchase of deposits of acquired branches accounted for $45.6 million of the
increase. Core deposits (demand, NOW, Savings and Insured Money Market
Accounts) decreased $14.6 million while certificates of deposits and individual
retirement accounts increased $7.5 million and $1.7 million respectively.
During the period, 7,000 treasury shares were purchased at an average price of
$25.57 per share.
Due to the sustained increase in loan demand, management decided to
increase the loan loss provision to $200 thousand during the first quarter and
continued the allocation in the second and third quarters.
The Corporation defines smaller balance, homogeneous loans as consumer
loans, residential mortgages, home equity and credit card outstandings.
Significant factors impacting management's judgment in determining when a loan
is impaired include an evaluation of compliance with repayment program,
condition of collateral, deterioration in financial strength of borrower or any
case when the expected future cash payments may be less than the recorded
amount. Commercial loans are placed upon non-accrual status when delinquency
reaches 90 days unless collateral is deemed adequate, while consumer loans are
considered non-accrual at 120 days. This is due to management's evaluation of
commercial loans as carrying a greater level of inherent risk.
Management distinguishes between impaired and nonaccrual loans as follows:
Impaired Loans - A loan which may or may not be current with interest and
principal payments but of which loan management feels may have to be
restructured at some point in the future;
Nonaccrual Loans - Commercial loans that are 90 days delinquent and
Consumer loans that are 120 days delinquent or an event which occurs that
would jeopardize the collection of all interest and principal payments.
At 286% of non-performing loans and 1.59% of total loans, the reserve is
viewed by management as adequate relative to risk. Non-performing loans at
9/30/95 constituted 0.56% of total loans.
Changes in the allowance for possible loan losses for the nine months
ended September 30, 1995 is as follows:
<CAPTION
Amount (000's)
Balance at beginning of period $ $3,600
Charge-offs:
Domestic:
Commercial, financial and agricultural 12
Commercial mortgages 0
Residential mortgages 5
Consumer loans 225
$ 242
Recoveries:
Domestic:
Commercial, financial and agricultural $ 14
Commercial mortgages 0
Residential mortgages 0
Consumer loans 75
$ 89
Net charge-offs $ 153
Additions charged to operations 600
Balance at end of period $4,047
Ratio of net charge-offs during the
period to average loans outstanding
during the period .06%
For the period ended September 30, 1995, the allocation of the loan loss
provision for classified loans is as follows:
Reported Period
September 30, 1995
Balance at end of period
applicable to:
Percent of loans in each
Amount category to Total Loans
Domestic: $1,555,046 100.00%
Commercial, financial and
agricultural 1,133,555 32.32%
Commercial mortgages 279,950 3.88%
Residential mortgages -0- 24.06%
Consumer loans 141,541 39.74%
Unallocated: 2,492,104 N/A
Total $4,047,150 100.00%
For the periods ended September 30, 1995 and December 31, 1994, the
following table summarizes the Corporation's nonaccrual and past due loans:
Amount (000's)
Sept. 30 Dec. 31
1995 1994
Nonaccrual loans (1) $ 1,129 $ 1,201
Accruing loans past due
90 days or more $ 537 $ 354
(1) It is the Corporation's policy that when a past due loan is referred to legal counsel, or in
the case of a commercial loan which becomes 90 days delinquent, or in the case of a consumer loan
(not guaranteed by a government agency) or a real estate loan which becomes 120 days delinquent,
the loan is placed in nonaccrual and previously accrued interest is reversed unless, because of
collateral or other circumstances, it is deemed to be collectible. Loans may also be placed in
nonaccrual if management believes such classification is warranted for other reasons.
At September 30, 1995, the Corporation has no commercial loans for which
payments are presently current but the borrowers are currently experiencing
severe financial difficulties. Those loans are subject to constant management
attention and their classification is reviewed by the Board of Directors at
least simi-annually. At September 30, 1995, no loan concentrations to
borrowers engaged in the same or similar industries exceeded 10% of total loans
and the Corporation has no interest-bearing assets other than loans that meet
the nonaccrual, past due, restructured or potential problem loan criteria.
The core deposit intangible in the amount of $5.44 million at 9/30/95,
which accounts for the premium paid in connection with the acquisition of three
branches from the Resolution Trust Corporation in June of last year, is being
amortized over 15 years for both book and tax purposes. Our actual experience
with the deposit accounts acquired in this transaction is under continuing
review.
On September 30, 1995, the Corporation's consolidated leverage ratio was
8.17% versus 7.99% on June 30, and 7.51% at the beginning of the year. The
Tier I and Total Risk Adjusted Capital ratios were 13.61% and 15.12%,
respectively.
In June of this year, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 122 ("SFAS # 122") Accounting
for Certain Mortgage Banking Activities, an amendment of FASB Statement No. 65.
This statement amends certain provisions of Statement 65 to eliminate the
accounting distinction between rights to service mortgage loans for others that
are acquired through loan origination activities and those acquired through
purchase transactions. The Corporation presently recognizes servicing rights
acquired only through loan underwriting transactions and these are not
material. Adoption SFAS # 122 in 1996 will have no material impact upon its
financial statements.
PART II. OTHER INFORMATION
Item 5. Other Information
During the reporting period the board of directors approved an
amendment to the corporation's bylaws decreasing the number of board
positions from twenty to nineteen, which action eliminated the
vacancy created by the retirement of Whitney S. Powers effective
August 31, 1995.
Item 6. Exhibits and Reports on Form 8-K
(a) Applicable Exhibits
(3.1) Certificate of Incorporation is filed as Exhibit 3.1 to
Registrant's Registration Statement on Form S-14, Registration
No. 2-95743, and is incorporated herein by reference.
Certificate of Amendment to the Certificate of Incorporation,
filed with the Secretary of State of New York on April 1, 1988,
is incorporated herein by reference to Exhibit A of the
registrant's Form 10-K for the year ended December 31, 1988,
File No. 0-13888.
(3.2) Bylaws of the Registrant, as amended to September 13, 1995.
Exhibit A
(27) Financial Data Schedule (EDGAR version only)
(b) Reports on Form 8-K
During the quarter ended September 30, 1995, no reports on Form
8-K or amendments to any previously-filed Form 8-K were filed by
the registrant.
FORM 10-Q
QUARTERLY REPORT
EXHIBIT INDEX
FOR PERIOD ENDING SEPTEMBER 30, 1995
CHEMUNG FINANCIAL CORPORATION
ELMIRA, NEW YORK
EXHIBIT A Amended Bylaws Effective September 13, 1995
EXHIBIT A
CHEMUNG FINANCIAL CORPORATION
BY-LAWS
Amended to September 13, 1995
ARTICLE I
OFFICES
SECTION 1. Principal Office
The principal office of the corporation shall be located in the City of
Elmira, County of Chemung and State of New York.
SECTION 2. Other Offices
The corporation may also have such other offices, either within or without
the State of New York, as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
Shareholders
SECTION 1. Place of Meetings of Shareholders
Meetings of shareholders may be held at such place, within or without the
State of New York, as may be fixed by the Board of Directors.
SECTION 2. Annual Meeting of Shareholders
A meeting of shareholders shall be held annually on such date and at such
place and time as may be fixed by the Board of Directors for the election of
directors and the transaction of other business.
SECTION 3. Special Meetings of Shareholders
Special meetings of the shareholders may be called by the Board of
Directors or by the chairman of the board or by the president. Such call shall
state the purpose or purposes of the proposed meeting. Business transacted at
any special meeting shall be confined to the purpose or purposes for which the
meeting is called.
SECTION 4. Fixing Record Date
The Board of Directors may fix, in advance, a date as the record date for
purpose of determining the shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or to express consent to or
dissent from any proposal without a meeting, or for the purpose of determining
shareholders entitled to receive payment of any dividend or the allotment of
any rights, or for the purpose of any other action. Such date shall be not
more than fifty (50) nor less than ten (10) days before the date of such
meeting nor more than fifty (50) days before any other action. If no record
date is fixed, the record date for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders shall be at the
close of business on the day next preceding the day on which notice is given
and for all other purposes shall be at the close of business on the day on
which the resolution of the Board of Directors relating thereto is adopted.
SECTION 5. Notice of Meetings of Shareholders
Written notice of every meeting of shareholders shall state the place,
date and hour of the meeting and unless it is the annual meeting, indicate that
it is being issued by or at the direction of the person or persons calling the
meeting. Notice of a special meeting shall also state the purpose or purposes
for which the meeting is called. If, at any meeting, action is proposed to be
taken which would, if taken, entitle shareholders fulfilling the statutory
requirements to receive payment for their shares, the notice of such meeting
shall include a statement of that purpose and to that effect. A copy of the
notice of any meeting shall be given, personally or by mail, not less than ten
(10) nor more than fifty (50) days before the date of the meeting, to each
shareholder entitled to vote at such meeting. If mailed, such notice shall be
deemed given when deposited in the United States mail, with postage thereon
prepaid, directed to the shareholder at his address as it appears on the record
of shareholders or, if he shall have filed with the secretary of the
corporation a written request that notices to him be mailed to some other
address, then directed to him at such other address.
SECTION 6. Adjourned Meetings
When a determination of shareholders entitled to notice of or to vote at
any meeting of shareholders has been made, such determination shall apply to
any adjournment thereof, unless the Board of Directors fixes a new record date
for the adjourned meeting. When a meeting is adjourned to another time or
place, it shall not be necessary to give any notice of the adjourned meeting if
the time and place to which the meeting is adjourned are announced at the
meeting at which the adjournment is taken, and at the adjourned meeting the
corporation may transact any business that might have been transacted on the
original date of the meeting. However, if after the adjournment the Board of
Directors fixes a new record date for the adjourned meeting, a notice of the
adjourned meeting shall be given to each shareholder of record on the new
record date entitled to notice.
SECTION 7. List of Shareholders at Meeting
A list of shareholders as of the record date, certified by the secretary
or by the transfer agent, shall be produced at any meeting of shareholders upon
the request thereat or prior thereto of any shareholder. If the right to vote
at any meeting is challenged, the inspectors of election, or person presiding
thereat, shall require such list of shareholders to be produced as evidence of
the right of the persons challenged to vote at such meetings, and all persons
who appear from such list to be shareholders entitled to vote thereat may vote
at such meeting.
SECTION 8. Quorum of Shareholders
The holders of a majority of the shares entitled to vote thereat shall
constitute a quorum at a meeting of shareholders for the transaction of any
business. When a quorum is once present to organize a meeting, it is not
broken by the subsequent withdrawal of any shareholders. Despite the absence
of a quorum, the shareholders present may adjourn the meeting.
SECTION 9. Proxies
Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting may authorize another person or
persons to act for him by proxy. Every proxy must be signed by the shareholder
or his attorney-in-fact. No proxy shall be valid after the expiration of
eleven (11) months from the date thereof unless otherwise provided in the
proxy. Every proxy shall be revocable at the pleasure of the shareholder
executing it, except in those cases where an irrevocable proxy is provided by
law.
SECTION 10. Inspectors at Shareholders Meetings
The Board of Directors, in advance of any shareholders meeting, may
appoint one or more inspectors to act at the meeting or any adjournment
thereof. If inspectors are not so appointed, the person presiding at a
shareholders meeting may, and on the request of any shareholder entitled to
vote thereat shall, appoint inspectors. If appointed on the request of one or
more shareholders, the holders of a majority of shares present and entitled to
vote thereat shall determine the number of inspectors to be appointed. In case
any person appointed fails to appear or act, the vacancy may be filled by
appointment made by the Board of Directors in advance of the meeting or at the
meeting by the person presiding thereat. Each inspector, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and according
to the best of his ability. The inspectors shall determine the number of
shares outstanding and the voting power of each, the shares represented at the
meeting, the existence of a quorum, the validity and effect of proxies, and
shall receive votes, ballots or consents, hear and determine all challenges and
questions arising in connection with the right to the result, and do such acts
as are proper to conduct the election or vote with fairness to all
shareholders. On request of the person presiding at the meeting or any
shareholder entitled to vote thereat, the inspectors shall make a report in
writing of any challenge, question or matter determined by them and execute a
certificate of any fact found by them. A report or certificate made by them
shall be prima facie evidence of the facts stated and of the vote as certified
by them.
SECTION 11. Qualifications of Voters
Every shareholder of record shall be entitled at every meeting of
shareholders to one vote for every share standing in his name on the record of
shareholders.
Neither treasury shares nor shares held by another domestic or foreign
corporation of any type or kind, if a majority of the shares entitled to vote
in the election of directors of such other corporation is held by the
corporation, shall be voted at any meeting or counted in determining the total
number of outstanding shares.
Shares held by an administrator, executor, guardian, conservator,
committee, or other fiduciary, except a trustee, may be voted by him, either in
person or by proxy, without transfer of such shares into his name. Shares held
by a trustee may be voted by him, either in person or by proxy, only after the
shares have transferred into his name as trustee or into the name of his
nominee.
Shares held by or under the control of a receiver may be voted by him
without the transfer thereof into his name if authority so to do is contained
in an order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, or
a nominee of the pledgee.
Shares standing in the name of another domestic or foreign corporation of
any type or kind may be voted by such officer, agent or proxy as the Bylaws of
such corporation may provide or, in the absence of such provision, as the Board
of Directors of such corporation may determine.
SECTION 12. Vote of Shareholders
Directors shall, except as otherwise required by law, be elected by a
plurality of the votes cast at a meeting of shareholders by the holders of
shares entitled to vote in the election. Any other corporate action by vote of
the shareholders shall, except as otherwise required by law, these Bylaws or
the certificate of incorporation, be authorized by a majority of the votes cast
at a meeting of shareholders by the holders of shares entitled to vote thereon.
SECTION 13. Conduct of Shareholders' Meetings
The Officer presiding over the shareholders' meeting may establish such
rules and regulations for the conduct of the meeting as the presiding Officer
may deem to be reasonably necessary or desirable for the orderly and
expeditious conduct of the meeting.
SECTION 14. Shareholder Proposals
No shareholder shall be entitled to submit a proposal to a meeting of
shareholders unless at the time of submitting the proposal, the shareholder
shall be a record or beneficial owner of at least 1% or $1,000 in market value
of shares entitled to be voted at the meeting, and shall have held such shares
for at least one year and shall continue to own such shares through the date on
which the meeting is held. A shareholder meeting the above requirements shall
deliver to the secretary of the corporation not later than 120 days prior to
the date on which the corporation's proxy statement was mailed to stockholders
in connection with the previous year's annual meeting, the text of any proposal
which he intends to propose at an annual meeting of shareholders and a notice
of the intention of the shareholder to present such proposal at the meeting. A
proposal to be presented at any meeting of shareholders other than an annual
meeting shall be delivered to the secretary a reasonable time before the
mailing of the corporation's proxy material.
ARTICLE III
Directors
SECTION 1. Board of Directors
The business of the corporation shall be managed under the direction of
its Board of Directors.
SECTION 2. Qualifications of Directors
Each director shall be at least 18 years of age and shall automatically
cease to be a director on the last day of the month during which he or she
attains the age of seventy-two (72) years. At the time of taking an office,
each director shall be a stockholder of the corporation owning in his or her
own right, free from pledge, lien or charge, the number of shares of capital
stock of the corporation while each director of a New York bank or trust
company is required to own in such bank or trust company or a holding company
of such bank or trust company by the New York State Banking law. If a director
shall cease to own the required number of shares, he or she automatically
ceases to be a director of the corporation and his or her office shall be
vacant, and he or she shall not be eligible for re-election as a director for a
period of one year from the date of the next succeeding annual meeting of
stockholders of the corporation.
SECTION 3. Number of Directors
The number of directors constituting the entire Board shall be nineteen
(19). This number may be increased or decreased from time to time by amendment
of these By-Laws, provided, however, that the number may not be decreased to
less than three (3). No decrease in the number of directors shall shorten the
term of any incumbent director.
SECTION 4. Election and Term of Directors
The directors shall be classified by the Board of Directors with respect
to the time for which they severally hold office, into three classes, as nearly
equal in number for a term of one (1) year, the second class shall be
originally elected for a term of two (2) years, and the third class shall be
originally elected for a term of three (3) years, with the directors of each
class to hold office until their successors are elected and qualified. Newly
created directorships resulting from an increase in the number of directors
shall be classified by the Board of Directors when the directorship is created.
At each annual meeting of the stockholders of the corporation, the successors
of the class of directors whose term expire at that meeting shall be elected to
hold office for a term expiring at the annual meeting of stockholders held in
the third year following the year of their election or until their successors
are elected and have qualified.
SECTION 5. Nominations for Directors
Nominations of candidates for election as directors of the corporation at
any meeting of stockholders called for the election of directors may be made by
the Board of Directors or by any stockholder entitled to vote at such meeting.
Nominations made by the Board of Directors shall be made at a meeting of the
Board of Directors, or by written consent of directors in lieu of a meeting,
not later than 60 days prior to the date of any meeting of stockholders called
for the election of directors. The secretary of the corporation shall request
that each such proposed nominee provide the corporation with such information
concerning himself as is required, under the rules of the Securities and
Exchange Commission, to be included in the corporation's proxy statement
soliciting proxies for his election as a director. Any stockholder who intends
to make a nomination at any annual meeting of stockholders shall deliver to the
secretary of the corporation not later than 120 days prior to the date on which
the corporation's proxy statement was mailed to stockholders in connection with
the previous year's annual meeting, or if such nomination is to be made at a
meeting of shareholders other than an annual meeting, a reasonable time before
the mailing of the corporation's proxy material, a notice setting forth (i) the
name, age, business address and residence address of each nominee proposed in
such notice, (ii) the principal occupation or employment of each such nominee,
(iii) the number of shares of capital stock of the corporation which are owned
of record and beneficially by each such nominee and (iv) such other information
concerning each such nominee as would be required, under the rules of the
Securities and Exchange Commission, in a proxy statement soliciting proxies for
the election of such nominees. Such notice shall include a signed consent of
such nominee to serve as a director of the corporation, if elected. In the
event that a person is validly designated as a nominee in accordance with the
provisions of this section and shall thereafter become unable or unwilling to
stand for election to the Board of Directors, the Board of Directors or the
stockholder who proposed such nominee, as the case may be, may designate a
substitute nominee. If the secretary of the meeting of stockholders called for
the election of directors determines that a nomination was not made in
accordance with the foregoing procedures, such nomination shall be void.
SECTION 6. Newly Created Directorships and Vacancies
Newly created directorships resulting from an increase in the number of
directors and vacancies occurring in the Board of Directors for any reason may
be filled by vote of a majority of the directors then in office, although less
than a quorum exists. A director elected to fill a newly created directorship
or a vacancy, shall be elected to hold office until the next meeting of
shareholders at which the election of directors is in the regular order of
business, and until his successor has been elected and qualified.
SECTION 7. Removal of Directors
Any director, an entire class of directors or the entire Board of
Directors may be removed from office, with or without cause, only by the
affirmative vote of the holders of at least 75% of the outstanding shares of
stock of the corporation entitled to vote generally in the election of
directors, voting together as a single class.
SECTION 8. Quorum of Directors
One-third (1/3) of the entire Board of Directors or seven directors,
whichever number is greater, shall constitute a quorum for the transaction of
business or of any specified item of business.
SECTION 9. Action by the Board of Directors
The vote of the majority of the directors present at a meeting of the
Board of Directors at the time of the vote, if a quorum is present at such
time, shall, except as otherwise provided by law, these Bylaws or the
certificate of incorporation, be the act of the Board of Directors.
SECTION 10. Written Consent of Directors Without A Meeting
Any action required or permitted to be taken by the Board of Directors or
a committee thereof may be taken without a meeting if all members of the Board
or the committee consent in writing to the adoption of a resolution authorizing
the action. The resolution and the written consents thereto by the members of
the board or committee shall be filed with the minutes of the proceedings of
the Board or committee.
SECTION 11. Place and Time of Meetings of Board of Directors
Meetings of the Board of Directors, regular or special, may be held at any
place, within or without the State of New York and at any time, fixed by the
Board of Directors or by the person or persons calling the meeting. Such
meetings may be held by means of a conference telephone or similar
communications equipment allowing all persons participating in the meeting to
hear each other at the same time.
SECTION 12. Notice of Meetings of the Board of Directors
Regular meetings of the Board of Directors may be held without notice if
the time and place of such meetings are fixed by the Board of Directors.
Special meetings of the Board of Directors shall be held upon notice to the
directors and may be called by the chairman of the board, the president, the
executive vice president, or any two directors. This notice shall be given
personally including by telephone or mail, telegram, cable or other public
instrumentality. If given personally or by telephone, such notice shall be
given not less than 48 hours before the meeting to each director. If given by
mail, cable, telegram or other public instrumentality, such notice shall be
given not less than five (5) days before the date of the meeting, to each
director. Such notice shall be deemed given, if mailed, when deposited in the
United States mail, with postage thereon prepaid or, if telegraphed, cabled or
sent by other public instrumentality, when given to the telegraph company,
cable company, or other public instrumentality, directed to the director at his
business address or, if he shall have filed with the secretary of the
corporation, a written request that notices to him be mailed or telegraphed,
cabled or sent to some other address, then directed to him at such other
address. The notice need not specify the purpose of any regular or special
meeting of the Board of Directors.
SECTION 13. Interested Directors
No contract or other transaction between a corporation and one or more of
its directors, or between a corporation and any other corporation, firm,
association or other entity in which one or more of its directors, or officers,
are directors or have a substantial financial interest, shall be either void or
voidable for this reason alone or by reason alone that such director or
directors are present at the meeting of the Board, or of a committee thereof,
which approves such contract or transaction, or that his or their votes are
counted for such purpose:
1) If the material facts as to such director's interest in such contract
or transaction and as to any such common directorship, officership or financial
interest are disclosed in good faith or known to the Board or committee, and
the Board or committee approves such contract or transaction by a vote
sufficient for such purpose without counting the vote of such interested
director or, if the votes of the disinterested directors are insufficient to
constitute an act of the Board as defined in Section 9 of this Article, by
unanimous vote of the disinterested directors; or
2) If the material facts as to such directors interest in such contract
or transaction and as to any such common directorship, officership or financial
interest are disclosed in good faith or known to the shareholders entitled to
vote thereon, and such contract or transaction is approved by vote of such
shareholders; or
3) If the contract or transaction is affirmatively established by the
party or parties thereto to be fair and reasonable as to the corporation at the
time it was approved by the Board, a committee thereof, or the shareholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board or a committee thereof which approves such
contract or transaction.
The Board of Directors shall have authority to fix the compensation of
directors for services in any capacity.
A loan shall not be made by the corporation to any director unless it is
authorized by vote of the shareholders. For this purpose, the shares of the
director who would be the borrower shall not be shares entitled to vote.
SECTION 14. Reimbursement and Compensation of Directors
The directors may be paid their expenses of attendance at each meeting of
the Board of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of the executive
committee or other committees may be allowed similar reimbursement and
compensation for their services as such.
SECTION 15. Executive Committee and Other Committees
The Board of Directors by resolution adopted by a majority of the entire
Board, may designate from among its members an executive committee and other
committees, each consisting of three or more directors, and each of which shall
have and may exercise such powers as shall be conferred or authorized by the
resolution appointing it, except that no such committee shall have authority as
to the following matters:
1) The submission to shareholders of any action that needs shareholders'
approval;
2) The filling of vacancies in the Board of Directors or in any
committee;
3) The fixing of compensation of the directors for serving on the Board
of Directors or on any committee;
4) The amendment or repeal of the Bylaws or the adoption of new Bylaws;
5) The amendment or repeal of any resolution of the Board of Directors.
Each such committee shall serve at the pleasure of the Board. The Board
of Directors shall have the power at any time to fill vacancies in, to change
the size or membership of, and to discharge any such committee.
A majority of any such committee may determine its action and may fix the
time and place of its meetings, unless provided otherwise by the Board of
Directors. Each such committee shall keep a written record of its acts and
proceedings and shall submit such record to the Board of Directors at each
regular meeting thereof and at such other times as requested by the Board of
Directors. Failure to submit such record, or failure of the Board to approve
any action indicated therein will not, however, invalidate such action to the
extent it has been carried out by the corporation prior to the time the record
of such action was, or should have been, submitted to the Board of Directors as
herein provided.
ARTICLE IV
Officers
SECTION 1. Number
The Board of Directors may elect a chairman of the board who shall be a
member of the Board of Directors and shall elect a president, one or more vice
presidents, a secretary and a treasurer, who need not be members of the Board
of Directors and such other officers and assistant officers who need not be
members of the Board of Directors as the Board of Directors may from time to
time deem proper. Any two or more offices may be held by the same person,
except the offices of president and secretary.
SECTION 2. Election and Term of Office
The officers of the corporation to be elected or appointed by the Board of
Directors shall be elected or appointed annually by the Board of Directors at
the first meeting of the Board of Directors held after each annual meeting of
the shareholders. Subject to the provisions of Section 3 of this Article, each
officer shall hold office until the first meeting of the Board of Directors
following the next annual meeting of shareholders and until his successor has
been elected or appointed and qualified.
SECTION 3. Removal
Any officer or agent elected or appointed by the Board of Directors may be
removed by the Board of Directors with or without cause, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
The election or appointment of an officer shall not of itself create contract
rights.
SECTION 4. New Offices and Vacancies
Newly created offices and vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled from time to
time by the Board of Directors for the unexpired portion of the term.
SECTION 5. Chief Executive Officer
The Board of Directors shall appoint either the chairman of the board, if
any, or the president the chief executive officer of the corporation ("the
CEO") who, subject to the control of the Board of Directors, shall direct and
control all the business and affairs of the corporation.
SECTION 6. Chairman of the Board
The chairman of the board, if any, and if so designated by the Board of
Directors, shall be the chief executive officer of the corporation and, subject
to the control of the Board of Directors, shall in general perform all duties
incident to the office of chief executive officer. He shall, when present,
preside at all meetings of the shareholders and of the Board of Directors. He
may sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the Board of Directors, certificates representing
shares of the corporation, any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors has authorized to be executed, except
in cases where the signing and execution thereof shall be expressly delegated
by the Board of Directors or by these Bylaws to some other officer or agent of
the corporation, or shall be required by law to be otherwise signed or
executed; and shall perform such other duties as may be prescribed by the Board
of Directors from time to time.
SECTION 7. President
The president shall be the chief operating officer of the corporation and,
subject to the control of the Board of Directors and the chairman of the board
(if he is the CEO), shall direct the conduct and operation of the business and
properties of the corporation. If so designated by the Board of Directors, he
shall also be the chief executive officer of the corporation and shall perform
all duties incident to that office. He shall, in the absence of the chairman
of the board, preside at all meetings of the shareholders and of the Board of
Directors. He may sign, with the secretary or any other proper officer of the
corporation thereunto authorized by the Board of Directors, certificates
representing shares of the corporation, any deeds, mortgages, bonds, contracts
or other instruments which the Board of Directors has authorized to be
executed, except in cases where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the corporation, or shall be required by law to be
otherwise signed or executed; and shall perform such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 8. Vice President
In the absence of the chairman of the board and the president or in the
event of their death or inability to act, the executive vice president (or in
the event of the death or inability to act of the executive vice president, the
vice president designated by the Board of Directors, if any, or if none, the
vice president having the greatest seniority) shall perform the duties of the
chairman of the board and the president, and when so acting shall have the
authority of and be subject to all the restrictions upon the chairman of the
board and the president. Any vice president may sign, with the secretary or
any other proper officer of the corporation thereunto authorized by the Board
of Directors, certificates representing shares of the corporation; and shall
perform such other duties as from time to time may be assigned to him by the
chairman of the board (if he is the CEO) or by the president or by the Board of
Directors.
SECTION 9. Secretary
The secretary shall: 1) keep the minutes of the proceedings of its
shareholders, Board of Directors and executive committee and other committees,
if any, in one or more books provided for that purpose; 2) see that all notices
are duly given in accordance with the provisions of these Bylaws or as required
by law; 3) be custodian of the corporate records and of the seal of the
corporation and see that the seal of the corporation is affixed to all
documents and execution of which on behalf of the corporation under its seal is
duly authorized; 4) file each written request by a shareholder that notices to
him be mailed to some address other than this address as it appears on the
record of shareholders; 5) sign with the chairman of the board or the president
or a vice president certificates representing shares of the corporation, the
issuance of which shall have been authorized by resolution of the Board of
Directors; 6) have general charge of the record of shareholders of the
corporation; and 7) in general perform all duties incident to the office of
secretary and such other duties as from time to time may be assigned to him by
the chairman of the board (if he is the CEO) or by the president or by the
Board of Directors.
SECTION 10. Treasurer
If required by the Board of Directors, the treasurer shall give a bond for
the faithful discharge of his duties in such sum and with such surety or
sureties as the Board of Directors shall determine. He shall: 1) have charge
and custody of and be responsible for all funds and securities of the
corporation, receive and give receipts for monies due and payable to the
corporation from any source whatsoever, and deposit all such monies in the name
of the corporation in such banks, trust companies or other depositaries as
shall be selected in accordance with the provisions of these Bylaws; 2) have
charge and custody of and be responsible for the keeping of correct and
complete books and records of account of the corporation; sign with the
chairman of the board, or the president or a vice president, certificates
representing shares of the corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; and 3) in general perform
all of the duties incident to the office of treasurer and such other duties as
from time to time may be assigned to him by the chairman of the board (if he is
the CEO) or by the president or by the Board of Directors.
SECTION 11. Assistant Secretaries and Assistant Treasurers
The assistant secretaries, when authorized by the Board of Directors, may
sign with the chairman of the board or the president or a vice president,
certificates representing shares of the corporation, the issuance of which
shall have been authorized by a resolution of the Board of Directors. The
assistant treasurers shall, if required by the Board of Directors, give bonds
for the faithful discharge of their duties in such sums and with such sureties
as the Board of Directors shall determine. Assistant secretaries and assistant
treasurers, in general, shall perform such duties as shall be assigned to them
by the secretary or the treasurer, respectively, or by the chairman of the
board (if he is the CEO) or the president or the Board of directors. In the
absence of the secretary or in the event of his death, inability or refusal to
act,the assistant secretary (or in the event there be more than one assistant
secretary, the assistant secretaries in the order of their appointment or as
determined by the chairman of the board (if he is the CEO) or the president or
the Board of Directors), shall perform the duties and exercise the authority of
the secretary. In the absence of the treasurer or in the event of his death,
inability or refusal to act, the assistant treasurer, (or in the event there be
more than one assistant treasurer, the assistant treasurers in the order of
their appointment or as determined by the chairman of the board (if he is the
CEO) or the president or the Board of Directors) shall perform the duties and
exercise the authority of the treasurer.
SECTION 12. Compensation of Officers
The compensation of the officers shall be fixed from time to time by the
Board of Directors and no officer shall be prevented from receiving such
compensation by reason of the fact that he is also a director of the
corporation.
ARTICLE V
Contracts, Checks and Deposits
SECTION 1. Contracts
The Board of Directors may authorize any officer or officers, agent or
agents, to enter into any contract or execute and deliver any instrument in the
name of and on behalf of the corporation and such authority may be general or
confined to specific instances.
SECTION 2. Checks, Drafts, etc.
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the corporation and in
such manner as shall from time to time be determined by resolution of the Board
of Directors.
SECTION 3. Deposits
All funds of the corporation not otherwise employed shall be deposited
from time to time to the credit of the corporation in such banks, trust
companies or other depositaries as the Board of Directors may select.
ARTICLE VI
Certificates Representing Shares, Record
of Shareholders, Transfer of Shares
SECTION 1. Issuance of Shares
No shares of any class of the corporation or any obligations or other
securities convertible into or carrying options to purchase any such shares of
the corporation, or any options or rights to purchase any such shares or
securities of the corporation, shall be issued or sold unless such issuance or
sale is approved by the affirmative vote of at least 80% of the entire Board of
Directors.
SECTION 2. Certificates Representing Shares
The shares of the corporation shall be represented by certificates which
shall be in such form as shall be determined by the Board of Directors. All
such certificates shall be consecutively numbered or otherwise identified.
Such certificates shall be signed by the Chairman of the Board or the president
or a vice president and the secretary or an assistant secretary or the
treasurer or an assistant treasurer, and may, but need not, be sealed with the
seal of the corporation or a facsimile thereof. The signature of the officers
upon the certificate may be facsimiles if the certificate is countersigned by a
transfer agent or an assistant transfer agent, or registered by a registrar
other than the corporation itself or its employee. In case any officer who
has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer before such certificate is issued, it may
be issued by the corporation with the same effect as if he were such officer at
the date of issue. Each certificate shall state upon the face thereof; 1) that
the corporation is formed under the laws of New York; 2) the name of the person
or persons to whom issued; 3) the number and class of shares and the par value
of each share represented by such certificate.
SECTION 3. Lost, Destroyed or Wrongfully Taken Certificates
The Board of Directors may direct a new certificate or certificates to be
issued in place of any certificate or certificates theretofore issued by the
corporation, alleged to have been lost, apparently destroyed or wrongfully
taken upon the making of an affidavit of that fact by the person claiming the
certificate to be lost, apparently destroyed or wrongfully taken. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, apparently destroyed or wrongfully
taken certificate or certificates, or his legal representative to advertise the
same in such manner as it shall require and/or give the corporation a bond in
such sum and with such surety or sureties as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, apparently destroyed or wrongfully
taken.
SECTION 4. Record of Shareholders
The corporation shall keep at its principal office, or at the office of
its transfer agent in the State of New York, a record containing the names and
addresses of all shareholders, the number and class of shares held by each and
the dates when they respectively became the owners of record thereof. The
corporation shall be protected in treating the persons in whose names shares
stand on the record of shareholders as the owners thereof for all purposes.
SECTION 5. Transfer of Shares
Upon surrender to the corporation or the transfer agent of the corporation
of a certificate representing shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, and cancel the old certificate. Every such transfer of shares shall
be entered on the record of shareholders of the corporation.
ARTICLE VII
Fiscal Year
The fiscal year of the corporation shall be determined by resolution of
the Board of Directors.
ARTICLE VIII
Dividends
The Board of Directors may from time to time declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its certificate of incorporation.
ARTICLE IX
Seal
The seal of the corporation shall be circular in form and contain the name
of the corporation, the year when it was formed, and the words "New York." The
corporation may use the seal causing it or a facsimile to be affixed or
impressed or reproduced in any other manner.
ARTICLE X
Waiver of Notice
SECTION 1. Waiver of Notice to Shareholders
Notice of meeting need not be given to any shareholder who signed a waiver
of notice, in person or by proxy, whether before or after the meeting. The
attendance of any shareholder at a meeting, in person or by proxy, without
protesting prior to the conclusion of the meeting the lack of notice of such
meeting, shall constitute a waiver of notice by him.
SECTION 2. Waiver of Notice to Director
Notice of meeting need not be given to any director who signs a waiver of
notice whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to him. A
waiver of notice need not specify the purpose of any regular or special meeting
of the Board of Directors.
SECTION 3. Notice Dispensed with When Delivery Prohibited
Whenever communication to any shareholder or any director is unlawful
under any statute of the State of New York or of the United States or any
regulation, proclamation or order issued under said statutes, the giving of any
notice to such shareholder or such director shall not be required and there
shall be no duty to apply for license or other permission to do so.
ARTICLE XI
Indemnification
To the fullest extent permitted by law, either directly or by the purchase
of insurance or in part directly and in part by the purchase of insurance, the
corporation shall indemnify each natural person, or if deceased, his personal
representative made or threatened to be made a party to any action or
proceeding civil or criminal, including an appeal therein against the
reasonable expenses, attorneys' fees, judgments, fines and amounts paid in
settlement if such person is made or threatened to be made a party by reason of
the fact that he or his testator or intestate is or was: 1) an officer,
director or employee of the corporation or 2) an officer, director or employee
of or served in any capacity in any other corporation, partnership, joint
venture, trust or other enterprise, at the request of this corporation,
provided that in the case of a person serving as an employee or in any capacity
in any other corporation, that such person was at the time he was so designated
to serve by this corporation, an employee of this corporation, or 3) the
occupant of a position or a member of a committee or Board or a person having
responsibilities under federal or state law, including but not limited to
responsibilities under the Employee Retirement Income Security Act of 1974, who
was appointed to such position or to such committee or Board by the Board of
this corporation or by an officer of this corporation or who served in such
position or on such committee or Board at the request or direction of the Board
of this corporation or an officer of this corporation or who assumed such
responsibilities at the request or direction of the Board of this corporation
or of any officer of this corporation, provided only that such person acted in
good faith for a purpose which he reasonably believed would be in the best
interest of the corporation or in the case of service for any other corporation
or any partnership, joint venture, trust, employee benefit plan or other
enterprise, not opposed to the best interests of the corporation, and in
criminal proceedings had no reasonable cause to believe that his conduct was
unlawful.
The corporation's obligations under this Article shall be reduced by the
amount of any insurance which is available to any such person whether such
insurance is purchased by the corporation or otherwise. The right of indemnity
created herein shall be personal to the officer, director, employee or other
person and their respective legal representatives and in no case shall any
insurance carrier be entitled to be subrogated to any rights created herein.
Nothing contained herein shall obligate the corporation to indemnify any
person against any claim arising out of personal injuries, bodily injuries or
property damage.
ARTICLE XII
Amendment and Repeal
SECTION 1. Amendment and Repeal by the Shareholders
These Bylaws may be amended or repealed by vote of the shareholders
entitled to vote generally in the election of directors, provided that notice
of meeting states such purpose, and provided further that the provisions of
Article III may be amended or repealed only by the affirmative vote of holders
of at least 75% of the outstanding shares of stock of the corporation entitled
to vote generally in the election of directors.
SECTION 2. Amendment and Repeal by the Board of Directors
These Bylaws may also be amended or repealed by a majority of the entire
Board of Directors provided that the provisions of Article III may be amended
only by the affirmative vote of at least 75% of the entire Board of Directors
and further provided that Section 1 of Article VI may be amended only by the
affirmative vote of at least 80% of the entire Board of Directors.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there to duly authorized.
CHEMUNG FINANCIAL CORPORATION
DATE: November 14, 1995 /s/ John W. Bennett
John W. Bennett
President & CEO
DATE: November 14, 1995 /s/ Jan P. Updegraff
Jan P. Updegraff
Vice President &
Treasurer