CHEMUNG FINANCIAL CORP
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
CHMG$84.75-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001628280-25-049947
Item 2. : Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001628280-26-031834
Item 2. : Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 223 previous paragraphs and 188 current paragraphs.
106 unchanged; 58 reworded; 23 added; 53 removed; 6 previous and 1 current paragraphs rearranged.
Tables are not compared: 42 previous and 36 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
Net interest income for the first quarter of 2026 increased $3.8 million, or 19.0%, to $23.6 million compared to the same period in the prior year, largely due to an increase of $3.4 million in interest income on loans and a decrease of $2.6 million in interest expense on deposits, partially offset by a decrease of $1.3 million on taxable securities and an increase of $0.7 million in interest expense of borrowed funds.
Current report
Interest income on loans, including fees, increased to $31.5 million for the three months ended March 31, 2026, from $28.1 million for the same period in the prior year. The increase was driven by a $214.5 million increase in average balances of total loans and a ten basis point increase in the average yield on total loans, each compared to the same period in the prior year. Growth in average loan balances was concentrated in commercial real estate loans, with additional increases in commercial and industrial loans and residential mortgage loans, partially offset by a decrease in consumer loans. Average balances of total commercial loans increased $233.0 million compared to the same period in the prior year, reflecting growth primarily in the Corporation’s Capital Bank division in the Albany market, as well as growth in the Canal Bank division in the Western New York market. Average balances of residential mortgage loans increased $10.7 million compared to the same period in the prior year, largely due to increased origination activity compared to the same period in the prior year and the retention of a higher proportion of originated loans for investment. Average balances of consumer loans decreased $29.2 million compared to the same period in the prior year, primarily due to a reduction in indirect auto loan balances, as the Corporation continued to prioritize other types of lending during 2025 and year to date in 2026.
Current report
The increase in the average yield on total loans was primarily due to a 45 basis point increase in the average yield on residential mortgage loans and, to a lesser extent, a three basis point increase in the average yield on commercial loans, each compared to the same period in the prior year. The increase in the average yield on residential mortgage loans was largely due to yields on residential mortgage loans originated during 2025 and year to date in 2026 generally being higher than the portfolio's overall average yield. The increase in the average yield on commercial loans was mainly due to strong origination volume during 2025, partially offset by lower interest rates on variable rate commercial loans resulting from declines in benchmark indices between the first quarters of 2025 and 2026.
Current report
Interest expense on deposits decreased to $8.5 million for the three months ended March 31, 2026, from $11.2 million for the same period in the prior year. The decrease was primarily due to a 43 basis point decline in the average cost of total interest‑bearing deposits and a $135.5 million decrease in average balances of total interest‑bearing deposits, including brokered deposits. The decline in the average cost of interest‑bearing deposits reflected decreases of 57 basis points in the average cost of customer time deposits and 19 basis points in the average cost of savings and money market deposits. In addition, the current period included lower average balances of higher‑cost brokered deposits, which declined $81.1 million compared to the prior year period. The decrease in the average cost of customer time deposits was largely due to the discontinuation of longer‑term, higher‑rate promotional offerings during the second half of 2025, in favor of shorter‑term offerings with rates that were reduced over time as market interest rates declined. This strategy also contributed to a $52.3 million decrease in average balances of customer time deposits compared to the same period in the prior year. Customer time deposits represented 19.9% of total average deposits during the first quarter of 2026, compared to 21.1% during the same period in the prior year. The decrease in the average cost of savings and money market deposits was mostly due to targeted reductions in tiered interest rates implemented during the fourth quarter of 2025 and the first quarter of 2026 in response to declining market interest rates.
Current report
Interest expense on borrowed funds increased to $1.5 million for the three months ended March 31, 2026, from $0.7 million for the same period in the prior year. The increase was mainly due to a $38.6 million increase in average balances of total borrowed funds and a 120 basis point increase in the average cost of borrowed funds. These changes were largely the result of the issuance of subordinated debt in the second quarter of 2025, which increased average balances of borrowed funds by $44.0 million. Average balances of other borrowed funds, including FHLBNY overnight and term advances, decreased $5.4 million compared to the same period in the prior year. Partially offsetting the increase in the average cost of total borrowings were decreases of 72 basis points and 68 basis points in the average cost of FHLBNY overnight advances and term advances and other debt, respectively, reflecting the declining interest rate environment during the second half of 2025.
Current report
The provision for credit losses decreased to $0.6 million for the three months ended March 31, 2026, from $1.1 million for the same period in the prior year. The decrease was primarily due to a $0.7 million recovery on a previously charged‑off commercial loan during the current period, resulting in net recoveries of $0.1 million for the three months ended March 31, 2026, compared to net charge-offs of $0.3 million for the same period in the prior year, a decrease of $0.4 million. Also contributing to the decrease in the provision was the impact of the annual update and recalibration of loss drivers utilized in the Corporation’s CECL model, which is performed during the first quarter of each year. The 2026 update resulted in lower modeled baseline loss rates compared to the prior year update, which had resulted in higher modeled baseline loss rates. Partially offsetting the overall decrease was $1.2 million in specific reserves established on two commercial loans, an increase in qualitative adjustments applied to the current period model, and higher loan growth relative to the same period in the prior year.
Current report
Wealth Management Group Fee Income
Current report
The increase in wealth management group fee income was primarily due to an increase in total assets under management in the current period, compared to the same period in the prior year, mainly due to improvements in financial markets during the last three quarters of 2025.
Current report
CFS Fee and Commission Income
Current report
The increase in CFS fee and commission income was largely due to the recognition of additional income in the current period from a broker-dealer as a result of changes in contractual arrangements.
Current report
The decrease in service charges on deposit accounts was mainly due to a decrease in non-sufficient fund (NSF) fees in the current period, compared to the same period in the prior year.
Current report
The increase in compensation expense for the current period, compared to the same period in the prior year, was largely due to increases in salaries and wages, and pension and other employee benefits. Salaries and wages increased largely due to an increase in expenses relating to annual incentives as well as merit-based increases in salaries. Pension and other employee benefits increased primarily due to an increase in employee healthcare-based expenses.
Current report
The increase in cash and cash equivalents was largely due to an increase in total deposits, paydowns and maturities of investment securities, and cash flow provided by operating activities, primarily offset by an increase in total loans and a decrease in advances and other debt.
Current report
The increase in loans, net of deferred loan fees, was primarily due to an increase in non-owner occupied commercial real estate loans of $51.7 million, as well as increases of $2.8 million and $1.6 million in construction loans and home equity lines and loans, respectively, partially offset by a decrease of $10.9 million in indirect consumer loans.
Current report
The decrease in other assets was mostly due to a decrease in interest rate swap assets resulting from a decrease in the fair value of interest rate swaps, and a decrease in premises and equipment, largely due to normal depreciation of fixed assets. The decrease was partially offset by an increase in loans held for sale, due to an increase in residential mortgages originated for sale but not yet sold to Freddie Mac or FHLBNY.
Current report
The increase in deposits was due to increases in both non interest-bearing deposits and interest-bearing deposits. The increase in total deposits was partially due to seasonal inflows of municipal deposits, which increased toward the end of the first quarter due to tax collections. Non interest-bearing deposits also benefited from targeted promotional activity, including enhanced debit card reward program incentives at account opening, introduced in the first quarter of 2026. Interest-bearing deposits also benefited from the introduction of new product offerings, including a new escrow platform.
Current report
The decrease in advances and other debt was mostly due to an increase in total deposits compared to the prior year end, partially due to seasonal inflows of municipal deposits. Total FHLBNY overnight advances decreased $71.4 million while FHLBNY term advances increased $60.0 million, and was comprised of multiple two-month advances which mature in the second quarter of 2026. Also included in advances and other debt were finance lease liabilities, which decreased $0.1 million compared to the prior year end.
Current report
The decrease in other liabilities was primarily due to a net decrease in total accrued expenses and interest rate swap liabilities, partially offset by increases in accrued interest payable and operating lease liabilities. Interest rate swap liabilities decreased mainly due to a decrease in the fair value of interest rate swaps. The increase in operating lease liabilities was largely due to the Corporation's lease of office space in Buffalo, New York to operate as a representative office for Canal Bank operations.
Current report
The increase in the allowance for credit losses was largely due to $1.2 million in specific allocations made on individually analyzed loans, including $1.0 million on a non-owner occupied commercial real estate loan, an increase in qualitative adjustment rates, partially due to the effect of ongoing geopolitical events on certain borrower groups, and provisioning relating to loan growth, concentrated in commercial real estate. Partially offsetting the increase in the allowance were the impact of the annual review and update to loss drivers of the Corporation's CECL model, which are implemented in the first quarter each year and resulted in a net decrease in baseline loss rates in the current year. FOMC forecasts for both U.S. civilian unemployment and year-over-year U.S. GDP growth were stable as of March 31, 2026, compared to December 31, 2025. The FOMC's forecast for year-end U.S. civilian unemployment was 4.4% as of March 31, 2026, unchanged from December 31, 2025, while the forecast for U.S. GDP growth improved 10 basis points, from 2.3% as of December 31, 2025 to 2.4% as of March 31, 2026. Changes in FOMC forecasts did not have a material effect on the Corporation's CECL model as of March 31, 2026 compared to December 31, 2025.
Current report
Borrowings decreased $11.5 million to $123.1 million as of March 31, 2026 from December 31, 2025, primarily due to the increase in deposits during the quarter ended March 31, 2026. The Corporation's borrowed funds as of March 31, 2026 were comprised of a $15.7 million FHLBNY overnight advance, $60.0 million in FHLBNY term advances, $44.1 million in subordinated notes, and $3.3 million in long term finance lease obligations. The Corporation’s borrowed funds as of December 31, 2025 were comprised of a $87.1 million FHLBNY overnight advance, $44.0 million in subordinated notes, and $3.5 million in long term finance lease obligations. There were no outstanding FHLBNY or FRBNY term advances as of December 31, 2025.
Current report
Subsequent Events
Current report
Proposed Charter Conversion
Current report
On April 3, 2026, the Bank filed an application with the Office of the Comptroller of the Currency (the “OCC”) to convert from a New York chartered trust company to a national bank (the “Application”). If the Application is approved, the Bank will no longer be a New York trust company, subject to the regulation and examination of the NYSDFS, and will become a national bank subject to the regulation and examination of the OCC. In addition, the FRBNY would no longer be the Bank’s primary federal regulator. We cannot provide assurance as to whether the Application will be approved or the timing of any approval.
Removed paragraphs (53)
Previous report
The following table presents selected financial information for the periods indicated, and the dollar and percent change (in thousands, except per share and ratio data) adjusted for nonrecurring items (refer to the GAAP to Non-GAAP reconciliations, pages 79-81, for further information):
Previous report
(1)Adjusted for $17.5 million loss on sale of securities available for sale and $0.6 million gain on sale of previous branch property during second quarter, 2025.
Previous report
(2)Adjusted for tax impact of loss on sale of securities available for sale and gain on sale of previous branch property, during second quarter, 2025.
Previous report
Net income for thenine months ended September 30, 2025 was$7.4 million, or $1.53 per share, compared to$17.8 million, or$3.72 per share, for the same period in the prior year. Return on average equity for the nine months ended September 30, 2025 was 4.27%, compared to 11.82%for the same period in the prior year. The decrease in net income for the nine months ended September 30, 2025 was primarily attributable to a decrease in non-interest income, and increases in the provision for credit losses and non-interest expense, offset by an increase in net interest income and a decrease in income tax expense.
Previous report
During the second quarter of 2025, the Corporation sold a portion of its available for sale securities portfolio, and recognized a $17.5 million loss on the sale. In addition, the Corporation recognized a gain of $0.6 million upon completing the sale of a previously held for sale branch property. Excluding these nonrecurring items, net income (as adjusted) for thenine month period ended September 30, 2025 was $20.1 million, or $4.19 per share. Non-GAAP net income as presented in the MD&A has been adjusted for these two items. Refer to the GAAP to Non-GAAP reconciliations, on pages 79-81, for further information. Adjusted return on average equity for the nine months ended September 30, 2025 was 11.67%, compared to 11.82% for the same period in the prior year.
Previous report
Net interest income for the third quarter of 2025 increased $4.3 million, or 23.4%, to $22.7 million compared to the same period in the prior year, due primarily to increases of $2.4 million in interest income on loans and $0.7 million in interest income on interest-earning deposits, and a decrease of $2.8 million in interest expense on deposits, partially offset by a decrease of $1.4 million in interest and dividend income on taxable securities.
Previous report
Interest income on loans, including fees, increased to $31.0 million for the three months ended September 30, 2025, from $28.6 million for the same period in the prior year. Interest income on loans increased largely due to an increase of $151.4 million in average balances of total loans compared to the same period in the prior year, as well as an increase of three basis points in the average yield on total loans compared to the same period in the prior year. The increase in average balances of total loans was concentrated in commercial loans, which increased $183.3 million compared to the same period in the prior year, largely comprised of growth in commercial real estate loans, particularly in the Corporation's Capital region and Western New York markets. The average yield on commercial loans decreased seven basis points compared to the same period in the prior year, largely due to declines in benchmark interest rates on existing variable rate loans, the lower market interest rate environment for new originations, and $0.2 million in interest income recognized on the payoff of a nonaccrual commercial real estate loan in the third quarter of 2024.
Previous report
Average balances of residential mortgage loans increased $4.3 million and the average yield on residential mortgage loans increased 41 basis points, each compared to the same period in the prior year. The increase in average balances of residential mortgage loans was largely due to stronger origination activity year-to-date in 2025 compared to the same period in the prior year, however originations remain below typical historical levels. The increase in the average yield on residential mortgage loans was largely due to the higher interest rate environment resulting in origination yields which exceed the portfolio's average yield, as well as the recognition of interest income on the payoff of a previously nonaccrual loan and deferred fee income on early payoffs during the current period. Average balances of consumer loans decreased $36.2 million, while the average yield on consumer loans increased five basis points compared to the same period in the prior year. The decrease in average balances was largely due to normal portfolio turnover and lower origination activity in the indirect auto portfolio segment, as the Corporation has continued prioritizing funding other types of lending during the past year, and the increase in the average yield on consumer loans was primarily due to portfolio turnover in the indirect auto portfolio as older, lower-yielding balances were replaced by higher-yielding balances. The increase in average yield on consumer loans was partially offset by lower yields on originations of promotional home equity lines of credit and the impact of declines in benchmark interest rates, such as the Prime rate, over the past year on variable rate home equity loans and lines.
Previous report
Interest income on interest-earning deposits increased to $1.1 million for the three months ended September 30, 2025, from $0.4 million for the same period in the prior year. Interest income on interest-earning deposits increased largely due to an increase of $64.3 million in average balances of interest-earning deposits, despite a decrease of 50 basis points in the average yield on interest-earning deposits, each compared to the same period in the prior year. Average balances of interest-earning deposits increased primarily due to proceeds from the Corporation's sale of available for sale securities and issuance of subordinated debt in the second quarter of 2025, net of payoffs of wholesale funding sources in the third quarter of 2025 and funding of commercial loan growth. The decrease in the average yield on interest-earning deposits was largely due to a decrease in the Federal Funds Target Range Upper Limit of 125 basis points between the third quarter of 2024 and third quarter of 2025. Deposits held at the FRBNY receive interest at a rate of 10 basis points below the Federal Funds Target Range Upper Limit.
Previous report
Interest expense on deposits decreased to $10.2 million for the three months ended September 30, 2025, from $13.0 million for the same period in the prior year. Interest expense on deposits decreased mainly due to decreases of $58.7 million in average balances of brokered deposits and $47.0 million in average balances of customer time deposits, as well as decreases of 104 and 88 basis points in the average cost of brokered deposits and customer time deposits, respectively, compared to the same period in the prior year. Average balances of brokered deposits decreased due to the Corporation's payoff of all outstanding balances of brokered deposits during July 2025 as part of its balance sheet repositioning efforts. The decrease in the average cost of brokered deposits compared to the same period in the prior year was largely due to the declining interest rate environment, which the Corporation benefited from by largely utilizing brokered deposits with terms of three months or less. Average balances and the average cost of customer time deposits each decreased largely due to changes in the Corporation's promotional CD campaign offerings over the past year, including a shift in strategic focus beginning in 2024 toward shorter-term offerings to take advantage of the declining interest rate environment. Average balances of customer time deposits decreased to 21.7% of total average deposits in the third quarter of 2025 from 23.0% in the third quarter of 2024.
Previous report
Including customer time deposits, average balances of total interest-bearing customer deposits decreased $25.6 million, compared to the same period in the prior year and the average cost of customer interest-bearing deposits decreased 44 basis points, compared to the same period in the prior year. Combined, these changes resulted in a decrease of 52 basis points in the average cost of interest-bearing deposits compared to the same period in the prior year, from 2.88% in the third quarter of 2024 to 2.36% in the third quarter of 2025. Additionally, average balances of non-interest bearing deposits increased $17.2 million compared to the same period in the prior year. The deposit beta on total deposits was 34% between the third quarters of 2024 and 2025.
Previous report
Net interest income for the nine months ended September 30, 2025 totaled $63.3 million compared to $54.2 million for the same period in the prior year, an increase of $9.1 million, or 16.7%, due to a decrease of $5.4 million in interest expense and an increase of $3.6 million in interest and dividend income. The decrease in interest expense for the first nine months of 2025 was primarily attributed to a decrease of $5.5 million in interest expense on deposits. The increase in interest and dividend income for the first nine months of 2025 was primarily attributed to increases of $5.2 million in interest income on loans, including fees and $1.3 million in interest income on interest-earning deposits, partially offset by a decrease of $2.7 million in interest and dividend income on taxable securities.
Previous report
Interest expense on deposits decreased to $32.4 million for the first nine months of 2025, from $37.9 million for the same period in the prior year. The decrease was primarily due to a decrease in interest expense on customer time deposits compared to the same period in the prior year. The decrease in interest expense on customer time deposits was primarily due to a decrease of $8.2 million in average balances of customer time deposits and a 69 basis points decrease in the average cost of customer time deposits for the first nine months of 2025, compared to the same period in the prior year, largely due to changes in offered terms on CD campaigns. Average balances of customer time deposits comprised 21.3% of total average deposits for the first nine months of 2025, compared to 21.7% for the same period in the prior year. The average cost of brokered deposits decreased 93 basis points and average balances of brokered deposits decreased $25.5 million for the first nine months of 2025, compared to the same period in the prior year.
Previous report
Also contributing to the decrease in interest expense on deposits were decreases of $0.7 million in interest expense on savings and money market deposits and $0.3 million on interest-bearing demand deposits. The decrease in interest expense on savings and money market deposits was primarily due to a 12 basis points decrease in the average cost of savings and money market accounts, despite an increase of $4.5 million in average balances of savings and money market deposits, for the nine months ended September 30, 2025, compared to the same period in the prior year. The decrease in interest expense on interest-bearing demand deposits was primarily due to a 25 basis points decrease in the average cost of interest-bearing demand deposits, despite a $24.2 million increase in average balances of interest-bearing demand deposits for the nine months ended September 30, 2025, compared to the same period in the prior year. Combined with the decline in interest expense on time deposits, these changes resulted in a decrease of 40 basis points in the total average cost of interest-bearing deposits compared to the same period in the prior year, from 2.83% in the first nine months of 2024 to 2.43% in the first nine months of 2025.
Previous report
Interest expense on borrowed funds of $2.9 million was consistent with the same period in the prior year, primarily a result of the Corporation's balance sheet restructuring efforts in the second quarter of 2025 which reduced the Corporation's usage of brokered deposits and FHLNBY overnight and term advances. The average balances of term advances and other debt decreased $14.8 million and the average cost of term advances and other debt decreased 47 basis points compared to the same period in the prior year. The Corporation paid off $100.0 million in brokered deposits and $55.0 million in short-term FHLBNY advances in July, 2025 as part of its balance sheet repositioning efforts. The average balances of FHLBNY overnight advances decreased $7.0 million for the first nine months of 2025 and the average cost of FHLBNY overnight advances decreased 93 basis points, compared to the same period in the prior year.
Previous report
Interest income on loans, including fees, increased to $88.6 million for the first nine months of 2025, from $83.3 million for the same period in the prior year. The increase was mostly attributable to an increase of $145.2 million in average balances of commercial loans, compared to the same period in the prior year, largely concentrated in commercial real estate. The average yield on commercial loans decreased eight basis points compared to the same period in the prior year, primarily due to the impact of decreases in benchmark indices on variable rate loans. Average yields on the residential mortgage and consumer loan portfolios increased 34 basis points and 19 basis points, respectively, for the nine months ended September 30, 2025, compared to the same period in the prior year. The increase in the average yield on residential mortgage loans was primarily due to higher origination yields between the first nine months of 2024 and 2025, while the increase in average yield on the consumer loan portfolio was primarily attributable to lower rate loans being replaced by higher-yield production. The average yield on total loans increased four basis points compared to the same period in the prior year, from 5.56% to 5.60%.
Previous report
Interest income on interest-earning deposits increased to $2.3 million for the first nine months of 2025, from $1.0 million for the same period in the prior year. The increase was primarily due to a $40.7 million increase in average balances of interest-earning deposits, despite a decrease of 37 basis points in the average yield on interest-earning deposits, each compared to the same period in the prior year. The increase in average balances was largely due to remaining proceeds from the Corporation's sale of available for sale securities in the second quarter of 2025 being held as deposits at the FRBNY. The decrease in the average yield on interest-earning deposits was largely due to a decrease in the Federal Funds Target Range Upper Limit of 125 basis points between the first nine months of 2024 and 2025.
Previous report
Interest and dividend income on taxable securities decreased to $7.2 million for the first nine months of 2025, from $9.9 million for the same period in the prior year. The decrease in interest and dividend income on taxable securities was primarily due to a $136.4 million decrease in the average balances of and a 13 basis points decrease in the average yield on taxable securities for the nine months ended September 30, 2025, compared to the same period in the prior year. The decrease in average balances was mainly attributable to $244.8 million in sales of available for sale securities during the second quarter of 2025 as part of the Corporation's balance sheet repositioning efforts. Additionally, there were $53.9 million in paydowns and maturities of available for sale securities between the first nine months of 2024 and 2025. The decrease in the average yield on taxable securities was mainly attributable to decreases in interest rates earned on variable rate securities such as SBA pooled-loan securities between the first nine months of 2024 and 2025, as well as the average yield of securities sold in the second quarter 2025 being higher than the overall average yield on the portfolio at the time of the sale.
Previous report
Fully taxable equivalent net interest margin was 3.15% for the nine months ended September 30, 2025 compared to 2.70% for the same period in the prior year. Average interest-earning assets increased $5.2 million, while average interest-bearing liabilities decreased $8.5 million, for the nine months ended September 30, 2025, compared to the same period in the prior year. The average yield on interest-earning assets increased 18 basis points, to 4.90%, while the average cost of interest-bearing liabilities decreased 37 basis points, to 2.55% for the nine months ended September 30, 2025, compared to the same period in the prior year.
Previous report
(3) Annualized.
Previous report
The provision for credit losses for the third quarter of 2025 was $1.1 million, compared to $0.6 million for the same period in the prior year. The $0.5 million increase in the provision for credit losses was largely due to stronger loan growth in the third quarter of 2025, which totaled $69.9 million, compared to loan growth of $17.5 million during the same period in the prior year, as well as changes in other model inputs such as a decrease in modeled prepayment speeds. Net charge-offs for both the three months ended September 30, 2025 and 2024 were $0.1 million.
Previous report
The provision for credit losses for the nine months ended September 30, 2025 was $3.3 million, compared to a credit of $0.6 million for the same period in the prior year. The $3.9 million increase in the provision for credit losses in the nine months ended September 30, 2025, compared to the same period in the prior year was largely driven by the directionality of the impact from the annual loss driver update applied to the Bank's CECL model in the first quarter of the current year, compared to the loss driver update applied in the first quarter of the prior year. The current year update resulted in higher modeled baseline loss rates, while the update in the prior year resulted in lower baseline loss rates. Net charge-offs for the nine months ended September 30, 2025 were $1.3 million, compared to $0.6 million for the same period in the prior year. $0.8 million in net charge-offs during the nine months ended September 30, 2025 related to two commercial and industrial loans which had specific allocations in the allowance for credit losses, and therefore did not impact provision expense. Remaining charge-offs for the nine months ended September 30, 2025 and 2024 were largely concentrated in the consumer indirect auto portfolio.
Previous report
Other Non-Interest Income
Previous report
The increase in other non-interest income can primarily be attributed to an increase in interest rate swap fees reflecting an increase in originations of loans with interest rate swap exposures in the third quarter of 2025, compared to the same period in the prior year.
Previous report
The increase in service charges on deposit accounts can primarily be attributed to fee schedule increases which were phased in during the fourth quarter of 2024.
Previous report
Total non-interest income for the nine months ended September 30, 2025 decreased $15.9 million compared to the same period in the prior year. The decrease was primarily due to a $17.5 million net loss on securities transactions, partially offset by increases of $1.0 million in other non-interest income, $0.4 million in services charges on deposit accounts, and $0.3 million in WMG fee income.
Previous report
Net Losses on Securities Transactions
Previous report
The Corporation recognized a pre-tax loss of $17.5 million on the sale of a portion of its available for sale securities portfolio in the second quarter of 2025.
Previous report
Other Non-Interest Income
Previous report
The increase in other non-interest income can primarily be attributed to a $0.6 million gain on the sale of a previous branch property during the second quarter of 2025 and an increase of $0.3 million in swap fee income compared to the same period in the prior year.
Previous report
Service Charges on Deposit Accounts
Previous report
The increase in service charges on deposit accounts can primarily be attributed to fee rate increases which were phased in during the fourth quarter of 2024.
Previous report
WMG Fee Income
Previous report
The increase in WMG fee income can primarily be attributed to fee rate increases which were implemented in the second half of 2024 as well as improved market conditions during the first nine months of 2025.
Previous report
The increase in compensation expense for the current period, compared to the same period in the prior year, was primarily due to increases in all compensation expense components. The increase in salaries and wages can be primarily attributed to an increase in base salaries, which included staffing for the Corporation's Western New York Canal Bank division, consisting of additional lending, branch, and wealth management personnel. Also contributing to the increase were merit-based salary increases for existing employees. Pension and employee benefits increased largely due to an increase in employee healthcare-related expenses compared to the same period in the prior year. The increase in other components of net periodic pension and postretirement benefits was primarily due to actuarial adjustments related to the Corporation's pension plans.
Previous report
Total non-interest expense for the nine months ended September 30, 2025 increased $2.9 million compared to the same period in the prior year. The increase was due to increases in total compensation expense and total non-compensation expense. For the nine months ended September 30, 2025 and 2024, non-interest expense to average assets was 2.54% and 2.41%, respectively.
Previous report
Compensation expense
Previous report
The increase in compensation expense for the current period, compared to the same period in the prior year, was due to increases in all compensation expense components. The increase in salaries and wages included additional staffing for the Corporation's Western New York regional banking center and the timing of annual raises compared to the same period in the prior year. The increase in pension and other employee benefits was primarily attributable to an increase in employee healthcare expenses for the current period, compared to the same period in the prior year. The increase in other components of net periodic pension and postretirement benefits was primarily due to actuarial adjustments related to the Corporation's pension plans.
Previous report
Non-compensation expense
Previous report
The increase in non-compensation expense was primarily due to increases of $0.4 million in professional services, $0.2 million in data processing expense and $0.2 million in other non-interest expense, partially offset by a decrease of $0.4 million in FDIC insurance expense. The increase in professional services was mainly due to an increase in consulting expenses, partially attributable to revenue enhancement initiatives in 2024. The increase in data processing was primarily due to an increase in core service provider expenses and additional expenses related to Canal Bank operations in Western New York. The increase in other non-interest expense was primarily due to moderate increases related to losses on sales of repossessed vehicles, directors' fees and recruitment expenses compared to the same period in the prior year. The decrease in FDIC insurance expense was primarily due to improved metrics used to calculate the current year assessment.
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Reworded paragraphs (58)
Previous wording
The following is the MD&A of the Corporation in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2025. Reference should be made to the accompanying unaudited consolidated financial statements and footnotes, and the Corporation’s 2024 Annual Report on Form 10-K, which was filed with the SEC on March 14, 2025, for an understanding of the following discussion and analysis. See the list of commonly used abbreviations and terms on pages 3–5.
Current wording
The following is the MD&A of the Corporation in this Quarterly Report on Form 10-Q for the three months ended March 31, 2026. Reference should be made to the accompanying unaudited consolidated financial statements and footnotes, and the Corporation’s 2025 Annual Report on Form 10-K, which was filed with the SEC on March 13, 2026, for an understanding of the following discussion and analysis. See the list of commonly used abbreviations and terms on pages 3–5.
Previous wording
The MD&A included in this Form 10-Q contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the Corporation's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. For a discussion of those risks and uncertainties and the factors that could cause the Corporation’s actual results to differ materially from those risks and uncerta inties, see Forward-looking Statements below, in Part I, Item 1A, Risk Factors, and on pages 20–31 of the Corporation’s 2024 Form 10-K. For a discussion of the use of non-GAAP financial measures, see pages 64-67 of the Corporation's 2024 Form 10-K, and pages 79-81 in this Form 10-Q.
Current wording
The MD&A included in this Form 10-Q contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of the Corporation's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. For a discussion of those risks and uncertainties and the factors that could cause the Corporation’s actual results to differ materially from those risks and uncerta inties, see Forward-looking Statements below, in Part I, Item 1A, Risk Factors, and on pages 19–29 of the Corporation’s 2025 Form 10-K. For a discussion of the use of non-GAAP financial measures, see pages 68-70 of the Corporation's 2025 Form 10-K, and pages 67-70 of this Form 10-Q.
Previous wording
As of September 30, 2025 and December 31, 2024, the allowance for credit losses totaled $23.6 million and $21.4 million, respectively. A significant portion of the allowance for credit losses is allocated to the commercial portfolio, to both commercial real estate and commercial and industrial loans. As of September 30, 2025 and December 31, 2024, the allowance for credit losses allocated to the total commercial portfolio was $18.3 million and $15.7 million, respectively, or 77.5% and 73.6% of the total allowance for credit losses on loans. For comparison, total commercial loans represented 75.9% and 73.2% of total loan balances as of September 30, 2025 and December 31, 2024, respectively. Given the concentration of the allowance for credit losses allocated to the commercial portfolio, and the significant judgments made by management to derive its estimates, management analyzes risks distinctive to commercial lending with a high degree of scrutiny.
Current wording
As of March 31, 2026 and December 31, 2025, the allowance for credit losses totaled $24.9 million and $24.2 million, respectively. A significant portion of the allowance for credit losses is allocated to the commercial portfolio, to both commercial real estate and commercial and industrial loans. As of March 31, 2026 and December 31, 2025, the allowance for credit losses allocated to the total commercial portfolio was $20.0 million and $18.9 million, respectively, or 80.3% and 78.0% of the total allowance for credit losses on loans. For comparison, total commercial loans represented 77.3% and 76.4% of total loan balances as of March 31, 2026 and December 31, 2025, respectively. Given the concentration of the allowance for credit losses allocated to the commercial portfolio, and the significant judgments made by management to derive its estimates, management analyzes risks distinctive to commercial lending with a high degree of scrutiny.
Previous wording
Changes in the FOMC's median forecasted U.S. civilian unemployment rate and year over year change in U.S GDP could have a material impact on the model's estimation of the allowance. Currently, most pools utilize the FOMC's projections for unemployment as a loss driver, while the commercial and industrial, consumer, and other loans loan pools utilize the FOMC's projections for U.S. GDP growth as a loss driver. Segmentation and attributes of loan pools are defined in Note 1 – Summary of Significant Accounting Policies to the Audited Consolidated Financial Statements in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2024. FOMC projections are sourced from a quarterly Summary of Projections, which accompanies select FOMC meetings. Each participant's projections represent the value to which selected variables would be expected to converge over time under appropriate monetary policy, and considering all currently available information. An immediate "shock" or increase of 100 basis points in the FOMC's projected rate of U.S. civilian unemployment, and a decrease of 50 basis points in the FOMC's projected rate of U.S. GDP growth would increase the model's total calculated allowance by $1.5 million, or 6.2%, to $25.1 million as of September 30, 2025, assuming qualitative adjustments were kept at current levels.
Current wording
Changes in the FOMC's median forecasted U.S. civilian unemployment rate and year over year change in U.S GDP could have a material impact on the model's estimation of the allowance. Currently, most pools utilize the FOMC's projections for unemployment as a loss driver, while the commercial and industrial, consumer, and other loans loan pools utilize the FOMC's projections for U.S. GDP growth as a loss driver. Segmentation and attributes of loan pools are defined in Note 1 – Summary of Significant Accounting Policies to the Audited Consolidated Financial Statements in the Corporation's Annual Report on Form 10-K for the year ended December 31, 2025. FOMC projections are sourced from a quarterly Summary of Projections, which accompanies select FOMC meetings. Each participant's projections represent the value to which selected variables would be expected to converge over time under appropriate monetary policy, and considering all currently available information. An immediate "shock" or increase of 100 basis points in the FOMC's projected rate of U.S. civilian unemployment, and a decrease of 50 basis points in the FOMC's projected rate of U.S. GDP growth would increase the model's total calculated allowance by $1.5 million, or 5.9%, to $26.3 million as of March 31, 2026, assuming qualitative adjustments were kept at current levels.
Previous wording
In addition to analyzing the Corporation’s results on a reported basis, management uses certain non-GAAP financial measures because it believes these non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Corporation, and therefore facilitate a comparison of the Corporation with the performance of other companies. Non-GAAP financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies. Refer to pages 79-81 for further explanation and reconciliation of the Corporation’s use of non-GAAP measures.
Current wording
In addition to analyzing the Corporation’s results on a reported basis, management uses certain non-GAAP financial measures because it believes these non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Corporation, and therefore facilitate a comparison of the Corporation with the performance of other companies. Non-GAAP financial measures used by the Corporation may not be comparable to similarly named non-GAAP financial measures used by other companies. Refer to pages 67-70 for further explanation and reconciliation of the Corporation’s use of non-GAAP measures.
Previous wording
The following section of the MD&A provides a comparative discussion of the Corporation’s Consolidated Results of Operations on a reported basis for the three and nine months ended September 30, 2025 and 2024. For a discussion of the Critical Accounting Estimates that affect the Consolidated Results of Operations, see pages 46-47 of this Form 10-Q and page 37 of the Corporation’s 2024 Form 10-K.
Current wording
The following section of the MD&A provides a comparative discussion of the Corporation’s Consolidated Results of Operations on a reported basis for the three months ended March 31, 2026 and 2025. For a discussion of the Critical Accounting Estimates that affect the Consolidated Results of Operations, see pages 41-42 of this Form 10-Q and page 39 of the Corporation’s 2025 Form 10-K.
Previous wording
The Corporation reported net income for the third quarter of 2025 of $7.8 million, or $1.62 per share, compared to $5.7 million, or $1.19 per share, for the same period in the prior year. Return on average equity for the current quarter was 12.89%, compared to 10.81% for the same period in the prior year. The increase in net income for the three months ended September 30, 2025 was attributable to increases in net interest income and non-interest income, offset by increases in the provision for credit losses, non-interest expense, and income tax expense.
Current wording
The Corporation reported net income for the first quarter of 2026 of $9.2 million, or $1.91 per share, compared to $6.0 million, or $1.26 per share, for the same period in the prior year. Return on average equity for the current quarter was 14.25%, compared to 10.96% for the same period in the prior year. The increase in net income for the three months ended March 31, 2026 was attributable to increases in net interest income and non-interest income, as well as a decrease in the provision for credit losses, offset by increases in non-interest expense and income tax expense.
Previous wording
Interest income on taxable securities decreased to $1.7 million for the three months ended September 30, 2025, from $3.1 million for the same period in the prior year. Interest income on taxable securities decreased largely due to a decrease of $271.3 million in average balances of taxable securities, as well as a decrease of four basis points in the average yield on taxable securities, both compared to the same period in the prior year. The decrease in average balances was mainly attributable to $244.8 million in sales of available for sale securities during the second quarter of 2025 as part of the Corporation's balance sheet repositioning efforts and normal paydown activity between the third quarters of 2024 and 2025. The decrease in the average yield on taxable securities was primarily due to the average yield of securities sold in the second quarter of 2025 being higher than the overall average yield on the portfolio at the time of the sale.
Current wording
Interest income on taxable securities decreased to $1.7 million for the three months ended March 31, 2026, from $3.0 million for the same period in the prior year. The decrease was largely due to a $257.5 million decrease in average balances of taxable securities, attributable to sales of available for sale securities during the second quarter of 2025 as part of the Corporation’s balance sheet repositioning efforts, as well as normal paydowns and maturities totaling $35.9 million between the first quarters of 2025 and 2026. The average yield on taxable securities was comparable to the same period in the prior year, decreasing by one basis point.
Previous wording
Fully taxable equivalent net interest margin was 3.45% for the third quarter of 2025, compared to 2.72% for the same period in the prior year. Average interest-earning assets decreased $82.3 million for the three months ended September 30, 2025, while average interest-bearing liabilities decreased $104.7 million, compared to the same period in the prior year. The average yield on interest-earning assets increased 37 basis points to 5.15%, while the average cost ofinterest-bearing liabilities decreased 46 basis points to 2.51%, for the three months ended September 30, 2025, compared to the same period in the prior year. Total cost of funds was 1.85%for the three months ended September 30, 2025, compared to 2.24% for the same period in the prior year, a decrease of 39 basis points.
Current wording
Fully taxable equivalent net interest margin was 3.60% for the three months ended March 31, 2026, compared to 2.96% for the same period in the prior year. Average interest-earning assets decreased $67.5 million for the three months ended March 31, 2026, while average interest-bearing liabilities decreased $96.9 million, each compared to the same period in the prior year. The decreases of the average interest-earning assets and average interest-bearing liabilities was mostly due to the effects of the Corporation's balance sheet repositioning efforts during 2025. The average yield on interest-earning assets increased 41 basis points to 5.13%, while the average cost ofinterest-bearing liabilities decreased 28 basis points to 2.27%, for the three months ended March 31, 2026, compared to the same period in the prior year. Total cost of funds was 1.67%for the three months ended March 31, 2026, compared to 1.92% for the same period in the prior year, a decrease of 25 basis points.
Previous wording
The following tables present certain information related to the Corporation’s average consolidated balance sheets and its consolidated statements of income for the three and nine months ended September 30, 2025 and 2024. For the purpose of the tables below, nonaccrual loans are included in the daily average loan amounts outstanding. Daily balances were used for average balance computations. Investment securities are stated at amortized cost. Tax equivalent adjustments have been made in calculating yields on obligations of states and political subdivisions, tax-free commercial loans, and dividends on equity investments.
Current wording
The following table presents certain information related to the Corporation’s average consolidated balance sheets and its consolidated statements of income for the three months ended March 31, 2026 and 2025. For the purpose of the table below, nonaccrual loans are included in the daily average loan amounts outstanding. Daily balances were used for average balance computations. Investment securities are stated at amortized cost. Tax equivalent adjustments have been made in calculating yields on obligations of states and political subdivisions, tax-free commercial loans, and dividends on equity investments.
Previous wording
Net interest income can be analyzed in terms of the impact of changes in rates and volumes. The tables below illustrate the extent to which changes in interest rates and the volume of average interest-earning assets and interest-bearing liabilities have affected the Corporation’s interest income and interest expense during the three and nine months ended September 30, 2025 and 2024. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate); (ii) changes attributable to changes in rates (changes in rates multiplied by prior volume); and (iii) the net changes. For purposes of these tables, changes that are not due solely to volume or rate changes have been allocated to these categories based on the respective percentage changes in average volume and rate. Due to the numerous simultaneous volume and rate changes during the periods analyzed, it is not possible to precisely allocate changes between volume and rates. In addition, average interest-earning assets include nonaccrual loans and taxable equivalent adjustments were made.
Current wording
Net interest income can be analyzed in terms of the impact of changes in rates and volumes. The table below illustrates the extent to which changes in interest rates and the volume of average interest-earning assets and interest-bearing liabilities have affected the Corporation’s interest income and interest expense during the three months ended March 31, 2026 and 2025. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate); (ii) changes attributable to changes in rates (changes in rates multiplied by prior volume); and (iii) the net changes. For purposes of this table, changes that are not due solely to volume or rate changes have been allocated to these categories based on the respective percentage changes in average volume and rate. Due to the numerous simultaneous volume and rate changes during the periods analyzed, it is not possible to precisely allocate changes between volume and rates. In addition, average interest-earning assets include nonaccrual loans and taxable equivalent adjustments were made.
Previous wording
Management has established and maintains a methodology for determining and adjusting its allowance for credit losses in conformity with ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The allowance is based on a combination of quantitative and qualitative analysis and changes in the required allowance are recorded through income as a provision (credit). The quantitative portion of the model is significantly influenced by changes in projected economic conditions, as well as changes in the composition of the numerous loan portfolio segments. Qualitative adjustments reflect the degree to which management anticipates future outcomes may differ from those projected by the quantitative model.
Current wording
Management has established and maintains a methodology for determining and adjusting its allowance for credit losses based on a combination of quantitative and qualitative analysis, and changes in the required allowance are recorded through income as a provision. The quantitative portion of the model is significantly influenced by changes in projected economic conditions, as well as changes in the composition of the numerous loan portfolio segments. Qualitative adjustments reflect the degree to which management anticipates future outcomes may differ from those projected by the quantitative model.
Previous wording
Total non-interest income for the third quarter of 2025 increased $0.2 million compared to the same period in the prior year, primarily due to increases of $0.1 million each in other non-interest income and service charges on deposit accounts.
Current wording
Total non-interest income for the three months ended March 31, 2026 increased $0.4 million compared to the same period in the prior year, largely due to increases of $0.3 million each in wealth management group fee income and CFS fee and commission income, partially offset by a decrease of $0.1 million in service charges on deposit accounts.
Previous wording
Total non-interest expense for the third quarter of 2025 increased $1.1 million compared to the same period in the prior year. The increase was due to an increase in total compensation expense partially offset by a decrease in non-compensation expense. For the three months ended September 30, 2025 and 2024, non-interest expense to average assets was 2.61% and 2.39%, respectively.
Current wording
Total non-interest expense for the three months ended March 31, 2026 increased $0.5 million compared to the same period in the prior year. The increase was due to an increase in total compensation expense, while non-compensation expense was in-line with the same period in the prior year. For the three months ended March 31, 2026 and 2025, non-interest expense to average assets was 2.59% and 2.47%, respectively.
Previous wording
The decrease in non-compensation expense for the current period, compared to the same period in the prior year, was primarily due to decreases in FDIC insurance, other non-interest expense, and loan expenses, offset by an increase in professional services. FDIC insurance decreased largely due to favorable changes in metrics used to determine assessment rates. Other non-interest expense decreased due to decreases across a number of expense categories included in the line item. Loan expense decreased largely due to decreases in legal expenses compared to the same period in the prior year. The increase in professional services was primarily due to an increase in consulting expenses, partially attributable to revenue enhancement initiatives in 2024.
Current wording
Non-compensation expense was comparable to the same period in the prior year. Most significant were the decreases in FDIC insurance and marketing and advertising, which were mostly offset by increases in other non-interest expense, loan expenses, and professional services. FDIC insurance decreased primarily due to favorable changes in metrics used to determine assessment rates. Marketing and advertising expense decreased largely due to higher digital and television advertising in the first quarter of 2025 due to promotional product offerings during that period, which did not occur in the current year period. Other non-interest expense increased due to increases across expense categories. Loan expense and professional services each increased due to increases in legal fees compared to the same period in the prior year.
Previous wording
Income tax expense for the three month periods ended September 30, 2025 and 2024 were $2.3 million and $1.5 million, respectively. The increase in income tax expense was primarily due to an increase of $2.8 million in income before income tax expense, compared to the same period in the prior year. The effective income tax rate increased from 20.9% for the three months ended September 30, 2024 to 22.6% for the three months ended September 30, 2025.
Current wording
Income tax expense for the three month periods ended March 31, 2026 and 2025 was $2.6 million and $1.7 million, respectively. The increase in income tax expense was primarily due to an increase of $4.2 million in income before income tax expense, compared to the same period in the prior year. The effective income tax rate increased from 21.6% for the three months ended March 31, 2025 to 22.3% for the three months ended March 31, 2026.
Previous wording
The decrease in investment securities can primarily be attributed to the sale of available for sale securities with a market value totaling $227.3 million in the second quarter of 2025. The sale of securities included the Corporation's entire portfolio of U.S. Treasury and SBA pooled-loan securities, as well as portions of the mortgage-backed securities and municipal bonds portfolios. Year to date net paydowns and maturities on available for sale securities totaled $39.9 million, largely on mortgage-backed and SBA pooled-loan securities. Partially offsetting the overall decrease in the available for sale securities portfolio was an increase of $17.6 million in the fair value of securities, mainly due to favorable changes in interest rates compared to December 31, 2024. Also contributing to the decrease in total investment securities was a decrease of $3.6 million in FHLB and FRB stock, at cost, mainly due to a decrease in total borrowings through the FHLBNY as of September 30, 2025, compared to the prior year end.
Current wording
The decrease in total investment securities was mostly due to year to date net paydowns and maturities on available for sale securities, totaling $5.6 million. The market value of available for sale securities was relatively consistent compared to the prior year end. Also contributing to the decrease in total investment securities was a decrease of $0.5 million in FHLBNY and FRBNY stock, at cost, primarily due to a decrease in total borrowings through the FHLBNY as of March 31, 2026, compared to the prior year end.
Previous wording
The increase in the allowance for credit losses was largely due to the annual review and update to loss drivers used in the Bank's CECL model, which is applied to the model in the first quarter of each year and year-to-date loan growth, concentrated in commercial real estate. The update in the current year resulted in an increase in baseline loss rates used for modeling. Also contributing to the increase were deteriorations in FOMC economic forecasts compared to prior year end, a decline in modeled prepayment speeds, and other adjustments to model inputs. Partially offsetting the overall increase was the charge-off of $0.8 million in commercial and industrial loan balances during the nine month periods ended September 30, 2025 which had carried specific allocations in the allowance as of December 31, 2024, and a net decrease in overall qualitative adjustment rates, due to improvements in evaluated internal portfolio metrics and regional economic outlooks.
Current wording
The increase in the allowance for credit losses was mainly due to specific reserve allocations of $1.2 million made on two commercial loans in the current quarter, as well as an increase in qualitative adjustments applied to the Corporation's CECL model and year to date loan growth. Partially offsetting this increase was the impact of the annual review and update to loss drivers used in the CECL model, which is implemented in the first quarter of each year, resulting in a net decrease in baseline loss rates in the current quarter.
Previous wording
Subordinated debt, net of deferred issuance costs, increased due to the issuance of $45.0 million in 7.75% fixed-to-floating rate notes (the "Notes") in June 2025 in a private offering. There were $1.0 million in deferred issuance costs associated with the offering. The subordinated debt qualifies as tier 2 capital at the holding company, when applicable, and tier 1 capital at the Bank. Of the $45.0 million in subordinated debt issued, $37.0 million was downstreamed to the Bank, qualifying as tier 1 capital. The Notes carry an original term of ten years and are redeemable by the Corporation beginning in June 2030, and beginning in June 2030 will float based on the then current Three-Month Term SOFR, plus 415 basis points. Further details regarding the offering can be found in the Corporation's Form 8-K filed with the Securities and Exchange Commission on June 10, 2025.
Current wording
Subordinated debt, net of deferred issuance costs, was in-line with the prior year end. In June of the prior year, the Corporation issued $45.0 million in 7.75% fixed-to-floating rate notes in a private offering, due June 2035, net of $1.0 million in deferred issuance costs associated with the offering.
Previous wording
Shareholders’ equity was $245.3 million at September 30, 2025 compared to $215.3 million at December 31, 2024. The increase can primarily be attributed to a decrease of $26.0 million in accumulated other comprehensive loss and an increase of $2.7 million in retained earnings. The decrease in accumulated other comprehensive loss was largely due to the reclassification of a portion of losses attributable to the available for sale securities portfolio into current period earnings, due to the Corporation's sale of available for sale securities in the second quarter of 2025, as well as an increase in the fair value of securities available for sale, mainly due to favorable changes in market interest rates. The increase in retained earnings was mainly due to net income of $7.4 million for the nine months ended September 30, 2025, which included a $13.2 million loss on the sale of available for sale securities in the second quarter of 2025, net of tax, partially offset by dividends declared of $4.7 million during the nine months ended September 30, 2025.
Current wording
The increase in shareholders' equity was mainly due to an increase of $7.6 million in retained earnings and a decrease of $0.3 million in accumulated other comprehensive loss. The increase in retained earnings was primarily due to net income of $9.2 million for the three months ended March 31, 2026, partially offset by dividends declared of $1.6 million during the three months ended March 31, 2026. The decrease in accumulated other comprehensive loss was due to an increase in the fair value of available for sale securities.
Previous wording
The market value of total assets under management or administration in Wealth Management Group was $2.393 billion as of September 30, 2025, including $335.2 million of assets held under management or administration for the Corporation, compared to $2.212 billion as of December 31, 2024, including $301.9 million of assets held under management or administration for the Corporation, an increase of $180.6 million, or 8.1%. Excluding assets under management or administration for the Corporation, total market value of Wealth Management Group assets increased $147.3 million, or 7.9%, primarily due to improvements in financial markets during 2025.
Current wording
The market value of total assets under management or administration in the Wealth Management Group was $2.338 billion as of March 31, 2026, including $329.7 million of assets held under management or administration for the Corporation, consistent with $2.338 billion as of December 31, 2025, including $301.8 million of assets held under management or administration for the Corporation. Excluding assets under management or administration for the Corporation, the total market value of Wealth Management Group assets decreased $27.9 million, or 1.6%, primarily due to declines in financial markets during the first quarter of 2026.
Previous wording
The available for sale segment of the securities portfolio totaled $280.5 million as of September 30, 2025, a decrease of $250.9 million, or 47.2%, from $531.4 million as of December 31, 2024. Securities available for sale decreased primarily due to the Corporation's strategic balance sheet repositioning, which included the sale of available for sale securities with a market value totaling $227.3 million in the second quarter of 2025. The sale of securities included the Corporation's entire portfolio of U.S. Treasury and SBA pooled-loan securities, as well as portions of the mortgage-backed securities and municipal bonds portfolios. Year to date net paydowns and maturities on available for sale securities totaled $39.9 million, largely on mortgage-backed and SBA pooled-loan securities. Partially offsetting the overall decrease in the available for sale securities portfolio was an increase of $17.6 million in the fair value of securities, mainly due to favorable changes in interest rates compared to December 31, 2024. The held to maturity securities portfolio consists of obligations of political subdivisions in the Corporation’s market areas. These securities totaled $0.7 million and $0.8 million as of September 30, 2025 and December 31, 2024, respectively.
Current wording
The available for sale segment of the securities portfolio totaled $275.3 million as of March 31, 2026, a decrease of $5.3 million, or 1.9%, from $280.6 million as of December 31, 2025. Securities available for sale decreased primarily due to net paydowns and maturities. Year to date net paydowns and maturities on available for sale securities totaled $5.6 million, largely on mortgage-backed securities totaling $5.0 million and municipal securities maturities of $0.5 million. Partially offsetting the overall decrease in the available for sale securities portfolio was an increase of $0.4 million in the fair value of securities compared to December 31, 2025. The held to maturity segment of the securities portfolio consists of obligations of political subdivisions in the Corporation’s market areas. These securities totaled $0.6 million as of both March 31, 2026 and December 31, 2025.
Previous wording
Non-marketable equity securities as of September 30, 2025 and December 31, 2024 include shares of FRBNY stock and FHLBNY stock, carried at their cost. FRBNY stock and FHLBNY stock were $3.0 million and $2.5 million respectively as of September 30, 2025, and $1.9 million and $7.2 million respectively as of December 31, 2024. The fair value of these securities is assumed to approximate their cost. The investment in these stocks is regulated by regulatory policies of the respective institutions.
Current wording
Non-marketable equity securities as of March 31, 2026 and December 31, 2025 include shares of FRBNY stock and FHLBNY stock, carried at their cost. FRBNY stock and FHLBNY stock were $3.1 million and $5.9 million respectively as of March 31, 2026, and $3.0 million and $6.4 million respectively as of December 31, 2025. The fair value of these securities is assumed to approximate their cost. The investment in these stocks is regulated by regulatory policies of the respective institutions.
Previous wording
Portfolio loans totaled $2.202 billion as of September 30, 2025, an increase of $130.9 million, or 6.3%, from $2.071 billion as of December 31, 2024. The increase in loans can be attributed to increases of $145.0 million in commercial mortgages, $9.7 million in commercial and industrial loans, and $2.8 million in residential mortgages, offset by a decrease of $26.5 million in consumer loans.
Current wording
Portfolio loans totaled $2.312 billion as of March 31, 2026, an increase of $42.1 million, or 1.9%, from $2.270 billion as of December 31, 2025. The increase in loans was due to an increase of $53.5 million in commercial real estate loans, partially offset by decreases of $9.6 million in consumer loans, $0.9 million in commercial and industrial loans and $0.9 million in residential mortgages.
Previous wording
Commercial lending continues to be a primary driver of growth for the Corporation, and demand remains strong across the Corporation's footprint, particularly for commercial real estate in the Capital Bank and Canal Bank divisions in the Albany and Western New York markets, respectively. Loan growth in the Canal Bank division has accelerated in 2025 after the opening of a regional banking center and expansion of the commercial lending team in that market. Total commercial loan balances in the Canal Bank division increased 38.6% to $184.7 million as of September 30, 2025, from $133.3 million as of December 31, 2024. Commercial real estate loans, including construction loans, increased year-to-date for all three regional divisions, led by a $72.7 million increase for the Capital Bank division. Commercial real estate balances for the Canal Bank and Chemung Canal divisions increased $51.4 million and $25.1 million year-to-date, respectively. Commercial and industrial loan balances increased $5.9 million and $5.6 million in the Chemung Canal and Capital Bank divisions, respectively, while balances for Canal Bank decreased $1.8 million year-to-date.
Current wording
Commercial lending continues to be a primary driver of asset growth for the Corporation, and demand remains strong across the Corporation's footprint, particularly for commercial real estate in the Canal Bank division in the Western New York market and Capital Bank division in the Albany market. Commercial real estate loans in the Canal Bank and Capital Bank divisions increased $33.3 million and $27.7 million, respectively, compared to December 31, 2025. Commercial and industrial loans were relatively stable as of March 31, 2026, compared to December 31, 2025, with modest increases in the Chemung Canal division being offset by modest declines in the Capital Bank and Canal Bank divisions.
Previous wording
Residential mortgage loans totaled $277.7 million as of September 30, 2025, an increase of $2.8 million, or 1.0%, compared to December 31, 2024. During the nine months ended September 30, 2025, the Corporation originated $41.7 million in residential mortgages, including $10.3 million originated to be sold in the secondary market to Freddie Mac and FHLBNY. Total balances of residential mortgage originations increased 37.0% compared to the same period in the prior year; however overall origination volumes remain below typical historic levels. Total consumer loans decreased $26.5 million, or 0.5%, largely due to a decrease of $35.0 million, or 19.6%, in indirect consumer loans compared to December 31, 2024, partially offset by an increase of $9.9 million in home equity lines and loans. The decrease in indirect consumer loans was primarily due to the prioritization of other types of lending, resulting in paydowns exceeding originations during 2025 year to date, as well as the relatively fast turnover rate in the portfolio. The increase in home equity lines and loans was mainly due to home equity line of credit promotional efforts during 2025, which included offering a below-market introductory interest rate.
Current wording
Total consumer loans decreased largely due to a decrease of $10.9 million, or 8.2%, in indirect consumer loans and was partially offset by an increase of $1.6 million in home equity lines and loans. The decrease in indirect consumer loans was mainly due to continued prioritization of other types of lending, resulting in total paydowns exceeding originations year to date during 2026, as well as the relatively fast turnover rate in the portfolio. The increase in home equity lines and loans was mainly due to advances on home equity lines of credit originated as part of promotional efforts during the prior year, which included offering a below-market introductory interest rate. Residential mortgage loans decreased largely due to overall origination volumes remaining below typical historic levels, due to the elevated interest rate environment. During the three months ended March 31, 2026, the Corporation originated $11.1 million in residential mortgages, including $1.5 million originated to be sold in the secondary market to Freddie Mac and FHLBNY. Total balances of residential mortgage originations increased $1.7 million, or 15.2%, compared to the same period in the prior year
Previous wording
Commercial real estate lending represented the largest portion of the Corporation's loan portfolio as of September 30, 2025 and December 31, 2024. Commercial real estate lending is comprised of the construction, owner occupied commercial real estate, and non-owner occupied commercial real estate categories of the loan portfolio, as presented in Note 4 - Loans and Allowance for Credit Losses to the Consolidated Financial Statements. As of September 30, 2025 and December 31, 2024, total commercial real estate loans were $1.362 billion and $1.217 billion, respectively, representing 61.9% and 58.7% of total loan balances, respectively. As the largest component of the Corporation's loan portfolio, quantitative and qualitative attributes of commercial real estate have a significant impact on management's strategic initiatives, and understanding such attributes are critical in understanding the Corporation's anticipated future liquidity needs and sensitivity to changes in interest rates. Management closely monitors maturity and repricing schedules as part of its broader risk management framework, enabling measures to proactively manage economic volatility and promote longer-term portfolio stability. Management also evaluates the risk inherent in its portfolio of commercial real estate loans using a variety of metrics, including but not limited to type, geography, collateral, and borrower or sponsor industry.
Current wording
As the largest component of the Corporation's loan portfolio, quantitative and qualitative attributes of commercial real estate have a significant impact on management's strategic initiatives, and understanding such attributes are critical in understanding the Corporation's anticipated future liquidity needs and sensitivity to changes in interest rates. Management closely monitors maturity and repricing schedules as part of its broader risk management framework, enabling measures to proactively manage economic volatility and promote longer-term portfolio stability. Management also evaluates the risk inherent in its portfolio of commercial real estate loans using a variety of metrics, including but not limited to type, geography, collateral, and borrower or sponsor industry.
Previous wording
(1)Includes$61.2 million in commercial real estate loans located outside of New York State.
Current wording
(1)Includes $75.4 million and $77.6 million in commercial real estate loans located outside of New York State as of March 31, 2026 and December 31, 2025, respectively.
Previous wording
The Corporation closely monitors economic and credit trends for the industries in which its commercial real estate borrowers are involved. Property types are designated based on the purpose of the collateral securing commercial real estate loans. The table below presents commercial real estate loans by borrower industry and percentage as of September 30, 2025 and December 31, 2024, as well as the weighted average (WA) loan to value (LTV) ratio for each industry as of September 30, 2025 (dollars in thousands):
Current wording
The Corporation closely monitors economic and credit trends for the industries in which its commercial real estate borrowers are involved. Property types are designated based on the purpose of the collateral securing commercial real estate loans. The tables below present commercial real estate loans by borrower industry and percentage as well as the weighted average (WA) loan to value (LTV) ratio for each industry as of March 31, 2026 and December 31, 2025 (dollars in thousands):
Previous wording
Loan concentrations are considered to exist when there are amounts loaned to multiple borrowers engaged in similar activities, which may cause them to be similarly impacted by economic or other conditions. Industries are identified using NAICS codes, and the Corporation monitors specific NAICS industry classificat ions of commercial loans to identify concentrations of greater than 10.0% of total loans. As of September 30, 2025 and December 31, 2024, commercial loans to borrowers involved in the real estate and real estate rental and leasing businesses were 52.0% and 50.9% of total loans, respectively. No other concentration of loans existed in the commercial loan portfolio in excess of 10.0% of total loans as of September 30, 2025 and December 31, 2024.
Current wording
Loan concentrations are considered to exist when there are amounts loaned to multiple borrowers engaged in similar activities, which may cause them to be similarly impacted by economic or other conditions. Industries are identified using NAICS codes, and the Corporation monitors specific NAICS industry classificat ions of commercial loans to identify concentrations of greater than 10.0% of total loans. As of March 31, 2026 and December 31, 2025, commercial loans to borrowers involved in the real estate and real estate rental and leasing businesses were 53.1% and 52.1% of total loans, respectively. No other concentration of loans existed in the commercial loan portfolio in excess of 10.0% of total loans as of March 31, 2026 and December 31, 2025.
Previous wording
Non-performing assets consist of non-performing loans, other real estate owned that has been acquired in partial or full satisfaction of loan obligations or upon foreclosure, and vehicles that have been repossessed. Non-performing loans is comprised of nonaccrual loans. Past due status on all loans is based on the contractual terms of the loan. It is generally the Corporation's policy that a loan 90 days past due be placed on nonaccrual status unless factors exist that would eliminate the need to classify a loan as such. A loan may also be designated as nonaccrual at any time if payment of principal or interest in full is not expected due to deterioration in the financial condition of the borrower. At the time loans are placed into nonaccrual status, the accrual of interest is discontinued and previously accrued interest is reversed. Payments received on nonaccrual loans are generally applied to principal using the cost recovery method. Loans are considered for return to accrual status when they become current as to principal and interest and remain current for a period of six consecutive months or when, in the opinion of management, the Corporation expects to receive all of its original principal and interest. In the case of nonaccrual loans where a portion of the loan has been charged off, the remaining balance is kept in nonaccrual status until the entire principal balance has been recovered.
Current wording
Non-performing assets consist of non-performing loans, other real estate owned that has been acquired in partial or full satisfaction of loan obligations or upon foreclosure, and vehicles that have been repossessed. Non-performing loans are comprised of nonaccrual loans. Past due status on all loans is based on the contractual terms of the loan. It is generally the Corporation's policy that a loan 90 days past due be placed on nonaccrual status unless factors exist that would eliminate the need to classify a loan as such. A loan may also be designated as nonaccrual at any time if payment of principal or interest in full is not expected due to deterioration in the financial condition of the borrower. At the time loans are placed into nonaccrual status, the accrual of interest is discontinued and previously accrued interest is reversed. Payments received on nonaccrual loans are generally applied to principal using the cost recovery method. Loans are considered for return to accrual status when they become current as to principal and interest and remain current for a period of six consecutive months or when, in the opinion of management, the Corporation expects to receive all of its original principal and interest. In the case of nonaccrual loans where a portion of the loan has been charged off, the remaining balance is kept in nonaccrual status until the entire principal balance has been recovered.
Previous wording
Non-performing loans totaled $7.8 million, or 0.35% of total loans as of September 30, 2025, compared to $9.0 million, or 0.43% of total loans as of December 31, 2024. Non-performing assets, which are comprised of non-performing loans, other real estate owned, and repossessed vehicles were $8.0 million, or 0.30% of total assets as of September 30, 2025, compared to $9.6 million, or 0.35% of total assets as of December 31, 2024. The decrease in non-performing loans was largely due to the payoff of four nonaccrual commercial real estate loans totaling $1.6 million during the nine months ended September 30, 2025 and the charge-off of two commercial and industrial loans during the second quarter of 2025, totaling $0.8 million. Additionally, there were $0.6 million in paydowns on other non-performing commercial loans, partially offset by $0.4 million in additions to nonaccrual commercial loans during the nine months ended September 30, 2025. Non-performing retail loans increased $1.4 million compared to December 31, 2024, driven by $3.1 million in additions to nonaccrual retail loans, partially offset by $0.7 million in net charge-offs and $1.2 million in paydowns during the nine months ended September 30, 2025.
Current wording
Non-performing loans totaled $7.6 million, or 0.33% of total loans as of March 31, 2026, compared to $7.9 million, or 0.35% of total loans as of December 31, 2025. Non-performing assets, which are comprised of non-performing loans, other real estate owned, and repossessed vehicles were $9.8 million, or 0.36% of total assets as of March 31, 2026, compared to $8.2 million, or 0.30% of total assets as of December 31, 2025. The decrease in non-performing loans was largely driven by the transfer of $2.0 million in commercial real estate loan balances to other real estate owned during the first quarter of 2026, net of $0.3 million in related charge-offs, comprised of two loans to a single borrower. Also contributing to the decrease in total non-performing loans was the payoff of a $0.5 million commercial real estate loan during the first quarter of 2026. Partially offsetting the overall decrease in non-performing loans was the addition of two commercial loans into non-performing status during the first quarter of 2026, totaling $2.2 million. The increase in non-performing assets was primarily due to the transfer of four commercial real estate properties into other real estate owned during the first quarter of 2026, relating to two loans to a single borrower, with a fair value of $1.7 million. The transfer date fair value of $1.7 million was net of $0.3 million in charge-offs at the time of transfer.
Previous wording
The Corporation works closely with borrowers experiencing financial difficulties to identify viable solutions that minimize the potential for loss. The Corporation especially monitors modifications made to borrowers experiencing financial difficulty where contractual cash flows are directly impacted, including through principal reductions, reductions in effective interest rates, term extensions, significant payment delays, or a combination thereof. As of September 30, 2025, the Corporation had seven active loans modified under such terms. There was one loan modification made to a borrower experiencing financial difficulty during the three and nine month period ended September 30, 2025; a payment delay on a $3.4 million non-owner occupied commercial real estate loan. During the nine month period ended September 30, 2025, a $0.7 million unsecured commercial and industrial loan which had previously been given a six month term extension was fully charged-off. All other active loans were performing on their modified terms as of September 30, 2025.
Current wording
The Corporation works closely with borrowers experiencing financial difficulties to identify viable solutions that minimize the potential for loss. The Corporation especially monitors modifications made to borrowers experiencing financial difficulty where contractual cash flows are directly impacted, including through principal reductions, reductions in effective interest rates, term extensions, significant payment delays, or a combination thereof. As of March 31, 2026, the Corporation had ten active loans modified under such terms. There was one loan modification made to a borrower experiencing financial difficulty during the three month period ended March 31, 2026; a term extension of three years on a $0.1 million commercial and industrial loan. All active loans previously modified were performing on their modified terms as of March 31, 2026. During the three month period ended March 31, 2026, there was a $0.7 million recovery on a commercial and industrial loan which had previously been given a term extension and had subsequently been charged-off.
Previous wording
Loans are analyzed for credit loss on either an individual basis or a pooled (collective) basis, determined by risk characteristics. The Corporation begins analyzing loans on an individual basis when management determines a loan no longer exhibits risk characteristics consistent with the risk characteristics in its designated pool under the Corporation's CECL methodology. The amortized cost basis of individually analyzed loans as of September 30, 2025 totaled $4.1 million, compared to $6.5 million as of December 31, 2024. Remaining loans are analyzed on a pooled basis and are segmented based on groups of assigned FFIEC Call Report codes. Management seeks to disaggregate its loan portfolio in a granular enough manner to capture the risk profile of each loan, yet broad enough to accurately allow for the application of certain pool-level assumptions.
Current wording
Loans are analyzed for credit loss on either an individual basis or a pooled (collective) basis, determined by risk characteristics. The Corporation begins analyzing loans on an individual basis when management determines a loan no longer exhibits risk characteristics consistent with the risk characteristics in its designated pool under the Corporation's CECL methodology. The amortized cost basis of individually analyzed loans as of March 31, 2026 totaled $3.8 million, compared to $4.2 million as of December 31, 2025. Remaining loans are analyzed on a pooled basis and are segmented based on groups of assigned FFIEC Call Report codes. Management seeks to disaggregate its loan portfolio in a granular enough manner to capture the risk profile of each loan, yet broad enough to accurately allow for the application of certain pool-level assumptions.
Previous wording
A majority of the Corporation's individually analyzed loans are secured and measured for credit loss based on collateral evaluations, using the collateral-dependent practical expedient prescribed by ASC 326. It is the Corporation's policy to obtain updated appraisals, by independent third parties, on loans secured by real estate at the time a loan is determined to require individual analysis. A measurement is performed based upon the most recent appraisal on file to determine the amount of any specific allocation to the allowance for credit losses or charge-off. In determining the amount of any specific allocation or charge-off, the Corporation makes adjustments to reflect the estimated costs to sell the property. Upon receipt and review of updated appraisals, an additional measurement is performed to determine if any adjustments are necessary to reflect proper provisioning or charge-offs. Individually analyzed loans are reviewed on a quarterly basis to determine if any changes in credit quality or market conditions would require additional allocations to the allowance for credit losses or recognition of additional charge-offs. Real estate values in each of the Corporation's market areas have remained stable. Non-real estate collateral may be valued using (i) an appraisal, (ii) net book value of the collateral per the borrower’s financial statements, or (iii) accounts receivable aging reports, that may be adjusted based on management’s knowledge of the client and client’s business. If market conditions warrant, future appraisals are obtained for both real estate and non-real estate collateral. Certain individually analyzed loans determined not to be collateral-dependent are analyzed using a cash flow analysis.
Current wording
Certain of the Corporation's individually analyzed loans are secured and measured for credit loss based on collateral evaluations, using the collateral-dependent practical expedient prescribed by ASC 326. It is the Corporation's policy to obtain updated appraisals, by independent third parties, on loans secured by real estate at the time a loan is determined to require individual analysis. A measurement is performed based upon the most recent appraisal on file to determine the amount of any specific allocation to the allowance for credit losses or charge-off. In determining the amount of any specific allocation or charge-off, the Corporation makes adjustments to reflect the estimated costs to sell the property. Upon receipt and review of updated appraisals, an additional measurement is performed to determine if any adjustments are necessary to reflect proper provisioning or charge-offs. Individually analyzed loans are reviewed on a quarterly basis to determine if any changes in credit quality or market conditions would require additional allocations to the allowance for credit losses or recognition of additional charge-offs. Non-real estate collateral may be valued using (i) an appraisal, (ii) net book value of the collateral per the borrower’s financial statements, or (iii) accounts receivable aging reports, that may be adjusted based on management’s knowledge of the client and client’s business. If market conditions warrant, future appraisals are obtained for both real estate and non-real estate collateral. Certain individually analyzed loans determined not to be collateral-dependent are analyzed using a cash flow analysis.
Previous wording
The allowance for credit losses on loans was $23.6 million as of September 30, 2025, and $21.4 million as of December 31, 2024. The allowance for credit losses on loans was 304.63% of non-performing loans as of September 30, 2025, compared to 238.87% as of December 31, 2024. The ratio of allowance for credit losses on loans to total loans was 1.07% as of September 30, 2025 and 1.03% as of December 31, 2024. Net charge-offs for the nine months ended September 30, 2025 and 2024 were $1.3 million and $0.6 million, respectively.
Current wording
The allowance for credit losses on loans was $24.9 million as of March 31, 2026, and $24.2 million as of December 31, 2025. The allowance for credit losses on loans was 326.34% of non-performing loans as of March 31, 2026, compared to 306.13% as of December 31, 2025. The ratio of allowance for credit losses on loans to total loans was 1.08% as of March 31, 2026 and 1.07% as of December 31, 2025. Net recoveries for the three months ended March 31, 2026 were $0.1 million and net charge-offs for the three months ended March 31, 2025 were $0.3 million.
Previous wording
The table below summarizes the Corporation’s ratio of net charge-offs and recoveries to average loans outstanding by loan category for the nine months ended September 30, 2025 and 2024:
Current wording
The table below summarizes the Corporation’s ratio of net charge-offs and recoveries to average loans outstanding by loan category for the three months ended March 31, 2026 and 2025:
Previous wording
The table below summarizes the Corporation’s credit loss experience for the nine months ended September 30, 2025 and 2024 (in thousands):
Current wording
The table below summarizes the Corporation’s credit loss experience for the three months ended March 31, 2026 and 2025 (in thousands):
Previous wording
(1)Additional provision related to off-balance sheet exposure was a credit of $296 thousand for the nine months ended September 30, 2025 and a credit of $87 thousand for the nine months ended September 30, 2024.
Current wording
(1)Additional provision related to off-balance sheet exposure was $14 thousand for the three months ended March 31, 2026 and a credit of $304 thousand for the three months ended March 31, 2025.
Previous wording
Other real estate owned totaled $0.1 million as of September 30, 2025, and $0.4 million as of December 31, 2024. As of September 30, 2025 there was only one property included in other real estate owned, which had previously been associated with a home equity loan. There were no properties added to other real estate owned in the first nine months of 2025. There were a total of five properties sold from other real estate owned in the first nine months of 2025, including one property which had carried a $32 thousand valuation allowance at the time of sale. The Corporation's net loss on the sale of other real estate owned during the first nine months of 2025 was $8 thousand. The Corporation had $0.2 million in repossessed vehicles as of September 30, 2025 and $0.1 million as of December 31, 2024, which is included in other assets on the Consolidated Balance Sheets, and is a component of non-performing assets.
Current wording
Other real estate owned totaled $1.9 million as of March 31, 2026. There was no other real estate owned as of December 31, 2025. There were five properties added to other real estate owned in the first three months of 2026. Four of the properties added during the first three months of 2026 were associated with one commercial borrower group, and included one multifamily property and three 1-4 family residential rental properties, with a transfer date fair value totaling $1.7 million. The transfer date fair value is inclusive of $0.3 million in charge-offs at the time of transfer. Additionally, there was one residential mortgage transferred to other real estate owned in the first three months of 2026, totaling $0.2 million. There were no properties sold from other real estate owned in the first three months of 2026. The Corporation had $0.2 million in repossessed vehicles as of March 31, 2026 and $0.3 million as of December 31, 2025, which is included in other assets on the Consolidated Balance Sheets, and is a component of non-performing assets.
Showing the first 40 of 58 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Commercial real estate lending represented the largest component of the Corporation's loan portfolio as of March 31, 2026 and December 31, 2025. Commercial real estate lending is comprised of the construction, owner occupied commercial real estate, and non-owner occupied commercial real estate categories of the loan portfolio, as presented in Note 4 - Loans and Allowance for Credit Losses to the Consolidated Financial Statements. As of March 31, 2026 and December 31, 2025, total commercial real estate loans were $1.463 billion and $1.410 billion, respectively, representing 63.3% and 62.1% of total loan balances, respectively.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
The following table presents net interest income for the periods indicated, and the dollar and percent change (in thousands):
Previous report — wording carried elsewhere
(1) Net interest rate spread is the difference in the average yield on interest-earning assets less the average rate on interest-bearing liabilities.
Previous report — wording carried elsewhere
(2) Net interest margin is the ratio of fully taxable equivalent net interest income divided by average interest-earning assets.
Previous report — wording carried elsewhere
The following table presents non-interest income for the periods indicated, and the dollar and percent change (in thousands):
Previous report — wording carried elsewhere
The following table presents non-interest expense for the periods indicated, and the dollar and percent change (in thousands):
Previous report — wording carried elsewhere
The following table presents income tax expense and the effective tax rate for the periods indicated, and the dollar and percent change (in thousands):