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Chemung Financial revises earnings due to impaired loans

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Chemung Financial revises earnings due to impaired loans

Chemung Financial Corp. increased its loan loss provision for fourth-quarter and full-year 2017 by $3.9 million, after an internal review resulted in one long-standing relationship in the Southern Tier of New York being deemed impaired.

In fact, the provision was up $5.9 million year over year largely due to reserves for eight commercial loans to two long-standing relationships in the Southern Tier of New York. Chemung recorded $805,000 in net charge-offs for the quarter, compared with the linked-quarter's $699,000 and the year-ago quarter's $1.5 million.

The provision increase, meanwhile, also translated to an additional deferred tax asset, which in turn lowered income tax expense by $1.0 million. Net income, therefore, was reduced by $2.9 million instead of the full $3.9 million.

For the quarter ended Dec. 31, 2017, the Elmira, N.Y.-based company reported a net loss of $2.2 million, or 45 cents per share. It had originally reported net income of $778,000, or 16 cents per share. A year ago, it was net income of $3.0 million, or 62 cents per share.

For full year 2017, net income was $7.4 million, or $1.55 per share. It had previously reported net income of $10.4 million or $2.16 per share. In 2016, it was $10.0 million or $2.11 per share.