Chemung Financial Corp. unit Chemung Canal Trust Co. settled the matter of Fane v. Chemung Canal Trust Co. The bank agreed to pay Fane $3.3 million, according to a company filing.

The parties agreed to dismiss the action with prejudice and to release each other from any and all liabilities, claims, counterclaims, demands, charges, complaints and causes of action.

As of March 31, Elmira, N.Y.-based Chemung Financial had a legal reserve of $2.3 million for the action; it will now recognize an additional $1.0 million of legal expense during the second quarter.