Chemung Financial (CHMG) risk factors, FY2025 10-K

Risks Related to Lending

1. 01Economic conditions may adversely affect the Corporation’s financial performance
2. 02iv. an increase in the number of borrowers and counter-parties who become delinquent, file for protection under bankruptcy laws or default on their loans or other obligations to the Corporation
3. 03Imposition of limits by bank regulators on commercial real estate lending activities could curtail the Corporation’s growth and adversely affect our earnings23% rewritten
4. 04Commercial real estate and commercial and industrial loans increase the Corporation’s exposure to credit risks
5. 05Purchased loan participations may have a higher risk of loss than loans the Bank originates because the Bank is not the lead bank and has limited control over credit monitoring29% rewritten
6. 06We are subject to environmental liability risk associated with lending activities
7. 07The foreclosure process may adversely impact the Bank’s recoveries on non-performing loans
8. 08The Corporation's portfolio of indirect automobile lending exposes it to increased credit risks
9. 09The allowance for credit losses may prove to be insufficient to absorb losses in the loan portfolio
10. 10The Corporation is subject to risks and losses resulting from fraudulent activities that could adversely impact its financial performance and results of operations
11. 11Use of appraisals when underwriting loans secured by real property may not accurately represent the net value of collateral the Bank can realize at a future date

Risks Related to Liquidity

1. 12Liquidity needs could adversely affect the Corporation’s financial condition and results of operation

Risks Related to Changes in Interest Rates

1. 13The Corporation is subject to interest rate risk, and fluctuations in market interest rates may affect its interest margin and income, demand for products, defaults on loans, loan prepayments and the fair value of its financial instruments27% rewritten

Risks Related to Competition

1. 14Strong competition within the Corporation's industry and market areas could limit its growth and profitability

Risks Related to Business Strategy

1. 15The Corporation’s growth strategy may not prove to be successful and its market value and profitability may suffer
2. 16The risks presented by acquisitions could adversely affect the Corporation's financial condition and results of operations

Risks Related to Laws and Regulations

1. 17The Corporation operates in a highly regulated environment and may be adversely affected by changes in laws and regulations
2. 18Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition, and results of operations68% rewritten
3. 19We are subject to the Community Reinvestment Act and fair lending laws, and alleged failure to comply with fair lending laws has led to material penalties
4. 20Non-compliance with the USA PATRIOT Act, Bank Secrecy Act, or other laws and regulations could result in fines or sanctions
5. 21The Corporation may need to access capital markets or manage its existing capital structure in the future, but such capital may not be available when needed, or may only be available on unacceptable terms, which could adversely affect its financial condition and results of operations28% rewritten
6. 22Changes in tax rates could adversely affect the Corporation's results of operations and financial condition

Risks Related to Operational Matters

1. 23The Corporation's controls and procedures may fail or be circumvented, which may result in a material adverse effect on its business
2. 24Our risk management framework may not be effective in mitigating risk and reducing the potential for significant losses50% rewritten
3. 25We face significant operational risks because the financial services business involves a high volume of transactions, and these operational risks may be magnified through the use of automated processing
4. 26The Corporation continually encounters technological change and the failure to understand and adapt to these changes could adversely affect its business23% rewritten
5. 27Systems failures or breaches of our network security could subject us to increased operating costs as well as litigation and other liabilities
6. 28Operating systems and infrastructure, managed or supplied by third parties on whom we rely, could be interrupted, compromised, or otherwise breached

Risks Related to Accounting Matters

1. 29The Corporation's accounting policies and estimates are critical to how the Corporation reports its financial condition and results of operations, and any changes to such accounting policies and estimates could materially affect how the Corporation reports its financial condition and results of operations
2. 30The Corporation holds certain intangible assets that could be classified as impaired in the future. If these assets are considered to be either partially or fully impaired in the future, its earnings and the book values of these assets would decrease35% rewritten
3. 31Financial counterparties expose the Corporation to risks

Risks Related to Wealth Management

1. 32Involvement in wealth management creates risks associated with the industry
2. 33There may be claims and litigation pertaining to fiduciary responsibility
3. 34Severe weather, natural disasters, and other external conditions can affect the Corporation’s business
4. 35Inflation can have an adverse impact on our business and on our customers35% rewritten
5. 36The geographic concentration of the Corporation's markets in upstate New York makes it more sensitive to adverse changes in regional conditions than larger or more geographically diversified competitors
6. 37The Corporation may not be able to attract and retain skilled people

Risks Relating to Ownership of Our Common Stock

1. 38The Corporation’s common stock is not heavily traded, and the stock price may fluctuate significantly
2. 39The Corporation is a holding company and depends on its subsidiaries for dividends, distributions, and other payments
3. 40The Corporation's common stock is subordinate to its existing and future indebtednessNew
4. 41Provisions of the Corporation's certificate of incorporation, bylaws, as well as New York law and certain banking laws, could delay or prevent a takeover of the Corporation by a third party