Chemung Financial in Elmira, N.Y., is calling for a do-over less than two weeks after releasing its second-quarter results.
The $1.7 billion-asset company late last week said that net income in the quarter fell 37% from a year earlier to $1.6 million, after it reported July 21 that profits had declined just 8.1% to $2.4 million.
A lease dispute was the culprit. Chemung created a $1.2 million legal reserve after the New York Supreme Court for the County of Tompkins granted a partial summary judgment in favor of the owner of a branch in Ithaca that the company's Chemung Canal Trust unit closed this spring. The company said it was notified of the decision July 25, four days after it initially reported second-quarter results.
According to the Ithaca Journal, Chemung Canal Trust in March announced plans to close the branch at the end of May, but the landlord claims the bank has failed to pay rent since Dec. 31 even though it signed a 10-year extension on the lease with his company in December 2013.
The court will hold an inquest on damages at a later date, but the original claim by the plaintiff sought $4 million in damages, Chemung said in a news release Friday.
Meanwhile, Chemung Financial's revised earnings report showed that net interest income rose 2.5% to $13 million primarily on loan interest and fees and income from securities.
Noninterest income decreased 2% to $5.2 million because of a drop in gains on securities transactions and income from bank-owned life insurance.
Noninterest expenses increased 12.6% to $15.6 million due primarily to increases in pension and employee benefits, occupancy expenses, data processing, and professional services.