Chemung Financial in Elmira, N.Y., has sold three nonperforming commercial loans, joining a short list of banks purging problem credits from their balance sheets.
The $2.3 billion-asset company said in a press release Thursday that the loans had a total balance of $3.8 million. Chemung also sold a performing commercial loan with a $1.1 million balance.
Chemung said the four loans were sold for a net gain of $200,000. It did not identify the buyers.
Very few banks have been willing to sell large chunks of loans during the pandemic.
Hancock Whitney Holding in Gulfport, Miss., sold its energy loans last year, and OceanFirst Financial in Toms River, N.J., alsomoved some loans. Truist Financial in Charlotte, N.C., said earlier this week that it plans to sell its portfolio of small-ticket loans and leases.
Chemung said the loan sales allowed it to release reserves tied to the credits. The company’s loan-loss provision fell by 63% from a quarter earlier to $250,000.
Nonperforming loans fell by 37% to $10 million, or 0.65% of total loans.
Profit at Chemung decreased by 8% from the third quarter but rose by 24% from a year earlier, to $5.2 million.
