Elmira Savings Bank Posts 4% Earnings Increase

ELMIRA, NY--(Marketwire -07/18/12)- Elmira Savings Bank (ESBK) today announced net income for the six months ended June 30, 2012 totaling $2,516,000 or $.76 per diluted share, compared to the $2,422,000 of net income or $.77 per diluted share reported for the same period in 2011. This represents a 4% or $94,000 increase in net income.

Net income for the three months ended June 30, 2012 totaled $1,358,000 or $.42 per diluted share compared to $1,308,000 or $.43 per diluted share for the same period in 2011. This represents a 4% or $50,000 increase in net income.

The decline in diluted earnings per share despite increases in net income is attributable to an increase in potentially dilutive shares resulting from the higher average market price of the Bank's common stock for the three and six months ended June 30, 2012 versus the same periods in 2011. The average share price for the three and six months ended June 30, 2012 was $19.09 and $18.23 versus the average share price for the three and six months ended June 30, 2011 of $15.18 and $15.50. This represents a $3.91 or 26% increase in the average share price for the three months ended June 30, 2012 and a $2.73 or 18% increase in the average share price for the six months ended June 30, 2012, compared to the same periods in 2011.

Net interest income was $7.5 million for the first six months of 2012 compared to $7.9 million for the same period last year. Noninterest income was $2.8 million compared to $2.1 million for the same period in 2011. Operating expenses were $6.4 million for the first six months of 2012 compared to $6.1 million for the same period in 2011.

Total assets increased by $31.0 million from $499.7 million at June 30, 2011 to $530.7 million as of June 30, 2012. Total deposits were $365.6 million as of June 30, 2011 compared to $398.0 million as of June 30, 2012. This represents a $32.4 million or 9% increase. Total loans increased by $45.7 million or 14% from $320.1 million as of June 30, 2011 to $365.9 million as of June 30, 2012.

"During the first half of 2012, our mortgage and consumer loan production remained strong and above our expectations. This activity has allowed us to grow our loan portfolio, recognize increased levels of revenue from our secondary market activities, and avoid participating in the historically low yield investment market," said Michael P. Hosey, President and CEO. Hosey continued, "We continue to protect our net interest margin, monitor asset quality, and evaluate our capital needs and alternatives."

Elmira Savings Bank with $530.7 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a New York State chartered Bank with five offices in Chemung County, NY; three offices and a loan center in Tompkins County, NY; one office in Steuben County, NY; one office in Cayuga County, NY; one office in Schuyler County; and a loan center in Cortland County, NY.

Except for the historical information contained herein, the matters discussed in this news release are forward looking statements that involve the risks and uncertainties, including the timely availability and acceptance of Bank products, the impact of competitive products and pricing, the management of growth, and other risks detailed from time to time in the Bank's regulatory reports.

  Elmira Savings Bank SELECTED CONSOLIDATED INCOME STATEMENT ITEMS (Unaudited) (In thousands except per share amounts) Three Months Ended Six Months Ended June 30, June 30, --------------------- --------------------- 2012 2011 2012 2011 ---------- ---------- ---------- ---------- Net interest income $ 3,772 $ 3,955 $ 7,540 $ 7,877 Provision for loan losses 142 182 267 332 Gain on sale of securities 75 230 75 296 Other noninterest income 1,473 1,003 2,723 1,841 Total noninterest expense 3,157 3,035 6,372 6,093 Income before taxes 2,021 1,971 3,699 3,589 Net income 1,358 1,308 2,516 2,422 Dividends on preferred stock 403 341 798 679 Accretion of preferred stock discount - 21 - 42 Income available to common shareholders 955 946 1,718 1,701 Basic earnings per common share $ 0.44 $ 0.44 $ 0.80 $ 0.79 Diluted earnings per common share $ 0.42 $ 0.43 $ 0.76 $ 0.77 Dividends per common share $ 0.22 $ 0.18 $ 0.44 $ 0.36 Elmira Savings Bank SELECTED CONSOLIDATED BALANCE SHEET ITEMS (Unaudited) (In thousands except per share amounts) June 30 December 31 June 30 2012 2011 2011 ------------- ------------- ------------- Total assets $ 530,646 $ 523,358 $ 499,745 Loans receivable 362,312 345,982 320,140 Allowance for loan losses 3,556 3,299 3,010 Deposits 397,972 381,729 365,550 Borrowings 59,000 70,019 70,057 Shareholders' equity 65,621 64,615 58,528 Book value per common share $ 19.15 $ 18.83 $ 18.47 Per share data have been adjusted to reflect the 10% stock dividend, or 196,819 shares, distributed on December 28, 2011.