Elmira Savings Bank Posts Record Earnings

Elmira Savings Bank, FSB (Nasdaq: ESBK) today announced net income for the twelve months ended December 31, 2009 totaling $4,526,000 or $1.60 per diluted share, compared to the $3,018,000 or $1.09 per diluted share reported for the same period in 2008.

Net income for the three months ended December 31, 2009 totaled $1,253,000 or $.45 per diluted share, compared to a net income of $1,154,000 or $.48 per diluted share in the fourth quarter of 2008. Fourth quarter earnings for 2008 were affected by a $1.65 million gain on sale of the Mansfield, Pennsylvania, branch.

Total assets increased by $18.4 million or 4% from $480.6 million on December 31, 2008 to $499.0 million at December 31, 2009.

Total deposits increased by $32.7 million or 10% from $319.9 million as of December 31, 2008 to $352.6 million as of December 31, 2009. Total outstanding loans declined by $24.5 million or 7% from $332.1 million as of December 31, 2008 to $307.6 million as of December 31, 2009. The decline in loans is primarily attributable to an $11.4 million decline in consumer loans and $12.9 million decline in commercial loans.

“We are extremely proud of reaching $4.5 million of net income in 2009. We achieved this level of net income in two years, a full year ahead of plan, after our franchise expansion into the Finger Lakes market,” said Michael P. Hosey, President and Chief Executive Officer.

Hosey continued, “During 2009 we achieved record mortgage originations of $104 million an increase of $40 million or 63% from mortgage originations of $64 million in 2008. This level of mortgage originations and associated fee income, derived from secondary mortgage market sales, gave us the flexibility to accumulate a significant amount of short term funds that we will have available to invest in future periods when we expect interest rates to be higher. We also are pleased with the progress we have made expanding our deposit market share, particularly at our Ithaca locations, where the majority of our $32.7 million of deposit growth was achieved. “

Elmira Savings Bank, FSB with $499.0 million in total assets, is insured by the Federal Deposit Insurance Corporation (FDIC) and is a federally 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; and a cashless branch in Schuyler 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.