Elmira Savings Bank
Annual Report 2018

Plain-text annual report

1869-2019 Annual Report 2018 ELMIRA SAVINGS BANK Board of Directors (Front row l-r) Marianne W. Young, Retired President & Chief Executive Officer, Market Street Trust Company ; John R. Alexander, Vice Chairman and Corporate Secretary of the Board & Managing Partner, Sayles & Evans; Thomas M. Carr, President & Chief Executive Officer; Michael P. Hosey, Chairman of the Board; (Back row l-r) Donald G. Quick, Jr., Retired Partner, Mengel, Metzger, Barr & Co. LLP.; Kristin A. Swain, Retired Executive Director, The Rockwell Museum; A. Scott Welliver, Chairman & Chief Executive Officer, Welliver; Arie J. van den Blink, Chairman & Chief Executive Officer, The Hilliard Corporation. Not pictured: Katherine H. Roehlke, President & Chief Executive Officer, F.M. Howell & Company. Our Mission THE MISSION OF ELMIRA SAVINGS BANK is to provide above average returns to our shareholders while providing a broad range of financial services that meet the needs of the individuals, businesses, and organizations of our community. We will achieve this through our commitment to: • Consistent and superior quality service for our customers. • A culture that incents employees to excel personally and professionally. • Leadership in and support for our community. • Independence as a local community bank. ELMIRA SAVINGS BANK Senior Officers (Left to right): Kevin J. Berkley, Executive Vice President & Senior Loan Officer; Thomas M. Carr, President & Chief Executive Officer; Donna J. Tangorre, Senior Vice President & Retail Banking Manager; Jason T. Sanford, Senior Vice President & Chief Financial Officer. I am pleased to write this message to you, our loyal shareholders, updating you on the Bank’s progress during 2018. The year 2018 produced solid financial results highlighted by net income of $4.2 million, the issuance of a 5% stock dividend and balance sheet growth of 6.4%. The balance sheet growth was composed of 5.2% of loan portfolio growth, which was funded by deposit growth of 7.6%. Thomas M. Carr President & Chief Executive Officer TO OUR Shareholders In addition to the financial results, we continued to invest in developing our staff’s sales abilities, improving our customer-based technologies, and launching a new marketing campaign. Net income totaled $4.2 million for 2018 compared to $4.9 million in 2017. The decrease in net income is due to a $0.6 million increase in income tax expense and a decrease of $0.9 million in non- interest income partially offset by a $0.5 million decrease in the provision for loan losses and $0.4 million decrease in non-interest expense. The results from 2017 were positively impacted by the one-time tax adjustment due to the tax law changes, which totaled $1.2 million. The $4.2 million of net income produced diluted earnings per share of $1.21, the same as 2017. During the year, the Bank issued a 5% stock dividend while paying a cash dividend of $0.92 per share. Net interest income totaled $16.6 million, slightly ahead of the $16.5 million recorded in 2017. Our net interest margin decreased by 1 basis point from 3.32 in 2017 to 3.31 in 2018. This slight margin decline was more than offset in net interest income by earnings on increases in average loans and deposits. Non-interest income declined by $0.9 million, primarily the result of lower sales of mortgages to the secondary markets. During 2018, the Bank sold $39.6 million, or 49%, of its total mortgage production compared to $63.3 million, or 71%, of its total mortgage production in 2017. The effect of this lower sales volume was to reduce our gain on sale of mortgage revenue by $1.1 million from $2.7 million in 2017 to $1.6 million in 2018. Non-interest expense was well controlled in 2018 totaling $15.5 million, or 2.5%, below the 2017 level of $15.9 million. Salaries and benefits were $95,000, or 1.2%, lower year to year. Marketing expense and professional fees were $148,000 and $179,000 lower respectively. These positive variances were partially offset by increases in net occupancy and equipment expense of $97,000 and $114,000 respectively. The loan portfolio increased by $23.6 million, or 5.2%, from December 31, 2017 to December 31, 2018. The 5.2% loan growth rate was significantly higher than the two previous years, which were less than one percent growth. The $23.6 million of growth was composed of consumer loan growth of $9.5 million, commercial loan growth of $11.5 million and residential mortgage loan growth of $2.2 million. Residential mortgage originations totaled $81.7 million in 2018 compared to $89.7 million in 2017. During 2018, the Bank added $42.0 million of mortgages to its portfolio compared to $26.4 million added in 2017. The result of the increase in portfolio loans was $2.2 million of residential mortgage portfolio growth. Page 4 : Elmira Savings Bank : 2018 ANNUAL REPORT raise of $9.5 million, the repurchase of We were able to repurchase these up payments on multiple websites or the preferred stock which totaled $9.4 shares with the capital raised in paying by check. The latest version of million and the difference between net income and dividends. Our common shares outstanding had a book value per share of $17.07 at December 31, Consumer loan originations were $30.5 2017, an increase of $0.33 per share million in 2018, an increase of $5.8 from December 31, 2016. million, or 23%, from the $24.7 million of originations in 2017. This increase We invested in our branch network in production helped to grow our in 2017 by completing our new full- consumer loan portfolio by $9.5 million, service branch located at 602 West or 17%. State Street in Ithaca in May. This historic rehabilitation was a major Commercial loan originations totaled management focus for the last half of $34.9 million in 2018, slightly above 2016 and the first five months of 2017. the $34.3 million from 2017. The 2018 The completed facility, showcased in originations increased our commercial this report, is the centerpiece of our loan portfolio $11.5 million, or 9%. franchise in Tompkins County. The Our asset quality remains strong with branch consists of a full-service Bank $4.5 million in non-performing loans Branch of 2,100 square feet with two representing 0.93% of total loans. drive-through lanes, one of which Our delinquent loans were 0.98% of includes a state of the art ATM. total loans as of December 31, 2018 In addition to the Bank Branch, we have compared to 0.95% for 2017. leasable space on the second floor. The investment portfolio decreased We also maintain control of several slightly during the year from $42.3 vacant parcels surrounding the State million at December 31, 2017 to $42.0 Street Branch that we look forward to million at the end of 2018. We continue developing in the future. to avoid low yielding investments in During 2017 we restructured our capital, favor of loan portfolio growth. Due to first in April with the successful private deposit growth exceeding loan growth, placement of 548,430 shares of common we had an increase in cash of $11.6 stock. These shares were placed with million, which we intend to deploy in select investors with no single investor loan originations. acquiring more than 5% of total The $34.8 million of deposit growth, outstanding shares. The proceeds from or 7.6%, was composed of a $24.4 this issuance totaled $9.5 million. million increase in time deposits, a $5.1 In December, the Bank repurchased all million increase in savings accounts, of its shares of preferred stock that were a $7.6 million increase in non-interest outstanding. The liquidation value of bearing accounts, and a $2.9 million these shares was $10.0 million. They increase in interest bearing transaction also had a dividend rate of 9.00%. The accounts. These favorable variances shares were repurchased at a discount were partially offset by a $5.3 million of $600,000 with the total purchase decrease in money market accounts. price being $9.4 million. The 7.6% growth in deposits was more than twice the industry average for the private placement of common stock. After this transaction, the Bank maintained a core capital ratio of 8.5% as of December 31, 2017, significantly community banks and nearly three above the well-capitalized level times the Bank’s average deposit growth established by Bank regulators. rate for the three previous years, which was 2.7%. The $34.8 million of deposit The anticipated effect of retiring growth is attributed to growth across all preferred shares will be to reduce the 13 branches in our network. overall dividends paid out of earnings, increase the net income available to The Bank continued to lessen its common shareholders, and improve reliance on borrowed funds, reducing the Bank’s tangible common equity them from $35.0 million in 2017 to ratio. We were pleased to execute this $31.0 million in 2018. repurchase and complete the second We continued to invest in technologies step of our capital strategy during 2017. that protect and improve the customer As mentioned, we continue to experience. During 2018, we work on improving operations and implemented SecurLOCK Equip, processes and are pleased to have providing enhanced customer controls implemented a mortgage loan process to better protect our debit cardholders. management system to improve the We also implemented Electronic time it takes us to process a mortgage Signature throughout our branch loan from application to closing. This network, allowing customers to sign effort began with an analysis of our Bank documents electronically. Finally, 2016 mortgage originations which we upgraded our website to a more provided us with key information to responsive design, with greater standardize our process and establish functionality and enhanced formats, benchmarks. The implementation of making the site more user friendly. Please this system has produced early results visit us at www.elmirasavingsbank.com. that are encouraging. In the first half We have experienced a considerable of 2017, our mortgage turn time was increase in the use of our Mobile approximately 60 days. By the 4th Banking app during 2018. Our app has quarter of 2017, the average turn time one touch access convenience, utilizing was 44 days, an improvement of 16 days fingerprint technology that allows from application to closing. you, in seconds, to have your current Finally, we continued to invest in banking information. We have over 5,000 technology. We recently continued customers using this modern technology. expansion of our Electronic Banking We are focused on growing the business Services through an upgrade to our Bill and continued, in 2018, to invest in Pay Services, as well as expansion of the our staff by providing professional Touch ID and Passcode access within sales training to all of our employees Mobile Banking. Bill Pay allows users who regularly interact with our to pay all of their bills through Online customers. We believe the benefit of this or Mobile Banking rather than setting investment is evidenced in our deposit and loan growth. Bill Pay features an updated look and streamlined efficiencies within Online Banking, as well as expanded abilities offered through Mobile Banking. 2019 marks the Bank’s 150th Additionally, the Elmira Savings Bank anniversary of being chartered on Mobile Banking App was recently March 19, 1869. To celebrate this updated to allow users to access all milestone, we unveiled a special 150th functionalities of the App using a anniversary logo that we have been fingerprint or six-digit Passcode of using in our campaigns and as a theme their choice. of this Annual Report. We have planned events in all of the markets we serve As we look forward to 2018, we are to commemorate this anniversary. We dedicated to organically growing our hope you enjoy the historical images we business. We are fortunate to have have incorporated into this report. strong and expanding economies in our geographic footprint and will continue Looking back over the last 150 years to focus on increasing our market share reveals sweeping changes in society and in these regions. the recollection of epic challenges, both manmade and natural. It has required We will continue to invest in our staff great determination and leadership to and in technology to keep improving survive these obstacles and preserve the quality and convenience of every our independence as a community customer interaction with our institution. bank. Elmira Savings Bank was one We have, and going forward will, benefit of the first New York mutual savings financially from changes in the federal banks to convert to a public form of tax code. These changes have reduced ownership in the 1980s and it remains our tax burden and will benefit our one of the few banks in upstate New shareholders, customers and employees. York to have made that transition and maintain its independence. We remain optimistic that regulatory relief will occur in a meaningful way The Board of Directors is actively and provide us with reductions in engaged in overseeing the strategic compliance-related burden. direction of the organization while Bank Officers and employees are We are determined to provide excellent committed to executing the objectives. service for our customers and strong We continually strive to improve while financial results for shareholders. fulfilling the mission of a community bank. We appreciate your support as We appreciate your loyal support as a shareholder and look forward to shareholders and look forward to continuing our journey in 2019. continuing to build our business. Thomas M. Carr Thomas M. Carr President and President and Chief Executive Officer Chief Executive Officer Elmira Savings Bank : 2017 ANNUAL REPORT : Page 5 Elmira Savings Bank : 2018 ANNUAL REPORT : Page 5 ELMIRA SAVINGS BANK Officers FINANCE Jason T. Sanford Senior Vice President Chief Financial Officer John J. Stempin Vice President Controller Robert W. Hazelton III Vice President Dawn Siglin Vice President Kathleen Bange Assistant Secretary Judy A. Woodruff Assistant Vice President Taryn Schwartz Assistant Secretary HUMAN RESOURCES Bradley V. Serva Senior Vice President Stacy Ward Assistant Secretary LENDING Kevin J. Berkley Executive Vice President Senior Loan Officer Christopher J. Giammichele Senior Vice President Gary O. Short Senior Vice President Erin Thomas-Allen Assistant Secretary MANAGEMENT INFORMATION SYSTEMS Joseph L. Walker Vice President Phillip J. Collins Assistant Vice President OPERATIONS Margaret A. Phillips Vice President RETAIL SERVICES Donna J. Tangorre Senior Vice President Retail Banking Manager Renee A. Wheeler Vice President Linda S. Confer Assistant Vice President Kimberly A. Elliott Assistant Vice President Deborah French Assistant Vice President John Strong Assistant Vice President Cory Eddy Assistant Treasurer Lorenda D. Gneo Assistant Treasurer Ellaminda Leader Assistant Secretary EXECUTIVE Thomas M. Carr President Chief Executive Officer Anne M. Lavancher Assistant Secretary AUDIT AND CONTROL Edith B. Harkness Vice President Meredith Tigue Vice President Jill M. McConnell Assistant Secretary COLLECTIONS Amber Simms Assistant Secretary CREDIT Carrie L. Spencer Vice President Susan M. Cook Assistant Vice President Amy Frisbie Assistant Vice President Frank P. Spena, Jr. Assistant Vice President Page 6 : Elmira Savings Bank : 2018 ANNUAL REPORT ELMIRA SAVINGS BANK Employees Laurel Griffith Meggie Hall Kristin Haner Brooke Hockeborn Malissa Hootman Jennifer Hourihan Rachel Houseknecht Margaret Hurd Blaine Johnson-White William Klinko Joshua Knoll Keegan Knoll Debra Sue Knowles Brian Kunk-Czaplicki Theresa Laney Shaina Leister Christina M. Losey Trisha Luchaco Colleen Manuel Laurel Mareck Julie May Lindsey McCutcheon Cherry Merrill Kala Mitchell Haley Mullins Katie Murphy Alexis Naylor Kimberly O’Dell Jessica Ober Jennifer Orr Christina Allen Shannon J. Bailey Dwayne Balcom Blair Beavers Mary A. Becker Joyelle Briggs Amber Brimmer Marilynne Burchard Alyssa Carlisle Janet S. Caswell Jennifer Catron Jacqueline Cecce Brenda Cimakasky Mandie Close Jessica Coates Ashley Congdon Michele Corby Kristie Cummings Eric DeJesus Falon Denison Brianna DiMento Tina Dittler Pamela Donovan Nicholas Dutcher April Eggleston-Branston Kelly Ewanyk Shanna Flint Valerie Friedrich Patricia Frisbie Ilene Girardi Mario Gonzalez-Ayon Sarah Parker Eileen Payne James Pollen Michael Price Hannah Qualey Laura Reynolds April Roberts Deborah M. Rockwell Amber Rogers Sharla R. Root Kristin Sad Denise Sarro Youngmi Schickel Ashley Schultz Samantha Senich Brad Serva Kadison Shaver Mark Simon II Christine Snyder Jennifer Stampp Tania-lynn Suhm Desirea Sullivan Ashley Tallarida Michelle M. Tilden Jenara Towner Suzanne Walsh Joseph Whitaker Tracy Wiles Jenna Wilson Jennifer Wood Stacy Woodworth Elmira Savings Bank : 2018 ANNUAL REPORT : Page 7 9 Board of Directors 35 Bank Officers 127 Bank Employees 14 Bank Locations n o i t i s o p m o C t e s s A ■ Cash & Investments ■ Commercial Mortgages ■ Consumer Loans ■ Commercial Loans ■ Other Assets ■ Residential Mortgages 14,781 Depositors Total Assets ___________________________________ ___________________________________ ___________________________________ $590,040 ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ ___________________________________ $273,952 $11,529 $224 1903 1950 2000 2018 1869-78 David Decker 1890-97 Jackson Richardson 1897-1900 Thomas S. Flood 1901-14 Jesse L. Cooley 1914-23 William H. Ferguson 1923-33 John W. Huston 1933-40 Seymour Lowman 1940-60 Herbert C. Wing 127 Bank Employees 21,145 Bank Customers 376 Bank Shareholders 14,781 Depositors 5,621 Mortgages 1869–2019 Celebrating 150 Years of Community Building All data as of December 31, 2018 15 Bank Presidents 1940-60 Herbert C. Wing 1960-67 Russell F. Gee Jr. 1967-70 Lee D. Blackwell 1970-80 William S. Bushnell 1980-95 Robert P. Carges 1995-2003 John C. Brugler 2003-13 Michael P. Hosey 2013- Thomas M. Carr Assets, Deposits, and Loans ($000) Total Assets Total Deposits Total Loans SELECTED FINANCIAL DATA $545,969 $561,344 $573,450 $554,560 $440,472 $469,547 $454,998 $459,528 $2,765 $456,762 $460,628 $422,561 $418,146 $590,040 (in thousands, except share and per share amounts) FINANCIAL STATEMENT HIGHLIGHTS 2018 2017 $491,517 $483,664 Assets $ 590,040 554,560 Loans (including loans held for sale) 483,664 460,628 Allowance for loan losses Deposits Shareholders’ equity Net interest income Provision for loan losses Non-interest income Non-interest expense 2014 2015 2016 2017 2018 Per Share Data Net income attributable to Elmira Savings Bank Diluted Earnings Per Common Share Cash Dividends Per Common Share 1.19 1.21 1.21 1.11 0.94 PER SHARE INFORMATION Basic earnings per share Diluted earnings per share Book value per share Cash dividend per share 0.88 0.88 0.88 0.88 0.92 SELECTED RATIOS 2014 2015 2016 2017 2018 Net Income ($000) Net Income ($000) Available to Common Shareholders Return on average assets Return on average equity Shareholders’ equity to assets Dividend payout ratio Efficiency ratio OTHER SELECTED DATA Number of offices $4,851 Number of automated teller machines 4,372 4,442 491,517 456,762 57,949 16,570 367 4,518 15,489 4,239 $ 1.22 1.21 16.52 0.92 56,681 16,548 895 5,437 15,884 4,851 1.22 1.21 16.26 0.88 0.75% 7.36% 0.86% 7.78% 9.82% 10.22% 75.41% 72.13% 73.45% 72.25% 14 14 14 14 $4,122 $4,337 $4,006 $4,239 $4,239 $3,665 $2,765 $3,222 $3,437 Weighted average shares outstanding 3,479,916 3,281,706 Weighted average diluted shares outstanding 3,494,218 3,297,938 2014 2015 2016 2017 2018 Page 10 : Elmira Savings Bank : 2018 ANNUAL REPORT SELECTED FINANCIAL DATA Consolidated Balance Sheets Elmira Savings Bank and Subsidiaries (in thousands, except for share and per share data) ASSETS Cash and due from banks Federal funds sold and other short-term investments Total cash and equivalents Securities available for sale, at fair value Securities held to maturity - fair value of $7,638 at December 31, 2018, and $8,186 at December 31, 2017 Federal Reserve and Federal Home Loan Bank (FHLB) stock, at cost Loans held for sale Loans receivable Less: Allowance for loan losses Net Loans Premises and equipment, net Bank-owned life insurance Accrued interest receivable Goodwill Other assets Total assets LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits Borrowings Other liabilities Total liabilities SHAREHOLDERS’ EQUITY: Preferred stock, $1 par value; $1,000 liquidation value per issued share; 5,000,000 shares authorized; 10,000 shares issued at December 31, 2018 and at December 31, 2017 Common stock, $1 par value; authorized 5,000,000 shares; 3,597,605 shares issued at December 31, 2018 and 3,410,622 at December 31, 2017 Additional paid-in capital Retained earnings Treasury stock, at cost - 93,883 common shares and 10,000 preferred shares at December 31, 2018 and December 31, 2017 Accumulated other comprehensive loss Total Elmira Savings Bank shareholders’ equity Noncontrolling interest Total shareholders’ equity December 31, 2018 December 31, 2017 $ 19,429 94 19,523 25,051 7,518 9,462 1,392 482,272 4,372 477,900 16,846 14,444 1,566 12,320 4,018 $ 7,800 97 7,897 24,056 8,039 10,221 1,999 458,629 4,442 454,187 16,772 13,982 1,497 12,320 3,590 $ 590,040 $ 554,560 $491,517 31,000 9,574 $456,762 35,000 6,117 532,091 497,879 9,700 3,598 53,784 3,176 (12,202) (158) 57,898 51 57,949 9,700 3,411 50,258 5,493 (12,202) (31) 56,629 52 56,681 Total liabilities and shareholders’ equity $ 590,040 $ 554,560 Elmira Savings Bank : 2018 ANNUAL REPORT : Page 11 Consolidated Statements of Income Elmira Savings Bank and Subsidiaries (in thousands, except for per share amounts) INTEREST AND DIVIDEND INCOME Interest and fees on loans Interest and dividends on securities Taxable Non-taxable Total interest and dividend income INTEREST EXPENSE Interest on deposits Interest on borrowings Total interest expense Net interest income Provision for loan losses Years Ended December 31 2017 2016 2018 $ 19,569 $ 18,971 $ 19,056 1,037 472 965 610 1,000 832 21,078 20,546 20,888 3,565 943 2,951 1,047 4,508 3,998 3,055 1,313 4,368 16,570 367 16,548 895 16,520 487 Net interest income after provision for loan losses 16,203 15,653 16,033 NONINTEREST INCOME Service fees Gain on sale of loans held for sale Net gain on sale of securities Other service fees Earnings on bank-owned life insurance Other Total noninterest income NONINTEREST EXPENSE Salaries and benefits Net occupancy Equipment Marketing and public relations Professional fees Other Total noninterest expense Income before income taxes Income taxes Net income Less: Net income attributable to noncontrolling interest 1,456 1,588 - 813 384 277 1,485 2,701 - 739 390 122 1,420 3,061 180 728 403 108 4,518 5,437 5,900 8,088 1,596 1,392 736 541 3,136 8,183 1,499 1,278 884 720 3,320 7,927 1,416 1,200 794 517 3,748 15,489 15,884 15,602 5,232 988 4,244 5 5,206 350 4,856 5 6,331 1,989 4,342 5 Net income attributable to Elmira Savings Bank $ 4,239 $ 4,851 $ 4,337 Dividend on preferred stock - 845 900 Income available to common shareholders $ 4,239 $ 4,006 $ 3,437 Basic earnings per common share Diluted earnings per common share $ $ 1.22 1.21 $ $ 1.22 1.21 $ $ 1.20 1.19 Per share data has been restated to reflect a 5% stock dividend paid on June 15, 2018. Page 12 : Elmira Savings Bank : 2018 ANNUAL REPORT Consolidated Statements of Comprehensive Income Elmira Savings Bank and Subsidiaries (in thousands) Net income OTHER COMPREHENSIVE LOSS Net unrealized holding losses on securities available for sale Tax benefit Realized securities gains included in net income Tax expense Other comprehensive loss, net of tax Comprehensive income Years Ended December 31, 2018 2017 2016 $ 4,239 $ 4,851 $ 4,337 (163) 42 (121) - - - (121) (20) 8 (12) - - - (12) (459) 177 (282) (180) 70 (110) (392) $ 4,118 $ 4,839 $ 3,945 Consolidated Statements of Shareholders’ Equity Elmira Savings Bank and Subsidiaries (in thousands, except for share and per share amounts) Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Accumulated Other Comprehensive Loss Noncontrolling Interest Total Balance at December 31, 2017 $ 9,700 3,411 50,258 5,493 (12,202) (31) 52 56,681 Reclassification of certain income tax effects from accumulated other comprehensive loss Net income Other comprehensive loss 5% stock dividend (166,481 shares) Stock based compensation expense Restricted stock grants (11,707 shares) Exercise of stock options, net (8,795 shares) Preferred stock repurchased - noncontrolling interest Cash dividend on preferred stock Cash dividend on common stock ($.92 per share) - - - - - - - - - - - - - - - - 6 4,239 - 166 3,213 (3,379) - 12 9 - - - 230 (12) 95 - - - - - - - - (3,183) - - - - - - - - - - (6) - (121) - - - - - - - - 5 - - - - - (1) (5) - 4,244 (121) - 230 - 104 (1) (5) - (3,183) Balance at December 31, 2018 $9,700 3,598 53,784 3,176 (12,202) (158) 51 57,949 Per share data has been restated to reflect the 5% stock dividend paid on June 15, 2018. Elmira Savings Bank : 2018 ANNUAL REPORT : Page 13 To the Board of Directors and Shareholders of Elmira Savings Bank We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Elmira Savings Bank and subsidiaries as of December 31, 2018 and 2017, and the related statements of income, comprehensive income, shareholders’ equity, and cash flows (not presented herein) for each of the three years in the period ended December 31, 2018, and in our report dated March 18, 2019, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived. Cranberry Township, Pennsylvania March 18, 2019 MARKET PRICE INFORMATION Quarters 2018 2017 The Bank’s common stock was first offered in March 1985, and is now listed on the NASDAQ exchange under the symbol ESBK. This table summarizes the high and low market price for the Bank’s stock during 2018 and 2017. High Low High Low First 19.95 19.19 20.71 19.31 Second 20.60 19.29 20.71 18.71 Third 21.00 20.10 20.10 18.86 Fourth 20.47 15.77 19.90 18.00 ANNUAL SHAREHOLDERS’ MEETING The Annual Shareholders’ Meeting will be held at 10:00 a.m. on April 23, 2019 at the Clemens Center, 207 Clemens Center Parkway, Elmira, NY 14901 SHAREHOLDER INQUIRIES The Bank’s transfer agent is: Computershare, Inc. Computershare Investor Services PO Box 30170, College Station, TX 77842 (800) 368-5948 • The Bank’s Annual Report on Form 10-K will be furnished without charge upon written request to: Thomas M. Carr President & Chief Executive Officer Elmira Savings Bank 333 E. Water Street, Elmira, NY 14901 Page 14 : Elmira Savings Bank : 2018 ANNUAL REPORT Finger Lakes Region ELMIRA SAVINGS BANK Locations MAIN OFFICE 333 East Water Street Elmira, NY 14902-9967 607-734-3374 STATE STREET 602 West State Street Ithaca, NY 14850 607-272-111 HORSEHEADS 2149 Grand Central Avenue Horseheads, NY 14845 607-734-3374 SOUTH MEADOW 702 South Meadow Street Ithaca, NY 14850 607-272-2211 SOUTHPORT 1136 Pennsylvania Avenue Elmira, NY 14904 607-734-3374 TRIPHAMMER 2300 North Triphammer Road Suite 5 Ithaca, NY 14850 607-257-8808 WEST ELMIRA 930 West Church Street Elmira, NY 14905 607-734-3374 BIG FLATS 971 County Route 64 Elmira, NY 14903 607-734-3374 ELMIRA HEIGHTS 2075 Lake Road Elmira, NY 14903 607-734-3374 CORNING 19 East Market Street, Suite 101 Corning, NY 14830 607-962-0812 ERWIN 404 South Hamilton Street Painted Post, NY 14870 607-936-1806 MORAVIA 142 Main Street Moravia, NY 13118 315-497-1300 VESTAL LOAN CENTER* 3439 Vestal Parkway East Vestal, NY 13850 607-729-0386 WATKINS GLEN 712 North Franklin Street Watkins Glen, NY 14891 607-535-4108 ARNOT MALL ATM Entrance 4 - Center Court Horseheads, NY 14845 607-734-3374 *ATM available at all locations except for the Vestal Loan Center. Elmira Savings Bank : 2018 ANNUAL REPORT : Page 15 www.elmirasavingsbank.com Member FDIC | Equal Housing Lender Design: PS Graphic Design Photography: Foto Forum 001CSN39C4 

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