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Elmira Savings Bank (NASDAQ:ESBK) is a federally chartered bank with 10 offices in Chemung, Tompkins, Steuben and Cayuga Counties of NY and one office in Tioga County, PA. It also has 2 loan centers, 1 in Tompkins County, NY and 1 in Cortland County, NY. ESBK just announced that it purchased another branch office in Elmira Heights, NY which will open on 8/27/2012.

What are the reasons to buy this bank?

  1. It offers a dividend of $.92 per year (4.6%).
  2. It just increased the dividend from $.22 to $.23 a quarter.
  3. The dividend represents around 50% of earnings. (S&P)
  4. Value of $10,000 invested in the company 5 years ago would be worth $14,771 today. (S&P)
  5. Total assets of the company have been growing steadily over the past 10 years. From $284 million in 2002 to $523 million at the end of 2011. (S&P)
  6. Reasonable P/E of 13 for a growing company.
  7. It is a well-managed bank that remained profitable through the 2007 - 2008 housing bust and recession.

The only concern I have with this equity is the lack of knowledge about insider holdings. S&P shows no buying or selling by insiders for the past year. Yahoo has no record of insider holdings as well. Research on EDGAR yielded a report on insider holdings dated 2002. At that time there were 2 individuals who were holding over 8% each of the stock. I prefer to see recent insider buying when I buy a small rural bank and I could not find any.

This is a small bank located in the northern rural sections of New York and Pennsylvania. It has been growing consistently in size and profitability. It offers a good dividend at its present price of $18.75 - $19.00 per share. Put your money in this bank and get a current 4.5% return with about 4% growth in the value of the company annually. Since this stock is lightly traded use a limit order if you decide to purchase.

Source: Elmira Savings Bank: Place Your Money Here To Get A 4.5% Return