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?
- It offers a dividend of $.92 per year (4.6%).
- It just increased the dividend from $.22 to $.23 a quarter.
- The dividend represents around 50% of earnings. (S&P)
- Value of $10,000 invested in the company 5 years ago would be worth $14,771 today. (S&P)
- 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)
- Reasonable P/E of 13 for a growing company.
- 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.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ESBK over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.