<PAGE>
<PAGE>
        SECURITIES AND EXCHANGE COMMISSION
            Washington, D.C.  20549

               --------------------

                     FORM 10-K

           FOR ANNUAL AND TRANSITION REPORTS
        PURSUANT TO SECTIONS 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934

[X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended June 30, 1999
                           OR
[  ] TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from __________ to __________

                  Commission File Number:  0-18782

                     ES&L BANCORP, INC.
       -----------------------------------------------------
      (Exact Name of Registrant as Specified in Its Charter)

      Delaware                                16-1387158
-------------------------------            -------------------
(State or other Jurisdiction of            (I.R.S. Employer
Incorporation or Organization)             Identification No.)

300 West Water Street, Elmira, New York                14901
---------------------------------------------------------------
(Address of Principal Executive Offices)             (Zip Code)

Registrant's telephone number, including area code:(607) 733-5533
                                                   --------------
Securities registered pursuant to Section 12(b) of the Act:  None

   Securities registered pursuant to Section 12(g) of the Act:

                Common Stock, par value $.01 per share
                --------------------------------------
                           (Title of Class)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing re-

quirements for the past 90 days. YES   X     NO      .

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  YES   X     NO      .

The registrant's voting stock is not regularly and actively
traded in any established market and there are no regularly
quoted bid and asked prices for the registrant's common stock.
On the basis of the last per share sales price of which the
registrant is aware ($26.25 per share), management estimates
that the aggregate market value of the voting stock held by non-
affiliates of the registrant at September 1, 1999 was
$12,284,239.  Solely for purposes of this calculation, the
shares held by directors and executive officers of the
registrant and by any stockholder beneficially owning more than
5% of the registrant's outstanding common stock are deemed to be
shares held by affiliates.

As of September 1, 1999, there were 830,595 shares outstanding
of the registrant's common stock, of which directors and
executive officers and more than 5% beneficial owners held
362,624 shares.

          DOCUMENTS INCORPORATED BY REFERENCE

  1.  Portions of Annual Report to Stockholders for the Fiscal
Year Ended June 30, 1999.  (Part II)

  2.  Portions of Proxy Statement for the 1999 Annual Meeting of
Stockholders. (Part III)

<PAGE>
<PAGE>
                        PART I
ITEM 1.  BUSINESS
-----------------

GENERAL

     THE CORPORATION.  ES&L Bancorp, Inc. (the "Corporation")
was incorporated under the laws of the State of Delaware in
March 1990 for the purpose of becoming a savings and loan
holding company for Elmira Savings & Loan, F.A. ("Elmira Savings
& Loan" or the "Bank").  On August 28, 1990, the Corporation
acquired all of the outstanding stock of Elmira Savings & Loan
issued in connection with the Bank's conversion from mutual to
stock form.  The Corporation issued 352,558 shares of common
stock in connection with the Bank's conversion.

     Prior to the acquisition of all of the outstanding stock
of the Bank the Corporation had no assets or liabilities and
engaged in no business activities.  Since its acquisition of the
Bank, the Corporation has engaged in no significant activity
other than holding the stock of the Bank and operating the
business of a savings association through Elmira Savings & Loan.
Accordingly, the information set forth in this report, including
financial statements and related data, relates primarily to the
Bank and its subsidiaries.

     The Corporation's executive offices are located at 300
West Water Street, Elmira, New York.  Its telephone number is
(607) 733-5533.

     THE BANK.  Elmira Savings & Loan was incorporated in 1888
as a New York chartered savings association.  In 1983, the Bank
converted from a state to a federally chartered association and
acquired its current name.  The Bank's main office is located in
Elmira, New York.

     The Bank is principally engaged in the business of
accepting deposits from the general public and originating loans
secured by residential real estate.  The Bank also engages in
commercial real estate lending in its primary market area and,
to a lesser extent, consumer lending, and invests in government
and federal agency obligations.  At June 30, 1999, the Bank had
total assets of  $153.7 million, deposits of $111.6 million, net
loans receivable of $129.3 million and shareholders' equity of
$15.6 million.

     The Bank's mortgage banking subsidiary, ES&L Mortgage
Corporation, d/b/a Cayuga Mortgage Company  ("Cayuga Mortgage")
is partner in a mortgage banking partnership with Audrey Edelman
& Associates Real Estate, Inc., the largest real estate firm in
Ithaca, New York.  The company, PACE Funding Company ("PACE
Funding"), operates as a correspondent for a number of large
mortgage banking companies and financial institutions, one of
whom is the Bank.

     Elmira Savings & Loan is subject to examination and
comprehensive regulation by the Office of Thrift Supervision
("OTS").  The Bank's deposits are insured by the Savings
Association Insurance Fund ("SAIF") administered by the Federal
Deposit Insurance Corporation ("FDIC").  The Bank is a member of
and owns capital stock in the Federal Home Loan Bank ("FHLB") of
New York, which is one of the twelve regional banks in the FHLB
system.  The Bank is further subject to regulations of the Board
of Governors of the Federal Reserve System (the "Federal Reserve
Board") governing reserves to be maintained against deposits and
certain other matters.  See "Regulation."

PROPOSED REGULATORY AND LEGISLATIVE CHANGES

     Legislation has been passed by both the U.S. House of
Representatives and Senate which calls for the modernization
of the banking system and which would significantly affect the
operations and regulatory structure of the financial services
industry, including savings institutions like Elmira Savings &
Loan.  At this time, management does not know what form final
legislation might take, but if enacted into law, the legislation
could affect the Corporation's competitive environment as well
as its business and operations.  See " -- Regulation -- Proposed
Legislative and Regulatory Changes."

                              1

<PAGE>
<PAGE>
LENDING ACTIVITIES

     GENERAL.  The Bank originates loans through its home
office in Elmira and its mortgage banking subsidiary in Ithaca,
New York.  Historically, the Bank originated primarily
conventional first mortgage loans secured by one-to-four-family
residential property.  Additionally, the Bank originates loans
secured by commercial and multi-family properties located in its
primary market area, and home equity loans.

     The Bank has emphasized the origination of adjustable-rate
mortgage loans for portfolio.  When market conditions require,
the Bank originates fixed-rate loans, the majority of which are
sold in the secondary market.

                              2

<PAGE>
<PAGE>
     Set forth below is selected data relating to the composition
of Elmira Savings & Loan's loan portfolio by type of loan on the
dates indicated.

<TABLE>
<CAPTION>

                                                                   At June 30,
                                                ---------------------------------------------------
                                                       1999            1998               1997
                                                ---------------  ---------------   ----------------
                                                Amount      %    Amount      %     Amount       %
                                                ------    -----  ------    -----   ------      ----
                                                              (Dollars in thousands)
<S>                                             <C>       <C>    <C>       <C>     <C>        <C>
First Mortgage Permanent Loans:
  Conventional 1-4 family. . . . . . . . . . . $ 64,907   50.20% $ 65,069  51.57% $ 74,276    56.39%
  FHA/VA 1-4 family. . . . . . . . . . . . . .       --      --        --     --        --       --
  Multi-family . . . . . . . . . . . . . . . .   14,617   11.30    12,972  10.28    11,554     8.77
  Commercial real estate . . . . . . . . . . .   28,257   21.86    29,740  23.57    28,003    21.26
  Construction:
    Residential. . . . . . . . . . . . . . . .    4,171    3.23     1,997   1.58     2,210     1.68
    Commercial . . . . . . . . . . . . . . . .    6,721    5.20     2,996   2.37     2,510     1.91
                                               --------  ------  -------- ------  --------   ------
     Total first mortgage. . . . . .            118,673   91.79   112,774  89.37   118,553    90.01

Consumer loans:
  Home equity line of credit . . . . . . . . .    4,316    3.34     5,392   4.27     6,049     4.58
  Loans on savings accounts. . . . . . . . . .      394     .30       264    .21       246      .19
  Education loans. . . . . . . . . . . . . . .      148     .11       333    .26       462      .35
  Automobile loans . . . . . . . . . . . . . .      410     .32       460    .36       627      .48
  Second mortgage loans. . . . . . . . . . . .    4,728    3.66     5,005   3.97     4,440     3.37
  Other consumer loans . . . . . . . . . . . .      172     .13       157    .13       136      .11
  Demand notes . . . . . . . . . . . . . . . .    1,369    1.06       954    .76     1,188      .90
                                               --------  ------  -------- ------  --------   ------
     Total consumer loans. . . . . . . . . . .   11,537    8.92    12,565   9.96    13,148     9.98

Commercial lines of credit . . . . . . . . . .    2,039    1.58     2,891   2.29     1,353     1.03
Commercial non-mortgage. . . . . . . . . . . .    1,629    1.26     1,603   1.27     1,807     1.37
                                               --------  ------  -------- ------  --------   ------
     Total . . . . . . . . . . . . . . . . . .  133,878      --   129,833     --   134,861       --

Less:
Loans in process . . . . . . . . . . . . . . .   (3,477)  (2.69)   (2,274) (1.80)   (1,790)   (1.36)
Allowance for loan  loss . . . . . . . . . . .   (1,269)   (.98)   (1,473) (1.17)   (1,435)   (1.09)
Deferred loan origination fees and premiums. .      155     .12        95    .08        75      .06
                                               --------  ------  -------- ------  --------   ------
     Total . . . . . . . . . . . . . . . . . . $129,287  100.00% $126,181 100.00% $131,711   100.00%
                                               ========  ======  ======== ======  ========   ======
</TABLE>

                              3
<PAGE>
<PAGE>
     The following table presents at June 30, 1999 the
scheduled amounts of loan principal repayments expected to be
received by the Bank during the periods shown based upon the
time remaining before contractual maturity.  Demand loans, loans
having no schedule of repayments and no stated maturity, and
overdrafts are reported as due in one year or less.

     The table below does not include any estimate of
prepayments.  Prepayments significantly shorten the average life
of all mortgage loans.  Thus, management believes that the
following table will bear little resemblance to what the actual
repayments of the loan portfolio will be.
<TABLE>
<CAPTION>

                                                       Due after
                                     Due during        1 through      Due after 5
                                  the year ending   5 years after     years after
                                      June 30,           June 30,       June 30,
                                       2000              1999             1999
                                  ----------------  --------------   -------------
<S>                                  <C>              <C>              <C>
Real estate mortgage . . . . . . .   $ 4,584,607      $19,207,976      $83,987,316
Mortgages held for resale. . . . .     5,541,981               --               --
Real estate construction . . . . .     1,460,552          937,736        8,494,018
Installment. . . . . . . . . . . .     3,077,401        4,238,546        4,220,861
Commercial . . . . . . . . . . . .       387,444        1,174,728        2,105,642
                                     -----------      -----------      -----------
    Total. . . . . . . . . . . . .   $15,051,985      $25,558,986      $98,807,837
                                     ===========      ===========      ===========
</TABLE>

     The following table apportions the dollar amount of the
loans due subsequent to the year ended June 30, 1999 between
those with predetermined interest rates and those with
adjustable interest rates.
<TABLE>
<CAPTION>

                                      Predetermined Rates     Adjustable Rates
                                      -------------------     ----------------
<S>                                    <C>                      <C>
Real estate mortgage . . . . . . . . . $ 6,656,148              $101,123,751
Mortgages held for resale. . . . . . .   5,541,981                        --
Real estate construction . . . . . . .   4,805,199                 6,087,107
Installment. . . . . . . . . . . . . .   6,920,805                 4,616,003
Commercial . . . . . . . . . . . . . .   1,628,738                 2,039,076
                                       -----------              ------------
    Total. . . . . . . . . . . . . . . $25,552,871              $113,865,937
                                       ===========              ============
</TABLE>
     ONE- TO FOUR-FAMILY MORTGAGE LOANS.   At June 30, 1999,
the Bank held in its portfolio  $64.9 million of first mortgage
loans secured by one- to four-family residential units,
representing 50.2% of its total portfolio.  Since approximately
1983, the majority of  one- to four-family mortgage instruments
offered by the Bank have included several forms of adjustable-
rate loans with interest rates and payment adjustments made at
regular intervals (generally on a 12 month cycle).  These loans
are generally limited to 2% maximum annual adjustments and a
maximum aggregate adjustment over the life of the loan, and are
based upon movements in the United States Treasury Securities
Index for securities of the same length as the applicable
adjustment period, with amortization schedules generally varying
from 15 to 30 years.  The Bank also offers adjustable rate
mortgage loans which are convertible, at the option of the
borrower, into fixed rate mortgage loans.  Upon conversion,
these loans are generally sold by the Bank in the secondary
market.  The Bank's adjustable rate mortgage loans do not permit
negative amortization of principal and carry no prepayment
penalty.  The Bank qualifies the borrower at either the initial
interest rate or at  200 basis points above the initial rate on
adjustable-rate mortgage loans.  At June 30, 1999, approximately
$59.6 million of the Bank's first mortgage one- to four-family
residential loan portfolio consisted of adjustable-rate loans.

     The retention of adjustable-rate mortgage loans in the
Bank's loan portfolio helps reduce the Bank's exposure to
increases in interest rates.  However, there are unquantifiable
credit risks resulting from potential increased costs to the

                              4
<PAGE>
<PAGE>
borrower as a result of repricing of adjustable-rate mortgage
loans.  It is possible therefore that during periods of rising
interest rates, the risk of default on adjustable-rate mortgage
loans may increase due to the upward adjustment of interest cost
to the borrower.  Further, the adjustable-rate mortgages offered
by the Bank, as well as by many other thrift institutions,
sometimes provide for initial rates of interest below the rates
which would prevail were the index used for pricing applied
initially.  These loans are subject to increased risk of
delinquency or default as the higher, fully indexed rate of
interest subsequently comes into effect, replacing the lower
initial rate.  During fiscal year 1999, the Bank, Cayuga
Mortgage and PACE Funding originated approximately $8.5 million
of residential  adjustable-rate mortgage loans with such below-
market rates.

     The Bank also makes 15 through 30 year fixed rate fully
amortizing loans.  The majority of these loans are originated
with a commitment for sale in the secondary market.  Typically,
when the rate is established on these loans, a forward
commitment is generated to sell the loan.  During fiscal year
1999, the Bank and its mortgage banking subsidiary originated
approximately $53.9 million of fixed-rate loans and sold $52.5
million, servicing retained, in the secondary market.  At June
30, 1999, the Bank had forward commitments to sell closed loans
totaling approximately $13.3 million in the secondary mortgage
market.

     Cayuga Mortgage and PACE Funding also originate fixed-rate
mortgage loans for the Bank, some of which may be sold,
servicing retained, in the secondary market.  At June 30, 1999,
the Bank had a residential mortgage servicing portfolio of
$174.0 million.

     The terms of the residential real estate loans originated
by the Bank generally conform to underwriting guidelines of the
Federal Home Loan Mortgage Corporation ("FHLMC").  The Bank also
offers 15 to 30 year fixed-rate and 15 to 30 year conforming and
non-conforming adjustable-rate loans.  Loans with balances in
excess of the amount prescribed by FHLMC may be sold to private
investors on a negotiated basis.

     Conventional residential mortgage loans granted by the
Bank generally contain a "due-on-sale" clause which normally
permits the Bank to accelerate the indebtedness of the loan upon
transfer of ownership of the mortgaged property.  Due-on-sale
clauses are an important means of increasing the rate on
existing fixed-rate mortgage loans during periods of rising
interest rates and increasing the turnover of mortgage loans in
the Bank's portfolio.  Due-on-sale clauses are required for
loans to be sold to FHLMC and private investors in the secondary
mortgage markets.  Additionally, due to prepayments in
connection with refinancings and sales of property, the average
length of the Bank's long-term residential loans is shorter than
their weighted average contractual maturity.  In periods of
rising interest rates, prepayments tend to decline whereas in
periods of declining interest rates, prepayments tend to
increase.

     CONSTRUCTION LENDING.  The Bank originates construction
loans for the construction of one- to four-family residences and
commercial real estate properties.  Such loans are secured by a
first lien on the subject property and are made in conjunction
with the Bank's review and approval to provide the permanent
mortgage loan financing for the residential or commercial
property.   Construction loans generally have  a construction
period which  ranges from  three months to one year, with
interest due monthly.  The rate  during construction, is
typically tied to the Prime Interest Rate.   As of June 30, 1999
the Bank had $10.9 million outstanding in construction loans.
Of that amount, $4.2 million represented loans on one- to four-
family residences made directly to the homeowner.

     Construction loans originated by the Bank include single-
and multi-family residences, motels and office buildings.  The
Bank typically will not originate the construction loan unless
it is also making the permanent loan if a permanent loan is
required.  These loans typically range in size between $50,000
and $250,000 for residential loans and up to approximately $1.0
million  for commercial loans.

     Cayuga Mortgage and PACE Funding originated approximately
$1.8 million of the $4.2 million total residential construction
loans outstanding at June 30, 1999.  All construction loans
originated by Cayuga Mortgage and PACE Funding are underwritten
according to the same standards and on the same general terms as
those originated by the Bank. These residential construction
loans are generally in amounts under $250,000 and are secured by
single family properties.

                              5
<PAGE>
<PAGE>
     Construction financing is generally considered to involve
a higher degree of risk of loss than long-term financing on
improved occupied real estate because loan funds are advanced
upon the security of the project under construction, which is of
uncertain value prior to the completion of construction.  The
Bank's risk of loss on a construction loan is dependent largely
upon the accuracy of the initial estimate of the property's
value at completion of construction or development and the
estimated cost (including interest) of construction.  If the
estimate of construction cost proves to be inaccurate, the Bank
may be required to advance funds beyond the amount originally
committed to permit completion of the project.  If the estimate
of value proves to be inaccurate, the Bank may be confronted, at
or prior to the maturity of the loan, with a project with a
value which is insufficient to assure full repayment.

     The Bank's underwriting criteria are designed to evaluate
and minimize the risks of each construction loan.  Among other
things, the Bank considers the reputation of the borrower and
the contractor, the amount of the borrower's equity in the
project, independent valuations and review of cost estimates,
pre-construction sale and leasing information, and cash flow
projections of the borrower.  To reduce the risks inherent in
construction lending, the Bank also requires, where appropriate,
personal guarantees of the principals of the borrower.

     COMMERCIAL REAL ESTATE AND MULTI-FAMILY LENDING.  As of
June 30, 1999, the Bank held $28.3 million in commercial real
estate loans and $14.6 million in multi-family loans, which
represented approximately 21.9% and 11.3% of loans held in the
Bank's loan portfolio, respectively.  These loans are secured by
property located in the Bank's market area and by diverse forms
of collateral, including apartment buildings, single  proprietor
businesses, motels, restaurants, and various special purpose
properties.  The Bank originates a small number of these loans
with Small Business Administration ("SBA") guarantees.  SBA will
generally guarantee between 75% and 80% of the loan balance.
However, the SBA imposes some limitations on the interest rate
and loan origination fees charged.

     Commercial real estate lending and multi-family
residential lending may involve a higher degree of credit risk
than one- to four-family residential lending because of the
concentration of funds in a limited number of loans typically
involving large loan balances and because such loans depend on
cash flow from the property to service the debt.  Cash flow may
be significantly affected by adverse conditions in the real
estate market or by general economic conditions.  The Bank has
attempted to minimize the risks involved in originating such
loans by considering, among other things, the creditworthiness
of the borrower, the location of the real estate, the condition
and occupancy levels of the security and the quality of the
organization managing the property.  The Bank also obtains
appraisals of each property in accordance with applicable
federal regulations.  Additionally, the Bank's loan review
policy includes provisions for the periodic inspection,
throughout the term of the loan, of real estate securing large
balance commercial real estate and multi-family loans.

     Commercial real estate loans have been originated for
varying terms and interest rates depending on market conditions
and on the interest rates prevailing at the time the loan is
originated.  In general, commercial real estate loans are
primarily made as adjustable rate loans with interest rates
adjustable at specifically identified intervals up to five years
and primarily based upon movements in the United States Treasury
Securities Index.  These loans generally range in size from
$50,000 to $200,000 and have been made in amounts up to
approximately $1.8 million.   Amortization schedules for this
type of loan generally vary from 15 to 20 years.

     The Bank has become increasingly active in lending on
commercial real estate and multi-family properties in recent
years as a result of increased referrals from existing customers
and an expanded presence in the Bank's market area.  Management
expects continued moderate growth in commercial real estate and
multi-family lending in the future, subject to the continued
imposition of the underwriting and credit review standards
discussed above.

                              6
<PAGE>
<PAGE>
     The table below sets forth, by type of security property,
the number and amount of Elmira Savings & Loan's commercial real
estate loans at June 30, 1999.
<TABLE>
<CAPTION>
                                                              Outstanding
                                Number       Principal          Amount
                               of Loans       Balance      Non-Performing
                               --------      ---------     --------------
<S>                            <C>            <C>           <C>
Medical facilities . . . . .    32          $ 4,785,195     $ 0.00
Retail property. . . . . ..     35            4,005,578       0.00
Office buildings . . . . . .    42            3,982,294       0.00
Restaurant/lounge. . . . . .    14              869,945       0.00
Office and warehouse/storage
   units . . . . . . . . . .    13            2,042,617       0.00
Hotel/motel. . . . . . . . .    12            5,190,506       0.00
Nonprofit/church/
  school . . . . . . . . . .     7              603,977       0.00
Other. . . . . . . . . . . .    62            6,776,667       0.00
                               ---          -----------     ------
    Total. . . . . . . . . .   217          $28,256,779     $ 0.00
                               ===          ===========     ======
</TABLE>
     CONSUMER AND COMMERCIAL BUSINESS LENDING.  At June 30,
1999, the Bank's consumer loan portfolio totaled  $11.5 million
and its commercial business loans totaled $3.7 million,
representing 8.9% and 2.8% of the Bank's total loan portfolio,
respectively.  The majority of the loans in the Bank's consumer
loan portfolio are secured by real estate.  The Bank offers a
variety of secured consumer loans, including automobile loans,
home equity and home improvement loans, as well as  loans
secured by savings deposits.  Additionally, the Bank offers, on
a small scale, unsecured consumer loans.  The Bank expects to
continue, subject to market conditions, to expand its consumer
lending activities as part of its plan to provide a wide range
of personal financial services to its customers. Management
believes that the shorter terms and normally higher interest
rates available on various types of consumer loans will be
helpful in maintaining a profitable spread between Elmira
Savings & Loan's average loan yield and its cost of funds.

     Consumer loans may entail greater risk than do residential
mortgage loans, particularly in the case of consumer loans which
are unsecured or secured by rapidly depreciable assets such as
automobiles.  In such cases, any repossessed collateral for a
defaulted consumer loan may not provide an adequate source of
repayment of the outstanding loan balance as a result of the
greater likelihood of damage, loss or depreciation.  The
remaining deficiency often does not warrant further substantial
collection efforts against the borrower.  In addition, consumer
loan collections are dependent on the borrower's continuing
financial stability, and thus are more likely to be adversely
affected by job loss, divorce, illness or personal bankruptcy.
Furthermore, the application of various federal and state laws,
including federal and state bankruptcy and insolvency laws, may
limit the amount which can be recovered on such loans.  Such
loans may also give rise to claims and defenses by a consumer
loan borrower against an assignee of such loans such as the
Bank, and a borrower may be able to assert against such assignee
claims and defenses which it has against the seller of the
underlying collateral.  These risks are somewhat minimized with
respect to the Bank's consumer loan portfolio since the majority
of these loans are home equity loans secured by residential real
estate.

     The Bank adds general provisions to its consumer loan loss
allowance, based on general economic conditions and prior loss
experience.  The Bank's allowance for consumer loan losses at
June 30, 1999 was equal to $98,364, or approximately 0.85% of
the total outstanding balance of such loans.  In establishing
its allowance for consumer loan losses, management considers
that the majority of the loans in its consumer loan portfolio
are home equity loans secured by residential real estate.
Consumer loan delinquencies often increase over time as the
loans age.  Accordingly, although the level of delinquencies in
the Bank's consumer loan portfolio has generally been low
($121,000, or approximately 1.05% of

                              7
<PAGE>
<PAGE>
the consumer loan portfolio, at June 30, 1999), there can be no
assurance that delinquencies will not increase in the future.

     Since 1986, the Bank has been actively involved in
originating home equity lines of credit.  These loans amounted
to $4.3 million or 3.3% of the Bank's loan portfolio at June 30,
1999.  Home equity  loan rates adjust quarterly with an open
credit line during the initial four to seven year period.  Loan
to value ratios on these loans (including the first mortgage)
typically do not exceed 80% of the appraised value of the real
estate.  The Bank also originates short-term, fixed-rate, second
mortgage loans.  At June 30, 1999, these consumer mortgages
totaled $4.7 million, or 3.7% of the Bank's loan portfolio.

     The Bank originates student loans, most of which are
guaranteed by the federal government and sold to the Student
Loan Marketing Association.  The Bank also originates direct
automobile loans to its customers (approximately $410,000
outstanding at June 30, 1999), and had approximately $1.4
million of secured and unsecured time and demand notes
outstanding at June 30, 1999.

     The Bank had approximately $1.6 million of commercial
business loans outstanding at June 30, 1999 which were not
collateralized by real estate.  Approximately 40% of these loans
are guaranteed by the SBA.  The Bank's commercial business
lending activities encompass loans with a variety of purposes
and forms of security, including loans to finance accounts
receivable, inventory and equipment.  The Bank offers a
commercial line of credit secured by real estate.  These lines
of credit have adjustable rates which adjust monthly or
quarterly and are tied to the prime rate.  At June 30, 1999,
lines totaling $5.1million had been approved with loan balances
outstanding of approximately $2.0 million.

     Unlike residential mortgage loans, which generally are
made on the basis of the borrower's ability to make repayment
from his or her employment and other income and which are
secured by real property whose value tends to be more easily
ascertainable, commercial business loans are of higher risk and
typically are made on the basis of the borrower's ability to
make repayment from the cash flow of the borrower's business.
As a result, the availability of funds for the repayment of
commercial business loans may be substantially dependent on the
success of the business itself.  Further, the collateral
securing the loans may depreciate over time, may be difficult to
appraise and may fluctuate in value based on the success of the
business.

     The Bank recognizes the generally increased risks
associated with commercial business lending.  The Bank's
commercial business lending policy emphasizes complete credit
file documentation and analysis of the borrower's character,
capacity to repay the loan, the adequacy of the borrower's
capital and collateral as well as an evaluation of the industry
conditions affecting the borrower.  Analysis of the borrower's
past, present and future cash flows is also an important aspect
of the Bank's credit analysis.  The Bank's commercial business
loans have been to borrowers in its primary market area, and the
Bank intends to continue its commercial business lending in this
geographic area.

     LOAN UNDERWRITING POLICIES.  The Board of Directors of the
Bank has the responsibility and authority for general
supervision over the loan policies of the Bank.  The Board has
approved a written lending policy for the Bank and has
established a Board Loan Committee responsible for review and
ratification of all loans up to $500,000 and for monitoring
compliance with the written loan policies of the Bank.

<PAGE>
     Generally, the Bank, for its portfolio, lends up to 95% of
the lower of current cost or appraised value of a residential
one-to-four family property, and typically requires private
mortgage insurance on all such loans when loan to value ratios
exceed 80%.  Loans on commercial and multi-family (more than
four units) property are required to have a loan to value ratio
of 80% or less.  Certain residential mortgages originated for
sale in the national secondary mortgage market may  exceed a
95% loan-to-value, based on the specific investor product
requirements.

     All of the Bank's lending is subject to its written,
nondiscriminatory standards and to loan origination procedures
prescribed by the Board of Directors.  Decisions on loan
applications are made on the basis of detailed applications and
property valuations (based upon the Bank's written appraisal
policy) by staff or independent appraisers approved by the Board
of Directors.  The loan applications are designed primarily to
determine the borrower's ability to repay and the more
significant items on the application are verified through use of
credit reports, financial statements and confirmations.

                              8
<PAGE>
<PAGE>
     The Staff Loan Committee, chaired by the Chief Executive
Officer, has the authority to approve loans up to $300,000,
whereas the Board Loan Committee may approve loans up to
$500,000.  All loans in excess of $500,000 must be approved by
the full Board of Directors.  In addition, the Chief Executive
Officer and one other Executive Officer may act on behalf of the
Staff Loan Committee.  Individual loan personnel may also
approve loans up to specified limits established for each
individual and approved by the Board of Directors.  All loan
approvals are ultimately ratified by the full Board of
Directors.

     It is the policy of the Bank to obtain a title insurance
policy or title abstract insuring that the Bank has a valid
first lien on mortgaged real estate.  The borrower must also
obtain fire and casualty insurance policies.

     LOAN ORIGINATIONS, PURCHASES AND SALES.  The Bank has
general authority to make real estate loans secured by
properties located throughout the United States.  However, at
June 30, 1999, greater than 99% of all of the Bank's total
mortgage loans receivable were secured by real estate located in
its primary market area.

     The Bank originates adjustable-rate real estate loans for
portfolio and originates fixed-rate one- to four-family owner-
occupied residential mortgage loans primarily for sale in the
secondary market as part of the management of its asset and
liability interest rate sensitivity.  The Bank typically obtains
a contract to sell fixed-rate loans at the time of rate
commitment and sells those loans in the secondary market without
recourse while retaining the servicing on the majority of the
loans it sells.   At June 30, 1999, the Bank was servicing
residential loans for others in the amount of $174.0 million.
Due to the strong loan demand in the Bank's market area, the
Bank has not purchased loans during recent years.

     Historically, loans have been originated by the Bank
primarily through referrals received from real estate brokers,
builders, and customers as well as through refinancing of loans
for existing customers.  The Bank attempts to carefully monitor
interest rates in its market areas and believes that it is
competitive in such areas.  In December 1990, the Bank formed
Cayuga Mortgage for the purpose of engaging in mortgage banking
activities through the origination of mortgage loans for sale to
investors, including the Bank.  Currently, substantially all of
Cayuga Mortgage loans are originated for sale to the Bank, which
retains the adjustable rate mortgage loans in its portfolio and
sells the fixed rate mortgage loans, servicing retained, in the
secondary market.  During fiscal year 1999, Cayuga Mortgage and
PACE Funding originated $32.3 million in loans for sale to the
Bank.

     Set forth below is a table showing the Bank's loan
origination and sales activity for the periods indicated.
Neither loans originated by Cayuga Mortgage for sale to
investors other than the Bank nor loans closed by Cayuga
Mortgage and sold to investors other than the Bank are included
in this table.  Loans originated by Cayuga Mortgage for sale to
the Bank are not considered loan sales because no income is
generated for the subsidiary in accordance with the provisions
of Financial Accounting Standards Statement No. 91.  See Note A
to the Notes to Consolidated Financial Statements included in
the Corporation's Annual Report to Stockholders for the Fiscal
Year Ended June 30, 1999 (the "Annual Report") filed as Exhibit
13 to this report.  Loans originated, as shown in the following
table, include loans from the Bank, Cayuga Mortgage Company, and
its mortgage banking partnership, PACE Funding, where such loans
are currently being serviced by the Bank.

                              9
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                                                     Year Ended June 30,
                                            ------------------------------------
                                              1999         1998            1997
                                            -------      --------        -------
                                                       (In thousands)
<S>                                         <C>          <C>             <C>
Loans originated:
  Conventional real estate loans:
    Construction loans . . . . . . . . .    $  3,096     $  3,887        $  1,477
    Loans on existing property . . . . .      42,358       34,862          35,787
    Loans refinanced . . . . . . . . . .      27,704       18,899           7,726
  Insured and guaranteed loans . . . . .       4,545        2,707           3,194
  Consumer . . . . . . . . . . . . . . .       1,976        2,491           2,080
  Commercial loans . . . . . . . . . . .         430          146             470
  Other loans. . . . . . . . . . . . . .       4,734        5,279           3,397
                                            --------     --------        --------
    Total loans originated . . . . . . .    $ 84,843     $ 68,271        $ 54,131

Loans sold:
  Whole Loans. . . . . . . . . . . . . .     (53,076)     (42,311)        (27,682)
  Participation loans. . . . . . . . . .          --           --            (375)
                                            --------     --------        --------
    Total loans sold . . . . . . . . . .     (53,076)     (42,311)        (28,057)

Loans held for sale. . . . . . . . . . .      (5,542)      (8,231)         (4,461)
Principal repayments . . . . . . . . . .     (25,344)     (21,969)        (13,060)
Loans transferred to  foreclosed
  real estate  . . . . . . . . . . . . .        (374)        (737)           (173)
Increase (decrease) in other  items,
  net. . . . . . . . . . . . . . . . . .       2,599         (553)          1,695
                                            --------     --------        --------
  Net increase (decrease). . . . . . . .    $  3,106     $ (5,530)       $ 10,075
                                            ========     ========        ========
</TABLE>

     LOAN SERVICING AND LOAN FEES.  Interest rates charged by
the Bank on mortgage loans are primarily determined by
competitive loan rates offered in its market area.  Mortgage
loan rates reflect factors such as general interest rate levels,
the supply of money available to the savings industry and the
demand for such loans.  These factors are in turn affected by
general economic conditions, the monetary policies of the
Federal government, including the Federal Reserve Board, the
general supply of money in the economy, tax policies and
governmental budget matters.

     As of June 30, 1999, Elmira Savings & Loan was servicing
approximately $174.0 million of loans for others.  The Bank
receives a servicing fee typically ranging from 1/4% to 3/8% for
these loans.

     In addition to interest earned on loans and income from
servicing of loans, the Bank receives fees in connection with
loan commitments and originations, loan modifications, late
payments, changes of property ownership and for miscellaneous
services related to its loans.  Income from these activities
varies from period to period with the volume and type of loans
originated, sold and purchased, which in turn are dependent on
prevailing mortgage interest rates and their effect on the
demand for loans in the markets served by the Bank.  See Note A
of the Notes to Consolidated Financial Statements included in
the Annual Report for information regarding the accounting
treatment of loan origination fees and mortgage servicing
rights.

     LOAN COMMITMENTS.  Real estate loan commitments are
generally granted for a period of 35 days from the date of
commitment.  When the Bank issues a written loan commitment the
borrower pays  an origination fee up to 3%  at that time in
order to retain the commitment.  Historically less than 5% of
the Bank's commitments expire before being funded.  At June 30,
1999, the Bank's outstanding commitments totaled approximately
$8.4 million.

     The Bank generally obtains forward commitments  on a loan
by loan or pooled mortgage backed security  basis to sell fixed
rate residential mortgages in the national secondary mortgage
market.  Interest rates on real estate loans sold
are generally locked in at either application, commitment or
closing.
                              10
<PAGE>
<PAGE>
     NON-PERFORMING LOANS AND ASSET CLASSIFICATION.  Loans are
reviewed on a monthly basis and are placed on non-accrual status
when, in the opinion of management, the collection of additional
interest is doubtful.  Residential and commercial mortgage loans
are generally placed on non-accrual status when either principal
or interest is more than 90 days past due.  Interest accrued and
unpaid at the time a loan is placed on non-accrual status is
charged against interest income.  Subsequent payments are either
applied to the outstanding principal balance or recorded as
interest income, depending on the assessment of the ultimate
collectibility of the loan.  Consumer loans are generally
charged off when or before the loan becomes 120 days delinquent,
although collection efforts continue.

     Identification of a delinquent mortgage loan is generally
made by the 15th day of delinquency, and a late notice is mailed
between the 16th and 18th day of delinquency.  The Bank attempts
to contact the borrower by telephone beginning approximately
five days after mailing the notice.  If satisfactory
arrangements to bring the account current have not been made by
the 45th day of delinquency, efforts are made to conduct a face-
to-face interview with the borrower.  If a satisfactory response
is not obtained, the Bank continues to follow up with notices,
telephone contacts and personal interviews until the mortgage
loan has been brought current or until the Bank determines that
recommendation for foreclosure, deed in lieu of foreclosure, or
other action is appropriate.

     Real estate acquired by the Bank as a result of
foreclosure or by deed in lieu of foreclosure is classified as
real estate owned until such time as it is sold.  Real estate
properties acquired through loan foreclosure are valued at the
lower of cost or fair value minus estimated costs to sell.
Costs relating to the improvement of property are capitalized to
the extent that the carrying value does not exceed estimated
fair value, whereas costs relating to holding property are
expensed.  Valuations are periodically performed by management
and an allowance for losses is established, if necessary, by a
charge to operations if the carrying value of a property exceeds
its estimated net realizable value.

     As of June 30, 1999, there were no loans excluded from the
table below where known information about the possible credit
problems of borrowers caused management to have serious doubts
as to the ability of the borrower to comply with present loan
repayment terms and which may result in disclosure of such loans
in the future except as identified herein. As of June 30, 1999,
there were no concentrations of loans in any types of industry
which exceeded 10% of the Bank's total loans that are not
included as a loan category in the table which follows.

     At June 30, 1999, the Bank had two loans totaling
approximately  $72,000, which were classified as troubled debt
restructured loans in accordance with SFAS 118.  A portion of
the larger of the two loans, a home equity line of credit, was
classified at both June 30, 1998 and 1997 as a result of a
Chapter 13 Bankruptcy filing.

                              11
<PAGE>
<PAGE>
     The following table sets forth information with respect to
the Bank's non-performing assets for the periods indicated.
<TABLE>
<CAPTION>

                                                             At June 30,
                                                     ----------------------------
                                                      1999       1998       1997
                                                     ------     ------     ------
<S>                                                  <C>        <C>        <C>
Loans accounted for on a non-accrual basis: (1)
  Real Estate:
    Residential. . . . . . . . . . . . . . . . . .  $ 73,476    $183,402  $250,078
    Commercial and Multi-Family. . . . . . . . . .    66,129      80,218    61,132
    Consumer/Home Equity.  . . . . . . . . . . . .        --      32,307    29,193
  Consumer . . . . . . . . . . . . . . . . . . . .        --          --        --
  Other. . . . . . . . . . . . . . . . . . . . . .        --          --        --
                                                    --------    --------  --------
      Total. . . . . . . . . . . . . . . . . . . .  $139,605    $295,927  $340,403
                                                    ========    ========  ========
Accruing loans which are  contractually past due
  90 days or more:
  Real Estate:
    Residential. . . . . . . . . . . . . . . . . .  $182,284    $     --  $ 62,898
    Commercial and Multi-Family. . . . . . . . . .    75,308          --   316,148
    Consumer/Home Equity . . . . . . . . . . . . .        --          --        --
  Education. . . . . . . . . . . . . . . . . . . .        --          --        --
  Consumer . . . . . . . . . . . . . . . . . . . .        --          --        --
  Other. . . . . . . . . . . . . . . . . . . . . .        --          --        --
                                                    --------    --------  --------
      Total . . . . . .    . . . . . . . . . . . .  $257,592    $     --  $379,046
                                                    ========    ========  ========
Troubled debt restructurings . . . . . . . . . . .  $ 71,807    $ 17,060  $ 17,116
                                                    ========    ========  ========

Total of nonaccrual and 90
  days past due loans and
  troubled debt restructurings . . . . . . . . . .  $469,004    $312,987  $736,565
                                                    ========    ========  ========
Percentage of total loans. . . . . . . . . . . . .       .35%        .23%      .55%
                                                    ========    ========  ========
Other non-performing assets (2). . . . . . . . . .  $ 34,000    $485,226  $131,000
                                                    ========    ========  ========
<FN>
___________
(1)  Non-accrual status denotes loans on which, in the opinion of management, the
     collection of additional interest is unlikely, or loans that meet non-accrual
     criteria as established by regulatory authorities.  Payments received on a
     non-accrual loan are either applied to the outstanding principal balance or
     recorded as interest income, depending on an assessment of the collectibility
     of the loan.
(2)  Other non-performing assets represents property acquired or in the process of
     being acquired by the Bank through foreclosure or repossession.  This property
     is carried at the lower of its fair market value or the principal balance of
     the related loan.
</FN>
</TABLE>

     During the year ended June 30, 1999, gross interest income
of $17,021 would have been recorded on loans accounted for on a
non-accrual basis if the loans had been current throughout the
period.  Interest on such loans included in income during the
period amounted to $11,472.

                              12
<PAGE>
<PAGE>
     The following table sets forth an analysis of the Bank's
allowance for loan loss account for the periods indicated.
<TABLE>
<CAPTION>
                                                             At June 30,
                                                  -------------------------------
                                                   1999        1998        1997
                                                  ------      ------      ------
<S>                                               <C>         <C>        <C>
Balance at beginning of period . . . . . . . . .  $1,473,346  $1,435,499 $1,430,781
Loans charged-off:
 Real Estate -- mortgage:
   Residential . . . . . . . . . . . . . . . . .      37,863     101,993     44,466
   Commercial. . . . . . . . . . . . . . . . . .      89,677     125,404         --
 Commercial business. . . . . . . . . . . . .  .       8,681      10,506         --
 Consumer. . . . . . . . . . . . . . . . . . . .      49,410      32,087         --
                                                  ----------  ---------- ----------
      Total charge-offs. . . . . . . . . . . . .  $  185,631  $  269,990 $   44,466
                                                  ----------  ---------- ----------
Recoveries:
  Real Estate--Mortgage:
    Residential. . . . . . . . . . . . . . . . .  $      298  $    7,630 $    8,140
    Commercial . . . . . . . . . . . . . . . . .       4,599         147        292
  Commercial business. . . . . . . . . . . . . .         300          --         --
  Consumer . . . . . . . . . . . . . . . . . . .         656          60        752
                                                  ----------  ---------- ----------
      Total recoveries . . . . . . . . . . . . .  $    5,853  $    7,837 $    9,184
                                                  ----------  ---------- ----------
Net loans charged-off. . . . . . . . . . . . . .  $ (179,778) $ (262,153)$  (35,282)
Provision for possible loan losses . . . . . . .          --     300,000     40,000
Allocation to specific reserve . . . . . . . . .          --     (68,000)   (33,000)
General allowance valuation adjustment . . . . .     (25,000)         --         --
Specific allowance for loan losses . . . . . . .          --      68,000     33,000
                                                  ----------  ---------- ----------
   Total allowance . . . . . . . . . . . . . . .  $1,268,568  $1,473,346 $1,435,499
                                                  ==========  ========== ==========
Ratio of net charge-offs to average
   loans outstanding during the period. . . . .          .14%        .21%       .03%
                                                  ==========  ========== ==========
</TABLE>
     For a discussion of the Bank's provision for loan losses in
fiscal year 1999, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Comparison of
Operating Results for the Years Ended June 30, 1999 and 1998 --
Provision for Loan Losses" in the Annual Report.

     The following table sets forth the breakdown of the
allowance for loan losses by loan category for the periods
indicated.  Management believes that the allowance can be
allocated by category only on an approximate basis.  The
allocation of the allowance to each category is not necessarily
indicative of future losses and does not restrict the use of the
allowance to absorb losses in any category.
<TABLE>
<CAPTION>
                                                           AT JUNE 30,
                                -----------------------------------------------------------------------
                                         1999                  1998                     1997
                                ---------------------- ----------------------  ------------------------
                                           Percent of             Percent of                Percent of
                                         Loans in Each          Loans in Each             Loans in Each
                                          Category to            Category to               Category to
                                Amount    Total Loans  Amount    Total Loans    Amount     Total Loans
                                ------   ------------  ------   --------------  -------   -------------
<S>                             <C>        <C>        <C>        <C>          <C>           <C>
Real estate mortgage:
   Residential . . . . . . . . $  328,932   25.92%   $  255,086    17.34%     $  310,754      21.64%
   Commercial. . . . . . . . .    790,700   62.33       704,155    47.79         671,293      46.76
Commercial business. . . . . .     33,000    2.62        29,000     1.96          34,000       2.36
Consumer . . . . . . . . . . .     98,364    7.75       115,599     7.84         101,585       7.07
Unallocated. . . . . . . . . .     17,572    1.38       369,505    25.07         317,867      22.17
                               ----------  ------    ----------   ------      ----------     ------
  Total allowance for loan
    losses . . . . . . . . . . $1,268,568  100.00%   $1,473,345   100.00%     $1,435,499     100.00%
                               ==========  ======    ==========   ======      ==========     ======
</TABLE>
                              13
<PAGE>
<PAGE>
     Federal regulations require savings associations to review
their assets on a regular basis and to classify them as
"substandard," doubtful" or "loss," if warranted.   Assets
classified as substandard or doubtful require the institution to
establish general allowances for loan losses.  If an asset or
portion thereof is classified loss, the insured institution must
either establish specified allowances for loan losses in the
amount of 100% of the portion of the asset classified loss, or
charge off such amount.  An asset which does not currently
warrant classification but which possesses weaknesses or
deficiencies deserving close attention is required to be
designated as "special mention."  OTS examiners may disagree
with the insured institution's classifications and amounts
reserved.  If an institution does not agree with an examiner's
classification of an asset, it may appeal this determination to
the OTS.  As of June 30, 1999, the Bank had $1.2 million of
assets classified as substandard, no assets were classified as
doubtful and $15,800 were classified as loss.

     While the Bank believes it has established its existing
allowances for loan losses in accordance with generally accepted
accounting principles, there can be no assurance that
regulators, in reviewing the Bank's loan portfolio in the
future, will not request the Bank to increase its allowance for
loan losses, thereby negatively impacting the Bank's financial
condition and earnings.

     The Bank's primary lending area has experienced controlled
growth over the last several years.  Management believes that
the market is fairly stable.   There can be no assurance,
however, that economic conditions in the Bank's market area will
remain stable.  Any deterioration in the condition of the real
estate market could adversely effect the Bank's earnings or
financial condition.

INVESTMENT ACTIVITIES

     Elmira Savings & Loan is required under federal
regulations to maintain a minimum amount of liquid assets which
can be invested in specified short-term securities and is also
permitted to make certain other investments.  See "Regulation --
Liquidity Requirements."  It has generally been Elmira Savings &
Loan's policy to maintain a liquidity portfolio in order to
satisfy regulatory requirements.  All corporate bonds are
investment grade.  Liquidity levels may be increased or
decreased depending upon the yields on investment alternatives,
management's judgment as to the attractiveness of the yields
then available in relation to other opportunities, its
expectations of the level of yield that will be available in the
future and its projections as to the short-term demand for funds
to be used in the Bank's loan origination and other activities.

                              14
<PAGE>
<PAGE>
     The following table sets forth the carrying value of the
Bank's investment securities portfolio, short-term investments
and FHLB stock at the dates indicated.  At June 30, 1999, the
market value of the Bank's investment securities portfolio was
approximately $5.9 million.
<TABLE>
<CAPTION>

                                                             At June 30,
                                                  ------------------------------
                                                   1999        1998       1997
                                                  ------      ------     ------
                                                           (In thousands)
<S>                                               <C>         <C>        <C>
Investment securities:
  U.S. Government and  agency securities . . . .  $4,380      $1,000     $3,991
  Corporate debt securities. . . . . . . . . . .      18          25         32
  Corporate Stock. . . . . . . . . . . . . . . .     162          82         66
                                                  ------      ------     ------
     Total investment securities . . . . . . . .   4,560       1,107      4,089
Federal funds sold and overnight deposits . . .       --       6,000         --
                                                  ------      ------     ------
     Total investment securities,  federal
       funds sold and overnight deposits . . . .   4,560       7,107      4,089
Federal Home Loan Bank of  New York stock. . . .   1,313       1,313      1,313
                                                  ------      ------     ------
     Total investments . . . . . . . . . . . . .  $5,873      $8,420     $5,402
                                                  ======      ======     ======
</TABLE>
     The Bank carries its investment securities in one of the
following manners:

     1)   Held  to Maturity - carried at cost as adjusted for
          discounts and unamortized premiums with the intent
          to hold until maturity.

     2)   Available for Sale - carried at  cost  and subject
          to sale at any time.  However, a valuation allowance
          is established with an offset entry for any
          unrealized appreciation or depreciation made against
          capital with actual gains or losses being recorded
          on the income statement at time of sale.

     At June 30, 1999, the market value of investment
securities "Held to Maturity" was approximately $10,500 less
than the carrying value while the "Available for Sale"
investment was approximately $26,100 in excess of the cost.

     For further information, see Notes A and B to Notes to
Consolidated Financial Statements included in the Annual Report.

                              15
<PAGE>
<PAGE>
     The following table sets forth the scheduled maturities,
carrying values, market values and average yields for certain of
the Corporation's investment securities at June 30, 1999.


<TABLE>
<CAPTION>

                                  One Year or Less      One to Five Years        Five to Ten Years
                                -------------------   --------------------    ----------------------
                                Carrying   Average     Carrying    Average     Carrying    Average
                                  Value     Yield       Value       Yield       Value       Yield
                                 --------  -------    ---------   --------    ---------   ---------
                                                   (Dollars in thousands)
<S>                              <C>        <C>       <C>         <C>          <C>        <C>
  U.S. government and
    agency obligations . . . .  $   --        --%      $4,380       5.85%       $    --      --%
  Corporate debt securities. .      --        --           --         --             --      --
  Corporate stock. . . . . . .      --        --           --         --             --      --
                                ------       ----      ------       ----        -------     ----
    Total. . . . . . . . . .    $   --        --%      $4,380       5.85%       $    --      --%
                                ======       ====      ======       ====        =======     ====
<CAPTION>

                                More than Ten Years     Total Investment Portfolio
                                -------------------   ----------------------------------
                                Carrying   Average     Carrying    Market      Average
                                  Value     Yield       Value      Value        Yield
                                 --------  -------    ---------   --------    ---------
                                                   (Dollars in thousands)
<S>                              <C>        <C>       <C>         <C>          <C>
  U.S. government and
    agency obligations . . . .  $    --      -- %     $ 4,380     $ 4,369      5.85%
  Corporate debt securities. .       18    6.61            18          19      6.61
  Corporate stock. . . . . . .      162    1.20           162         162      1.20
                                -------    ----       -------     -------      ----
    Total. . . . . . . . . .    $   180    1.76%      $ 4,560     $ 4,550      5.64%
                                =======    ====       =======     =======      ====
</TABLE>

                              16
<PAGE>
<PAGE>
DEPOSIT ACTIVITY AND OTHER SOURCES OF FUNDS

     GENERAL.  Deposits are a significant source of the Bank's
funds for lending and other investment purposes.  In addition to
deposits, Elmira Savings & Loan derives funds from loan
principal repayments, interest payments, advances from the FHLB
of New York and reverse repurchase agreements.  Loan repayments
and interest payments are a relatively stable source of funds,
while deposit inflows and outflows are significantly influenced
by general interest rates and money market conditions.
Borrowing may be used on a short-term basis to compensate for
reductions in the availability of funds from other sources.
They may also be used on a longer term basis for general
business purposes.

     In November 1996, the Bank opened a "cashless" deposit
office in Ithaca, New York.  The office is located within a
suite of offices which also houses its mortgage banking
subsidiary, ES&L Mortgage Corporation, d/b/a Cayuga Mortgage
Company.  The primary goal of the office is to open transaction
and certificate of deposit accounts.  All transactions must be
in the form of a check, although the Bank installed an ATM
machine in the main lobby of the office building complex.

     DEPOSITS.  Consumer and commercial deposits are attracted
principally from within the Bank's primary market area through
the offering of a variety of deposit instruments, including
passbook and statement accounts and certificates of deposit
ranging in term from 30 days to 5 years.  Deposit account terms
vary, with the principal differences being the minimum balance
required, the time periods the funds must remain on deposit and
the interest rate.  The Bank also offers individual retirement
accounts ("IRAs").

     The Bank's policies are designed primarily to attract
deposits from local residents rather than to actively solicit
deposits from areas outside its primary market.  The Bank does
not accept deposits from brokers due to the volatility and rate
sensitivity of such deposits, nor does the Bank pay above market
rates for deposits received from outside its primary market
area.

     Interest rates paid, maturity terms, service fees and
withdrawal penalties are established by the Bank on a periodic
basis.  Determination of rates and terms are predicated upon
funds acquisition and liquidity requirements, rates paid by
competitors, growth goals and federal regulations.

     As part of the Bank's  strategy of managing its assets and
liabilities, it has attracted, by rate, certificates of deposit
with  terms of fourteen months or less.  Since the Bank has only
two offices, it has been unable to attract a large number of
transaction accounts.

     Certificates of deposit with balances in excess of $100,000
amounted to 17.6% of deposits at June 30, 1999.  Under New York
law, the Bank is not permitted as a savings association to
accept public funds.  The jumbo deposits in the portfolio have
come from local union funds, businesses and individuals, the
majority of which have been longstanding customers of the Bank;
these funds do not represent brokered deposits.

                              17
<PAGE>
<PAGE>
     The following table sets forth the change in dollar amount
of deposits in the various types of accounts offered by the Bank
between the dates indicated.
<TABLE>
<CAPTION>
                                                                                   Increase
                                                                                  (Decrease)
                                  Balance at             Balance                 from June 30,
                                   June 30,      %      at June 30,     %        1998 to June
                                     1999     Deposits     1998      Deposits      30, 1999
                                   ---------  --------  ---------    --------   -------------
<S>                               <C>          <C>        <C>        <C>         <C>
Non-interest bearing savings
  account  . . . . . . . . . . . $    964,386     .86%  $  1,427,622    1.27%     $  (463,236)
NOW checking account . . . . . .    4,134,097    3.70      4,078,966    3.64           55,131
Jumbo certificates . . . . . . .   19,649,626   17.61     17,361,558   15.48        2,288,068
Super NOW checking accounts. . .    2,256,667    2.02      2,836,831    2.53         (580,164)
Passbook and statement savings .   14,300,702   12.82     14,817,520   13.20         (516,818)
Money market deposit accounts. .    4,848,123    4.34      5,275,041    4.70         (426,918)
Six month money market
  certificates . . . . . . . . .    5,484,324    4.91      3,932,711    3.51        1,551,613
30 and 48 month certificates . .    3,214,557    2.88      3,604,647    3.21         (390,090)
IRA certificates, excluding
  jumbo certificates . . . . . .    4,843,846    4.34      4,645,049    4.14          198,797
Other certificates . . . . . . .   51,889,967   46.52     54,199,886   48.32       (2,309,919)
                                 ------------  ------    -----------  ------      -----------
    Total. . . . . . . . . . . . $111,586,295  100.00%  $112,179,831  100.00%     $  (593,536)
                                 ============  ======   ============  ======      ===========
<CAPTION>

                                                        Increase
                                                       (Decrease)
                                  Balance at           from June 30,
                                   June 30,      %     1997 to June
                                     1997     Deposits  30, 1998
                                   ---------  -------- ------------
<S>                               <C>          <C>        <C>
Non-interest bearing savings
  account  . . . . . . . . . . . $    407,841     .36%  $  1,019,781
NOW checking account . . . . . .    4,443,572    3.98       (364,606)
Jumbo certificates . . . . . . .   15,651,466   14.01      1,710,092
Super NOW checking accounts. . .    2,900,320    2.60        (63,489)
Passbook and statement savings .   14,183,722   12.69        633,798
Money market deposit accounts. .    5,232,229    4.68         42,812
Six month money market
  certificates . . . . . . . . .    5,195,663    4.65     (1,262,952)
30 and 48 month certificates . .    4,126,996    3.69       (522,349)
IRA certificates, excluding
  jumbo certificates . . . . . .    4,515,806    4.04        129,243
Other certificates . . . . . . .   55,090,903   49.30       (891,017)
                                 ------------  ------    -----------
    Total. . . . . . . . . . . . $111,748,518  100.00%  $    431,313
                                 ============  ======   ============
</TABLE>

                              18
<PAGE>
<PAGE>
     Deposits in the Bank as of June 30, 1999 were represented by
the various types of savings programs described below.
<TABLE>
<CAPTION>
Weighted
 Average                                                                    Percentage
Interest                                            Minimum    Balance in   of Total
  Rate      Term             Category                Amount     Thousands    Savings
--------  --------           ----------             --------   -----------  ----------
<S>       <C>          <C>                           <C>        <C>           <C>
                          Demand Deposits
                          ---------------
0.00%     On Demand  Non-Interest Bearing Savings
                        Accounts                     $     1    $    964       0.86%
0.00      On Demand  NOW Accounts                         10       4,134       3.70
2.37      On Demand  Passbook and Statement Savings
                        Accounts                           5      14,054      12.59
2.83      On Demand  Money Market Accounts             2,500       4,848       4.34
2.37      On Demand  Super NOW Accounts                2,500       2,257       2.02
2.37      On Demand  Holiday Club Accounts                 1         247       0.22

                           Certificates of Deposit
                           -----------------------

3.08      30 Days    30 Day Certificate, Fixed-Rate    5,000         309       0.28
3.94      91 Days    91 Day Certificate, Fixed-Rate    2,500       1,042       0.93
4.58     182 Days    6 Month Certificate, Fixed-Rate   2,500       5,751       5.15
5.13      7 Months   7 Month Certificate, Fixed-Rate     500          32       0.03
4.60      8 Months   8 Month Certificate, Fixed-Rate     500       1,045       0.94
4.60      9 Months   9 Month Certificate, Fixed-Rate   5,000         421       0.38
4.73     10 Months  10 Month Certificate, Fixed-Rate     500         245       0.22
4.88     11 Months  11 Month Certificate, Fixed Rate   2,500       8,008       7.18
4.99     12 Months   1 Year Certificate, Fixed-Rate      500       8,810       7.90
5.11     14 Months  14 Month Certificate, Fixed-Rate     500      11,832      10.60
4.96     18 Months  18 Month Certificate, Fixed-Rate     500       4,721       4.23
5.49     24 Months  24 Month Certificate, Fixed-Rate     500       9,005       8.07
5.17    100 Weeks   100 Week Certificate, Fixed-Rate     500         378       0.34
5.02     30 Months  30 Month Certificate, Fixed-Rate     500      17,590      15.76
5.61     36 Months  36 Month Certificate, Fixed-Rate     500       2,070       1.86
5.53     48 Months   4 Year Certificate, Fixed-Rate      500       3,647       3.27
6.25     60 Months   5 Year Certificate, Fixed-Rate      500       8,900       7.98
4.93     12 Months   1 Year Mini Jumbo Certificate,
                        Fixed-Rate                    20,000       1,269       1.14
5.41     18 Months   18 Month Certificate, Variable-
                        Rate                              10           7       0.01
                                                                --------     ------
                                                                $111,586     100.00%
                                                                ========     ======
</TABLE>
                              19
<PAGE>
<PAGE>
       The following table indicates the amount of the Bank's
certificates of deposit of $100,000 or more by time remaining
until maturity as of June 30, 1999.

Maturity Period                                 Amount
---------------                              -------------
                                             (In thousands)

 Three months or less. . . . . . . . . . . . . $ 5,194
 Three through six months. . . . . . . . . . .   3,867
 Six through twelve months . . . . . . . . . .   8,019
 Over twelve months. . . . . . . . . . . . . .   2,570
                                               -------
     Total . . . . . . . . . . . . . . . . . . $19,650
                                               =======

     The following table sets forth the average balances and
interest rates based on month end balances for demand deposits
and time deposits as of the dates indicated.
<TABLE>
<CAPTION>

                                                     Year Ended June 30,
                                --------------------------------------------------------------------
                                        1999                  1998                    1997
                                -------------------   --------------------    ----------------------
                                Demand      Time      Demand      Time        Demand        Time
                                Deposits   Deposits   Deposits   Deposits     Deposits     Deposits
                                --------   --------   ---------  --------     ---------    --------
                                                   (Dollars in thousands)
<S>                             <C>        <C>        <C>        <C>          <C>          <C>
Average balance. . . . . . .     $27,750   $85,622    $27,597     $87,128     $27,273       $82,040
Average rate . . . . .              2.23%     5.24%      2.51%       5.55%       2.63%         5.42%
</TABLE>


     The following table sets forth the Bank's deposit
activities for the periods indicated.
<TABLE>
<CAPTION>
                                                 Year Ended June 30,
                                             ----------------------------
                                              1999       1998       1997
                                             ------     ------     ------
                                                    (In thousands)
<S>                                          <C>        <C>        <C>
Deposits . . . . . . . . . . . . . . . . .   $155,915   $155,419    $140,913
Withdrawals. . . . . . . . . . . . . . . .    161,605    160,526     140,920
                                             --------   --------    --------
Net increase (decrease)  before interest
  credited . . . . . . . . . . . . . . . .     (5,690)    (5,107)         (7)
Interest credited. . . . . . . . . . . . .      5,096      5,538       5,103
                                             --------   --------    --------
Net increase (decrease) in  deposits . . .   $   (594)  $    431    $  5,096
                                             ========   ========    ========
</TABLE>

     BORROWINGS.  Savings deposits are the primary source of
funds for the Bank's lending and investment activities and for
its general business activities.  The Bank does, however, rely
upon advances from the FHLB of New York to supplement its supply
of lendable funds and to meet deposit withdrawal requirements.
Advances from the FHLB are typically secured by the Bank's stock
in the FHLB and a portion of the Bank's mortgage loans.  The
Bank has utilized borrowings from the FHLB of New York as a
source of funds to duration match against loan originations.
The FHLB has served as the Bank's primary borrowing source.  At
June 30, 1999, Elmira Savings & Loan had advances totaling $22.6
million from the FHLB of New York.

                              20
<PAGE>
<PAGE>
     The FHLB of New York functions as a central  bank providing
credit for savings institutions and certain other member
financial institutions.  As a member, Elmira Savings & Loan is
required to own capital stock in the FHLB and is authorized to
apply for advances on the security of such stock and certain
of its home mortgages and other assets (principally, securities
which are obligations of, or guaranteed by, the United States)
provided certain standards related to creditworthiness have been
met.

     From time to time the Bank borrows funds under reverse
repurchase agreements.  Under a reverse repurchase agreement,
the Bank sells securities (generally government securities,
mortgage-backed securities and FHLMC participation certificates)
and agrees to repurchase them at a specified price at a later
date.  Reverse repurchase agreements are generally for terms of
up to 90 days, are subject to renewal, and are deemed to be
borrowings collateralized by the securities sold.  At June 30,
1999, the Bank had no reverse repurchase agreements outstanding.
Reverse repurchase agreements are contracted with primary
registered broker-dealers or Shay Government Securities Company,
formerly the U.S. League Securities, Inc.

     The following tables set forth certain information
regarding the Bank's FHLB advances (which represent the Bank's
only short-term borrowings during the periods covered) at the
end of and during the periods indicated.
<TABLE>
<CAPTION>
                                            At June 30,
                                       ---------------------
                                        1999           1998
                                       ------         ------
<S>                                   <C>             <C>
Weighted average rate  . . . . . . .  5.82%            6.54%

<CAPTION>
                                            During the
                                        Year Ended June 30,
                                       ---------------------
                                        1999           1998
                                       ------         ------
                                          (In thousands)
<S>                                   <C>             <C>
Maximum amount outstanding  at any
  month end. . . . . . . . . . . . .  $8,100          $21,700
Approximate average amount . . . . .  $1,483          $11,408
Approximate weighted average
  rate paid (1). . . . . . . . . . .    5.56%            6.00%
<FN>
___________
(1)  The weighted average rate is determined by use of the
     weighted average rate for each month-end in the period.
</FN>
</TABLE>
                              21
<PAGE>
<PAGE>
     RATE/VOLUME ANALYSIS.  The table below sets forth certain
information regarding changes in interest income and interest
expense of the Bank for the periods indicated.  For each
category of interest-earning asset and interest-bearing
liability, information is provided on changes attributable to
(i) changes in volume (changes in volume multiplied by old
rate); (ii) changes in rate (changes in rate multiplied by
old volume); and (iii) the net change.  The change attributable
to the combined impact of volume and rate has been allocated
proportionately to the change due to volume and the change due
to rate.
<TABLE>
<CAPTION>
                                                          Year Ended June 30,
                             _________________________________________________________________________________
                              1999            vs               1998   1998             vs.              1997
                             ______________________________________   ________________________________________
                                       Increase (Decrease)                      Increase (Decrease)
                                            Due to                                   Due to
                             ______________________________________   _______________________________________
                              Volume         Rate            Net       Volume          Rate            Net
                             _______         ____           ____      _______          ____            ___
                                                            (In thousands)
<S>                           <C>            <C>           <C>         <C>             <C>          <C>
Interest income:
  Loan portfolio . . . . . . $(422,687)    $(435,529)   $(858,216)    $468,365      $(55,547)     $412,818
  Investment securities. . .   (99,289)      (51,181)    (150,470)     (96,077)       11,282       (84,795)
  Mortgage-backed
    securities . . . . . . .    (6,246)      (10,445)     (16,691)     (34,920)       13,800       (21,120)
  Interest-earning deposits
    with other banks . . . .    40,446        27,890       68,336       20,326        (6,558)       13,768
                             ---------     ---------    ---------     --------     ---------      --------
    Total interest-earning
      assets . . . . . . . .  (487,776)     (469,265)     957,041      357,694       (37,023)      320,671
                             ---------     ---------    ---------     --------     ---------      --------

Interest expense:
   Demand deposits . . . . .     3,809       (77,884)     (74,075)       8,453       (35,063)      (26,610)
   Time deposits . . . . . .   (82,489)     (262,730)    (345,219)     280,610       103,349       383,959
   Borrowings and advances .  (300,714)      (67,093)    (367,807)     (64,707)        3,831       (60,876)
                             ---------     ---------    ---------     --------     ---------      --------
    Total interest-bearing
       liabilities . . . . .  (379,394)     (407,707)    (787,101)     224,356        72,117       296,473
                             ---------     ---------    ---------     --------     ---------      --------
 Increase (decrease) in
   net interest income . . . $(108,382)    $ (61,558)   $(169,940)    $133,338     $(109,140)     $ 24,198
                             =========     =========    =========     ========     =========      ========

<PAGE>
<CAPTION>

                                        Year Ended June 30,
                             ______________________________________
                              1997           vs               1996
                             ______________________________________
                                       Increase (Decrease)
                                            Due to
                             ______________________________________
                              Volume         Rate            Net
                             _______         ____            ___
                                          (In thousands)
<S>                           <C>            <C>           <C>
Interest income:
  Loan portfolio . . . . . . $ 644,680     $ (38,481)   $ 606,199
  Investment securities. . .    10,642        10,141       20,783
  Mortgage-backed
    securities . . . . . . .   (37,940)      (19,458)     (57,398)
  Interest-earning deposits
    with other banks . . . .    (7,344)        3,746       (3,598)
                             ---------     ---------    ---------
    Total interest-earning
      assets . . . . . . . .   610,038       (44,052)     565,986
                             ---------     ---------    ---------

Interest expense:
   Demand deposits . . . . .   (15,190)       12,307       (2,883)
   Time deposits . . . . . .   169,681      (155,964)      13,717
   Borrowings and advances .   210,150       (11,719)     198,431
                             ---------     ---------    ---------
    Total interest-bearing
       liabilities . . . . .   364,641      (155,376)     209,265
                             ---------     ---------    ---------
 Increase (decrease) in
   net interest income . . . $ 245,398     $ 111,323    $ 356,721
                             =========     =========    =========
</TABLE>

                              22
<PAGE>
<PAGE>
     AVERAGE BALANCE SHEET.  The following table sets forth
certain information relating to the Bank's average balance sheet
and reflects the average yield on assets and average cost of
liabilities for the periods indicated.  Such yields and costs
are derived by dividing income or expense by the average monthly
balance of assets or liabilities, respectively, for the periods
presented.  Average balances are derived from month-end
balances.  Management does not believe that the use of month-end
balances instead of average daily balances has caused any
material difference in the information presented.
<TABLE>
<CAPTION>
                                                          Year Ended June 30,
                             -------------------------------------------------------------------------
                                                1999                             1998
                             ------------------------------------  -----------------------------------
                                                         Average                              Average
                               Average                    Yield/  Average                     Yield/
                               Balance       Interest      Cost   Balance       Interest       Cost
                              ---------      --------    -------  --------      --------     --------
<S>                            <C>           <C>          <C>     <C>           <C>           <C>
Interest-earning assets:
  Total loan portfolio(1). . $133,764,419  $11,016,230    8.24%   $138,797,744  $11,874,446   8.55%
  Investment securities,
    including FHLB stock . .    2,061,496      104,210    5.06       3,836,541      254,680   6.64
  Mortgage-backed
    securities . . . . . . .    1,345,728       94,208    7.00       1,429,283      110,899   7.76
  Interest-earning
    deposits . . . . . . . .    2,174,020       93,971    4.32       1,039,447       25,635   2.47
                             ------------  -----------   -----    ------------  -----------  -----
    Total interest-earning
      assets . . . . . . . .  139,345,663   11,308,619    8.12     145,103,015   12,265,660   8.45
 Non-interest earning
  assets . . . . . . . . . .    5,257,832                            5,284,444
                             ------------                         ------------
    Total assets . . . . . . $144,603,495                         $150,387,459
                             ============                         ============

Interest-bearing
  liabilities:
  Demand deposits. . . . . . $ 27,749,610      617,934    2.23    $ 27,596,906      692,009   2.51
  Time deposits. . . . . . .   85,621,638    4,488,405    5.24      87,128,369    4,833,624   5.55
                             ------------  -----------   -----    ------------  -----------  -----
    Total deposits,
      including escrows. . .  113,371,248    5,106,339    4.50     114,725,275    5,525,633   4.82
  Borrowings . . . . . . . .   15,266,567      807,778    5.29      20,884,473    1,175,585   5.63
                             ------------  -----------   -----    ------------  -----------  -----
    Total interest-bearing
      liabilities. . . . . .  128,637,815    5,914,117    4.60     135,609,748    6,701,218   4.94
Non-interest-bearing
  liabilities. . . . . . . .    1,180,489                            1,268,273
                             ------------                         ------------
    Total liabilities. . . .  129,818,304                          136,878,021
Retained earnings. . . . . .   14,785,191                           13,509,438
                             ------------                         ------------
    Total liabilities and
      retained earnings. . . $144,603,495                         $150,387,459
                             ============                         ============
Net interest income. . . . .               $ 5,394,502                          $ 5,564,442
                                           ===========                          ===========
Interest rate spread . . . .                              3.52%                               3.51%
                                                          ====                                ====
Net yield on interest-
  earning assets . . . . . .                              3.87%                               3.83%
                                                          ====                                ====
Ratio of average interest-
  earning assets to average
  interest-bearing
  liabilities. . . . . . . .                            108.32%                             107.00%
                                                        ======                              ======
_______________
(1)  Average balances include non-accrual loans.

<PAGE>
<CAPTION>
                                     Year Ended June 30,
                             -----------------------------------
                                           1997
                             -----------------------------------
                                                         Average
                               Average                    Yield/
                               Balance       Interest      Cost
                              ---------      --------    -------
<S>                            <C>           <C>          <C>
Interest-earning assets:
  Total loan portfolio(1). . $133,325,929  $11,461,628    8.60%
  Investment securities,
    including FHLB stock . .    5,289,207      339,475    6.42
  Mortgage-backed
    securities . . . . . . .    1,894,287      132,019    6.97
  Interest-earning
    deposits . . . . . . . .      284,727       11,867    4.17
                             ------------  -----------   -----
    Total interest-earning
      assets . . . . . . . .  140,794,150   11,944,989    8.48
 Non-interest earning
  assets . . . . . . . . . .    4,716,671
                             ------------
    Total assets . . . . . . $145,510,821
                             ============

Interest-bearing
  liabilities:
  Demand deposits. . . . . . $ 27,272,996      718,619    2.63
  Time deposits. . . . . . .   82,039,648    4,449,665    5.42
                             ------------  -----------   -----
    Total deposits,
      including escrows. . .  109,312,644    5,168,284    4.73
  Borrowings . . . . . . . .   22,034,197    1,236,462    5.61
                             ------------  -----------   -----
    Total interest-bearing
      liabilities. . . . . .  131,346,841    6,404,745    4.88
Non-interest-bearing
  liabilities. . . . . . . .    1,261,612
                             ------------
    Total liabilities. . . .  132,608,453
Retained earnings. . . . . .   12,902,368
                             ------------
    Total liabilities and
      retained earnings. . . $145,510,821
                             ============
Net interest income. . . . .               $ 5,540,244
                                           ===========
Interest rate spread . . . .                              3.61%
                                                          ====
Net yield on interest-
  earning assets . . . . . .                              3.93%
                                                          ====
Ratio of average interest-
  earning assets to average
  interest-bearing
  liabilities. . . . . . . .                            107.19%
                                                        ======
_______________
(1)  Average balances include non-accrual loans.
</TABLE>

                              23
<PAGE>
<PAGE>
SUBSIDIARY ACTIVITIES

     As a federally chartered savings association, Elmira
Savings & Loan is permitted to invest an amount equal
to 2% of its assets in subsidiaries with an additional
investment of 1% of assets where such investment serves
primarily community, inner-city, and community development
purposes.  Under such limitations, as of June 30, 1999, Elmira
Savings & Loan was authorized to invest up to approximately $3.1
million in the stock of or loans to subsidiaries.  Institutions
meeting regulatory capital requirements, which Elmira Savings &
Loan currently does, may invest up to 50% of their regulatory
capital in conforming first mortgage loans to subsidiaries.  As
of June 30, 1999, Elmira Savings & Loan had $265,100 of equity
invested in its subsidiaries.

     In July 1987, the Bank activated its wholly owned
subsidiary, Brilie Corporation (d/b/a ES&L Financial
Services), for the purpose of selling life insurance and annuity
products, health insurance and mutual funds under an agency
relationship with major insurance companies and third party
mutual fund providers to the Bank's customers.   This division
of Brilie Corporation had net pretax revenues of approximately
$98,000 during fiscal year 1999.  In 1993, Brilie Corporation
formed a new subsidiary, d/b/a ES&L Appraisal Services.  This
company performs real estate appraisals for residential and
commercial properties, primarily for the Bank and Cayuga
Mortgage.  During the 1997 fiscal year, this company recorded a
loss of approximately $2,000 and was no longer active at June
30, 1999.

     In May 1989, Brilie Corporation entered into a 50% joint
venture partnership agreement with a family group who resides in
the Elmira area and who is affiliated with a real estate
brokerage company.  The partnership was formed for the purpose
of developing a planned unit development located in Horseheads,
New York.  Pursuant to the partnership agreement, the family
group receives sales commissions on the purchase price of
building lots which they sell on behalf of the partnership and
the family group agrees to use its best efforts to encourage
building lot purchasers to place their construction and
permanent mortgages with the Bank.  The Bank has a 50% interest
in the partnership and has committed up to $750,000 in
financing.  At June 30, 1999, the Bank had loaned approximately
$353,000 to the partnership.  Brilie Corporation earned $33,700
from this partnership during the fiscal year ended June 30,
1999.

     In December 1990, the Bank formed Cayuga Mortgage as a
wholly owned subsidiary of the Bank for purposes of engaging in
mortgage banking activities.  Cayuga Mortgage's primary function
is to originate mortgages for sale to investors, one of whom is
the Bank.  With respect to mortgages sold by Cayuga Mortgage to
the Bank, no income is generated for the subsidiary in
accordance with the provisions of Financial Accounting Standards
Statement No. 91.  (See Note A to the Notes to Consolidated
Financial Statements included in the Annual Report for
a discussion of loan fees).  With respect to mortgages sold to
third parties, income generated is not recognized until
after the closing of the sale of the mortgage.  PACE Funding was
formed during September 1995 through a mortgage banking
partnership between Cayuga Mortgage and Audrey Edelman &
Associates Real Estate.  During the fiscal year ended June 30,
1999, Cayuga Mortgage and PACE Funding originated approximately
$32.3 million of mortgages, the majority of which were
originated for the Bank for sale in the secondary market.  The
Bank's aggregate investment in Cayuga Mortgage was $265,000 at
June 30, 1999.

     The Bank is required to give the FDIC and the Director of
the OTS 30 days' prior notice before establishing
or acquiring a new subsidiary, or commencing any new activity
through an existing subsidiary.  Both the FDIC and
the Director of the OTS have authority to order termination of
subsidiary activities determined to pose a risk to the
safety or soundness of the institution.  In addition, federal
regulations require savings associations to deduct the
amount of their investments in and extensions of credit to
subsidiaries engaged in activities not permissible to
national banks from capital in determining regulatory capital
compliance.   See "Regulation -- Regulatory Capital
Requirements."

                              24
<PAGE>
<PAGE>
COMPETITION

     Elmira Savings & Loan is one of three local banks
headquartered in Chemung County.  The Bank experiences
substantial competition both in attracting and retaining savings
deposits and in the making of mortgage and other loans. Direct
competition for savings deposits comes from other savings
institutions, credit unions and commercial banks located in its
primary market area.  Additional significant competition for
savings deposits comes from money market mutual funds and
corporate and government debt securities.

     The primary factors in competing for loans are interest
rates and loan origination fees and the range of services
offered by various financial institutions.  Competition for
origination of real estate loans normally comes from other
thrift institutions, commercial banks, mortgage bankers,
mortgage brokers and insurance companies.  There are six
commercial banks, two savings associations and eight credit
unions with branches located in Chemung County.  Elmira Savings
& Loan is able to compete effectively in its primary market area
by offering competitive interest rates and loan fees, and a wide
variety of deposit products, and by emphasizing personal
customer service and cultivating relationships with local
businesses.

EMPLOYEES

     As of June 30, 1999, Elmira Savings & Loan and its
subsidiaries had 35 full-time and  5 part-time employees, none
of whom were represented by a collective bargaining agreement.
Elmira Savings & Loan believes that it enjoys good relations
with its personnel.

EXECUTIVE OFFICERS

     The following table sets forth certain information with
respect to the executive officers of the Corporation.
<TABLE>
<CAPTION>

                           Age at
                          June 30,
   Name                     1999       Position
   ----                   --------     --------
<S>                          <C>       <C>
William A. McKenzie          48        President and Chief Executive Officer

J. Michael Ervin             50        Senior Vice President and Treasurer

Michael J. Wayne             38        Vice President

Lynn M. Morris               47        Vice President

James D. Stanton             52        Vice President

Judy A. Peters               41        Vice President

Michael J. Crimmins          47        Vice President

</TABLE>

     WILLIAM A. MCKENZIE has served as President and Chief
Executive Officer of Elmira Savings & Loan since June 1983.  In
this capacity, Mr. McKenzie is responsible for the overall
operations of the Bank pursuant to the policies and procedures
established by the Board of Directors.  Mr. McKenzie is a Board
member of Elmira Downtown Development Inc., America's Community
Bankers and Community Bankers Association of New York State.  He
has also served as
                              25
<PAGE>
<PAGE>
Chairman of the  following organizations: Chemung County Chamber
of Commerce, Southern Tier Economic Growth and the Chemung
County United Way Fund Drive.  Mr. McKenzie has been employed at
the Bank since 1983.

     J. MICHAEL ERVIN has served as Senior Vice President/
Treasurer of the Bank since 1984.  In this capacity, Mr. Ervin
oversees all of the Bank's financial, accounting and operating
activities.  Prior to 1984, Mr. Ervin served as First Vice
President of the Bank.  Mr. Ervin  serves as a Board member,
past President and current Treasurer of the Arctic League of
Chemung County;   Board member and Treasurer of Southern Tier
Economic Growth.  He also is a past Director of the Chemung/
Schuyler Chapter of the American Red Cross and past President
and Board Member of Woodbrook, Inc.  Mr. Ervin has been employed
by the Bank since 1973.

     MICHAEL J. WAYNE is currently Vice President of Stockholder
and Public Relations, a position he has held since 1993.  In May
1999, Mr. Wayne was named the Corporation's Internal Auditor.
Since 1990, he has supervised the Corporation's compliance with
its reporting requirements to the Securities and Exchange
Commission.  Mr. Wayne has served as Vice President of
Marketing, Mortgage Originations and Loan Servicing.  He is a
member of the Executive, Finance and Ticket Committees for the
LPGA Corning Classic and is on the Executive Committee and
Treasurer of Elmira Downtown Development, Inc.  Mr. Wayne is a
Board member of  Capabilities and Family Services of Chemung
County, Inc.  He is a Past President of the Elmira Kiwanis Club.
Mr. Wayne is a volunteer for the United Way, the Chemung County
Chamber of Commerce and the Clemens Center.   Mr. Wayne has been
employed by the Bank since 1982.

     LYNN M. MORRIS has served as Vice President of Residential
Loan Originations since September 1990.  Prior to 1990, Ms.
Morris was the Bank's Marketing Director.  She is a 1990
graduate of the Chemung County Chamber of Commerce Leadership
Chemung program and served as Team Leader in the Chamber of
Commerce 1997 Membership Drive.  Ms. Morris is a member of the
Association of Professional Mortgage Women.   She is presently a
member of the Advisory Board for R.S.V.P. (Retired Senior
Volunteer Program) and is a Board Member of the Near Westside
Neighborhood Association.   She has been employed at the Bank
since 1989.

     JAMES D. STANTON has served as Vice President of
Compliance and Loan Review for the Bank since 1991.  Mr. Stanton
is a past Board Member and Treasurer of the Near Westside
Neighborhood Association and has worked on the Chemung County
Chamber of Commerce Membership Drive.  He has been employed by
the Bank since 1988.

     JUDY A. PETERS has served as Vice President of Commercial
Loan Originations since 1992.  She has been an instrumental
employee in the department since its inception in 1984.  In 1993
Mrs. Peters was named Small Business Advocate of the Year by the
U.S. Small Business Administration.  She is a member of the
Audit Committee of  St. Mathew's Church and has worked on the
Chemung County Chamber of Commerce Membership Drive, the 1997
National Kidney Foundation Fund Drive and 1999 American Cancer
Society Fund Drive.   Mrs. Peters has been employed by the Bank
since 1984.

     MICHAEL J. CRIMMINS has served as Vice President of
Operations, Accounting and Loan Servicing since 1994.  Prior to
that Mr. Crimmins was a systems and operations analyst for the
Bank and was responsible for the development of the Bank's
disaster recovery plan.  He is the Treasurer of the Hendy Avenue
School Parent Teachers Organization and is Vice President of
the  Board of Directors for  United Cerebral Palsey.  He is a
member of the AT&T/NCR New York Users Group.  Mr. Crimmins
worked part-time for the Bank from January 1993 until May 1993,
at which time he became a full-time employee of the Bank.

                              26
<PAGE>
<PAGE>
REGULATION

     GENERAL.  As a savings association, Elmira Savings & Loan
is subject to extensive regulation by the OTS.  The Bank's
lending activities and other investments must comply with
various federal regulatory requirements.  The OTS periodically
examines the Bank for compliance with various regulatory
requirements and the FDIC has the authority to conduct special
examinations of the Bank.  The Bank must file reports with OTS
describing its activities and financial condition, and is
subject to certain reserve requirements promulgated by the
Federal Reserve Board.  This supervision and regulation is
intended primarily for the protection of depositors.  As a
savings and loan holding company, the Corporation is subject to
OTS regulation, examination, supervision and reporting
requirements.  Certain of these regulatory requirements are
referred to in the following paragraphs or appear elsewhere
herein.

     PROPOSED LEGISLATIVE AND REGULATORY CHANGES.  The U.S.
Congress is in the process of drafting legislation which may
have a profound effect on the financial services industry.  In
January 1999 legislation restructuring the activities and
regulations oversight of the financial services industry was
reintroduced in both houses of the U.S. Congress.  The stated
purposes of the House bill ("H.R. 10") are to enhance consumer
choice in the financial services marketplace, level the playing
field among providers of financial services and increase
competition.  H.R. 10 would permit affiliations between
commercial banks, securities firms, insurance companies and,
subject to certain limitations, other commercial enterprises
allowing holding companies to offer new services and products.
In particular, H.R. 10 repeals the Glass-Steagall Act
prohibitions on bank affiliating with securities firms and
thereby allow holding companies to engage in securities
underwriting and dealing without limits and to sponsor and act
as distributor for mutual funds and also removes the Bank
Holding Company Act's prohibitions on insurance underwriting
allowing holding companies to underwrite and broker any type of
insurance product.  H.R. 10 also calls for a new regulatory
framework for financial institutions and their holding
companies.  The legislation preserves the thrift charter and all
existing thrift powers, but would restrict the activities of new
unitary thrift holding companies.  Both Houses passed differing
versions of the legislation, which have yet to be reconciled in
a conference committee.  At this time, it is unknown how the
legislation will be modified, or if enacted, what form the final
version of the legislation might take and how it will affect the
Corporation's and the Bank's business and operations and
competitive environment.

     FEDERAL HOME LOAN BANK SYSTEM.   The Bank is a member of
the FHLB System, which consists of 12 regional Federal Home Loan
Banks ("FHLB's") subject to supervision and regulation by the
Federal Housing Finance Board ("FHFB").  The FHLB's provide a
central credit facility primarily for member institutions.  As a
member of the FHLB of New York, the Bank is required to acquire
and hold shares of capital stock in the FHLB of New York in an
amount at least equal to 1% of the aggregate unpaid principal of
its home mortgage loans, home purchase contracts, and similar
obligations at the beginning of each year, or 1/20 of its
advances (borrowings) from the FHLB of New York, whichever is
greater.  Elmira Savings & Loan was in compliance with this
requirement with an investment in FHLB of New York stock at June
30, 1999, of $1,313,100.  The FHLB of New York serves as a
reserve or central bank for its member institutions within its
assigned region.  It is funded primarily from proceeds derived
from the sale of consolidated obligations of the FHLB System.
It offers advances to members in accordance with policies and
procedures established by the FHFB and the Board of Directors of
the FHLB of New York.  Long-term advances may only be made for
the purpose of providing funds for residential housing finance.
As of June 30, 1999, Elmira Savings & Loan had advances of $22.6
million outstanding from the FHLB of New York.  See "Business of
the Bank -- Sources of Funds -- Borrowings."

     LIQUIDITY REQUIREMENTS.  As a member of the FHLB System,
the Bank is required to maintain average daily balances of
liquid assets (cash, deposits maintained pursuant to Federal
Reserve Board requirements, time and savings deposits in certain
institutions, obligations of states and political subdivisions
thereof, shares in mutual funds with certain restricted
investment policies, highly rated corporate debt, and mortgage
loans and mortgage-related securities with less than one year to
maturity or subject to purchase within one year) equal to the
monthly average of not less than a specified percentage
(currently 4%) of its net withdrawable savings deposits plus
short-term borrowings.  Monetary penalties may be imposed for
failure to meet liquidity requirements.  The average daily
liquidity ratio of the Bank for June 1999 was 13.02%.

                              27
<PAGE>
<PAGE>
     QUALIFIED THRIFT LENDER TEST.  The Bank is currently
subject to OTS regulations which use the concept of a qualified
thrift lender ("QTL") to determine eligibility for Federal Home
Loan Bank advances and for certain other purposes.  A savings
institution that does not meet the QTL Test must either convert
to a bank charter or comply with the following restrictions on
its operations: (i) the institution may not engage in any new
activity or make any new investment, directly or indirectly,
unless such activity or investment is permissible for both a
national bank and a savings institution; (ii) the branching
powers of the institution are restricted to those of a national
bank located in the institution's home state; (iii) the
institution shall not be eligible to obtain any advances from
its Federal Home Loan Bank; and (iv) payment of dividends by the
institution shall be subject to the rules regarding payment of
dividends by a national bank.  In addition, any company that
controls a savings institution that fails to qualify as a QTL
will be required to register as and be deemed a bank holding
company subject to all of the provisions of the Bank Holding
Company Act of 1956 and other statutes applicable to bank
holding companies.  Upon the expiration of three years from the
date the institution ceases to be a QTL, it must cease any
activity, and not retain any investment not permissible for both
a national bank and a savings institution and immediately repay
any outstanding Federal Home Loan Bank advances (subject to
safety and soundness considerations).

     To qualify as a QTL, a savings institution must either
qualify as a "domestic building and loan association" under the
Internal Revenue Code or maintain at least 65% of its
"portfolio" assets in Qualified Thrift Investments.  Portfolio
assets are defined as total assets less intangibles, the value
of property used by a savings institution in its business and
liquidity investments in an amount not exceeding 20% of total
assets.  All of the following may be included as Qualified
Thrift Investments: investments in residential mortgages, home
equity loans, loans made for educational purposes, small
business loans, credit card loans and shares of stock issued by
a Federal Home Loan Bank.  Subject to a 20% of portfolio assets
limit, savings institutions are also able to treat the following
as Qualified Thrift Investments: (i) 50% of the dollar amount of
residential mortgage loans subject to sale under certain
conditions, (ii) investments, both debt and equity, in the
capital stock or obligations of and any other security issued by
a service corporation or operating subsidiary, provided that
such subsidiary derives at least 80% of its annual gross
revenues from activities directly related to purchasing,
refinancing, constructing, improving or repairing domestic
residential housing or manufactured housing, (iii) 200% of their
investments in loans to finance "starter homes" and loans for
construction, development or improvement of housing and
community service facilities or for financing small businesses
in "credit-needy" areas, (iv) loans for the purchase,
construction, development or improvement of community service
facilities, and (v) loans for personal, family or household
purposes.

     A savings institution must maintain its status as a QTL on
a monthly basis in nine out of every 12 months.  A savings
institution that fails to maintain QTL status will be permitted
to requalify once, and if it fails the QTL Test a second time,
it will become immediately subject to all penalties as if all
time limits on such penalties had expired.  At June 30, 1999,
approximately 81.11% of the Bank's "portfolio" assets were
invested in Qualified Thrift Investments.

<PAGE>
     LENDING LIMITS.  The aggregate amount of loans which a
federally chartered savings association may make on the security
of liens on non-residential real property may not exceed 400% of
the association's capital.  The Director of the OTS may,
however, permit savings associations to exceed the 400% of
capital limit in certain circumstances.

     Under regulations of the OTS, loans and extensions of
credit to a person outstanding at one time generally may not
exceed 15% of the unimpaired capital, surplus, including the
loan loss allowance of the Bank.  As of June 30, 1999, the Bank
was permitted to lend approximately  $2.5 million to one
borrower under this standard.  Loans and extensions of credit
fully secured by readily marketable collateral (having a market
value at least equal to the funds outstanding) may comprise an
additional 10% of unimpaired capital and surplus. As of June 30,
1999, the largest amount outstanding to any one borrower of the
Bank was $2.3 million, which was below the current limit.

     REGULATORY CAPITAL REQUIREMENTS.   Under the OTS's
regulatory capital requirements, savings associations must
maintain "tangible" capital equal to 1.5% of adjusted total
assets, "core" capital equal to at least 4.0% or 3.0% (if the
institution is rated composite 1 CAMELS under the OTS
examination rating system) of adjusted total assets and "total"
capital (a combination of core and "supplementary" capital)
equal to 8.0% of risk-weighted assets.  In addition, the OTS has
adopted regulations which impose certain restrictions on savings
associations that have a total risk-based capital ratio that is
less than 8.0%, a ratio of Tier 1 capital to risk-weighted
assets of less than 4.0% or a ratio of Tier 1 capital to
adjusted total

                              28
<PAGE>
<PAGE>
assets of less than 4.0% (or 3.0% if the institution is rated
composite 1 CAMELS under the OTS examination rating system).
For purposes of these regulations, Tier 1 capital has the same
definitions as core capital.  See "- -Prompt Corrective
Regulatory Action."

     Core capital is defined as common stockholders' equity
(including retained earnings), noncumulative perpetual preferred
stock and related surplus, minority interests in the equity
accounts of fully consolidated subsidiaries, certain
nonwithdrawable accounts and pledged deposits and "qualifying
supervisory goodwill."  Core capital is generally reduced by the
amount of the savings association's intangible assets for which
no market exists.  Limited exceptions to the deduction of
intangible assets are provided for purchased mortgage servicing
rights and qualifying supervisory goodwill.  Tangible capital is
given the same definition as core capital but does not include
an exception for qualifying supervisory goodwill and is reduced
by the amount of all the savings association's intangible assets
with only a limited exception for purchased mortgage servicing
rights.  Both core and tangible capital are further reduced by
an amount equal to a savings institution's debt and equity
investments in subsidiaries engaged in activities not
permissible to national banks (other than subsidiaries engaged
in activities undertaken as agent for customers or in mortgage
banking activities and subsidiary depository institutions or
their holding companies).  Investments in and extensions of
credit to such subsidiaries are required to be fully netted
against tangible and core capital.  At June 30, 1999, the Bank
had $480,000 of investments in or extensions of credit to a
subsidiary engaged in activities not permitted to national
banks.

     Adjusted total assets are a savings association's total
assets as determined under generally accepted accounting
principles increased by certain goodwill amounts and by a pro
rated portion of the assets of unconsolidated includable
subsidiaries in which the savings association holds a minority
interest.  Adjusted total assets are reduced by the amount of
assets that have been deducted from capital, the portion of
savings association's investments in unconsolidated includable
subsidiaries, and, for purpose of the core capital requirement,
qualifying supervisory goodwill.  At June 30, 1999, the Bank's
adjusted total assets for the purposes of the core and tangible
capital requirements were approximately $153.3 million.

     In determining compliance with the risk-based capital
requirement, a savings association is allowed to include both
core capital and supplementary capital in its total capital
provided the amount of supplementary capital included does not
exceed the savings association's core capital.  Supplementary
capital is defined to include certain preferred stock issues,
nonwithdrawable accounts and pledged deposits that do not
qualify as core capital, certain approved subordinated debt,
certain other capital instruments, a portion of the savings
association's general loss allowances and up to 45% of
unrealized gains on equity securities.  Total core and
supplementary capital are reduced by the amount of capital
instruments held by other depository institutions pursuant to
reciprocal arrangements, all equity investments and that portion
of the institution's land loans and non-residential construction
loans in excess of 80% loan-to-value ratio.  As of June 30,
1999, the Bank had no high ratio land or non-residential
construction loans and no equity investments for which OTS
regulations require a deduction from total capital.

     The risk-based capital requirement is measured against
risk-weighted assets which equals the sum of each asset and the
credit-equivalent amount of each off-balance sheet item after
being multiplied by an assigned risk weight.  Under the OTS
risk-weighting system, one- to four-family first mortgages not
more than 90 days past due with loan-to-value ratios under 80%
are assigned a risk weight of 50%.  Consumer and construction
loans are assigned a risk weight of 100%.  Mortgage-backed
securities issued, or fully guaranteed as to principal and
interest, by the FNMA or FHLMC are assigned a 20% risk weight.
Cash and U.S. Government securities backed by the full faith and
credit of the U.S. Government are given a 0% risk weight.
                              29
<PAGE>
<PAGE>
     The table below presents the Bank's capital position
relative to its various minimum statutory and regulatory capital
requirements at June 30, 1999.
<TABLE>
<CAPTION>

                                         At June 30, 1999
                                    -----------------------
                                                 Percent of
                                    Amount        Assets (1)
                                    -----------------------
                                     (Dollars in thousands)

<S>                                <C>             <C>
Tangible Capital . . . . . . . . . $15,005         9.79%
Tangible Capital Requirement . . .   2,299         1.50
                                   -------        -----
Excess . . . . . . . . . . . . . . $12,706         8.29%
                                   =======        =====

Tier 1/Core Capital. . . . . . . .  15,005         9.79%
Tier 1/Core Capital Requirement. .   4,598         3.00
                                   -------        -----
Excess . . . . . . . . . . . . . . $10,407         6.79%
                                   =======        =====
Risk-Based Capital . . . . . . . .  16,270        16.07%
Risk-Based Capital Requirement . .   8,101         8.00
                                   -------        -----
Excess . . . . . . . . . . . . . . $ 8,169         8.07%
                                   =======        =====
<FN>
____________
(1)  Based upon tangible assets for purposes of the tangible
     capital and core capital requirements, and risk-weighted
     assets for purposes of the risk-based capital requirement.
</FN>
</TABLE>
     The OTS's risk-based capital requirements require savings
institutions with more than a "normal" level of interest rate
risk to maintain additional total capital.  A savings
institution's interest rate risk is measured in terms of the
sensitivity of its "net portfolio value" to changes in interest
rates.  Net portfolio value is defined, generally, as the
present value of expected cash inflows from existing assets and
off-balance sheet contracts less the present value of expected
cash outflows from existing liabilities.  A savings institution
is considered to have a "normal" level of interest rate risk
exposure if the decline in its net portfolio value after an
immediate 200 basis point increase or decrease in market
interest rates (whichever results in the greater decline) is
less than two percent of the current estimated economic value of
its assets.  A savings institution with a greater than normal
interest rate risk is required to deduct from total capital, for
purposes of calculating its risk-based capital requirement, an
amount (the "interest rate risk component") equal to one-half
the difference between the institution's measured interest rate
risk and the normal level of interest rate risk, multiplied by
the economic value of its total assets.  Management does not
believe the implementation of the interest rate risk requirement
will have a material effect on the Bank.

     The OTS calculates the sensitivity of a savings
institution's net portfolio value based on data submitted by the
institution in a schedule to its quarterly Thrift Financial
Report and using the interest rate risk measurement model
adopted by the OTS.  The amount of the interest rate risk
component, if any, that is deducted from a savings institution's
total capital is based on the institution's Thrift Financial
Report filed two quarters earlier.  Savings institutions with
less than $300 million in assets and a risk-based capital ratio
above 12% are generally exempt from filing the interest rate
risk schedule with their Thrift Financial Reports.  However, the
OTS requires any exempt savings institution that it determines
may have a high level of interest rate risk exposure to file
such schedule on a quarterly basis.  The Bank has determined
that, on the basis of current financial data, it will not be
deemed to have more than normal level of interest rate risk
under the rule and believes that it will not be required to
increase its total capital as a result of the rule.

     In addition to requiring generally applicable capital
standards for savings associations, the Director of OTS is
authorized to establish the minimum level of capital for a
savings association at such amount or at such ratio of capital-
to-assets as the Director determines to be necessary or
appropriate for such association in light of the particular
circumstances of the association.  Such circumstances would
include a high degree of exposure of interest rate risk,
prepayment risk, credit risk and concentration of credit risk
and certain risks arising from non-traditional activities.   The
Director may treat the failure of any savings association to
maintain capital at or above such level as an unsafe or unsound
practice and may issue a directive requiring any savings
association which fails to maintain capital at or above the
minimum level required by the

                              30
<PAGE>
<PAGE>
Director to submit and adhere to a plan for increasing capital.
Such an order may be enforced in the same manner as an order
issued by the FDIC.

     PROMPT CORRECTIVE REGULATORY ACTION.  Under the Federal
Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), the federal banking regulators, including the OTS,
are required to take prompt corrective action if an insured
depository institution fails to satisfy certain minimum capital
requirements.  All institutions, regardless of their capital
levels, are restricted from making any capital distribution or
paying any management fees if the institution would thereafter
fail to satisfy the minimum levels for any of its capital
requirements.  An institution that fails to meet the minimum
level for any relevant capital measure (an "undercapitalized
institution") may be: (i) subject to increased monitoring by the
appropriate federal banking regulator; (ii) required to submit
an acceptable capital restoration plan within 45 days; (iii)
subject to asset growth limits; and (iv) required to obtain
prior regulatory approval for acquisitions, branching and new
lines of businesses.  The capital restoration plan must include
a guarantee by the institution's holding company that the
institution will comply with the plan until it has been
adequately capitalized on average for four consecutive quarters,
under which the holding company would be liable up to the lesser
of 5% of the institution's total assets or the amount necessary
to bring the institution into capital compliance as of the date
it failed to comply with its capital restoration plan.  A
"significantly undercapitalized" institution, as well as any
undercapitalized institution that did not submit an acceptable
capital restoration plan, may be subject to regulatory demands
for recapitalization, broader application of restrictions on
transactions with affiliates, limitations on interest rates paid
on deposits, asset growth and other activities, possible
replacement of directors and officers, and restrictions on
capital distributions by any bank holding company controlling
the institution.  Any company controlling the institution could
also be required to divest the institution or the institution
could be required to divest subsidiaries.  The senior executive
officers of a significantly undercapitalized institution may not
receive bonuses or increases in compensation without prior
approval and the institution is prohibited from making payments
of principal or interest on its subordinated debt.  In their
discretion, the federal banking regulators may also impose the
foregoing sanctions on an undercapitalized institution if the
regulators determine that such actions are necessary to carry
out the purposes of the prompt corrective action provisions.  If
an institution's ratio of tangible capital to total assets falls
below a "critical capital level," the institution will be
subject to conservatorship or receivership within 90 days unless
periodic determinations are made that forbearance from such
action would better protect the deposit insurance fund.  Unless
appropriate findings and certifications are made by the
appropriate federal bank regulatory agencies, a critically
undercapitalized institution must be placed in receivership if
it remains critically undercapitalized on average during the
calendar quarter beginning 270 days after the date it became
critically undercapitalized.

     Under regulations jointly adopted by the federal banking
regulators, including the OTS, a depository institution's
capital adequacy for purposes of the prompt corrective action
rules is determined on the basis of the institution's total
risk-based capital ratio (the ratio of its total capital to
risk-weighted assets), Tier 1 risk-based capital ratio (the
ratio of its core capital to risk-weighted assets) and leverage
ratio (the ratio of its core capital to adjusted total assets).
Under the regulations, a savings association that is not subject
to an order or written directive to meet or maintain a specific
capital level is deemed "well capitalized" if it also has: (i) a
total risk-based capital ratio of 10% or greater; (ii) a Tier 1
risk-based capital ratio of 6% or greater; and (iii) a leverage
ratio of 5% or greater.  An "adequately capitalized" savings
association is a savings association that does not meet the
definition of well capitalized and has: (i) a total risk-based
capital ratio of 8% or greater; (ii) a Tier 1 capital risk-based
ratio of 4% or greater; and (iii) a leverage ratio of 4% or
greater (or 3% or greater if the savings association has a
composite 1 CAMELS rating).  An "undercapitalized institution"
is a savings association that has (i) a total risk-based capital
ratio less than 8%; or (ii) a Tier 1 risk-based capital ratio of
less than 4%; or (iii) a leverage ratio of less than 4% (or 3%
if the association has a composite 1 CAMELS rating).  A
"significantly undercapitalized" institution is defined as a
savings association that has: (i) a total risk-based capital
ratio of less than 6%; or (ii) a Tier 1 risk-based capital ratio
of less than 3%; or (iii) a leverage ratio of less than 3%.  A
"critically undercapitalized" savings association  is defined as
a savings association that has a ratio of "tangible equity" to
total assets of less than 2%.  Tangible equity is defined as
core capital plus cumulative perpetual preferred stock (and
related surplus) less all intangibles other than qualifying
supervisory goodwill  and certain purchased mortgage servicing
rights.  The OTS may reclassify a well capitalized savings
association as adequately capitalized and may require an
adequately capitalized or undercapitalized association to comply
with the supervisory actions applicable to associations in the
next lower capital category (but may not reclassify a
significantly undercapitalized association as critically
undercapitalized) if the OTS determines, after notice and an
opportunity for a hearing, that the savings association is in an
unsafe or unsound condition or that the association has received

                              31
<PAGE>
<PAGE>
and not corrected a less-than-satisfactory rating for any CAMELS
rating category.  The Bank is classified as "well capitalized"
under these regulations.

     DEPOSIT INSURANCE.  The Bank is required to pay
assessments based on a percent of its insured deposits to the
FDIC for insurance of its deposits by the FDIC through the SAIF.
Under the Federal Deposit Insurance Act, the FDIC is required to
set semi-annual assessments for SAIF-insured institutions at a
level necessary to maintain the designated reserve ratio of the
SAIF at 1.25% of estimated insured deposits or at a higher
percentage of estimated insured deposits that the FDIC
determines to be justified for that year by circumstances
raising a significant risk of substantial future losses to the
SAIF.

     Under the FDIC's risk-based assessment system, the
assessment rate for an insured depository institution depends on
the assessment risk classification assigned to the institution
by the FDIC, which is determined by the institution's capital
level and supervisory evaluations.  Based on the data reported
to regulators for the date closest to the last day of the
seventh month preceding the semi-annual assessment period,
institutions are assigned to one of three capital groups -- well
capitalized, adequately capitalized or undercapitalized -- using
the same percentage criteria as under the prompt corrective
action regulations.  See " -- Prompt Corrective Regulatory
Action."  Within each capital group, institutions are assigned
to one of three subgroups on the basis of supervisory
evaluations by the institution's primary supervisory authority
and such other information as the FDIC determines to be relevant
to the institution's financial condition and the risk posed to
the deposit insurance fund.  Subgroup A  will consist of
financially sound institutions with only a few minor weaknesses.
Subgroup B consists of institutions that demonstrate weaknesses
which, if not corrected, could result in significant
deterioration of the institution and increased risk of loss to
the deposit insurance fund.  Subgroup C consists of institutions
that pose a substantial probability of loss to the deposit
insurance fund unless effective corrective action is taken.

     Historically, institutions with SAIF-assessable deposits,
like the Bank, paid higher deposit insurance premiums than
institutions with deposits insured by the Bank Insurance Fund
("BIF") also administered by the FDIC.  In order to recapitalize
the SAIF and address the premium disparity, in November 1996 the
FDIC imposed a one-time special assessment on institutions with
SAIF-assessable deposits based on the amount determined by the
FDIC to be necessary to increase the reserve levels of the SAIF
to the designated reserve ratio of 1.25% of insured deposits.
Institutions were assessed at the rate of 65.7 basis points
based on the amount of their SAIF-assessable deposits as of
March 31, 1995.  As a result of the special assessment the Bank
incurred a pre-tax expense of $657,000 during fiscal 1997.

     The special assessment recapitalized the SAIF, and as a
result, the FDIC lowered the SAIF deposit insurance assessment
rates to zero for well capitalized institutions with the highest
supervisory ratings and 0.27% of insured deposits for
institutions in the highest risk-based premium category.  Until
December 31, 1999, SAIF-insured institutions will be required to
pay assessments to the FDIC at the rate of 6.5 basis points to
help fund interest payments on certain bonds issued by the
Financing Corporation ("FICO"), an agency of the federal
government established to finance takeovers of insolvent
thrifts.  During this period, BIF members will be assessed for
these obligations at the rate of 1.3 basis points.  After
December 31, 1999, both BIF and SAIF members will be assessed at
the same rate for FICO payments.

<PAGE>
     SAIF members may convert to the status of members of the
BIF and may merge with or transfer assets to a BIF member.
Although the Bank would qualify for insurance of deposits of the
BIF, substantial entrance and exit fees apply to conversions
from SAIF to BIF insurance and such fees may make a SAIF to BIF
conversion prohibitively expensive.  In the past, the
substantial disparity existing between deposit insurance
premiums paid by BIF and SAIF members gave BIF-insured
institutions a competitive advantage over SAIF-insured
institutions like the Bank.  The reduction of the SAIF deposit
insurance premiums effectively eliminated this disparity and
could have the effect of increasing the net income of the Bank
and restoring the competitive equality between BIF-insured and
SAIF-insured institutions.

     FEDERAL RESERVE SYSTEM.  Pursuant to regulations of the
Federal Reserve Board, a savings institution must maintain
average daily reserves equal to 3% on transaction accounts of
between $4.9 million and $46.5 million, plus 10% on the
remainder.  This percentage is subject to adjustment by the
Federal Reserve Board.  Because required reserves must be
maintained in the form of vault cash or in a non-interest
bearing account at a Federal Reserve Bank, the effect of the

                              32
<PAGE>
<PAGE>
reserve requirement is to reduce the amount of the institution's
interest-earning assets.  As of June 30, 1999, the Bank met its
reserve requirements.

SAVINGS AND LOAN HOLDING COMPANY REGULATION

     GENERAL.  The Corporation is a savings and loan holding
company within the meaning of the Home Owners' Loan Act.  As
such, the Corporation is registered with the OTS and is subject
to OTS regulations, examinations, supervision and reporting
requirements.  As a subsidiary of a savings and loan holding
company, the Bank is subject to certain restrictions in its
dealings with the Corporation and affiliates thereof.

     RESTRICTIONS ON ACQUISITIONS.  The Home Owners' Loan Act
generally prohibits a savings and loan holding company, without
prior approval of the Director of OTS, from (i) acquiring
control of any other savings institution or savings and loan
holding company or controlling the assets thereof or (ii)
acquiring more than 5% of the voting shares of a savings
institution or holding company thereof which is not a
subsidiary.  Under certain circumstances a registered savings
and loan holding company is permitted to acquire, with the
approval of the Director of OTS, up to 15% of the voting shares
of an undercapitalized savings association pursuant to a
"qualified stock issuance" without that savings association
being deemed controlled by the holding company.  In order for
the shares acquired to constitute a "qualified stock issuance,"
the shares must consist of previously unissued stock or treasury
shares, the shares must be acquired for cash, the savings
institution holding company's other subsidiaries must have
tangible capital of at least 6 1/2% of total assets, there must
not be more than one common director or officer between the
savings institution holding company and the issuing savings
institution and transactions between the savings institution and
the savings institution holding company and any of its
affiliates must conform to Sections 23A and 23B of the Federal
Reserve Act.  Except with the prior approval of the Director of
OTS, no director or officer of a savings institution holding
company or person owning or controlling by proxy or otherwise
more than 25% of such company's stock, may also acquire control
of any savings institution, other than a subsidiary savings
institution, or of any other savings and loan holding company.

     OTS regulations permit federal savings institutions to
branch in any state or states of the United States and its
territories.  Except in supervisory cases or when interstate
branching is otherwise permitted by state law or other statutory
provision, a federal savings institution may not establish an
out-of-state branch unless (i) the federal institution qualifies
as a QTL or as a "domestic building and loan association" under
Section 7701(a)(19) of the Internal Revenue Code and the total
assets attributable to all branches of the institution in the
state would qualify such branches taken as a whole for treatment
as a QTL or as a domestic building and loan association and (ii)
such branch would not result in (a) formation of a prohibited
multi-state multiple savings and loan holding company or (b) a
violation of certain statutory restrictions on branching by
savings institution subsidiaries of banking holding companies.
Federal savings institutions generally may not establish new
branches unless the institution meets or exceeds minimum
regulatory capital requirements.  The OTS will also consider the
institution's record of compliance with the Community
Reinvestment Act of 1977 in connection with any branch
application.

     TRANSACTIONS WITH RELATED PARTIES.  Transactions between
savings associations and any affiliate are governed by Sections
23A and 23B of the Federal Reserve Act.  An affiliate of a
savings association is any company or entity which controls, is
controlled by or is under common control with the savings
association.  In a holding company context, the parent holding
company of a savings association (such as the Company) and any
companies which are controlled by such parent holding company
are affiliates of the savings association.  Generally, Sections
23A and 23B (i) limit the extent to which the savings
institution or its subsidiaries may engage in "covered
transactions" with any one affiliate to an amount equal to 10%
of such institution's capital stock and surplus, and contain an
aggregate limit on all such transactions with all affiliates to
an amount equal to 20% of such capital stock and surplus, and
(ii) require that all such transactions be on terms
substantially the same, or at least as favorable, to the
institution or subsidiary as those provided to a nonaffiliate.
The term "covered transaction" includes the making of loans,
purchase of assets, issuance of a guarantee and similar other
types of transactions.  In addition to the restrictions imposed
by Sections 23A and 23B, no savings association may (i) loan or
otherwise extend credit to an affiliate, except for any
affiliate which engages only in activities which are permissible
for bank holding companies, or (ii) purchase or invest in any
stocks, bonds, debentures, notes or similar obligations of any
affiliate, except for affiliates which are subsidiaries of the
savings association.  Section 106 of the Bank Holding Company
Act which also applies to the Bank, prohibits the Bank from
extending credit to or offering any other services, or fixing or
varying the

                              33
<PAGE>
<PAGE>
consideration for such extension of credit or service, on the
condition that the customer obtain some additional service from
the institution or certain of its affiliates  or not obtain
services of a competitor of the institution, subject to certain
exceptions.

     Savings associations are also subject to the restrictions
contained in Section 22(h) and Section 22(g) of the Federal
Reserve Act on loans to executive officers, directors and
principal stockholders.  Under Section 22(h), loans to a
director, executive officer or greater than 10% stockholder of a
savings association and certain affiliated interests of the
foregoing, may not exceed, together with all other outstanding
loans to such person and affiliated interests, the association's
loans to one borrower limit (generally equal to 15% of the
institution's unimpaired capital and surplus and an additional
10% of such capital and surplus for loans fully secured by
certain readily marketable collateral) and all loans to such
persons may not exceed the institution's unimpaired capital and
unimpaired surplus.  Section 22(h) also prohibits loans, above
amounts prescribed by the appropriate federal banking agency, to
directors, executive officers and greater than 10% stockholders
of a savings association, and their respective affiliates,
unless such loan is approved in advance by a majority of the
board of directors of the association with any "interested"
director not participating in the voting.  The Federal Reserve
Board has prescribed the loan amount (which includes all other
outstanding loans to such person), as to which such prior board
of director approval is required, as being the greater of
$25,000 or 5% of capital and surplus (up to $500,000).  Further,
the Federal Reserve Board pursuant to Section 22(h) requires
that loans to directors, executive officers and principal
stockholders be made on terms substantially the same as offered
in comparable transactions to other persons.  Section 22(h) also
prohibits a depository institution from paying the overdrafts of
any of its executive officers or directors.

     Section 22(g) of the Federal Reserve Act requires that
loans to executive officers of depository institutions not be
made on terms more favorable than those afforded to other
borrowers, requires approval for such extensions of credit by
the board of directors of the institution, and imposes reporting
requirements for and additional restrictions on the type, amount
and terms of credits to such officers.  In addition, Section 106
of the Bank Holding Company Act prohibits extensions of credit
to executive officers, directors, and greater than 10%
stockholders of a depository institution by any other
institution which has a correspondent banking relationship with
the institution, unless such extension of credit is on
substantially the same terms as those prevailing at the time for
comparable transactions with other persons and does not involve
more than the normal risk of repayment or present other
unfavorable features.

     ACTIVITIES RESTRICTIONS.  The Board of Directors of the
Corporation presently intends to operate the Corporation as a
unitary savings and loan holding company.  There are generally
no restrictions on the activities of a unitary savings and loan
holding company.  However, if the director of OTS determines
that there is reasonable cause to believe that the continuation
by a savings and loan holding company of an activity constitutes
a serious risk to the financial safety, soundness, or stability
of its subsidiary savings institution, the Director of OTS may
impose such restrictions as deemed necessary to address such
risk and limiting (i) payment of dividends by the savings
institution, (ii) transactions between the savings institution
and its affiliates, and (iii) any activities of the savings
institution that might create a serious risk that the
liabilities of the holding company and its affiliates may be
imposed on the savings institution.

     Notwithstanding the above rules as to permissible business
activities of unitary savings and loan holding companies, if the
savings institution subsidiary of such a holding company fails
to meet the QTL Test, then within one year after the institution
ceased to be a QTL, such unitary savings and loan holding
company shall register as and be deemed to be a bank holding
company and will become subject to the activities restrictions
applicable to bank holding companies.  See "Regulation --
Qualified Thrift Lender Test."

                              34
<PAGE>
<PAGE>
     If the Company were to acquire control of another savings
institution, other than through merger or other business
combination with Elmira Savings & Loan, the Company would there-
upon become a multiple savings and loan  holding company.
Except where such acquisition is pursuant to the authority to
approve emergency acquisitions and where each subsidiary savings
institution meets the QTL Test, the activities of the Company
and any of its subsidiaries (other than Elmira Savings & Loan or
other subsidiary savings institutions) would thereafter be
subject to further restrictions.  The Home Owners' Loan Act
provides that, among other things, no multiple savings and loan
holding company or subsidiary thereof which is not a savings
institution shall commence or continue for a limited period of
time after becoming a multiple savings and loan holding company
or subsidiary thereof, any business activity, upon prior notice
to, and no objection by the OTS, other than (i) furnishing or
performing management services for a subsidiary savings
institution, (ii) conducting an insurance agency or escrow
business, (iii) holding, managing, or liquidating assets owned
by or acquired from a subsidiary savings institution, or (iv)
holding or managing properties used or occupied by a subsidiary
savings institution, (v) acting as trustee under deeds of trust,
(vi) those activities previously authorized by regulation on
March 5, 1987 to be directly engaged in by multiple savings and
loan holding companies; or (vii) those activities authorized by
the Federal Reserve Board as permissible for bank holding
companies, unless the Director of OTS by regulation prohibits or
limits such activities for savings and loan holding companies.
Those activities described in (vii) above must also be approved
by the Director of OTS prior to being engaged in by a multiple
savings and loan holding company.

     The Director of OTS may also approve acquisitions
resulting in the formation of a multiple savings and loan
holding company which controls savings institutions in more than
one state, if (i) the multiple savings and loan holding company
involved controls a savings institution which operated a home or
branch office in the state of the institution to be acquired as
of March 5, 1987;  (ii) the acquiror is authorized to acquire
control of the savings institution pursuant to the emergency
acquisition provisions of the Federal Deposit Insurance Act; or
(iii) the laws of the state in which the institution to be
acquired is located specifically permit institutions to be
acquired by state-chartered institutions or savings and loan
holding companies located in the state where the acquiring
entity is located (or by a holding company that controls such
state-chartered savings institutions).

TAXATION

     FEDERAL INCOME TAXATION.  The Corporation and its
subsidiaries file a consolidated federal income tax return based
on a fiscal year ending June 30.  Consolidated returns have the
effect of eliminating intercompany distributions, including
dividends, from the computation of consolidated taxable income
for the taxable year in which the distributions occur.

     Savings institutions are subject to the provisions of the
Internal Revenue Code of 1986, as amended (the "Code") in the
same general manner as other corporations.  However,
institutions such as Elmira Savings & Loan which meet certain
definitional tests and other conditions prescribed by the Code
may benefit from certain favorable provisions regarding their
deductions from taxable income for annual additions to their bad
debt reserve.  The amount of the bad debt reserve deduction is
based upon actual loss experience (the "experience method").


     Effective for the Bank's fiscal year ending June 30, 1997,
legislation repealed the percentage of taxable income method of
calculating the bad debt reserve.  Savings associations, like
the Bank, which have previously used that method are required to
recapture into taxable income post-1987 reserves in excess of
the reserves calculated under the experience method over a six-
year period beginning with the first taxable year beginning
after December 31, 1995.  The start of such recapture may be
delayed until the third taxable year beginning after December
31, 1995 if the dollar amount of the institution's residential
loan originations in each year is not less than the average
dollar amount of residential loan originated in each of the six
most recent years disregarding the years with the highest and
lowest originations during such period.  For purposes of this
test, residential loan originations would not include
refinancings and home equity loans.  The Bank has provided
deferred taxes on its post-1987 additions to its bad debt
reserves and, as a result, the recapture provisions will have no
effect on the Bank's results of operations.

     For the first taxable year beginning after December 31,
1995, savings institutions, such as the Bank, are treated the
same as commercial banks.  Institutions with $500 million or
more in assets are only able to take a tax deduction when

                              35
<PAGE>
<PAGE>
a loan is actually charged off.  Institutions with less than
$500 million in assets are still permitted to make deductible
bad debt additions to reserves, but only using the experience
method.

     Earnings appropriated to an institution's bad debt reserve
and claimed as a tax deduction were not available for the
payment of cash dividends or for distribution to shareholders
(including distributions made on dissolution or liquidation),
unless such amount was included in taxable income, along with
the amount deemed necessary to pay the resulting federal income
tax.

     The Code imposes an alternative minimum tax at a rate of
20%.  The alternative minimum tax generally applies to a base of
regular taxable income plus certain tax preferences
("alternative minimum taxable income" or "AMTI") and is payable
to the extent such AMTI exceeds an exemption amount.  The Code
provides that an item of tax preference is the excess of the bad
debt deduction allowable for a taxable year pursuant to the
percentage of taxable income method over the amount allowable
under the experience method.  The other items of tax preference
that constitute AMTI include (a) tax-exempt interest on newly-
issued private activity bonds other than certain qualified bonds
and (b) 75% of the excess (if any) of (i) adjusted current
earnings as defined in the Code, over (ii) AMTI (determined
without regard to this preference and prior to reduction by net
operating losses).  Net operating losses can offset no more than
90% of AMTI.  Certain payments of alternative minimum taxes may
be used as credits against regular tax liabilities in future
years.

     The Bank's federal income tax returns were last audited in
1975.

     The Bank is subject to the New York State franchise tax on
banking corporations.  The New York State tax on banking
corporations is imposed in an annual amount of the greater (i)
9% of the Bank's "Entire Net Income" allocable to New York State
during the taxable year, or (ii) the applicable alternative
minimum tax.  The applicable alternative minimum tax is
generally the greater of (i) a percentage (0.01%, 0.004% or
0.002%, depending upon the nature and mix of the Bank's assets
and on the ratio of its net worth to the value of its assets) of
the value of the Bank's assets allocable to New York State with
certain modifications, (ii) 3-1/2% of the Bank's "Alternative
Entire Net Income" allocable to New York State or (iii) $325.00.

     For purposes of the New York State tax on banking
corporations, "Entire Net Income" is similar to federal taxable
income, subject to certain modifications (including the fact
that net operating losses cannot be carried back or carried
forward), and "Alternative Entire Net Income" is similar to
"Entire Net Income," subject to certain further modifications.

     The Bank and its subsidiaries file separate New York State
franchise tax returns.  The Bank's state tax returns were last
audited in February 1994.

ITEM 2.  PROPERTIES
-------------------

     The Bank opened its office at 300 West Water Street in
Elmira in 1955.  During the 1995 fiscal year, the Bank completed
an expansion and complete renovation of the office facility.  As
a result, an additional 7,600 square feet was added, bringing
the total size of the facility to 13,500 square feet.  At June
30, 1999, the Bank's total investment in this property was $2.9
million and the net book value was $2.5 million.  The Bank's
Ithaca office, which houses its mortgage banking subsidiary and
"cashless" deposit office, totaled approximately 1,000 square
feet and had a net book value of furniture, fixtures and
equipment (including leasehold improvements) of approximately
$32,300 at June 30, 1999.

     At June 30, 1999, the net book value of the Bank's
furniture, fixtures and equipment (including leasehold
improvements) was approximately $284,000.

ITEM 3.  LEGAL PROCEEDINGS
--------------------------

     Although the Bank is, from time to time, involved in
various legal proceedings in the normal course of business,
there are no material pending legal proceedings to which the
Corporation, the Bank or its subsidiary is a party, or to which
any of their property is subject.

                              36
<PAGE>
<PAGE>
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

     No matters were submitted to a vote of security holders
during the fourth quarter of the fiscal year ended June 30,
1999.

                        PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS
--------------------------------------------------------------

     The information contained under the section "Market Price
and Dividend Information"  in the Annual Report is incorporated
herein by reference.

     Since the Corporation has no significant source of income
other than dividends from the Bank, the payment of dividends by
the Corporation is dependent upon receipt of dividends from the
Bank.  Payment of cash dividends by the Bank is limited by
certain federal regulations under which the Bank may not declare
or pay a cash dividend on or repurchase any of its common stock
if the effect thereof would cause its regulatory capital to be
reduced below (1) the amount required for the liquidation
account established in connection with the Bank's conversion to
stock form or (2) the regulatory capital requirements imposed by
the OTS.  In certain circumstances earnings appropriated to bad
debt reserves and deducted for federal income tax purposes may
not be available to pay cash dividends without the payment of
federal income taxes by the Bank on the amount of such earnings
removed from the reserves for such purposes at the then current
income tax rate.

     Federal regulations impose certain additional limitations
on the payment of dividends and other capital distributions
(including stock repurchases and cash mergers) by Elmira Savings
& Loan.  Under OTS regulations, savings institutions must submit
notice to the OTS prior to making a capital distribution if (a)
they would not be well capitalized after the distribution, (b)
the distribution would result in the retirement of any of the
institution's common or preferred stock or debt counted as its
regulatory capital, or (c) the institution is a subsidiary of a
holding company.  A savings institution must make application to
the OTS to pay a capital distribution if (x) the institution
would not be adequately capitalized following the distribution,
(y) the institution's total distributions for the calendar year
exceeds the institution's net income for the calendar year to
date plus its net income (less distributions) for the preceding
two years, or (z) the distribution would otherwise violate
applicable law or regulation or an agreement with or condition
imposed by the OTS.

ITEM 6.  SELECTED FINANCIAL DATA
--------------------------------

     The information contained in the table captioned "Selected
Consolidated Financial Data" in the Annual Report is
incorporated herein by reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS
----------------------------------------------------------

     The information contained in the section captioned
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Annual Report is incorporated
herein by reference.

<PAGE>
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

     The financial statements contained in the Annual Report
which are listed under Item 14 herein are incorporated herein by
reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE
---------------------------------------------------------

     None.
                              37
<PAGE>
<PAGE>

                       PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------

     The information contained under the section captioned
"Proposal I -- Election of Directors" and "Beneficial Ownership
Reports" in the Corporation's definitive Proxy Statement for the
Corporation's 1999 Annual Meeting of Stockholders (the "Proxy
Statement") is incorporated herein by reference.

     For certain information regarding the executive officers
of the Corporation, see "Item 1.  Business --Executive
Officers."

ITEM 11.  EXECUTIVE COMPENSATION
--------------------------------

     The information contained under the section captioned
"Proposal I -- Election of Directors" in the Proxy Statement is
incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT
-------------------------------------------------------------

     (a)  Security Ownership of Certain Beneficial Owners

          The information required by this item is
          incorporated herein by reference to the section
          captioned "Voting Securities and Principal Holders
          Thereof" of the Proxy Statement.

     (b)  Security Ownership of Management

          Information required by this item is incorporated
          herein by reference to the sections captioned
          "Proposal I -- Election of Directors" and "Voting
          Securities and Principal Holders Thereof" of the
          Proxy Statement.

     (c)  Changes in Control

          Management of the Corporation knows of no
          arrangements, including any pledge by any person of
          securities of the Corporation, the operation of
          which may at a subsequent date result in a change of
          control of the registrant.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

     The information required by this item is incorporated
herein by reference to the section captioned "Proposal I --
Election of Directors" of the Proxy Statement.

                        PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
          ON FORM 8-K
--------------------------------------------------------------

     (a)  List of Documents Filed as a Part of this Report.

          (1)  Financial Statements.  The Consolidated
          Financial Statements and Independent Auditor's
          Report included in the Annual Report, listed below,
          are incorporated herein by reference.

     1.   Report of Independent Certified Public Accountants
     2.   Consolidated  Balance Sheets as of June 30, 1999 and
          1998
     3.   Consolidated Statements of Income for the Years
          Ended June 30, 1999, 1998 and 1997
     4.   Consolidated Statements of Changes in Shareholders'
          Equity and Comprehensive Income the Years Ended June
          30, 1999, 1998 and 1997
     5.   Consolidated Statements of Cash Flows for the Years
          Ended June 30, 1999, 1998 and 1997
     6.   Notes to Consolidated Financial Statements

                              38
<PAGE>
<PAGE>
          (2)  Financial Statement Schedules.  All schedules
          have been omitted as the required information is
          either inapplicable or included in the Notes to
          Consolidated Financial Statements.

          (3)  Exhibits.  The following exhibits are either
          filed or attached as part of this report or are
          incorporated herein by reference.

     No.     Description
     ---     -----------

     3.1     Certificate of Incorporation of ES&L Bancorp, Inc.*
     3.2     Bylaws of ES&L Bancorp, Inc. *
     10.1    Employment Agreements between the Bank and William
             A. McKenzie and J. Michael Ervin, as amended **
     10.2    Stock Option Plan *
     13      1999 Annual Report to Stockholders ***
     21      Subsidiaries of the Registrant
     23      Consent of Independent Accountants
     27      Financial Data Schedule

_________
*  Incorporated by reference to Registrant's Form S-1
   Registration Statement (File No. 33-33998) declared effective
   by the Securities and Exchange Commission on July 13, 1990.
** Incorporated by reference to the Registrant's Annual Report
   on Form 10-K for the fiscal year ended June 30, 1990.
***The 1999 Annual Report to Stockholders is included as an
   exhibit to this Report.  Except for those portions of the
   1999 Annual Report to Stockholders which have been expressly
   incorporated by reference into this Annual Report on Form
   10-K, such Annual Report to Stockholders is furnished solely
   for the information of the Securities and Exchange Commission
   and is not to be deemed "filed" as part of this Form 10-K.

     (b)  REPORTS ON FORM 8-K.  No Current Reports on Form 8-K
have been filed during the last quarter of the period covered by
this Report.

     (c)  EXHIBITS.  The exhibits required by Item 601 of
Regulation S-K are either filed as a part of this Annual Report
on Form 10-K or incorporated by reference herein.

     (d)  FINANCIAL STATEMENTS AND SCHEDULES EXCLUDED FROM
ANNUAL REPORT.  There are no other financial statements and
financial statement schedules which were excluded from
the Annual Report to Stockholders pursuant to Rule 14a-3(b)
which are required to be included herein.

                              39
<PAGE>
<PAGE>
                      SIGNATURES


     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                             ES&L BANCORP, INC.



Date:  September 21, 1999   By: /s/ William A. McKenzie
                                -----------------------------
                                William A. McKenzie
                                President and Chief Executive
                                Officer
                                (Duly Authorized Representative)


   Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.


By: /s/ William A. McKenzie           Date:  September 21, 1999
    ----------------------------
    William A. McKenzie
    Principal Executive Officer and
    Director


By: /s/ J. Michael Ervin              Date:  September 27, 1999
    ----------------------------
    J. Michael Ervin
    Principal Financial and Accounting
    Officer

By: /s/ Robert E. Butler              Date:  September 21, 1999
    ----------------------------
    Robert E. Butler
    Director

By: /s/ John F. Cadwallader           Date:  September 21, 1999
    ----------------------------
    John F. Cadwallader
    Director

By: /s/ L. Edward Considine           Date:  September 21, 1999
    ----------------------------
    L. Edward Considine
    Director


By: /s/ Dr. Adrian P. Hulsebosch      Date:  September 21, 1999
    ----------------------------
    Dr. Adrian P. Hulsebosch
    Director


<PAGE>
<PAGE>
By: /s/ Jack H. Mikkelsen             Date:  September 21, 1999
    ----------------------------
    Jack H. Mikkelsen
    Director


By: /s/ Frederick J. Molter           Date:  September 21, 1999
    ----------------------------
    Frederick J. Molter
    Director

By: /s/ Paul Morss                    Date:  September 21, 1999
    ----------------------------
    Paul Morss
    Director


By: /s/ Paul Morss                    Date:  September 21, 1999
    ----------------------------
    Gerald F. Schichtel
    Director