<PAGE>





                         1999

                        ANNUAL

                        REPORT










                                         ES&L BANCORP, INC.
<PAGE>
<PAGE>
          SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
SUMMARY OF FINANCIAL CONDITION
____________________________________________________________________________________________________
AT JUNE 30                          1999          1998          1997          1996          1995
____________________________________________________________________________________________________
<S>                             <C>           <C>           <C>           <C>           <C>
Total amount of:
  Assets                        $153,681,808  $152,160,204  $149,641,144  $140,138,518  $136,484,313
  Loans receivable, net          129,286,692   126,181,335   131,710,850   121,636,011   118,186,529
  Cash and investment
    securities (1)                 7,063,466     8,474,514     4,812,020     4,452,792     5,305,872
  Mortgage-backed securities       4,023,347     1,348,600     1,575,642     2,069,579     2,867,553
  Deposit accounts               111,586,295   112,179,831   111,748,518   106,652,829   101,014,522
  Advances from FHLB              22,586,951    21,897,090    20,606,615    17,615,560    20,523,963
  Shareholders' equity,
    substantially restricted      15,639,100    14,500,671    14,155,282    12,912,145    11,471,243
     Book value (2)                    18.80         17.43         16.71         15.29         13.92
</TABLE>
<TABLE>
<CAPTION>
____________________________________________________________________________________________________
SUMMARY OF OPERATIONS
____________________________________________________________________________________________________
YEAR ENDED JUNE 30,                 1999          1998          1997          1996          1995
____________________________________________________________________________________________________
<S>                              <C>           <C>           <C>           <C>           <C>
Interest income                  $11,308,619   $12,265,660   $11,944,989   $11,379,003   $10,052,154
Interest expense                   5,914,117     6,701,218     6,404,745     6,195,480     5,474,611
----------------------------------------------------------------------------------------------------
Net interest income before
  provision for loan losses        5,394,502     5,564,442     5,540,244     5,183,523     4,577,543
Provision for loan losses            (25,000)      300,000        40,000        60,000       150,000
----------------------------------------------------------------------------------------------------
Net interest income after
  provision for loan losses        5,419,502     5,264,442     5,500,244     5,123,523     4,427,543
Other income                       1,392,809     1,267,843     1,041,176       800,752       673,417
Other expenses                     3,441,868     3,297,107     4,012,490     3,078,154     2,770,757
----------------------------------------------------------------------------------------------------
Income before income taxes
  and cumulative effect            3,370,443     3,235,178     2,528,930     2,846,121     2,330,203
Income taxes                       1,228,482     1,195,785       690,550     1,092,560       747,227
----------------------------------------------------------------------------------------------------
NET INCOME                       $ 2,141,961   $ 2,039,393   $ 1,838,380   $ 1,753,561   $ 1,582,976
                                 ===========   ===========   ===========   ===========   ===========
Net Income per share, assuming
  dilution (2)                   $      2.55   $      2.41   $      2.14   $      2.05   $      1.88
                                 ===========   ===========   ===========   ===========   ===========
Cash dividends paid (2)          $      1.00   $      1.68   $      0.68   $      0.45   $      0.40
                                 ===========   ===========   ===========   ===========   ===========
</TABLE>
<TABLE>
<CAPTION>
____________________________________________________________________________________________________
KEY OPERATING RATIOS
____________________________________________________________________________________________________
YEAR ENDED JUNE 30,                                             1999          1998          1997
____________________________________________________________________________________________________
<S>                                                             <C>           <C>           <C>
Return on average assets                                            1.40%         1.35%         1.27%
Return on average equity                                           14.21%        14.23%        13.58%
Average equity-to-average
  asset ratio                                                       9.85%         9.49%         9.34%
Interest rate spread                                                3.52%         3.51%         3.61%
Net yield on interest-earning
  assets                                                            3.87%         3.83%         3.93%
Other expenses to average total
  assets                                                            2.25%         2.18%         2.77%
Non-performing loans as a
  percentage of total loans,
  at 6/30                                                           0.29%         0.23%         0.53%
One year interest rate sensitivity
  gap to total assets, at 6/30                                     -5.57%         0.61%         0.73%
Net interest income to other
  expenses (3)                                                      1.57%         1.69X         1.38X
<FN>
__________
(1) Includes interest-earning deposits in other depository institutions.
(2) Per share data has been adjusted for the three-for-two stock split which occurred on August 23,
    1996.
(3) Represents the number of times net interest income covers other expenses.
</FN>
</TABLE>

<PAGE>
<PAGE>
                   A MESSAGE FROM THE MANAGING OFFICER

TO OUR SHAREHOLDERS:

     Thanks to the outstanding efforts of our staff, the expert
guidance of our Board and support from our community,  I am
pleased to report another year of record performance. For year
end June 30, 1999, net income totaled $2,141,961, a 5% increase
over the prior year.  As a result of our performance, we are
reporting a return on average assets of 1.40% and a return on
average equity of 14.21%.  These measurements continue to exceed
the industry peer groups that we monitor.

     Shareholders benefited from the Bank's performance by
receiving quarterly dividends totaling $1.00 during the fiscal
year along with a special dividend of $1.00 per share, which was
paid on July 30, 1999. In addition, based on the limited trades
we are aware of, the Company's stock appreciated in value from
$21.00 per share at the beginning of the fiscal year to $26.25
per share at the end of the fiscal year.

        A number of initiatives were successfully implemented
        during this past year:

        ES&L became the first bank to participate in the Federal
        Home Loan Bank of New York's Mortgage Partnership
        Finance Program. We expect our participation in this
        program will favorably impact our mortgage banking
        operation - a significant component of our operation.

        Early in the year debit cards or check cards, if you
        will, were introduced allowing our customers to pay for
        merchandise directly out of their checking account
        without writing a check. These can also be used to
        access cash at ATM machines. The cards are part of the
        MasterCard system and accepted wherever a MasterCard is
        accepted.

        Loan origination levels, within all departments and
        affiliates, were at record levels. Closings for the Bank
        and its affiliates totaled $84.8 million, a 19% increase
        over the prior period. PACE Funding and Cayuga Mortgage
        Company, our Ithaca affiliates, contributed
        significantly to this achievement.

        The new relationship that our subsidiary, ES&L Financial
        Services, established with Raymond James Financial
        Services, proved to be very beneficial.  Profitability
        increased and our customers are now being offered new
        non-deposit investment opportunities that are being very
        well received.

     A major effort, on our part, that has been underway for
quite sometime has been preparing for the Year 2000. We feel
confident in our planning and expect business as usual the first
business day after the turn of the millennium. Our systems have
been tested and reviewed by examiners. Contingency backup plans
are in place. We are, however, concerned that depositors will
take imprudent risks with excess cash. Scam artists and other
thieves will be looking for easy prey. It is our hope that
individuals will realize the best place for their money is in
the Bank where it is insured by the Federal Deposit Insurance
Corporation.

     As we look to the future, a multitude of issues must be
considered. They include: products and pricing, competition,
technological advancements, regulatory and legislative actions,
capital management and staffing requirements. These and other
issues are evolving at an accelerating rate. In days gone by, it
was sufficient to establish a business plan before the year
started and then stick to it. Today we must have a plan in
effect that is flexible to change. Planning is no longer a once
a year event.  It is now an ongoing exercise. As we consider the
many issues confronting the Bank, please be assured that your
interests as owners of our company will be held in the forefront
of our deliberations.

     Your continued support is greatly appreciated.


                          /s/ William A. McKenzie

                          William A. McKenzie
                          President & CEO


                            1
<PAGE>
<PAGE>
                     ASSET/LIABILITY MANAGEMENT

The matching of assets and liabilities may be analyzed by
examining the extent to which such assets and liabilities are
"interest rate sensitive" and by monitoring an institution's
interest rate sensitivity "gap".  An asset or liability is said
to be interest rate sensitive within a specific period if it
will mature or reprice within that period.  The interest rate
sensitivity gap is defined as the difference between the amount
of interest-earning assets maturing or repricing within a
specific time period and the amount of interest-bearing
liabilities maturing or repricing within that time period.  A
gap is considered positive when the amount of interest rate
sensitive assets exceeds the amount of interest rate sensitive
liabilities and is considered negative when the amount of
interest rate sensitive liabilities exceeds the amount of
interest rate sensitive assets. Generally, during a period of
rising interest rates, a negative gap would adversely affect net
interest income while a positive gap would result in an increase
in net interest income, and during a period of falling interest
rates, a negative gap would result in an increase in net
interest income while conversely a positive gap would negatively
affect net interest income.

The thrift industry has experienced significant fluctuations in
net interest income due to changing interest rate environments.
During periods of increasing rates, net interest income has
decreased because thrifts generally have larger amounts of rate
sensitive liabilities than rate sensitive assets.  The Bank
currently has a negative one-year gap of 5.57%, which means if
rates increase, its net interest income should decrease
slightly.

The Bank is subject to minimal interest rate risk to the degree
that its interest-bearing liabilities mature or reprice slightly
faster, or on a different basis, than its interest-earning
assets.  As a continuing part of its financial strategy, the
Bank attempts to manage the impact of fluctuations in market
interest rates on its net interest income.  This effort entails
providing a reasonable balance between interest rate risk,
credit risk and maintenance of yield.

Management believes that interest rate risk is one of the most
significant factors affecting the Bank's future ability to
generate earnings consistently.  The Bank has established a
policy on the management of interest rate risk which establishes
guidelines for acceptable limits on the sensitivity of the
market value of the Bank's assets and liabilities to changes in
interest rates.  Accordingly, since 1983 the Bank has improved
the matching and limited the sensitivity of its interest-earning
assets and interest-bearing liabilities to a level which
management believes provides an acceptable level of interest
rate risk.  To accomplish this, fixed-rate mortgages,
mortgage-backed securities and investments have been sold and
proceeds reinvested in loans and securities with shorter terms
or adjustable rates.  Although the Bank continues to hold an
amount of fixed-rate mortgage loans, management believes that it
has adequately mitigated the interest rate exposure of these
loans through the origination of adjustable-rate mortgages and
the occasional purchase of adjustable-rate mortgage-backed
securities and investment grade corporate bonds.

At June 30, 1999, the Bank had a one-year negative gap of 5.57%
of total assets.

<PAGE>
The following table presents the Bank's interest sensitivity gap
between interest-earning assets and interest-bearing liabilities
at June 30, 1999 (000's):
<TABLE>
<CAPTION>
                                  1 YR.     OVER 1     OVER 3     OVER
                                    OR       THRU       THRU        5
                                  LESS      3 YRS.     5 YRS.      YRS.     TOTAL
                                  -----------------------------------------------
<S>                               <C>       <C>        <C>         <C>      <C>
Interest-Earning Assets:
  Mortgage-Backed Securities      $ 4,070    $      0   $     0   $     0  $  4,070
  Loans Receivable                 79,988      44,620     4,275     7,159   136,043
  Investments                       1,545           0     4,969         0     6,514
                                  -------------------------------------------------
                           Total  $85,603    $ 44,620   $ 9,244   $ 7,159  $146,627
Interest-Bearing Liabilities:
  Certificates of Deposit         $66,074    $ 14,380   $ 4,845   $     0  $ 85,299
  Other Deposits                   20,990           0         0     5,253    26,243
  Borrowings                        7,100       1,752     2,218    11,514    22,584
                                  -------------------------------------------------
                           Total  $94,164    $ 16,132   $ 7,063   $16,767  $134,126

Interest Sensitivity Gap          $(8,561)   $ 28,488   $ 2,181   $(9,608) $ 12,501

Gap as a Percentage of
  Total Assets                      -5.57%      18.54%     1.42%    -6.25%
Cumulative Gap                  $  (8,561)   $ 19,928   $22,109   $12,500
Cumulative Gap as a Percentage
  of Total Assets                   -5.57%      12.97%    14.39%     8.14%

</TABLE>
                            2
<PAGE>
<PAGE>
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                    AND RESULTS OF OPERATION

COMPARISON OF THE OPERATING RESULTS FOR THE YEARS ENDING JUNE
30, 1999 AND JUNE 30, 1998

GENERAL:
-------
During the Corporation's 1999 fiscal year it recorded net income
totaling $2,141,961, an increase of $102,568, or 5.03%, compared
to net income of $2,039,393 earned during the 1998 fiscal year.

Total assets of the Corporation equaled $153,681,808 at June 30,
1999, an increase of $1,521,604, or 1.00%, compared to the start
of the fiscal year.

The Corporation's cash and cash equivalents decreased by
$6,574,845 to $792,510, as funds were reallocated from federal
funds sold into longer term investments. During the 1999 fiscal
year the Corporation's investment securities portfolio,
including U.S. Government and agency investments, mortgage-
backed securities and certificates of deposit, increased by
$7,838,544 to $10,294,303.

The majority of all the fixed rate mortgages originated by the
Bank, and its mortgage banking affiliates, are sold in the
national secondary mortgage market, while adjustable rate and
short term loans are kept in the loan portfolio. Long term
mortgage interest rates remained low, during the majority of the
1999 fiscal year, prompting a significant number of the
residential borrowers to opt for fixed rate conventional
financing.  Therefore, despite a record $84.8 million in loan
originations, the Corporation's net loan portfolio, including
mortgage loans held for sale, increased by only $415,864, or
less than 1.00% to $134,828,673 at June 30, 1999.  During the
1999 fiscal year the residential lending department of the Bank,
and its mortgage banking affiliates originated $51.4 million of
fixed rate mortgages for sale in the national secondary mortgage
market.

Total liabilities of the Corporation remained nearly unchanged
during the 1999 and 1998 fiscal years, increasing by only
$383,175, or 0.28%, during the 1999 fiscal period.  At June 30,
1999 total liabilities equaled $138,042,708.

Shareholders' equity increased by $1,138,429, or 7.85%, during
the 1999 fiscal year.  The payment of cash dividends totaling
$833,794 and the repurchase of $240,426 worth of the
Corporation's common stock offset the Corporation's net income
of $2,141,961.

NET INTEREST INCOME:
-------------------
The Corporation's net interest income decreased by 3.05% to
$5,394,502 for the 1999 fiscal period, compared to $5,564,442
for the comparative period.

INTEREST INCOME:
---------------
During the 1999 fiscal year the Corporation earned interest
income of $11,308,619, a reduction of $957,041, or 7.80%,
compared to the fiscal year ending June 30, 1998.

The majority of the interest earned by the Corporation is
generated from its loan portfolio.  As a result of a decrease in
both the average yield and average balance of the loan
portfolio, during the 1999 period the Corporation's loan
interest income decreased by $858,216, or 7.23%, to $11,016,230.
During the year ending June 30, 1998, the average balance of the
loan portfolio was $138.8 million, yielding 8.56%, compared to
$133.8 million, yielding 8.24%, for the year ending June 30,
1999.  While, at June 30, 1999, the outstanding balance of the
net loan portfolio has increased from the beginning of the
fiscal year, up until the fourth quarter of the fiscal year the
outstanding balance of net loans receivable was lower than the
start of the fiscal period.   The majority of the loans
originated by the Corporation and its mortgage banking
affiliates are residential mortgages.  The Corporation sells,
servicing retained, most of its fixed rate residential mortgage
originations in the national secondary market, in order to
insulate itself from long term interest rate risk.  Adjustable
rate residential mortgages, and other commercial and consumer
loans, are originated and held in the Corporation's loan
portfolio.

Interest and dividend income generated from the Corporation's
investment portfolio totaled $104,210 for the 1999 fiscal year,
a decrease of $150,470 from the comparable period.  The decrease
is the result of a lower average balance and yield earned on the
portfolio during the current period.  While investment purchases
late in the 1999 fiscal year increased the year end investment
portfolio balance, the average balance of the portfolio,
excluding mortgage-backed securities, during the 1999 fiscal
year was $2.1 million, yielding 5.06%, compared to $3.8 million,
yielding 6.64% during the comparative period.

The interest earned on short term interest earning deposits
increased by $68,336 to $93,971 for the fiscal year ending June
30, 1999.  The increase is attributable to an increase in the
average balance and average yield of these deposits.  The
average balance increased as the Corporation accumulated cash
and cash equivalents, during the 1999 period,  primarily as a
timing difference related to the origination and sale of fixed
rate mortgages in the national secondary mortgage market, and
prior to the purchase of longer term investment securities,
which occurred during the fourth quarter of the 1999 fiscal
year.

INTEREST EXPENSE:
----------------
During the year ending June 30, 1999 the Corporation's total
interest expense equaled $5,914,117, a decrease of $787,101, or
11.75%, compared to $6,701,218, recorded during the year ending
June 30, 1998.

Interest paid to depositors during the 1999 period decreased
$419,294, or 7.59%, to $5,106,339.  During the comparative 1998
period deposit interest expense totaled $5,525,633.  The
interest savings was generated by a 32 basis point decrease in
the average cost of deposits combined with a $1.3 million
decrease in the average balance of deposits outstanding.
Average deposits outstanding totaled $114.7 million, costing
4.82%, compared to $113.4 million, costing 4.50%, for the years
ending June 30, 1998 and 1999, respectively.

Throughout the 1999 fiscal year the Corporation had utilized a
portion of cash and cash equivalents, generated early in the
fiscal year, to reduce its outstanding short term borrowings
(Federal Home Loan Bank Advances.)  The resulting reduction in
the average balance,

                            3
<PAGE>
<PAGE>
       MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

combined with a 34 basis point reduction in the average cost,
prompted a $367,807, or 31.29%, decrease in the Corporation's
interest expense paid on borrowings for the 1999 fiscal year.
During the year ending June 30, 1999 average borrowings totaled
$15.3 million, costing 5.29%, compared to $20.9 million, costing
5.63%, for the year ending June 30, 1998.

PROVISION FOR LOAN LOSSES:
-------------------------
Provisions for loan loss are charged to earnings to bring the
allowance to a level considered appropriate based on historical
experience, the volume and type of lending conducted by the
Corporation, industry standards, the status of past due
principal and interest payments, general economic conditions -
particularly as they relate to the Corporation's market area -
and other factors related to the collectibility of the
Corporation's loan portfolio.

In May 1999 the Securities and Exchange Commission (SEC), one of
the Corporation's Regulators, criticized the Banking industries
perceived excess loan loss allowances, based on loan
classifications and historical experience.  The SEC encouraged
individual financial institutions to review their allowance
allocation and balance.  As a result of an extensive management
review, and discussions with the Corporation's independent
accountant, the Corporation reduced its provision for loan loss
by $25,000 during the fourth quarter of the 1999 fiscal year,
thus resulting in a reduction of expense.  During the 1998
fiscal year the Corporation's provision expense totaled
$300,000.  At June 30, 1999 the Corporation's allowance for loan
loss totaled $1.3 million, compared to $1.5 million at June 30,
1998.

OTHER INCOME:
------------
During the 1999 fiscal year the Corporation's total other income
equaled $1,392,809, an increase of $124,966, or 9.86%, compared
to the 1998 fiscal year.

As has been previously identified, the Corporation sells the
majority of its fixed rate residential mortgages in the national
secondary mortgage market. Long term mortgage interest rates
remained relatively low throughout the majority of the 1999
fiscal year which prompted a significant number of residential
mortgage borrowers to select fixed rate instruments rather than
adjustable rate mortgages, which would have been held in the
Corporation's loan portfolio.  The Corporation recorded $690,443
in gains on the sale of mortgages during the year ending June
30, 1999, an increase of $107,779, or 18.50%, compared to the
prior year. Residential mortgage originations, totaling $52.5
million, were sold during the 1999 fiscal year, an increase of
$10.8 million over the 1998 comparative period.

Other operating income generated by the Corporation increased
$134,872 to $300,659 for the twelve months ending June 30, 1999.
Sales commissions generated by Brilie Corporation (d/b/a ES&L
Financial Services) increased by approximately $24,000 during
the current year and totaled nearly $158,000 for the current
fiscal year.  ES&L Financial Services is the Bank's subsidiary
which provides nontraditional investment and insurance products
to the Bank's customers and the general public, through an
agency relationship with major insurance companies and third
party mutual fund providers. The 1999 fiscal year also included
approximately $35,000 in income related to the settlement of two
deficiency actions the Corporation had successfully initiated
against former borrowers.  Additionally, during the 1999 fiscal
period, the sale of foreclosed real estate resulted in an
increase in net gains on sale to the Corporation of nearly
$77,500.  Minimal income for these items was recorded during the
1998 fiscal year.

The Corporation recognized a $104,141 reduction in loan
servicing income, which totaled $140,070 for the year ending
June 30, 1999.  The reduction results from an increase in the
expense related to the amortization of the value of mortgage
servicing rights, as required by Financial Accounting Standards
No. 122 (SFAS 122), entitled Accounting for Mortgage Servicing
Rights.   Without this accounting adjustment loan servicing
income would have increased by more than $164,000, or
approximately 40.00% when compared to the 1998 fiscal year.  The
outstanding balance of the Corporation's loan servicing
portfolio totaled $174.0 million and $151.1 million at June 30,
1999 and 1998, respectively.

OTHER EXPENSES:
--------------
The Corporation's total other expenses equaled $3,441,868 for
the 1999 fiscal year, an increase of $144,761, or 4.39%,
compared to $3,297,107 during the 1998 fiscal year.

During the 1999 fiscal period employee compensation and benefit
expense totaled $2,094,019, an increase of 7.66%, or $149,015.
The increase is the result of cost increases for employee wages,
Directors' fees and certain benefit expenses.  The Corporation
has also incurred an increase in expense related to its
Officer/Manager incentive payment plan, which is directly
related to the Corporation's net income.

Office occupancy and equipment expenses increased by $67,895, or
13.76%, to $561,173 for the current twelve month period.  The
increase results largely from an increase in the expense related
to third party service providers, some of which had been offset
by account credits in the prior fiscal year.

The Corporation's other expenses totaled $677,589 for the year
ending June 30, 1999, a $66,080, or 8.89%, decrease when
compared to the previous fiscal year.  The majority of the
decrease is related to timing differences relative to mortgage
origination expenses.  Additionally, expenses related to
foreclosed properties were significantly less during the current
year.  Losses incurred on the sale of foreclosed property during
the 1999 fiscal year were approximately $26,200 less than the
previous year, while the expense related to maintaining
foreclosed properties also decreased, by nearly $16,000, during
the year ending June 30, 1999.

INCOME TAXES:
------------
The Corporation's income tax expense increased by $32,697, or
2.73%, to $1,228,482 for the 1999 fiscal year.  The increase is
directly related to an increase in the Corporation's operating
income and approximates the statutory rate on pre-tax earnings,
less applicable tax credits.

                            4
<PAGE>
<PAGE>

       MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

COMPARISON OF THE OPERATING RESULTS FOR THE YEARS ENDING  JUNE
30, 1998 AND JUNE 30, 1997

GENERAL:
-------
For the fiscal year ending June 30, 1998 the Corporation
recorded net income totaling $2,039,393, an increase of
$201,013, or 10.93%, compared to net income of $1,838,380 earned
during the year ending June 30, 1997.

Since the beginning of the 1998 fiscal year, the Corporation's
total assets have increased by $2,519,060, or 1.68%, to
$152,160,204, compared to $149,641,144 at June 30, 1997. The
growth in assets occurred primarily in cash and cash
equivalents, specifically federal funds sold and mortgage loans
held for sale, and offset reductions in the outstanding balance
of the Corporation's net loans receivable and securities
portfolios.

The Corporation, like many lenders throughout the country, has
experienced a shrinkage in its loan portfolio as a result of a
flat yield curve which has prompted a significant, and lengthy,
decline in long term interest rates, while short term interest
rates have not decreased proportionately. The majority of the
residential and commercial loans which comprise the
Corporation's loan portfolio are adjustable rate mortgages. With
the overall reduction of long term fixed interest rates, many
borrowers have opted to refinance out of adjustable rate
mortgages to fixed rate mortgages. The Corporation originates
substantially all of its fixed rate residential mortgages for
sale in the national secondary mortgage market and only
originates fixed rate commercial mortgages on loans with very
short maturities. As a result, despite record overall loan
origination volumes, the outstanding balance of the portfolio,
net of adjustments, decreased $5,529,515 to $126,181,335 at June
30, 1998. Persistence of a flat yield curve will continue to put
pressure on the Corporation's net interest margin and therefore
its net income in future periods. The portion of the
Corporation's investment security portfolio, which was scheduled
to be held to maturity, decreased by $2,997,688 as a result of
the payoff of certain investments in the portfolio which had
callable features. The monies generated by these identified
reductions helped fund a $6,644,423 increase in cash and cash
equivalents and a $3,770,664 increase in mortgage loans held for
sale.

Total liabilities of the Corporation increased by $2,173,671 to
$137,659,533 at June 30, 1998, compared to $135,485,862 at June
30, 1997. Despite extensive competition from non-traditional,
uninsured, investment alternatives, aimed at luring customer
deposits from federally insured deposit instruments, the
Corporation, after the payment of approximately $5.5 million in
interest, reported a small increase, $431,313, in total deposits
at June 30, 1998 compared to the start of the 1998 fiscal year.
Total deposits were $112,179,831 and $11,748,518 at June 30,
1998 and 1997, respectively. At the end of the 1998 fiscal year,
the Corporation's total borrowings, Advances from the Federal
Home Loan Bank of New York, grew by $1,290,475, or 6.26%, to
$21,897,090. The Corporation's mortgage servicing escrow
balance, advances from borrowers for taxes and insurance, have
increased by $417,922, or 16.29%, to $2,982,958 at June 30,
1998, compared to $2,565,036 at June 30, 1997.

The fiscal year end balance of the Corporation's Shareholders'
equity increased by $345,389, or 2.44%, to $14,500,671, compared
to $14,155,282 at the start of the fiscal year. While net income
added in excess of $2 million to equity, the Corporation paid
$1,415,869 in cash dividends, including a $1.00 per share
special cash dividend, and utilized $275,722 towards the
repurchase of 15,261 shares of the Corporation's common stock.

NET INTEREST INCOME:
-------------------
Despite a 10 basis point reduction in its net interest spread,
the Corporation's 1998 fiscal year net interest income,
$5,564,442, remained nearly unchanged compared to the previous
year's net interest income of $5,540,244. The Corporation's net
interest spread for the year ending June 30, 1998 was 3.51%,
compared to a 3.61% net interest spread for the year ending June
30, 1997.

INTEREST INCOME:
---------------
Interest earned by the Corporation during the 1998 fiscal year
equaled $12,265,660, an increase of $320,671 or 2.68%, compared
to $11,944,989 earned during the 1997 fiscal year.

Income provided from the Corporation's loan portfolio, including
mortgage loans held for sale, generates the majority of the
interest earned by the Corporation. For the year ending June 30,
1998, loan interest income was $11,874,446, an increase of
$412,818, or 3.60%, compared to $11,461,628 earned during the
year ending June 30, 1997. The increase is the result of a $5.5
million increase in the average balance of the loan portfolio
and despite a 4 basis point decrease in the average yield earned
on these assets. During the 1998 fiscal year the average balance
outstanding totaled $138.8 million, yielding 8.56%, compared to
$133.3 million, yielding 8.60%, during the 1997 fiscal year.

Decreases in the average balances of the Corporation's
investment security and mortgage-backed security (MBS)
portfolios more than offset increases in the average yields
earned on the portfolios and resulted in lower earnings for both
during the recently concluded fiscal year. As was previously
mentioned, during the 1998 fiscal year several assets within the
investment security portfolio, with callable features, were
redeemed by their issuers. As a result, the average balance of
the Corporation's investment portfolio decreased from $5.3
million, yielding 6.42%, during the 1997 fiscal year to $3.8
million, yielding 6.64%, during the 1998 fiscal year. Overall,
interest provided from the investment security portfolio
decreased by $84,795 to $254,680 for the year ending June 30,
1998. The average balance of the Corporation's MBS portfolio,
which is comprised solely of adjustable rate mortgages,
decreased from $1.9 million, yielding 6.97%, during the 1997
fiscal year, to $1.4 million, yielding 7.76%, for the 1998
fiscal year. Interest earned from the MBS portfolio totaled
$110,899 during the 1998 period, a decrease of $21,120 from the
previous fiscal year.

INTEREST EXPENSE:
----------------
The Corporation's total interest expense was $6,701,218 during
the year ending June 30, 1998, an increase of $296,473, or
4.63%, compared to $6,404,745 recorded during the 1997 fiscal
year.

During the 1998 fiscal year the Corporation paid $5,525,633 in
interest on deposits, an increase of $357,349, or 6.91%,
compared to deposit interest expense of $5,168,284 during the
1997 fiscal period. The increase in deposit interest expense is
the direct result of an increase

                            5
<PAGE>
<PAGE>

       MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

in both the average balance and average cost of the
Corporation's deposits. During the 1998 fiscal period, average
deposits outstanding totaled $114.7 million, costing 4.82%,
compared to $109.3 million, costing 4.73%, during the 1997
fiscal year. Interest paid on the Corporation's borrowings,
Advances from the Federal Home Loan Bank of New York (FHLB
Advances), decreased by $60,876, or 4.92%, as a result of a
decrease in the average balance of borrowings. For the twelve
months ending June 30, 1998, the average balance of FHLB
Advances was $20.9 million, compared to $22.0 million, for the
twelve months ending June 30, 1997. The average cost for each of
the two years was nearly identical.

PROVISION FOR LOAN LOSSES:
-------------------------
Provisions for loan losses are charged to earnings to bring the
total allowance to a level considered appropriate based on
historical experience, the volume and type of lending conducted
by the Corporation, industry standards, the status of past due
principal and interest payments, general economic conditions -
particularly as they relate to the Corporation's market area -
and other factors related to the collectibility of the
Corporation's loan portfolio. The Corporation's provision for
loan loss totaled $300,000, for the year ending June 30, 1998,
compared to a $40,000 provision which was charged to earnings
during the 1997 period. During the 1998 fiscal period the
Corporation resolved, through foreclosure, several delinquent
mortgage loan accounts which resulted in net charge-offs of
approximately $270,000. At June 30, 1998 the Corporation's total
allowance for loan loss was $1,473,346, compared to $1,435,500
at June 30, 1997.

OTHER INCOME:
------------
Total other income earned by the Corporation during the 1998
fiscal year was $1,267,843, an increase of $226,667, or 21.77%,
compared to other income of $1,041,176 earned during the 1997
fiscal period.

The majority of the increase is related to the gain on the sale
of mortgages, which increased by $197,673, or 51.34%, to
$582,664 for the fiscal year ending June 30, 1998. As was
mentioned earlier, the Corporation sells substantially all of
its newly originated fixed rate mortgages in the national
secondary mortgage market, and the flat yield curve and low
interest rate environment, which has existed throughout the
entire fiscal year, has significantly increased the volume of
mortgages originated for sale.

Income earned by the Corporation's unconsolidated mortgage
banking partnership, PACE Funding Company, was $59,567 for the
1998 period, an increase of $37,042 in comparison to the 1997
fiscal year. PACE Funding Company originates residential
mortgages, servicing released, for sale to investors, one of
whom is the Corporation. The increase in the earnings from the
partnership are the result of an increase in mortgages
originated.

Service fees and other charges increased $32,301, or 25.38%, to
$159,549 for the year ending June 30, 1998. The increase was
largely attributable to increases in late payment, checking
account and mortgage conversion fees.

During the 1998 fiscal year the Corporation recognized income of
$54,817 from its unconsolidated land development joint venture
partnership, an increase of $25,090 over the 1997 fiscal year.
Income earned by the joint venture is the direct result of lot
sales of real estate owned by the partnership.
Despite a substantial increase in the Corporation's loans
serviced for others (from $129.5 million at June 30, 1997 to
$151.1 million at June 30, 1998), income generated from loan
servicing for others decreased by $49,778, or 16.93%, to
$244,211 for the year ending June 30, 1998. The decrease is
directly related to the amortization of mortgage servicing
rights, as required by Financial Accounting Standards No. 122
(SFAS 122) entitled "Accounting for Mortgage Servicing Rights."
Exclusive of this adjustment, the income from loan servicing
would have increased during the 1998 fiscal year.

Other operating income earned by the Corporation during the 1998
fiscal year was $165,787, a reduction of $26,909, or 13.96%,
when compared to the 1997 fiscal year. During the 1997 period
the Corporation had received a $35,000 settlement of a
deficiency judgment which resulted from a 1989 mortgage
foreclosure. No such income was included during the 1998 period.

OTHER EXPENSES:
--------------
During the 1998 fiscal year the Corporation's total other
expenses were $3,297,107, a reduction of $715,383, or 17.83%,
compared to total other expenses of $4,012,490 for the year
ending June 30, 1997.

The majority of the decrease is related to a reduction of
federal deposit insurance premium expense, which totaled
$844,055 during the 1997 period, compared to $115,156 for the
1998 period. During the first quarter of the 1997 fiscal year
the Corporation, in response to the passage of federal
legislation to recapitalize its insurance fund, paid a one-time,
pre-tax special assessment of $657,000. The assessment was
charged to all institutions insured by the Savings Association
Insurance Fund (SAIF). Included in the legislation was also a
provision which reduced the Corporation's ongoing insurance
premiums to a level nearly equal to its competitors, who are
insured by the Bank Insurance Fund (BIF). Both insurance funds,
SAIF and BIF, are part of the Federal Deposit Insurance
Corporation (FDIC).

Employee compensation and benefits expense decreased by $50,732,
or 2.54%, to $1,945,004 for the year ending June 30, 1998,
compared to $1,995,736 for the year ending June 30, 1997. There
were fewer employees working throughout the Corporation during
the 1998 period when compared to the 1997 year and this savings
more than offset any wage and benefit cost increases.

Other expenses of the Corporation totaled $743,669 during the
1998 fiscal year, an increase of $73,269, or 10.93%, compared to
$670,400 for the 1997 period. The majority of the increase is a
result of expenses related to loan origination activities which,
as reported earlier, were significantly greater than during the
comparable period. The Corporation also recognized increases in
expenses related to office supplies, contributions and in costs
related to properties owned as a result of foreclosure during
the 1998 fiscal year.

INCOME TAXES:
------------
The Corporation has recorded an income tax provision of
$1,195,785 for the fiscal year ending June 30, 1998, compared to
$690,550 for the fiscal year ending June 30, 1997. The income
tax provision during the 1997 fiscal year was substantially
reduced after an extensive review of all tax liabilities during
the first quarter of that fiscal year. The provision for the
1998 period approximates the statutory rate on the Corporation's
pre-tax earnings, less any applicable tax credits.

                            6
<PAGE>
<PAGE>

               LIQUIDITY AND CAPITAL RESOURCES

The Bank's primary source of funds are deposits, principal and
interest payments on loans, Federal Home Loan Bank (FHLB) of New
York advances and funds provided from operations.  While
scheduled loan payments and short-term investment maturities are
a relatively predictable source of funds, deposit flows are
significantly influenced by interest rates, general economic
conditions and more recently, the competition from traditional
and non-traditional financial instruments, specifically the
growth of mutual funds.

The Bank is required to maintain minimum levels of liquid assets
as defined by Office of Thrift Supervision (OTS) requirements.
This requirement, which may, depending upon economic conditions
and cash flows of the Bank, be varied from time to time at the
direction of the OTS, is based upon a percentage of deposits and
short-term borrowings.  The required ratio is currently 4%.
Elmira Savings & Loan's liquidity ratio for June 1999 was
13.02%.

An analysis of the three components of the Consolidated
Statements of Cash Flows provides a more detailed presentation
of the Bank's activities.  Net cash provided from operating
activities is normally a steady source of liquidity and this
area  provided $4,544,000 during the current fiscal year ending
June 30, 1999.  The period ending June 30, 1997 also provided a
positive $2,828,000 but year ending June 30, 1998 showed a
negative $1,605,000.  Two areas make up the majority of these
amounts.  Net income provided $2,142,000, $2,039,000 and
$1,838,000 during years ending June 30, 1999, 1998 and 1997,
respectively, while the net amounts provided from loan sales
offset by originations and purchase of loans for sale was
$2,421,000 <$3,715,000> and $1,139,000 for the same three
periods.

Net cash provided from investing activities was a negative
$10,387,000 for year ending June 30, 1999, positive $7,801,000
for the year ending June 30, 1998 and negative $11,227,000 for
the year ending June 30, 1997.  Again, the two main areas make
up the bulk of the differences.  Net other <increase> decrease
in loans receivable amounted to <$3,449,000>, $4,473,000 and
<$10,287,000> for the three periods while the net activity
between the purchase of securities versus the maturity or sale
of securities was <$8,190,000>, $3,009,000 and <$989,000> for
the comparable periods.  Additionally, to a much smaller degree,
proceeds from the sale of foreclosed real estate provided
$925,000, $408,000 and $120,000 for the three years.

Financing activities, the third component of cash flows,
decreased cash by $732,000 for period ending June 30, 1999 and
provided cash of $448,000 and $7,749,000 for periods ending June
30, 1998 and June 30, 1997.  Interest credited to deposit
accounts provided $5,096,000, $5,538,000 and $5,103,000 for the
three years but net other decreases in deposits offset most of
those gains.  These decreases amounted to $5,690,000 for the
1999 fiscal year and $5,107,000 and $8,000 for the comparable
periods. We continue to rely heavily on the FHLB for advances
and each period showed an increase.  These increases were
$690,000, $1,290,000 and $2,991,000 for the fiscal years ending
June 30, 1999, 1998 and 1997, respectively.  The final
significant item in this component is dividends paid and the net
cash used for the three periods amounted to $834,000, $1,416,000
and $577,000, respectively.

ES&L has available to it significant funds in the form of retail
repurchase agreements and advances from FHLB of New York, though
there can be no assurance as to the impact of any increase in
such borrowings on the Bank's cost of funds.  There are no
limits on the amount of advances made to Banks that are
Qualified Thrift Lenders (QTLs), of which the Bank is one, or
that are exempt from the QTL limitations, in order to replace
outflows occurring in the 30 days immediately preceding an
advance application, or advances made to fulfill outstanding
advance commitments, including AHP, CIP and CDF commitments, or
in order to repay maturing advances.  Advances and new money
commitments to ES&L for purposes other than what was stated
above may not exceed net new, $150 million per calendar month or
30% of a customer's assets without prior approval of the FHLB's
Board of Directors or its Executive Committee.

The Bank has included in its Y2K preparedness and contingency
plans, steps necessary to maintain adequate liquidity levels.
ES&L is not aware of any other trends, events or uncertainties,
other than those disclosed, that will have or that are
reasonably likely to have a material affect on the Bank's
liquidity position, operations or capital resources.

                            7
<PAGE>
<PAGE>

                   YEAR 2000 CONSIDERATIONS

A great deal of information has been disseminated about the
possible computer problems that may occur in the Year 2000. Many
computer programs that can only distinguish the final two digits
of the year (a common computer practice in earlier years) are
expected to read entries for the year 2000 as 1900, and compute
payment, interest or delinquency information based on the wrong
date, or are expected to be unable to function all together.

Rapid and accurate data processing is essential to the operation
of our Bank and, as a result, during 1997 we developed a Year
2000 preparedness plan. In 1998 the Bank developed a contingency
plan. Our plans have been reviewed and approved by our Board of
Directors and have been submitted and reviewed by our Regulator,
the Office of Thrift Supervision.

The Bank has tested all of our internal systems for Year 2000
readiness. The vast majority of all of our equipment was ready
for the Year 2000, and the small amount of equipment that was
not has either been replaced or updated. During the fiscal year
ending June 30, 1999 the Corporation has incurred expenses
totaling approximately $11,400 related to our Y2K preparedness
planning. No expense was incurred in the fiscal year ending June
30, 1998 and the Bank does not anticipate incurring significant
expense between now and the end of the 1999 calendar year,
although there can be no assurance in this regard.

The Bank's plan also included procedures to contact and monitor
the Year 2000 readiness of third party service providers,
including NCR Corporation, the company responsible for the
Bank's customer account processing. NCR has in place a plan that
has been reviewed by external audit organizations, as well as
Federal Bank Examiners.

All of the Bank's other major service providers have been
contacted and have provided the Bank with information regarding
their Year 2000 plans. Additionally, the Bank has surveyed our
commercial loan customer base, asking for information on how
these companies are addressing any potential problems.

The Bank has provided customers with information about our
readiness, and has provided written literature to identify how
the banking industry, as a whole, has prepared itself for the
transition to the Year 2000.

In summary, the Bank understands the significance of any
potential problem and believes it is poised to be more than
adequately prepared for those factors within our control.




         IMPACT OF INFLATION AND CHANGING PRICES

The Bank's Consolidated Financial Statements and Notes thereto,
presented herein, have been prepared in accordance with
generally accepted accounting principles, which require the
measurement of financial position and operating results in terms
of historical dollars without consideration of the changes in
the relative purchasing power of money over time due to
inflation. The impact of inflation is reflected in the increased
cost of the Bank's operations. Unlike most industrial companies,
nearly all the assets and liabilities of the Bank are monetary.
As a result, interest rates have a greater impact on the Bank's
performance than do the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or
to the same extent as the price of goods and services.

                            8
<PAGE>
<PAGE>



         [Letterhead of Mengel, Metzger, Barr & Co. LLP]









         REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
         --------------------------------------------------



To the Board of Directors of
ES&L Bancorp, Inc. and Subsidiary

We have audited the accompanying September 27, 1999 of ES&L
Bancorp, Inc. and Subsidiary as of June 30, 1999 and 1998, and
the related consolidated statements of income, changes in
shareholders' equity and comprehensive income, and cash flows
for each of the years in the three-year period ended June 30,
1999.  These consolidated financial statements are the
responsibility of the Corporation's management.  Our
responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of
material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures
in the consolidated financial statements.  An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of ES&L Bancorp, Inc. and
Subsidiary as of June 30, 1999 and 1998, and the results of
their operations and their cash flows for each of the years in
the three-year period ended June 30, 1999, in conformity with
generally accepted accounting principles.


                        /s/ Mengel, Metzger, Barr & Co. LLP


Elmira, New York
July 16, 1999

                              9
<PAGE>
<PAGE>
                 CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                          June 30,
                                                   -------------------------
                                                      1999          1998
                                                   ----------    -----------
<S>                                                <C>            <C>
ASSETS
------
Cash and due from banks                            $    791,116    $  1,362,039
Federal funds sold                                            -       6,000,000
Short-term investments                                    1,394           5,316
                                                   ------------    ------------
CASH AND CASH EQUIVALENTS                               792,510       7,367,355

Investment securities:
  Available for sale                                  1,051,032       1,294,037
  Held to maturity                                    7,533,271       1,161,722
Other investments                                     1,710,000               -
Mortgage loans held for sale                          5,541,981       8,231,474
Loans receivable, net of allowance for loan
   losses of $1,268,568 and $1,473,346 at
   1999 and 1998, respectively                      129,286,692     126,181,335
Federal Home Loan Bank stock, at cost                 1,313,100       1,313,100
Foreclosed real estate                                   34,000         485,226
Investment in joint venture - acquisition,
   development and construction arrangement             480,272         765,952
Investment in mortgage banking partnership              182,334         197,646
Property and equipment, net                           2,811,006       2,901,870
Accrued interest receivable:
   Loans receivable                                     757,994         731,153
   Investment securities and other                       57,864          44,163
Other assets                                          2,129,752       1,485,171
                                                   ------------    ------------
TOTAL ASSETS                                       $153,681,808    $152,160,204
                                                   ============    ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Deposits:
   Non-interest bearing                            $  5,093,766    $  5,506,587
   Interest bearing                                 106,492,529     106,673,244
                                                   ------------    ------------
                                                    111,586,295     112,179,831
Advances from Federal Home Loan Bank                 22,586,951      21,897,090

Accrued interest payable:
   Deposits                                               4,090           7,607
   Borrowings                                            85,356          84,614
Advances from borrowers for taxes and insurance       3,192,995       2,982,958
Other liabilities                                       587,021         507,433
                                                   ------------    ------------
TOTAL LIABILITIES                                   138,042,708     137,659,533

Shareholders' equity:
   Preferred stock:
      Authorized, 500,000 shares
      Issued, none                                            -               -
   Common stock, $.01 par value:
      Authorized 3,000,000 shares
      Issued 866,166 and 855,967 shares,
        respectively                                      8,662           8,560
   Additional paid-in capital                         2,711,666       2,599,554
   Retained earnings, substantially restricted       13,527,648      12,219,481
   Accumulated other comprehensive income                15,643          57,069
                                                   ------------    ------------
                                                     16,263,619      14,884,764
Less cost of treasury stock, 34,131 and
  24,194 shares, respectively                           624,519         384,093
                                                   ------------    ------------
                                                     15,639,100      14,500,671
                                                   ------------    ------------
TOTAL SHAREHOLDERS' EQUITY                         $153,681,808    $152,160,204
                                                   ============    ============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
                              10
<PAGE>
<PAGE>
              CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                     Year ended June 30,
                                          ---------------------------------------
                                             1999          1998          1997
                                          ----------    ----------     ----------
<S>                                       <C>           <C>            <C>
Interest income
  Loans                                   $11,016,230   $11,874,448    $11,461,628
  Investment securities                       104,210       254,680        339,475
  Mortgage-backed securities                   94,208       110,899        132,019
  Interest-earning deposits and other          93,971        25,635         11,867
                                          -----------   -----------    -----------
TOTAL INTEREST INCOME                      11,308,619    12,265,660     11,944,989

Interest expense:
  Deposits                                  5,106,339     5,525,633      5,168,284
  Borrowings                                  807,778     1,175,585      1,236,461
                                          -----------   -----------    -----------
TOTAL INTEREST EXPENSE                      5,914,117     6,701,218      6,404,745
                                          -----------   -----------    -----------
NET INTEREST INCOME                         5,394,502     5,564,442      5,540,244

Provision for loan losses                     (25,000)      300,000         40,000
                                          -----------   -----------    -----------
NET INTEREST INCOME AFTER
  PROVISION FOR LOAN LOSSES                 5,419,502     5,264,442      5,500,244

Other income:
  Service fees and other changes              166,374       159,549        127,248
  Net gain (loss) on investment
    securities                                      -         1,248        (10,000)
  Income from loan servicing                  140,070       244,211        293,989
  Income from unconsolidated joint
    venture                                    33,677        54,817         29,727
  Income from mortgage banking
    partnership                                61,586        59,567         22,525
  Gain on sale of mortgages                   690,443       582,664        384,991
  Other operating income                      300,659       165,787        192,696
                                          -----------   -----------    -----------
TOTAL OTHER INCOME                          1,392,809     1,267,843      1,041,176

Other expenses:
  Employee compensation and benefits        2,094,019     1,945,004      1,995,736
  Office occupancy and equipment              561,173       493,278        502,299
  Federal deposit insurance premiums          109,087       115,156        844,055
  Other expenses                              677,589       743,669        670,400
                                          -----------   -----------    -----------
TOTAL OTHER EXPENSES                        3,441,868     3,297,107      4,012,490
                                          -----------   -----------    -----------
INCOME BEFORE INCOME TAXES                  3,370,443     3,235,178      2,528,930

Income taxes                                1,228,482     1,195,785        690,550
                                          -----------   -----------    -----------
NET INCOME                                $ 2,141,961   $ 2,039,393    $ 1,838,380
                                          ===========   ===========    ===========

Earnings per common share                 $      2.57   $      2.44    $      2.17
                                          ===========   ===========    ===========

Earnings per common share - assuming
  dilution                                $      2.55   $      2.41    $      2.14
                                          ===========   ===========    ===========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
                              11
<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME

Years ended June 30, 1999, 1998 and 1997
----------------------------------------
<TABLE>
<CAPTION>
                                                             Retained       Accumulated
                                               Additional    earnings,         other
                                      Common    paid-in    substantially   comprehensive Treasury
                                      stock     capital     restricted         income      stock      Total
                                      ------   ----------  -------------   ------------- --------   --------
<S>                                   <C>       <C>         <C>             <C>          <C>         <C>
Balance at July 1, 1996               $5,665    $2,580,092   $10,334,941    $ 37,888    $ (46,441)  $12,912,145

Comprehensive income:
  Net income                               -             -     1,838,380           -            -     1,838,380
  Other comprehensive income,
    net of tax:
     Change in net unrealized gain
      on securities available
      for sale                             -             -             -      21,594            -        21,594
                                      ------    ----------   -----------    --------    ---------   -----------
      Comprehensive income                 -             -     1,838,380      21,594            -     1,859,974

Issuance of 283,147 shares in
  connection with three-for-two
  stock split                          2,832        (2,832)            -           -            -             -

Dividend in lieu of fractional
  shares due to three-for-two
  stock split                              -             -        (1,405)          -            -        (1,405)

Dividends on common stock
  ($.68 per share)                         -             -      (575,959)          -            -      (575,959)

Issuance of 6,315 shares in
  connection with options
  exercised at $3 5/9 per
  share                                   63        22,394             -           -            -        22,457

Purchase of 3,917 shares of
  treasury stock                           -             -             -           -      (61,930)      (61,930)
                                      ------    ----------   -----------    --------    ---------   -----------
BALANCE AT JUNE 30, 1997               8,560     2,599,654    11,595,957      59,482     (108,371)   14,155,282

Comprehensive income:
  Net income                               -             -     2,039,393           -            -     2,039,393
  Other comprehensive income,
    net of tax:
     Change in net unrealized gain
      on securities available for
      sale, net reclassification
      amount                               -             -             -      (2,413)           -        (2,413)
                                      ------    ----------   -----------    --------    ---------   -----------
      Comprehensive income                 -             -     2,039,393      (2,413)           -     2,036,980

Dividends on common stock
  ($1.68 per share)                        -             -    (1,415,869)          -            -    (1,415,869)

Purchase of 15,261 shares of
  treasury stock                           -             -             -           -     (275,722)     (275,722)
                                      ------    ----------   -----------     -------    ---------   -----------
BALANCE AT JUNE 30, 1998               8,560     2,599,654    12,219,481      57,089     (384,093)   14,500,671

Comprehensive income:
  Net income                               -             -     2,141,961           -            -     2,141,961
  Other comprehensive income,
    net of tax:
     Change in net unrealized gain
      on securities available for
      sale                                 -             -             -     (41,426)           -       (41,426)
                                      ------    ----------   -----------    --------    ---------   -----------
      Comprehensive income                 -             -     2,141,961     (41,426)           -     2,100,535

Dividends on common stock
  ($1.00 per share)                        -             -      (833,794)          -            -      (833,794)

Issuance of 10,199 shares in
  connection with options exercised
  at $3 5/9 per share                    102        36,163             -           -            -        36,265

Tax benefit from exercise of
  non-incentive stock options              -        75,849             -           -            -        75,849

Purchase of 9,937 shares of
  treasury stock                           -             -             -           -     (240,426)     (240,426)
                                      ------    ----------   -----------     -------    ---------   -----------
BALANCE AT JUNE 30, 1999              $8,862    $2,711,666   $13,527,648     $15,643    $(624,519)  $15,639,100
                                      ======    ==========   ===========     =======    =========   ===========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
                         12
<PAGE>
       CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                     Year ended June 30,
                                          ---------------------------------------
                                             1999          1998          1997
                                          ----------    ----------     ----------
<S>                                       <C>           <C>            <C>
CASH FLOWS - OPERATING ACTIVITIES
---------------------------------
  Net Income                              $  2,141,961  $  2,039,393   $  1,838,380
  Adjustments to reconcile net cash
   cash provided from (used for)
   operating activities:
    Depreciation                               174,151       172,874        175,774
    Deferred income taxes                      337,756       227,484         17,254
    Provision for loan losses                  (25,000)      300,000         40,000
    Net amortization                           488,041       214,286         85,201
    Deferred loan origination fees             (60,414)      (30,490)       (22,515)
    Income from unconsolidated joint
      venture                                  (33,677)      (54,817)       (29,727)
    Income from mortgage banking
      partnership                              (61,586)      (59,567)       (22,525)
    Net (gain) loss on investment
      securities                                     -        (1,248)        10,000
    Net loss on sale of property and
      equipment                                      -             -          3,091
    Net (gain)loss on sale of foreclosed
      real estate                              (78,926)       24,786         19,847
    Gain on sale of mortgages                 (690,443)     (582,664)      (384,991)
    Proceeds from loan sales                52,522,317    41,739,938     27,155,312
    Originations and purchases of loans
      held for sale                        (50,101,192)  (45,455,024)   (26,016,597)
    Changes in certain assets and
    liabilities affecting operations:
      Accrued interest receivable              (40,542)      125,606       (106,982)
      Other assets                            (180,915)     (299,520)        80,522
      Accrued interest payable                  (2,775)       (4,251)        (5,682)
      Other liabilities                        155,437        38,212         (8,240)
                                          ------------  ------------   ------------
NET CASH PROVIDED FROM (USED FOR)
OPERATING ACTIVITIES                         4,544,193    (1,605,002)     2,828,122

CASH FLOWS - INVESTING ACTIVITIES
---------------------------------
  Net other (increase) decrease in loan
    receivable                              (3,448,873)    4,472,577    (10,286,971)
  Net increase in Federal Home Loan
    Bank stock                                       -             -       (209,300)
  Investment in foreclosed real estate         (20,713)      (49,894)        (9,102)
  Investment in joint venture                  319,357       (35,134)      (149,109)
  Investment in mortgage banking
    partnership                                 76,898        45,239          9,272
  Proceeds from sale of foreclosed real
    estate                                     925,093       408,191        120,038
  Proceeds from sale of securities
    available for sale                               -         2,362              -
  Purchase of securities available for
    sale                                      (100,778)            -              -
  Purchase of securities held to
    maturity                                (7,386,392)            -     (2,324,062)
  Proceeds from maturities of securities
    held to maturity                         1,006,975     3,006,688      1,335,269
  Purchase of other investments             (1,710,000)            -              -
  Principal repayments on mortgage-
    backed securities                          284,262       199,652        502,279
  Proceeds from sale of property and
    equipment                                        -             -         13,464
  Purchase of property and equipment           (83,287)      (21,009)      (124,351)
  Purchase of mortgage servicing rights       (249,987)     (227,366)      (104,925)
                                          ------------  ------------   ------------
NET CASH (USED FOR) PROVIDED FROM
INVESTING ACTIVITIES                       (10,387,445)    7,801,306    (11,227,498)

<PAGE>
CASH FLOWS - FINANCING ACTIVITIES
---------------------------------
  Interest credited to deposit accounts      5,096,411     5,538,398      5,103,199
  Net other decrease in deposits            (5,689,947)   (5,107,085)        (7,510)
  Net increase in advances from Federal
    Home Loan Bank                             689,861     1,290,475      2,991,055
  Advances from borrowers for taxes and
    insurance                                  210,037       417,922        278,638
  Proceeds from exercise of stock options       36,265             -         22,457
  Purchase of treasury stock                  (240,426)     (275,722)       (61,930)
  Dividends paid                              (833,794)   (1,415,869)      (577,364)
                                          ------------  ------------   ------------
NET CASH (USED FOR) PROVIDED FROM
FINANCING ACTIVITIES                          (731,593)      448,119      7,748,545
                                          ------------  ------------   ------------
NET (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS                   (6,574,845)    6,644,423       (650,831)
Cash and cash equivalents at beginning
  of year                                    7,367,355       722,932      1,373,763
                                          ------------  ------------   ------------
CASH AND EQUIVALENT AT END OF YEAR        $    792,510  $  7,367,355   $    722,932
                                          ============  ============   ============
SUPPLEMENTAL DISCLOSURE OF
--------------------------
  CASH FLOW INFORMATION
  ---------------------
    Cash paid during the year for:
      Interest on advances from Federal
        Home Loan Bank                    $    807,036  $  1,160,666   $  1,239,795
                                          ============  ============   ============
      Income taxes                        $  1,113,622  $  1,101,335   $    782,909
                                          ============  ============   ============
SUPPLEMENTAL SCHEDULE OF NONCASH
--------------------------------
   INVESTING ACTIVITIES
   --------------------
     Loans transferred to foreclosed
       real estate                        $    374,228  $    737,309   $    170,968
                                          ============  ============   ============
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.

                             13
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
--------------------------------------------------------
ACCOUNTING POLICIES
-------------------
--------------------------------------------------------

NATURE OF OPERATIONS
--------------------
ES&L Bancorp, Inc. and Subsidiary (the "Corporation") provides a
variety of financial services to individuals and corporate
customers through its offices in Elmira and Ithaca, New York.
The Corporation's primary sources of revenue are from single
family residential loans to individuals and commercial mortgage
loans to small and middle market businesses.

PRINCIPLES OF CONSOLIDATION
---------------------------
ES&L Bancorp, Inc. is a unitary savings and loan holding
company, which engages in no significant business activity
other than holding the stock of Elmira Savings and Loan, F.A.
(the "Bank") and operating the business of a savings and loan
through the Bank.  The consolidated financial statements include
the accounts of the Corporation, its wholly-owned subsidiary,
the Bank and the wholly-owned subsidiaries of the Bank, Brilie
Corporation (D/B/A ES&L Financial Services) and ES&L Mortgage
Corporation (D/B/A Cayuga Mortgage Company).   All significant
intercompany transactions and balances have been eliminated in
consolidation.

CASH AND CASH EQUIVALENTS
-------------------------
For purposes of reporting cash flows, cash and cash equivalents
include cash, due from banks, federal funds sold, and short-term
investments, with original terms to maturity of 90 days or less.

INVESTMENTS SECURITIES
----------------------
The Corporation has classified as held to maturity, all debt
securities including certain mortgage-backed securities which
the Corporation has the positive intent and ability to hold
until maturity.  These securities are carried at amortized cost.
All other debt and equity securities, including certain
mortgage-backed securities, having readily determinable fair
values have been categorized as securities available for sale
and are carried at fair value.  Unrealized gains and losses for
these securities are reported in other comprehensive income.
The (decrease) increase in unrealized gains amounted to
$(41,426), $(2,413) and $21,594, net of deferred taxes of
$(27,616), $(1,608) and $14,396 for 1999, 1998 and 1997,
respectively.  The Corporation has no securities classified as
trading securities.

Realized gains or losses are recognized upon the sale of
securities on a specific identification basis.

Securities are exposed to various risks, such as interest rate,
market and credit risk.  Due to the risks associated with
securities and the uncertainty related to changes in their fair
value, it is at least reasonably possible that changes in risk
could affect the Corporation.

OTHER INVESTMENTS
-----------------
Other investments consist of certificates of deposit with
original maturities of between six and twenty-four months.
Certificates of deposit are recorded at cost, which approximates
market value, and are generally held until maturity.

MORTGAGE LOANS HELD FOR SALE
----------------------------
Mortgage loans held for sale are carried at the lower of cost or
estimated market value, determined in the aggregate.  Market
values of the mortgage loans held for resale approximate cost.
The mortgage loans held for resale represent fixed rate
one-to-four family mortgage loans, which are to be sold pursuant
to forward commitments.  For purposes of determining the gain on
the sale of loans sold in the secondary market, normal servicing
fees are determined by reference to the stipulated servicing fee
set forth in the loan sale agreements.

LOANS RECEIVABLE
----------------
Loans held in portfolio are stated at the principal amount
outstanding, less the allowance for losses and net deferred
loan origination fees and costs.  Interest is accrued as earned
unless collectibility of the loan is in doubt, at which time
an allowance is provided.

Uncollectible interest on loans that are contractually past due
is charged off, or an allowance is established based on
management's periodic evaluation.  The allowance is established
by a charge to interest income equal to all interest previously
accrued and still due, and income is subsequently recognized
only to the extent that cash payments are received until, in
management's judgment, the borrower's ability to make periodic
interest and principal payments is back to normal, in which case
the loan is returned to accrual status.  Interest income
generally is not recognized on specific impaired loans unless
the likelihood of further loss is remote.  Interest payments
received on such loans are applied as a reduction of the loan
principal balance.

                          14
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
--------------------------------------------------------
ACCOUNTING POLICIES, CONT'D
-------------------

LOAN FEES
---------
All loan origination fees received from loans with similar
characteristics, net of direct origination costs, are deferred
and amortized to interest income using the level yield method,
giving effect to actual loan prepayments.  Fees received for
loan commitments that are expected to be drawn upon, based on
the Bank's experience with similar commitments, are deferred
and amortized over the life of the loan using the level yield
method.  Fees for other loan commitments are deferred and
amortized over the loan commitment period on a straight-line
basis.

ALLOWANCE FOR POSSIBLE LOAN LOSSES
----------------------------------
The allowance for possible loan losses is maintained at a level
which management considers adequate to provide for
potential loan losses based upon an evaluation of known and
inherent risks in the loan portfolio.  Management's
evaluation is based upon a continuing review of the loan
portfolio which includes many factors, such as identification
of adverse situations which may affect the borrower's ability to
repay, a review of overall portfolio quality and an
assessment of current and future economic conditions.

Management believes that the allowance for loan losses is
adequate.  While management uses available information
to recognize losses on loans and foreclosed real estate, future
additions to the allowances may be necessary based
on changes in local economic conditions.  In addition,
regulatory agencies, as an integral part of their examination
process, periodically review the Bank's allowances for losses on
loans and foreclosed real estate.  Such agencies
may require the Bank to recognize additions to the allowances
based on their judgments about information available
to them at the time of their examination.

Management considers a loan impaired when, based on current
information and events, it is probable that the Bank
will be unable to collect all amounts of principal and interest
under the original terms of the loan agreement.
Accordingly, the Bank measures certain impaired commercial
mortgage loans based on the present value of expected
future cash flows, discounted at the loan's effective interest
rate or, at the loan's observable market price or fair value
of collateral.  Impairment losses are included in the allowance
for loan losses through a charge to the provision for
loan losses.  The Bank recognizes interest income on impaired
loans using the cash basis of income recognition.

MORTGAGE SERVICING RIGHTS
-------------------------
The cost of mortgage loans purchased or originated and
subsequently sold with servicing rights retained is allocated
between the mortgage servicing rights and the loans based on
their relative fair value.  The mortgage servicing rights
are amortized in proportion to, and over the period of,
estimated net servicing income.  Additionally, mortgage
servicing rights are assessed for impairment based on their fair
value, determined for each group of underlying loans
with similar risk characteristics.

During 1999 and 1998, approximately $1,209,000 and $754,000,
respectively, of costs of acquiring the rights to
service mortgage loans were capitalized and included in other
assets in the accompanying consolidated balance
sheets.  Amortization of servicing rights amounted to $435,000,
$166,700 and $65,000 for the years ended June 30,
1999, 1998 and 1997, respectively.  The aggregate fair value of
mortgage servicing rights is approximately
$2,519,000 and $1,165,000 at June 30, 1999 and 1998,
respectively.  Fair value is based on fundamental analysis
and the present value of expected future cash inflows.

For measuring impairment, mortgage servicing rights are
stratified based on one or more of the predominant risk
characteristics of the underlying loans.  Such characteristics
include the loan size, interest rate, date of origination,
loan term, and geographic region.  Impairment is recognized
through a valuation allowance for each stratum, as
necessary.  At June 30, 1999 and 1998, no valuation allowance
has been recorded.

FORECLOSED REAL ESTATE
----------------------
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 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.

PROPERTY AND EQUIPMENT
----------------------
Property and equipment are carried at cost.  Depreciation is
computed on the straight-line method over the estimated
useful lives of the related assets.  Repairs and maintenance, as
well as renewals and replacements of a routine nature, are
charged to operations, while costs incurred to improve or extend
the life of existing assets are capitalized.

                          15
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
--------------------------------------------------------
ACCOUNTING POLICIES, CONT'D
---------------------

INCOME TAXES
------------
Deferred income tax assets and liabilities arise from temporary
differences associated with differences between the
financial statement and tax basis of assets and liabilities, as
measured by the enacted tax rates which are expected to
be in effect when these differences reverse. Deferred tax
expense (credit) is a result of the changes in deferred tax
assets and liabilities, except for the change in deferred taxes
related to unrealized gains on securities available for
sale which is reflected in other comprehensive income.  The
principle types of temporary differences between assets
and liabilities for financial statement and tax return purposes
are depreciation, nonrefundable loan fees, certain
postretirement benefits, allowance for loan losses incurred
after July 1, 1988, mortgage servicing rights, certain
accrued expenses and unrealized gains on securities available
for sale.

COMPREHENSIVE INCOME
--------------------
On July 1, 1998, the Bank adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income".  SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its
components.  Comprehensive income represents net income and the
net change in unrealized gains or losses on securities available
for sale, net of taxes, and is presented in the Consolidated
Statements of Changes in Shareholders' Equity and Comprehensive
Income.  Prior year consolidated financial statements have been
reclassified to conform to the requirements of SFAS No. 130.

FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK
------------------------------------------------------
In the normal course of business to meet the financing needs of
its customers and to reduce its own exposure to fluctuations in
interest rates, the Bank is a party to financial instruments
with off-balance-sheet risk.  These financial instruments
include loan commitments, standby letters of credit, loans
written with interest rate caps and floors, and forward
contracts.  Those instruments involve, to varying degrees,
elements of credit and interest rate risk in excess of the
amount recognized in the balance sheet.  The contract or
notional amounts of those instruments reflect the extent of
involvement the Bank has in particular classes of financial
instruments.

The Bank considers its primary market area for lending and
savings activities to be Chemung, Tompkins, Steuben,
Schuyler and Tioga Counties in New York and Tioga and Bradford
Counties in Pennsylvania.  Although the Bank has a diversified
loan portfolio, a substantial portion of its debtors' ability to
honor their contracts is reliant upon the economic stability of
the area.

The Bank's exposure to credit loss in the event of non
performance by the other party to the financial instrument for
loan commitments and standby letters of credit is represented by
the contractual or notional amount of those instruments.  The
Bank uses the same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet
instruments.  For interest rate caps, floors, and forward
contracts, the contract or notional amounts do not represent
exposure to credit loss.  The Bank controls the credit risk of
forward contracts through credit approvals, limits and
monitoring procedures.

Loan commitments are agreements to lend to a customer as long as
there is no violation of any condition established in the
contract.  Loan commitments generally have fixed expiration
dates or other termination clauses and may require payment of a
fee.  The Bank evaluates each customer's creditworthiness on a
case-by-case basis.  The amount of collateral obtained, if
deemed necessary by the Bank upon extension of credit, is based
on management's credit evaluation.  Collateral held varies but
may include accounts receivable, inventory, property, plant and
equipment, income-producing commercial properties, and
residential and personal properties.

Forward contracts are written primarily with government
agencies, whereby the agency agrees to purchase substantially
all fixed-rate residential mortgage loans originated by the
Bank.  Risks arise from the possible inability of counterparties
to meet the terms of their contracts.

The Bank writes variable rate loan contracts with interest rate
caps and floors in order to manage its interest rate exposure.
Substantially, all variable rate loans are held by the Bank; the
interest rate caps and floors enable both customers and the Bank
to transfer, modify, or reduce their interest rate risk.

Standby letters of credit written are conditional commitments
issued by the Bank to guarantee the performance of a
customer to a third party.  Those guarantees are primarily
issued to support borrowing arrangements.  The credit risk
involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers.

                          16
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A:   NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
---------------------------------------------------------
ACCOUNTING POLICIES, CONT'D
-------------------

EARNINGS PER COMMON SHARE
-------------------------
During fiscal 1998, the Bank adopted the provisions of Statement
of Financial Accounting Standards No. 128, "Earnings Per Share"
(SFAS 128).  SFAS 128 changes the manner in which earnings per
share (EPS) amounts are calculated and presented.  Under SFAS
128 two EPS amounts are required - basic EPS and diluted EPS.

The numerator for the basic and diluted EPS equals net income
for each of the years.  For basic EPS the weighted average
shares actually outstanding (denominator) amounted to 832,346,
836,303 and 846,220 shares for the years ended June 30, 1999,
1998 and 1997, respectively.  For diluted EPS, the effect of
dilutive stock options was to add weighted average shares of
6,017, 10,938 and 12,438 shares for the years ended June 30,
1999, 1998 and 1997, respectively.  As a result, the denominator
for diluted EPS amounted to 838,363, 847,241 and 858,658 shares
for 1999, 1998 and 1997, respectively.

USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
-----------------------------------------------------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during
the reporting period.  Actual results could differ from those
estimates.

NOTE B:   INVESTMENT SECURITIES
-------------------------------

<PAGE>
The amortized cost and fair value of investments in securities
are as follows:
<TABLE>
<CAPTION>
June 30, 1999:                                  Gross         Gross
                                 Amortized   Unrealized    Unrealized    Fair
                                    Cost        Gains        Losses      Value
                                 ---------   ----------    ----------    -----
<S>                              <C>          <C>           <C>           <C>
Securities available for sale
  Corporate stock                $  136,215    $35,332      $ (9,260)    $  162,287
  Mortgage-backed securities        888,745         --            --        888,745
                                 ----------    -------      --------     ----------
                                 $1,024,960    $35,332      $ (9,260)    $1,051,032
                                 ==========    =======      ========     ==========

Securities held to maturity:
  U.S. Government and its
    agencies                     $4,380,258    $    --      $(10,660)    $4,369,598
  Corporate debt securities          18,411        145           --          18,556
  Mortgage-backed securities      3,134,602      2,204       (13,186)     3,123,620
                                 ----------    -------      --------     ----------
                                 $7,533,271    $ 2,349      $(23,846)    $7,511,774
                                 ==========    =======      ========     ==========
</TABLE>
<TABLE>
<CAPTION>
June 30, 1998:                                  Gross         Gross
                                 Amortized   Unrealized    Unrealized    Fair
                                    Cost        Gains        Losses      Value
                                 ---------   ----------    ----------    -----
<S>                              <C>          <C>           <C>           <C>
Securities available for sale
  Corporate stock                $   34,437    $46,478      $     --     $   81,915
  Mortgage-backed securities      1,163,485     48,637            --      1,212,122
                                 ----------    -------      --------     ----------
                                 $1,198,922    $95,115      $     --     $1,294,037
                                 ==========    =======      ========     ==========

Securities held to maturity:
  U.S. Government and its
    agencies                     $1,000,000    $   940      $     --     $1,000,940
  Corporate debt securities          25,244         15            --         25,259
  Mortgage-backed securities        136,478         --            --        136,478
                                 ----------    -------      --------     ----------
                                 $1,161,722    $   955      $     --     $1,162,677
                                 ==========    =======      ========     ==========
</TABLE>

                          17
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B:   INVESTMENT SECURITIES, CONT'D
-------------------------------

The amortized cost and fair value of debt securities at June 30,
1999, by contractual maturity, are shown below.  Expected
maturities will differ from contractual maturities because
borrowers may have the right to repay obligations with or
without call or prepayment penalties.  All mortgage-backed
securities mature after ten years.
<TABLE>
<CAPTION>

                                        Securities Held
                                          to Maturity
                                   ---------------------------
                                   Amortized           Fair
                                     Cost             Value
                                   ----------      -----------
<S>                                <C>             <C>
Due in one year or less            $       --       $       --
Due after one year through
  five years                        4,380,258        4,369,598
Due after five years through
  ten years                                --               --
Due after ten years                    18,411           18,556
                                   ----------       ----------
                                   $4,398,669       $4,388,154
                                   ==========       ==========
</TABLE>
Proceeds and gross realized gains and losses from sales and
maturities of securities are as follows:
<TABLE>
<CAPTION>
                              Securities Available for Sale
                          -------------------------------------
                          Proceeds
                            from
                          sales and    Realized      Realized
                          maturities     gains        losses
                          -------------------------------------
<S>                        <C>          <C>           <C>
Year ended June 30,
------------------
              1999         $   --      $   --        $   --
              1998          2,362       1,037            --
              1997             --          --            --

<CAPTION>
                              Securities Held to Maturity
                          -------------------------------------
                          Proceeds
                            from
                          sales and    Realized      Realized
                          maturities     gains        losses
                          -------------------------------------
<S>                        <C>          <C>           <C>
Year ended June 30,
------------------
              1999         $1,006,975  $   --        $    --
              1998          3,006,688     211             --
              1997          1,335,269      --         10,000
</TABLE>

                          18
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C:   LOANS RECEIVABLE
--------------------------

Loans receivable consist of the following:

<TABLE>
<CAPTION>
                                                          June 30,
                                                   -------------------------
                                                      1999          1998
                                                   ----------    -----------
<S>                                                <C>            <C>
Conventional first mortgage loans:
  Residential                                     $ 81,909,305   $ 81,576,916
  Commercial                                        25,870,595     26,203,528
  Construction loans                                10,892,305      4,993,395
Loans on savings accounts                              394,094        263,905
Education loans                                        147,527        333,449
Consumer loans                                       5,309,915      5,621,782
Demand notes                                         1,369,269        953,474
Home equity lines of credit                          4,316,003      5,392,259
Commercial non-mortgage loans                        1,628,739      1,602,953
Commercial lines of credit                           2,039,076      2,890,988
                                                  ------------   ------------
SUBTOTAL                                           133,876,828    129,832,649

Allowance for loan losses                           (1,268,568)    (1,473,346)
Loan in process                                     (3,476,979)    (2,273,617)
Net deferred loan origination fees and premiums        155,411         95,649
                                                  ------------   ------------
                                                  $129,286,692   $126,181,335
                                                  ============   ============
</TABLE>
The activity in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
                                                 Year ended June 30,
                                     -------------------------------------------
                                        1999             1998            1997
                                     ----------       ----------      ----------
<S>                                  <C>              <C>             <C>
Balance at beginning of year          $1,473,346       $1,435,500      $1,430,781
Provision for possible loan losses       (25,000)         300,000          40,000
Charged-off loans                       (185,631)        (269,990)        (44,465)
Recoveries                                 5,853            7,836           9,184
                                      ----------       ----------      ----------
BALANCE AT END OF YEAR                $1,268,568       $2,473,346      $1,435,500
                                      ==========       ==========      ==========
</TABLE>
Nonaccrual loans for which interest has been reduced totaled
approximately $140,000 and $313,000 at June 30, 1999 and 1998,
respectively.  Interest income that would have been recorded on
these loans for the years ended June 30, 1999, 1998 and 1997 was
approximately $3,000, $28,000 and $23,000, respectively.

The Bank is not committed to lend additional funds to debtors
whose loans have been modified.

<PAGE>
The Bank, in the ordinary course of business, has granted loans
to certain officers, directors and their related interests.
Related party loans were made on substantially the same terms as
those prevailing at the time for comparable transactions with
unrelated persons and do not involve more than normal risk of
collectibility.  An analysis of related party loan activity is
as follows:

      Balance at July 1, 1997            $272,218
      Increase                             51,187
      Decrease                            (61,233)
                                         --------
      BALANCE AT JUNE 30, 1998            262,172

      Increase                            117,900
      Decrease                            (41,115)
                                         --------
      BALANCE AT JUNE 30, 1999           $338,957
                                         ========

As stated in Note A, the Bank sells loans in the secondary
market and generates income on the subsequent servicing of
such loans.  The income is generated by continuing to service
loans sold in the secondary market for an agreed-upon
percentage of the interest earned.  Total loans serviced for
others amounted to $174,024,228, $151,050,157 and
$129,495,624 at June 30, 1999, 1998 and 1997, respectively.

                          19
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE D:  PROPERTY AND EQUIPMENT
-------------------------------

Property and equipment is summarized by major classification as
follows:
<TABLE>
<CAPTION>
                                              June 30,
                                     ---------------------------
                                        1999             1998
                                     ----------       ----------
       <S>                           <C>              <C>
        Land                          $  672,933       $  672,933
        Buildings                      2,262,652        2,262,652
        Furniture and equipment          881,140          829,460
                                      ----------       ----------
                                       3,816,725        3,765,045
        Less allowances for
          depreciation                 1,005,719          863,175
                                      ----------       ----------
                                      $2,811,006       $2,901,870
                                      ==========       ==========
</TABLE>
NOTE E:   DEPOSITS
------------------

Deposit accounts consist of the following:
<TABLE>
<CAPTION>
                                              June 30,
                                     ---------------------------
                                        1999             1998
                                     ----------       ----------
<S>                                  <C>              <C>
Savings accounts with a year end
  interest rate of 2.37% and 2.81%
  at June 30, 1999 and 1998,
  respectively                        $14,300,702      $14,817,520
NOW accounts with a year end
  interest rate of 1.29%, 1.74%
  at June 30, 1999 and 1998,
  respectively                          7,460,995        8,556,180
Money market deposit accounts
  with a year end interest rate
  of 2.57% and 2.96% at June
  30, 1999 and 1998, respectively       4,742,277        5,062,280
Certificates of deposit with a
  year end interest rate range
  of 3.20% - 6.90% at June 30,
  1999 and 1998                        85,082,321       83,743,851
                                     ------------     ------------
                                     $111,586,295     $112,179,831
                                     ============     ============
</TABLE>
Non-interest bearing checking accounts are included in the table
above in NOW accounts.

Maturities of outstanding certificates of deposit at June 30,
1999, are summarized as follows:

             Year                         Amount
             ----                       -----------

             2000                       $65,789,352
             2001                        11,655,637
             2002                         2,794,100
             2003                         4,028,481
             2004                           814,751
                                        -----------
                                        $85,082,321
                                        ===========

<PAGE>
The aggregate amount of individual deposits in excess of
$100,000 was approximately $23,700,000 and $23,000,000 at
June 30, 1999 and 1998, respectively.

Interest expense on deposits is summarized as follows:

<TABLE>
<CAPTION>
                                                 Year ended June 30,
                                     -------------------------------------------
                                        1999             1998            1997
                                     ----------       ----------      ----------
<S>                                  <C>              <C>             <C>
Savings accounts                      $  384,895       $  431,611      $  453,090
NOW accounts                              73,738           79,073          59,416
Money market                             169,385          187,732         209,290
Certificates of deposit                4,478,321        4,827,217       4,446,486
                                      ----------       ----------      ----------
                                      $5,106,339       $5,525,833      $5,168,284
                                      ==========       ==========      ==========
</TABLE>
                          20
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE F:   ADVANCES FROM FEDERAL HOME LOAN BANK
----------------------------------------------

Advances from Federal Home Loan Bank are collateralized by
certain residential mortgage loans and the Bank's investment in
Federal Home Loan Bank stock pursuant to the provisions of a
collateral pledge and security agreement.  The rate is variable
(5.05% to 6.42% at June 30, 1999).

Scheduled maturities are as follows:

           Maturing in
       fiscal year ending                      Amount
       ------------------                    ----------

             2000                            $8,110,796
             2001                               611,491
             2002                             1,812,237
             2003                               613,027
             2004                               888,872
           Thereafter                        10,550,528
                                            -----------
                                            $22,586,951
                                            ===========

The Bank has the ability to obtain additional advances from the
Federal Home Loan Bank, up to an amount established
at the time of borrowing by a predefined formula.

NOTE G:   BENEFIT PLANS
-----------------------

SAVINGS AND PROFIT SHARING PLAN
-------------------------------
The Bank maintains a defined contribution savings incentive plan
(401k) and a profit sharing plan for all eligible
employees.  Under these plans, the Bank will match up to 3% of
annual employee wages, dollar for dollar, for amounts
contributed to the savings incentive plan and will contribute a
Board approved percentage of wages to the profit sharing
plan.  Total expense including administrative costs amounted to
$97,078, $92,019 and $90,476 for the years ended
June 0, 1999, 1998 and 1997, respectively.

OTHER RETIREMENT BENEFITS
-------------------------
The Bank provides limited medical and life insurance benefits to
current retirees.  The Bank intends to continue to fund
the liability associated with these benefits on a
"pay-as-you-go" basis, and does not expect to extend this
benefit beyond those currently receiving benefits.

The accumulated postretirement benefit obligation of all
retirees as of June 30, 1999 and 1998 was $50,678 and $54,298,
respectively.  There are no plan/trust assets designated for
this purpose.

For measurement purposes, the weighted-average discount rate
used in determining the accumulated postretirement
benefit obligation was 8%.  The mortality rate was based on the
1983 Group Annuity Mortality Table.

STOCK OPTION PLAN
-----------------
Under the terms of the ES&L Bancorp, Inc. 1990 Stock Option Plan
(the "Option Plan"), shares were reserved for future
issuance by the Corporation upon exercise of stock options
granted to employees and directors of the Corporation and
its subsidiary from time to time under the Option Plan.  The
Option Plan provides for a term of ten years, after which no
awards may be made, unless earlier terminated by the Board of
Directors pursuant to the Option Plan.  These options are
priced at $3 5/9 per share, the equivalent of the purchase price
at the time of issuance.  Options outstanding at June 30,
1999 and 1998 amounted to 3,399 and 13,598, respectively.
                          21
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE H:   INCOME TAXES
----------------------

The provision for income taxes consists of the following:

A reconciliation of income taxes at the federal statutory
corporate tax rates to the effective tax rates follows:
<TABLE>
<CAPTION>
                                                 Year ended June 30,
                                     -------------------------------------------
                                        1999             1998            1997
                                     ----------       ----------      ----------
<S>                                  <C>              <C>             <C>
Currently payable:
  State                               $   50,184       $   97,560      $ 92,945
  Federal                                840,542          870,741       580,351
Deferred                                 337,756          227,484        17,254
                                      ----------       ----------      --------
                                      $1,228,482       $1,195,785      $690,550
                                      ==========       ==========      ========
</TABLE>
The difference between estimated tax payments made during the
year and income taxes currently payable are included in other
assets or other liabilities, as applicable, in the accompanying
consolidated financial statements.
<TABLE>
<CAPTION>
                                                 Year ended June 30,
                                     -------------------------------------------
                                        1999             1998            1997
                                     ----------       ----------      ----------
<S>                                  <C>              <C>             <C>
Total provision at federal
  statutory rates                     $1,146,000       $1,100,000     $ 860,000
State taxes, net of federal
  benefit                                 79,000           65,000        61,000
Resolution and adjustment of
  prior year tax liabilities                  --               --      (235,000)
Other                                      3,482           30,785         4,550
                                      ----------       ----------     ---------
                                      $1,228,482       $1,195,785     $ 690,550
                                      ==========       ==========     =========
</TABLE>
A deferred tax (liability) asset resulting from temporary
differences is summarized as follows and is included in other
(liabilities) assets in the accompanying consolidated balance
sheets:
<TABLE>
<CAPTION>
                                              June 30,
                                     ---------------------------
                                        1999             1998
                                     ----------       ----------
<S>                                  <C>              <C>
Depreciation                         $(120,000)       $ (99,000)
Nonrefundable loan fees                  8,000           14,000
Employee benefits                       20,000           18,000
Allowance for loan losses              236,000          276,000
Mortgage servicing rights             (518,000)        (218,000)
Accrued expenses                        38,000               --
Unrealized gains on securities
  available for sale                   (10,000)         (19,000)
Other                                   26,000           36,000
                                     ---------        ---------
                                     $(320,000)       $   8,000
                                     =========        =========
</TABLE>

As required by SFAS 109, deferred taxes have not been provided
for the allowance for loan losses for tax purposes that
arose in tax years beginning before July 1, 1988, as management
believes that it is not apparent such temporary
differences will reverse in the foreseeable future.  However, a
deferred tax asset has been recognized for the difference
between the provision for loan losses for book purposes and the
bad debt tax deductions arising in tax years after July 1,
1988.

In fiscal year 1997 the Bank performed an extensive analysis of
all potential income tax liabilities, which ultimately resulted
in an income tax benefit of $235,000.

The IRS has permitted a tax deduction for estimated bad debts in
an amount greater than the amount reported in the accompanying
consolidated financial statements.  This excess amount of
estimated bad debts is subject to tax only if it is actually
distributed to shareholders or depositors.  At June 30, 1999,
the accumulated amount of such excess for which income taxes
have not been accrued was approximately $2.7 million.

                          22
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE I:   COMMITMENTS
---------------------

The Bank leases an office for ES&L Mortgage Corporation under a
lease agreement, which is renewable annually.  The agreement
requires minimum monthly rentals, as well as requiring the Bank
to pay its pro rata share of property taxes and utilities.
Total rental expense under this agreement amounted to $17,628,
$17,375 and $17,029 for the years ended June 30, 1999, 1998 and
1997, respectively.

At June 30, 1999 and 1998, the Bank had outstanding commitments
of $8,371,539 and $5,256,912, respectively, to originate loans,
of which $3,184,719 and $3,011,112, respectively, were comprised
of fixed-rate loans and $5,186,820 and $2,245,800, respectively,
were comprised of variable-rate loans.  Substantially all of the
fixed-rate loan commitments are to be sold upon establishment of
a specified fixed rate of interest.  In the opinion of
management, all fixed-rate loan commitments equaled or exceeded
prevailing market interest rates and all loan commitments will
be funded by cash flows from operations, existing excess
liquidity, advances from the Federal Home Loan Bank and other
borrowings as necessary.

At June 30, 1999 and 1998, the Bank had outstanding commitments
under standby letters of credit totaling $397,571 and $365,358,
respectively.

NOTE J: INVESTMENT IN JOINT VENTURE - ACQUISITION, DEVELOPMENT
--------------------------------------------------------------
AND CONSTRUCTION ARRANGEMENT
----------------------------

The Bank's wholly-owned subsidiary, Brilie Corporation
("Brilie") has a partnership agreement with two unrelated
parties.  The primary purpose of this partnership is to develop
land in the Town of Horseheads for resale as residential
housing.  Management of the partnership developed the land in
several phases, enabling the partnership to increase its equity
as sales take place.  As of June 30, 1999 and 1998, the Bank had
loaned $352,536 and $636,401, respectively, to the partnership,
and was committed to lend an additional $597,464 and $313,599,
respectively, to finance further land development.

All costs incurred by the joint venture partnership during
development stages, including interest financing costs, directly
attributable to the project are capitalized and specifically
allocated to individual parcels within the subdivision.
Interest ceases to be capitalized upon the phase's readiness for
sale.  As sales take place, the partnership recognizes profits
by subtracting previously allocated costs for each parcel from
the individual sales proceeds of each parcel.  Further, interest
is not capitalized for phases of the project not presently
undergoing development.

The Bank has classified these loans as an acquisition,
development and construction arrangement, since the partnership
has title to, but little or no equity in the underlying security
and Brilie receives 50% of the profit on the ultimate sale of
the project.

Brilie recognizes profits from these activities under the equity
method of accounting when the collectibility of the sales
price is reasonably assured and the partnership is not obligated
to perform significant activities after the sale.  Accordingly,
profits on sales which do not meet the criteria for profit
recognition are deferred and credited to operations on the
installment basis until such time as the criteria for profit
recognition is met.

<PAGE>
All interest income earned by the Bank is deferred.  The
interest deferred is realized at the time of the sale of related
parcels of the project.  In addition, the Bank capitalizes
interest expense related to the average outstanding investment
balance multiplied by the Bank's average cost of funds rate.

                          23
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE J: INVESTMENT IN JOINT VENTURE - ACQUISITION, DEVELOPMENT
--------------------------------------------------------------
AND CONSTRUCTION ARRANGEMENT, CONT'D
-----------------------------

As of June 30, 1999, Brilie's share of the partnership's capital
was $127,736, which represents 50% of the accumulated
earnings of the partnership as of that date less partners'
withdrawals.  The following summarizes the unaudited financial
condition and results of operations of the joint venture
partnership:

BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
                                              June 30,
                                     ---------------------------
                                        1999             1998
                                     ----------       ----------
                                     (UNAUDITED)      (UNAUDITED)
<S>                                  <C>              <C>
            ASSETS
            ------

Investment in real estate             $575,008        $686,653
Mortgage and lot sale receivable       101,000         276,850
Other asset                                800             800
                                      --------        --------
                                      $676,808        $964,303
                                      ========        ========

        LIABILITIES AND
        PARTNERS' CAPITAL
        ------------------
Liabilities:
  Note payable to Elmira Savings
    and Loan                          $352,536        $636,401
  Mortgage payable                      68,000          68,000
  Other liabilities                        600             800
                                      --------        --------
                                       421,336         705,201

Partners' capital                      255,472         259,102
                                      --------        --------
                                      $676,808        $964,303
                                      ========        ========
</TABLE>

<PAGE>
STATEMENTS OF INCOME AND PARTNERS' CAPITAL
------------------------------------------

<TABLE>
<CAPTION>
                                                 Year ended June 30,
                                     -------------------------------------------
                                        1999             1998            1997
                                     ----------       ----------      ----------
                                     (Unaudited)      (Unaudited)     (Unaudited)
<S>                                  <C>              <C>             <C>
Sales                                 $417,500         $479,250        $307,000
Cost of sales                          328,556          337,006         234,484
                                      --------         --------        --------
GROSS PROFIT                            88,944          142,244          72,516

Net rental income (expense)             (7,659)           3,902           1,885
Interest income                             --            5,324              --
General and administrative expense     (13,931)         (12,316)        (14,947)
                                      --------         --------        --------
NET INCOME                              67,354          139,154          59,454

Partners' capital at beginning
  of year                              259,102          229,124         215,990
Partners' withdrawals                   70,984          109,176          46,320
                                      --------         --------        --------
PARTNERS' CAPITAL AT END OF YEAR      $255,472         $259,102        $229,124
                                      ========         ========        ========
</TABLE>

                          24
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE K:   PARENT COMPANY FINANCIAL INFORMATION
----------------------------------------------

BALANCE SHEETS
--------------
<TABLE>
<CAPTION>
                                              June 30,
                                     ---------------------------
                                        1999             1998
                                     ----------       ----------
<S>                                  <C>              <C>
        ASSETS
        ------
Cash and cash equivalents             $    28,036      $   208,358
Securities available for sale             162,287           81,915
Investment in subsidiary               11,292,265       10,111,123
Other assets                               91,603            5,184
                                      -----------      -----------
                                      $11,574,191      $10,406,580
                                      ===========      ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Shareholders' equity:
  Common stock                        $     8,662      $     8,580
  Additional paid-in capital            2,711,666        2,599,654
  Retained earnings                     9,462,739        8,154,572
  Accumulated other comprehensive
    income                                 15,643           27,887
                                      -----------      -----------
                                       12,198,710       10,790,673
  Less treasury stock                     624,519          384,093
                                      -----------      -----------
                                      $11,574,191      $10,406,580
                                      ===========      ===========
</TABLE>

<PAGE>
STATEMENTS OF INCOME AND RETAINED EARNINGS
------------------------------------------

<TABLE>
<CAPTION>
                                                 Year ended June 30,
                                     -------------------------------------------
                                        1999             1998            1997
                                     ----------       ----------      ----------
<S>                                  <C>              <C>             <C>
Revenues:
   Equity in earnings of subsidiary   $2,181,142       $2,075,061      $1,883,734
   Income from investments and
     other                                 2,406            3,033           2,619
                                      ----------       ----------      ----------
                                       2,183,548        2,078,094       1,886,353
General and administrative expenses       50,105           44,916          60,209
                                      ----------       ----------      ----------
INCOME BEFORE INCOME TAXES             2,133,443        2,033,178       1,826,144

Income tax benefit                         8,518            6,215          12,236
                                      ----------       ----------      ----------
NET INCOME                             2,141,961        2,039,393       1,838,380

Retained earnings at beginning
  of year                              8,154,572        7,531,048       6,270,032
Dividends paid                           833,794        1,415,869         577,364
                                      ----------       ----------      ----------
RETAINED EARNINGS AT
END OF YEAR                           $9,462,739       $8,154,572      $7,531,048
                                      ==========       ==========      ==========
</TABLE>
                          25
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE K:   PARENT COMPANY FINANCIAL INFORMATION, CONT'D
-----------------------------------------------

STATEMENTS OF CASH FLOWS
------------------------
<TABLE>
<CAPTION>
                                                 Year ended June 30,
                                     -------------------------------------------
                                        1999             1998            1997
                                     -----------      -----------     -----------
<S>                                  <C>              <C>             <C>
CASH FLOWS - OPERATING ACTIVITIES
---------------------------------
  Net income                         $ 2,141,961      $ 2,039,393     $ 1,838,380
  Adjustments to reconcile net
   income to net cash used
   for operating activities:
    Equity in earnings of subsidiary  (2,181,142)      (2,075,061)     (1,883,734)
    Gain on sale of securities
      available for sale                      --           (1,037)             --
    Change in other assets
      affecting operations                (2,408)           6,022          43,794
                                     -----------      -----------     -----------
NET CASH USED FOR
OPERATING ACTIVITIES                     (41,589)         (30,683)         (1,560)

CASH FLOWS - INVESTING ACTIVITIES
---------------------------------
  Dividend received from subsidiary    1,000,000        1,600,000         800,000
  Proceeds from sale of securities
    available for sale                        --            2,362              --
  Purchase of securities available
    for sale                            (100,778)              --              --
                                     -----------      -----------     -----------
NET CASH PROVIDED FROM
INVESTING ACTIVITIES                     899,222        1,602,362         800,000

CASH FLOWS - FINANCING ACTIVITIES
---------------------------------
  Dividends paid                        (833,794)      (1,415,869)       (577,364)
  Purchase of treasury stock            (240,426)        (275,722)        (61,930)
  Net proceeds from exercise of
    stock options                         36,265               --          22,457
                                     -----------      -----------     -----------
NET CASH USED FOR
FINANCING ACTIVITIES                  (1,037,955)      (1,691,591)       (616,837)
                                     -----------      -----------     -----------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS                    (180,322)        (119,912)        181,603

Cash and cash equivalents
  at beginning of year                   208,358          328,270         146,667
                                     -----------      -----------     -----------
CASH AND CASH EQUIVALENTS
AT END OF YEAR                       $    28,036      $   208,358     $   328,270
                                     ===========      ===========     ===========
</TABLE>

<PAGE>
NOTE L:   OFFICE OCCUPANCY AND EQUIPMENT EXPENSE
------------------------------------------------

Office occupancy and equipment expense is comprised of the following:
<TABLE>
<CAPTION>
                                                 Year ended June 30,
                                     ------------------------------------------
                                        1999             1998            1997
                                      --------         --------        --------
<S>                                  <C>              <C>             <C>
Depreciation                          $174,151         $172,874        $175,774
Service bureau                         161,000          151,526         150,012
Other                                  226,022          168,878         176,513
                                      --------         --------        --------
                                      $561,173         $493,278        $502,299
                                      ========         ========        ========
</TABLE>
                          26
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE M:  OTHER COMPREHENSIVE INCOME
-----------------------------------

The components of other comprehensive income are as follows:
<TABLE>
<CAPTION>
                                                 Year ended June 30, 1999
                                     --------------------------------------------
                                      Before tax         Tax           Net of tax
                                        amount          benefit          amount
                                      ----------        --------       ----------
<S>                                   <C>              <C>             <C>
Unrealized losses on securities
  available for sale:
  Unrealized losses arising during
    the period                         $(69,042)        $27,616         $(41,426)
                                       --------         -------         --------
OTHER COMPREHENSIVE INCOME             $(69,042)        $27,616         $(41,426)
                                       ========         =======         ========
<CAPTION>
                                                 Year ended June 30, 1998
                                     --------------------------------------------
                                      Before tax         Tax           Net of tax
                                        amount          benefit          amount
                                      ----------        --------       ----------
<S>                                   <C>              <C>             <C>
Unrealized losses on securities
 available for sale:
  Unrealized losses arising during
    the period                         $ (2,984)        $ 1,193         $ (1,791)
  Less: reclassification adjustment
    for gains included in net
    income                               (1,037)            415             (622)
                                       --------         -------         --------
OTHER COMPREHENSIVE INCOME             $ (4,021)        $ 1,608         $ (2,413)
                                       ========         =======         ========

<CAPTION>
                                                 Year ended June 30, 1997
                                     --------------------------------------------
                                      Before tax         Tax           Net of tax
                                        amount          benefit          amount
                                      ----------        --------       ----------
<S>                                   <C>              <C>             <C>
Unrealized gains on securities
  available for sale:
  Unrealized gains arising during
    the period                         $ 35,990         $(14,396)       $ 21,594
                                       --------         --------        --------
OTHER COMPREHENSIVE INCOME             $ 35,990         $(14,396)       $ 21,594
                                       ========         ========        ========
</TABLE>
NOTE N:   REGULATORY CAPITAL
----------------------------

The Bank is subject to various regulatory capital requirements
administered by its primary federal regulator, the Office
of Thrift Supervision (OTS).  Failure to meet the minimum
regulatory capital requirements can initiate certain mandatory,
and possible additional discretionary actions by regulators,
that if undertaken, could have a direct material affect on the
Bank's consolidated financial statements.  Under the regulatory
capital adequacy guidelines and the regulatory framework
for prompt corrective action, the Bank must meet specific
capital guidelines involving quantitative measures of the Bank's
assets, liabilities and certain off-balance-sheet items as
calculated under regulatory accounting practices.  The Bank's
capital amounts and classifications are also subject to
qualitative judgments by the regulators about components, risk
weightings, and other factors.

Quantitative measures established by regulation to ensure
capital adequacy require the Bank to maintain minimum
amounts and ratios of: total risk-based capital and Tier I
capital to risk-weighted assets (as defined in the regulations),
Tier I capital to adjusted total assets (as defined), and
tangible capital to adjusted total assets (as defined).
Management believes, as of June 30, 1999, that the Bank meets
all capital adequacy requirements to which it is subject.

As of June 30, 1999, the most recent notification from OTS
categorized the Bank as well capitalized under the regulatory
framework for prompt corrective action.  To be categorized as
well capitalized, the Bank must maintain minimum total risk-
based, Tier I risk-based, and Tier I leverage ratios as set
forth in the table.  There are no conditions or events since
that notification that management believes have changed the
Bank's category.

                          27
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE N:   REGULATORY CAPITAL, CONT'D
------------------------------

The Bank's actual capital amounts and ratios are also presented
in the table (000's omitted).
<TABLE>
<CAPTION>
                                                                                     To be well
                                                            For capital       capitalized under prompt
                                          Actual         adequacy purposes   corrective action provisions
                                      ---------------    -----------------   ----------------------------
                                      Amount    Ratio    Amount      Ratio     Amount        Ratio
                                      ------    -----    ------      -----   ----------    ----------
<S>                                   <C>       <C>      <C>         <C>     <C>           <C>
As of June 30, 1999
  Total risk-based capital
   (to risk-weighted assets)          $16,270   16.07% >  $8,101  >  8.00% >  $10,126   >   10.00%
                                                       -          -        -            -
  Tier 1 capital
   (to risk-weighted assets)           15,005   14.82% >   4,050  >  4.00% >    6,076   >    6.00
                                                       -          -        -            -
  Tier 1 capital (leveraged)
   (to adjusted total assets)          15,005    9.79% >   4,598  >  3.00% >    7,664   >    6.00
                                                       -          -        -            -
  Tangible capital
   (to adjusted total assets)          15,005    9.79% >   2,299  >  1.50% >       Not applicable
                                                       -          -        -

As of June 30, 1998
  Total risk-based capital
   (to risk-weighted assets)          $14,805   14.65% >  $8,087  >  8.00% >  $10,109   >   10.00%
                                                       -          -        -            -
  Tier 1 capital
   (to risk-weighted assets)           13,540   13.39% >   4,044  >  4.00% >    6,065   >    6.00
                                                       -          -        -            -
  Tier 1 capital (leveraged)
   (to adjusted total assets)          13,540    8.94% >   4,546  >  3.00% >    7,576   >    5.00
                                                       -          -        -            -
  Tangible capital
   (to adjusted total assets)          13,540    8.94% >   2,273  >  1.50% >       Not applicable
                                                       -          -        -
</TABLE>

NOTE O:   SHAREHOLDERS' EQUITY
------------------------------

CAPITAL RESTRICTIONS
--------------------

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 (see Note H).

At the time of conversion, the Bank established a liquidation
account for the benefit of Eligible Account Holders who continue
to maintain their accounts in the Bank.  The liquidation account
was set at an amount equal to the regulatory capital of the Bank
at March 31, 1990.  The liquidation account will be reduced
annually to the extent that Eligible Account Holders reduce
their eligible deposits.  Subsequent increases will not restore
an Eligible Account Holder's interest in the liquidation
account.  In the event of a complete liquidation, each Eligible
Account Holder will be entitled to receive a distribution from
the liquidation account in an amount proportionate to the
current adjusted eligible account balance held.

PREFERRED STOCK
---------------
Shareholders of the Corporation have authorized the issuance of
up to 500,000 shares of preferred stock with terms to
be established by the Board of Directors.  The serial preferred
may rank prior to the common stock as to dividend rights,
liquidation preference, or both, and may have full or limited
voting rights.  No shares of this preferred stock have been
issued, nor does the Corporation have any present plan for the
issuance or sale of any such shares.

SUBSEQUENT EVENT
----------------
On July 13, 1999, the Board of Directors of the Corporation
declared a special cash dividend of $1.00 per share payable
on July 30, 1999 to shareholders of record on July 16, 1999.

                         28
<PAGE>
<PAGE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE P:  DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL
------------------------------------------------------
INSTRUMENTS
-----------

The following methods and assumptions were used to estimate the
fair value of each class of financial instruments for
which it is practicable to estimate that value:

CASH AND SHORT-TERM INVESTMENTS
-------------------------------
The balance sheet carrying amounts for cash and short-term
instruments approximate the estimated fair values of such
assets.

SECURITIES (INCLUDING MORTGAGE-BACKED SECURITIES)
----------
Fair values for securities are based on quoted market prices, if
available.  If quoted market prices are not available, fair
values are based on quoted market prices of comparable
instruments.

LOANS RECEIVABLE (INCLUDING MORTGAGE LOANS HELD FOR SALE)
----------------
For variable rate loans that reprice frequently and which entail
no significant change in credit risk, fair values are based
on the carrying values.  The estimated fair values of certain
mortgage loans are based on quoted market prices of similar
loans sold in conjunction with the securitization transactions,
adjusted for differences in loan characteristics.  The
estimated fair values of other loans are estimated based on
discounted cash flow analyses using interest rates currently
offered for loans with similar terms to borrowers of similar
credit quality.

ACCRUED INTEREST
----------------
The carrying amount of accrued interest approximates its fair
value.

DEPOSITS
--------
The fair values estimated for demand deposits (e.g., interest
and non-interest bearing demand deposits, savings, and
certain types of money market accounts) are, by definition,
equal to the amount payable on demand at the reporting date
(i.e., their carrying amounts).  The carrying amounts of
variable rate, fixed-term money market accounts and certificates
of deposit approximate their fair values at the reporting date.
Fair values of fixed rate certificates of deposit are estimated
using a discounted cash flow calculation that applies interest
rates currently being offered to a schedule of aggregated
expected monthly time deposit maturities.

BORROWED FUNDS
--------------
The fair value of the advances from the Federal Home Loan Bank
is estimated using discounted cash flow analyses based
on the Bank's current incremental borrowing rate for similar
borrowing arrangements.

OFF-BALANCE-SHEET INSTRUMENTS
-----------------------------
Fair values for off-balance-sheet lending commitments
approximate the loan commitment amount (see Note I).

<PAGE>
Information regarding the Corporation's financial instruments is
as follows at June 30, 1999 and 1998:  (000's)
<TABLE>
<CAPTION>
                                         1999                     1998
                                 ----------------------   ----------------------
                                 Carrying    Estimated    Carrying    Estimated
                                   value     fair value     value     fair value
                                 ---------   ----------   --------    ----------
<S>                              <C>         <C>          <C>         <C>
Financial assets:
  Cash and short-term
    investments                   $    793    $    793     $  7,367    $  7,367
  Investment securities
    (including mortgage-
    backed securities)              11,607      11,586        3,769       3,770
  Loans receivable                 134,829     137,728      134,413     137,803
  Accrued interest receivable          816         816          775         775
Financial liabilities:
  Deposits                         111,586     112,155      112,180     112,342
  Advances from Federal Home
    Loan Bank                       22,587      22,422       21,897      21,375
Off-balance-sheet instruments:
  Commitments to extend credit       8,372       8,372        5,257       5,257
  Standby letters of credit            398         398          365         365
</TABLE>

                             29
<PAGE>
<PAGE>
          MARKET PRICE AND DIVIDEND INFORMATION

ES&L Bancorp stock is not listed on a national or regional
exchange and there are minimal trades occurring. While there are
no market makers for the stock, registered brokers can
facilitate sales and purchases of ES&L Bancorp shares by using
standard procedures for trading unlisted stocks.

Currently the following local brokerage offices have facilitated
purchases and sales of ES&L Bancorp Stock:

     Morgan Stanley Dean Witter, Elmira, New York
     Smith Barney Shearson, Ithaca, New York

During the 1999 fiscal year, the Corporation's Board of
Directors declared four quarterly cash dividends, paid at the
rate of $0.25 per share. During the 1998 fiscal year the
Corporation paid an annualized dividend of $1.68 per share,
represented by four quarterly dividends of $0.17 per share, and
a special cash dividend of $1.00 per share, which was paid in
July 1997.

Given the minimal trading activity, the Corporation must rely on
information obtained from brokers, investment advisors and
investors themselves in identifying the market price of the
common stock. During fiscal 1999, the trading price of the stock
has ranged from $21.00 to $26.25 per share.

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 such regulations, a savings institution that, immediately
prior to, and on a pro forma basis after giving effect to, a
proposed capital distribution, has total capital (as defined by
OTS regulation) that is equal to or greater than the amount of
its fully phased-in capital requirements (a "Tier 1
Institution") is generally permitted without OTS approval to
make capital distributions during a calendar year in the amount
of the greater of (a) 75% of its income for the previous four
quarters or (b) up to 100% of its net income to date during the
calendar year plus an amount that would reduce by one-half the
amount by which its total capital to assets ratio exceeded its
fully phased-in capital requirement to assets ratio at the
beginning of the calendar year. A savings institution with total
capital in excess of current minimum capital requirements but
not in excess of the fully phased-in requirements (a "Tier 2
Institution") is permitted to make capital distributions without
OTS approval of up to 75% of its net income for the previous
quarters, less dividends already paid for such period. A savings
institution that fails to meet current minimum capital
requirements (a "Tier 3 Institution") is prohibited from making
any capital distributions without the prior approval of the OTS.
Tier 1 Institutions that have been notified by the OTS that they
are in need of more than normal supervision will be treated as
either a Tier 2 or Tier 3 Institution. At June 30, 1999, ES&L
was a Tier 1 Institution.

ES&L Bancorp, Inc. has paid the following per share cash
dividends to its shareholders during the past three fiscal
years:

<TABLE>
<CAPTION>
                         1999 FISCAL YEAR     1998 FISCAL YEAR     1997 FISCAL YEAR
<S>                       <C>                 <C>                  <C>
                           8/28/98 $0.25       7/31/97 $1.00        8/30/96  $0.17
                          11/27/98 $0.25       8/29/97 $0.17       11/29/96  $0.17
                           2/26/99 $0.25      11/28/97 $0.17        2/28/97  $0.17
                           5/28/99 $0.25       2/27/98 $0.17        5/30/97  $0.17
                                               5/29/98 $0.17
                                   -----               -----                 -----
                                   $1.00               $1.68                 $0.68
DIVIDEND PAYMENT RATIO             39.22%              69.71%                31.76%

</TABLE>

On July 14, 1999, the Board of Directors of the Corporation
announced a special cash dividend of $1.00 per share, payable
July 30, 1999 to Stockholders' of record on July 16, 1999.

The Corporation's Board of Directors intend to periodically
review the financial condition, earnings and capital
requirements of the Corporation in an effort to determine the
declaration of future dividend payments.

At June 30, 1999, the Corporation had 832,035 shares of common
stock outstanding. At September 1, 1999, 830,595 shares were
outstanding, representing approximately 400 shareholders of
record, excluding those shares registered in the "street name"
of brokerage firms and stock depositories.

                             30
<PAGE>
<PAGE>
CORPORATE INFORMATION       AUDITORS, AGENTS AND COUNSEL

MAIN OFFICE                 INDEPENDENT AUDITORS
-----------                 --------------------
  300 West Water Street        Mengel, Metzger, Barr & Co. LLP
  Elmira, New York 14901       Suite 210
  607-733-5533                 147 West Gray Street
                               Elmira, New York 14901

"CASHLESS" DEPOSIT OFFICE   GENERAL COUNSEL
-------------------------   ---------------
  200 East Buffalo Street      Denton, Keyser, LaBrecque & Moore
  Suite 101B                   150 Lake Street
  Ithaca, NY 14850             Elmira, New York 14901
  607-272-4880

    SUBSIDIARIES
    ------------

BRILIE CORPORATION           SPECIAL COUNSEL
------------------           ---------------
  ES&L Financial Services       Housley Kantarian &
  300 West Water Street           Bronstein, P.C.
  Elmira, New York 14901        Suite 700
  607-733-5533                  1220 19th Street, NW
                                Washington, DC  20036

ES&L MORTGAGE CORPORATION    STOCK REGISTRAR AND TRANSFER AGENT
-------------------------    ----------------------------------
  Cayuga Mortgage Company       American Stock Transfer &
  200 East Buffalo Street         Trust Co.
  Suite 101B                    40 Wall Street
  Ithaca, New York 14850        New York, New York  10005
  607-272-3595                  (800) 937-5449

MEETING INFORMATION_____________________________________________

THE ANNUAL MEETING OF STOCKHOLDERS OF ES&L BANCORP, INC. WILL BE
HELD AT THE DOWNTOWN ELMIRA HOLIDAY INN, ONE HOLIDAY PLAZA,
ELMIRA, NEW YORK, ON MONDAY, OCTOBER 25, 1999, AT 7:00 P.M.

VISIT OUR WEBSITE_______________________________________________

FOR INFORMATION ON BANK PRODUCTS, INCLUDING CURRENT INTEREST
RATES VISIT OUR WEBSITE . . . WWW.ELMIRABANK.COM


                             31
<PAGE>
<PAGE>
                           DIRECTORS
________________________________________________________________

ROBERT E. BUTLER -
Chairman of the Board
President, Deister & Butler, Inc.
Former Owner, H. H. Equipment, Inc.

WILLIAM A. MCKENZIE -
President and Chief Executive Officer,
Elmira Savings & Loan, F.A.

JOHN F. CADWALLADER -
President of the following companies:
John F. Cadwallader, Inc. d/b/a "The Glass Company"
Windshield Installation Network, Inc. d/b/a WIN
Autoglass Insurance Company

L. EDWARD CONSIDINE -
Professional Engineer,
Hunt Engineers and Architects
Retired General Manager, Elmira Water Board

DR. ADRIAN P. HULSEBOSCH -
Retired Othodontist

JACK H. MIKKELSEN -
Retired President,
Zeiser Wilbert Vault, Inc.

FREDERICK J. MOLTER -
Professional Engineer,
The Sear Brown Group

PAUL MORSS -
Retired Insurance Executive,
Swan & Sons Morss Co. Insurance Agency

GERALD F. SCHICHTEL -
Retired President,
Hilliard Corporation

All directors of ES&L Bancorp, Inc. are directors of Elmira
Savings and Loan, F.A.


                         OFFICERS
________________________________________________________________

WILLIAM A. MCKENZIE                  GLENN R. AHART
President and Chief Executive        Assistant Vice President
   Officer

J. MICHAEL ERVIN                     ANNE H. BENNETT
Senior Vice President and            Assistant Vice President
   Treasurer

MICHAEL J. WAYNE                     MARYANNA S. ATKINSON
Vice President                       Assistant Vice President

LYNN M. MORRIS                       BRENDA A. BEMENT
Vice President                       Assistant Vice President

JAMES D. STANTON                     LARRY A. TRESSLER
Vice President                       Assistant Treasurer

JUDY A. PETERS                       ROBIN M. FULLER
Vice President                       Assistant Vice President

MICHAEL J. CRIMMINS                  SHIRLEY L. GLEOCKNER
Vice President                       Corporate Secretary


All officers of ES&L Bancorp, Inc. are officers of Elmira
Savings and Loan, F.A.

                             32
<PAGE>
<PAGE>
                      CORPORATE PROFILE

ES&L Bancorp, Inc. (the "Corporation") was formed in 1990 as a
Delaware corporation at the direction of Elmira Savings & Loan,
F.A. (the "Bank") for the purpose of becoming a holding company
for the Bank as part of the Bank's conversion from mutual to
stock form. The Bank, a federally chartered savings association
founded in 1888, conducts business through its main office
located in Elmira, NY and its "CASHLESS" Deposit Office located
in Ithaca, NY.

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. Subsequent to the 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 and loan through Elmira Savings & Loan,
F.A. Accordingly, the information set forth in this report,
including financial statements and related data, relates
primarily to the Bank and its subsidiaries.

The Corporation, through the Bank, is primarily 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.

                      MISSION STATEMENT

The primary mission of the Directors, Officers and staff of
Elmira Savings and Loan, F.A. is to generate profits, in the
course of business, sufficient enough to pay a fair and
equitable return to the shareholders of the institution, within
the constraints of applicable laws and regulations.

It is also recognized that this institution has an obligation to
the community or communities within which it is located to
provide services for the financial needs of the area. In
accordance with the Bank's Charter and its membership in the
Federal Home Loan Bank, it will concentrate its efforts on real
estate finance. The services provided must be cost justified as
well as conducive to sound banking principles. The institution
will also be supportive of those activities that contribute to
the quality of life within the communities served.

The Bank will provide its employees: a safe and aesthetically
appealing work environment, fair wages and benefits for services
rendered, adequate training, regular performance review and an
opportunity to voice their opinion on factors that contribute to
the well being of the institution.

The above mission will be accomplished by striving to be the
best customer driven organization in the community by providing
financial services to the Bank's primary market area defined as
Chemung County and its secondary market areas defined as all
counties contiguous to Chemung County.



COPIES OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED JUNE 30, 1999, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION, MAY BE OBTAINED AFTER SEPTEMBER 30,
1999, AT NO CHARGE TO STOCKHOLDERS BY WRITING TO THE SECRETARY
OF THE CORPORATION, 300 WEST WATER STREET, ELMIRA, NEW YORK
14901.