Elmer Bancorp, Inc. Announces Fourth Quarter and 2021 Annual Financial Results

ELMER BANCORP, INC. (“Elmer Bancorp” or the “Company”) (OTC Pink: ELMA), the parent company of The First National Bank of Elmer (the “Bank”), announces its operating results for the fourth quarter and full year ended December 31, 2021.

For the three months ended December 31, 2021, Elmer Bancorp reported net income of $412,000, or $0.36 per common share compared to $322,000, or $0.28 per common share for the quarter ended December 31, 2020. For the twelve months ended December 31, 2021, net income totaled $1.949 million, or $1.70 per common share compared to $1.469 million, or $1.28 per common share for the twelve months ended December 31, 2020.

Net interest income for the three months ended December 31, 2021 totaled $2.798 million, a decrease of $383,000 from the three months ended December 31, 2020 total of $3.181 million primarily resulting from a reduction of net loan fee income recognized on Payroll Protection Program (PPP) loans and a reduction in commercial loan interest income partially resulting from a decline in loan demand as many companies benefited from the PPP loan program and other government funding programs. These declines more than offset increased interest income on investment securities and a decline in interest expense on deposits as higher rated certificates of deposit repriced at maturity. For the three months ended December 31, 2021, there was no loan loss provision compared to a $360,000 loan loss provision for the three months ended December 31, 2020.

Non-interest income for the three months ended December 31, 2021 was $39,900 higher than the same period last year resulting from higher service fee income, an increase in premiums on sold mortgages and a gain on the sale of Other Real Estate Owned (“OREO”). Non-interest expenses for the three months ended December 31, 2021 were $95,100 lower than the fourth quarter of 2020 primarily resulting from lower legal and professional services partially offset by an increase in employment costs.

For the twelve months ended December 31, 2021, net interest income totaled $11.873 million compared to $11.492 million for the twelve months ended December 31, 2020, an increase of $380,700. This increase resulted from higher net loan fee income recognized on PPP loans and interest income on investment securities partially offset by a decline in interest on commercial loans. Non-interest income was $105,700 higher than the 2020 twelve-month period. Increased premiums on sold mortgages, higher gains on the sale of OREO and an increase in service fee income contributed to the year-over-year increase. Total non-interest expenses were $435,400 higher for the twelve months ended December 31, 2021 versus the prior year period. Higher employment costs and occupancy and equipment costs (building maintenance and repairs and snow removal costs) more than offset lower OREO and loan related expenses.

Elmer Bancorp’s total assets at December 31, 2021 totaled $375.7 million, an increase of $45.3 million from the December 31, 2020 level of $330.4 million. Total core assets (excluding PPP related assets) totaled $370.2 million, an increase of $63.9 million over December 31, 2020. Total loans were $254.0 million at December 31, 2021, a decrease of $25.4 million from the December 31, 2020 total of $279.4 million. Excluding PPP loan related balances of $5.5 million, total core loans were $248.5 million, $6.8 million lower than December 31, 2020. The allowance for loan losses was 1.83% of total core loans at December 31, 2021 compared to 1.64% at December 31, 2020. In addition, overnight investments increased $49.3 million and investment securities increased $21.2 million year-over-year.

Deposits totaled $344.5 million at December 31, 2021, an increase of $44.1 million from the December 31, 2020 level of $300.4 million. The positive variance from December 31, 2020 resulted from increases in demand deposits ($16.6 million), savings deposits ($15.0 million), interest-bearing checking and money market accounts ($13.7 million) and IRA accounts ($423,000), partially offset by a decline in certificates of deposit ($1.5 million). Stockholders’ equity totaled $29.3 million at December 31, 2021 compared to $28.2 million at December 31, 2020, an increase of $1.1 million. Elmer Bancorp’s book value per common share at December 31, 2021 was $25.50 per share compared to $24.55 per share at December 31, 2020. The Company and the Bank met all regulatory capital requirements at December 31, 2021.

Brian W. Jones, President and Chief Executive Officer, stated, “As 2021 comes to a close, the challenges of the past two years continue to linger. The COVID-19 coronavirus variants continue to disrupt the business community and the economy. As we cope with the ever- changing landscape, we, as a company, continue to abide by the CDC guidelines as well as the State of New Jersey health directives. As a result, this past year, we have experienced temporary closures whether they were lobby only or an entire branch location. I assure you that these closures were, and are, in the best interests of our employees and our customer base in striving to keep everyone as healthy as possible and we appreciate your understanding. Considering all of the challenges, the Company was able to record a 32.7% increase in net income over our 2020 results. Our total core assets increased $63.9 million year-over-year. While our total core loans declined $6.8 million year-over-year, we are optimistic that core loan demand will return in 2022 as the government funded programs and grants over the past two years will more than likely not return in 2022. We are pleased that during 2021 our lending staff approved an additional 120 PPP loans totaling $13.7 million. Overall, we approved $46.1 million in PPP loans over the two year program providing financial assistance to 366 customers. Deposits ended the year at a very strong $344.5 million, a $44.1 million increase over year-end 2020. As stated this time last year, as we begin a new year with COVID-19 outbreaks still occurring, we are hopeful, as everyone else is, that the vaccines along with continued diligence by all will aid in getting us back to normal operations soon. We ask for your understanding and wish to thank you, our loyal customers, our team members, and our stockholders for your continued support and diligence in these difficult times and we wish all a safe, healthy and Happy New Year.”

The First National Bank of Elmer, a nationally chartered bank headquartered in Elmer, New Jersey, has a long history of serving the community since its beginnings in 1903. We are a community bank focused on providing deposit and loan products to retail customers and to small and mid-sized businesses from our six full-service branch offices located in Cumberland, Gloucester and Salem Counties, New Jersey, including our main office located at 10 South Main Street in Elmer, New Jersey. Deposits at The First National Bank of Elmer are insured up to the legally maximum amount by the Federal Deposit Insurance Corporation (FDIC).

For more information about Elmer Bank and its products and services, please visit our website at www.ElmerBank.com or call 1-856-358-7000.

Forward-Looking Statements

This press release and other statements made from time to time by the Company’s management contain express and implied statements relating to our future financial condition, results of operations, credit quality, corporate objectives, and other financial and business matters, which are considered forward-looking statements. These forward-looking statements are necessarily speculative and speak only as of the date made, and are subject to numerous assumptions, risks and uncertainties, all of which may change over time. Actual results could differ materially from those expected or implied by such forward-looking statements. Risks and uncertainties which could cause our actual results to differ materially and adversely from such forward-looking statements include economic conditions affecting the financial industry: changes in interest rates and shape of the yield curve, credit risk associated with our lending activities, risks relating to our market area, significant real estate collateral and the real estate market, operating, legal and regulatory risk, fiscal and monetary policy, economic, political and competitive forces affecting our business, our ability to identify and address cyber-security risks, and management’s analysis of these risks and factors being incorrect, and/or the strategies developed to address them being unsuccessful. Any statements made that are not historical facts should be considered forward-looking statements. You should not place undue reliance on any forward-looking statements. We undertake no obligation to update forward-looking statements or to make any public announcement when we consider forward-looking statements to no longer be accurate, whether as a result of new information of future events, except as may be required by applicable law or regulation.

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