ELMA - Elmer Bancorp Inc. Announces Fourth Quarter and 2019 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, 2019.

For the three months ended December 31, 2019, Elmer Bancorp reported net income of $581,000, or $0.50 per common share compared to $431,000, or $0.38 per common share for the quarter ended December 31, 2018. For the twelve months ended December 31, 2019, net income totaled $2.067 million, or $1.80 per common share compared to $1.850 million, or $1.62 per common share for the twelve months ended December 31, 2018.

Net interest income for the three months ended December 31, 2019 totaled $2.764 million, a decrease of $101,000 from the three months ended December 31, 2018 total of $2.865 million. For the three months ended December 31, 2019 there was no loan loss provision compared to a provision of $160,000 for the three months ended December 31, 2018. The allowance for loan losses was 1.39% of total loans at December 31, 2019 compared to 1.35% at December 31, 2018. Non-interest income for the three months ended December 31, 2019 was $88,300 higher than the same period last year. Service fee income, income from an increase in the cash surrender value of Bank Owned Life Insurance (“BOLI”), higher fee income on sold mortgages and a gain on the sale of other real estate owned (“OREO”) totaling $35,200 were all contributors to the positive variance from last year’s three months ended December 31 period. Total non-interest expenses were $35,300 lower for the three months ended December 31, 2019.

For the twelve months ended December 31, 2019, net interest income totaled $11.129 million compared to $11.209 million for the twelve months ended December 31, 2018, a decrease of $80,000. Non-interest income was $28,800 lower than the 2018 twelve-month period. The twelve months ended December 31, 2018 included a gain of $151,000 gain on the sale of an SBA loan. Service fee income and income from an additional investment in BOLI were $37,700 and $68,900 higher for the twelve months ended December 31, 2019, respectively, versus the prior year period. Total non-interest expenses were $76,500 lower for the twelve months ended December 31, 2019 versus the prior year period. Higher OREO expenses resulting primarily from OREO write-downs were more than offset by lower loan collection expenses and lower legal and professional services, including regulatory assessments.

Elmer Bancorp’s total assets at December 31, 2019 totaled $285.8 million, an increase of $3.1 million from the December 31, 2018 level of $282.7. Total loans were $243.3 million at December 31, 2019, an increase of $3.1 million over year-end 2018 despite several large payoffs of construction related loans as well as the resolution of troubled legacy credits. An increased investment in BOLI of $2.1 million was primarily offset by reductions in the investment portfolio and interest-bearing bank balances.

Deposits totaled $257.2 million at December 31, 2019, an increase of $1.5 million from the December 31, 2018 level of $255.7 million. The positive variance from December 31, 2018 resulted from increases in demand deposits ($4.7 million), savings deposits ($3.4 million) and interest-bearing checking and money market accounts ($3.1 million), partially offset by a decline in certificates of deposit ($9.4 million) which included the maturity in the second quarter of 2019 of a $6.5 million CDARS one-way buy brokered deposit that was not renewed. Stockholders’ equity totaled $26.8 million at December 31, 2019 compared to $25.2 million at December 31, 2018, an increase of $1.6 million. Book value per share at December 31, 2019 was $23.32 per share compared to $21.97 per share at December 31, 2018. The Company and the Bank met all regulatory capital requirements at December 31, 2019.

Brian W. Jones, President and Chief Executive Officer, stated, “2019 proved to be another year of growth and profitability for the Company with total assets of $285.8 million at year-end and net income surpassing the $2 million mark as we continue our expense control efforts. Non-interest expenses for 2019 were $76,500 lower than 2018 despite higher OREO expenses of $60,300 primarily resulting from OREO write-downs. While our loan growth was impacted by construction loan payoffs and workouts of legacy loans, total loans at year-end 2019 were $3.1 million higher than year-end 2018, closing the year at $243.3 million. The allowance for loan losses remains strong at 1.39% of total loans at December 31, 2019 compared to 1.35% at December 31, 2018. Deposits were $1.5 million higher than last year-end which included a $6.5 million CDARS one-way buy brokered deposit that matured in May 2019 and was not renewed. We were pleased to again be recognized by South Jersey Biz magazine with Community Impact and Companies That Rise Above the Rest awards. Our successes are a direct result of the dedication and hard work of all members of our team serving and supporting our local communities. As we move into 2020, we look to continue our growth and profitability, thereby providing a solid return to our shareholders. As we are constantly looking to upgrade our systems, it is our goal in 2020 to deliver additional digital product offerings to our customers. Our team and I want to thank our loyal client base for their continued support and wish them all nothing but the best in the coming 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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