ELMA - Elmer Bancorp Inc. Announces Third Quarter 2019 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 three and nine months ended September 30, 2019.

For the three months ended September 30, 2019, Elmer Bancorp reported net income of $556,000, or $0.49 per common share compared to $494,000, or $0.43 per common share for the quarter ended September 30, 2018. For the nine months ended September 30, 2019 net income totaled $1.486 million, or $1.30 per common share compared to $1.419 million, or $1.24 per common share for the nine months ended September 30, 2018.

Net interest income for the three months ended September 30, 2019 totaled $2.791 million, a decrease of $76,000 from the three months ended September 30, 2018 total of $2.867 million. For the nine months ended September 30, 2019, net interest income totaled $8.389 million compared to $8.364 million for the nine months ended September 30, 2018. The loan loss provision for the three months ended September 30, 2019 totaled $23,000 compared to $135,000 for the three months ended September 30, 2018. The allowance for loan losses was 1.45% of total loans at September 30, 2019 compared to 1.35% at December 31, 2018.

Non-interest income for the three months ended September 30, 2019 was $40,000 higher than the same period last year. The prior year period included a $24,700 loss on the sale of other real estate owned (“OREO”). For the nine months ended September 30, 2019, non-interest income was $121,000 lower than the 2018 nine-month period. The nine months ended September 30, 2018 included net gains on the sale of OREO totaling $39,200 and a $151,000 gain on the sale of an SBA loan. Service fee income and income from an increase in the cash surrender value of Bank Owned Life Insurance (“BOLI”) were $17,300 and $78,400 higher for the three and nine months ended September 30, 2019, respectively, versus the prior year period. Total non-interest expenses were lower for the three and nine months ended September 30, 2019 versus the prior year periods by $26,000 and $42,000, respectively. 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 September 30, 2019 totaled $285.4 million, an increase of $2.7 million from the December 31, 2018 level of $282.7 million and $451,000 lower than the September 30, 2018 total of $285.8 million. Total loans were $236.4 million at September 30, 2019, a decrease of $3.8 million from the year-end 2018 total of $240.2 million and $6.6 million lower than September 30, 2018 total loans of $243.0 million. The decline in total loans primarily resulted from several large payoffs in the nine-month 2019 period consisting of construction related loans as well as troubled legacy credits.

Deposits totaled $257.1 million at September 30, 2019, an increase of $1.4 million from the December 31, 2018 level of $255.7 million and $2.2 million lower than the September 30, 2018 total of $259.3 million. The positive variance from December 31, 2018 resulted from increases in demand deposits ($6.4 million) and savings deposits ($3.6 million) offset by a decline in certificates of deposit of $8.4 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 $26.7 million at September 30, 2019 compared to $25.2 million at December 31, 2018 and $24.7 million at September 30, 2018. Book value per share at September 30, 2019 was $23.24 per share compared to $21.97 per share at December 31, 2018 and $21.58 per share at September 30, 2018. The Company and the Bank met all regulatory capital requirements at September 30, 2019.

Brian W. Jones, President and Chief Executive Officer, stated, “We are pleased to report that the Company’s earnings were strong for the three and nine months ended September 30, 2019, surpassing last year’s third quarter and nine months performance levels. The nine months ended September 30, 2018 included a one-time SBA gain of $151,000 and net gains on the sale of OREO of $39,200. Total non-interest expenses were $41,000 lower in the nine-month 2019 period versus the 2018 period as we continue our efforts to control expenses. At September 30, 2019, total past due loans, including non-accruing loans, decreased $1.9 million from the December 31, 2018 levels as we continue to reduce problem legacy loan exposures. The allowance for loan losses remains strong at 1.45% of total loans at September 30, 2019 compared to 1.35% at December 31, 2018. Deposits were $1.4 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 thank our customers for their continued loyalty and support and our staff for their continued hard work and dedication.”

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 nine 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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