Elmer Bancorp, Inc. Announces Third Quarter 2023 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, 2023.

For the three months ended September 30, 2023, Elmer Bancorp reported net income of $771,000, or $0.67 per average diluted common share, compared to $759,000, or $0.66 per average diluted common share for the three months ended September 30, 2022. For the nine months ended September 30, 2023 net income totaled $2.544 million or $2.21 per average diluted common share compared to $1.579 million, or $1.37 per average diluted common share for the nine months ended September 30, 2022.

Net interest income for the three months ended September 30, 2023 totaled $3.688 million, an increase of $356,000 from $3.332 million in the third quarter of 2022. For the nine months ended September 30, 2023, net interest income totaled $11.220 million compared to $9.075 million for the nine-month period of 2022. This increase in net interest income for the three-month period is related to higher interest and fees on loans resulting from core loan growth year-over-year partially offset by higher interest paid on deposits and lower interest income on our overnight investments. For the nine-month period, the increase in interest income was the result of higher interest and fees on loans and higher interest income on our overnight investments partially offset by higher interest paid on deposits. The loan loss provision was increased by $78,000 and $13,000 for the three and nine months ended September 30, 2023 compared to no loan loss provision in the first half of the year and a reduction in the loan loss provision of $87,000 in the third quarter of 2022. This adjustment was the result of the bank implementing the required loan loss calculation under the Current Expected Credit Loss (“CECL”) model.

Non-interest income for the three months ended September 30, 2023 was $5,000 higher than the same three-month period a year ago and $26,000 lower than the nine-month period last year. For the three-month period, higher service fee income was partially offset by higher Other Real Estate Owned (“OREO”) expenses and lower premiums on sold mortgages. For the nine-month period, a decrease in premiums on sold mortgages was partially offset by higher service fee income.

Non-interest expenses were higher for the three and nine months ended September 30, 2023 versus the prior year periods by $172,000 and $631,000, respectively. Increases in employment costs, data processing expenses, occupancy and equipment expenses, miscellaneous expenses, other real estate owned expenses and advertising/marketing expenses were partially offset by lower professional fees.

Elmer Bancorp’s total assets at September 30, 2023 totaled $353.7 million, a decrease of $31.9 million from the September 30, 2022 level of $385.6 million. Loans totaled $286.5 million at September 30, 2023, an increase of $19.4 million from the September 30, 2022 total of $267.1 million. The increase in loans was more than offset by a decrease in overnight investments of $50.6 million. At September 30, 2023, the allowance for loan losses was 1.43% of total loans.

Deposits totaled $320.1 million at September 30, 2023, a $35.3 million decrease over the September 30, 2022 total of $355.4 million, reflecting decreases of $29.3 million and $6.0 million in interest bearing and non-interest bearing deposits, respectively. This decrease in deposits is reflective of runoff that is occurring on deposits from government stimulus programs that have been artificially inflating our deposit totals. Stockholders’ equity totaled $31.6 million at September 30, 2023. The book value per share at September 30, 2023 was $27.44 compared to $24.63 per share at September 30, 2022. The Bank met all regulatory capital requirements to be classified as a well-capitalized institution as of September 30, 2023.

Brian W. Jones, President and Chief Executive Officer stated, “The third quarter proved to be yet another quarter of strong earnings. The increase in interest earned on our overnight investments as well as the increase in our loan balances of $19.4 million have both contributed to the year-over-year significant increase in our net interest income. Our deposits continue to be a significant source of liquidity for the bank as they continue to adjust toward pre-pandemic levels. As we prepare to close out the year, we would like to thank our customers, shareholders and team members for their loyalty and support.”

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 legal 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 toll free 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 because of new information of future events, except as may be required by applicable law or regulation.

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