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, 2021.

For the three months ended September 30, 2021, Elmer Bancorp reported net income of $604,000, or $0.53 per common share, compared to $183,000, or $0.16 per common share for the three months ended September 30, 2020. For the nine months ended September 30, 2021 net income totaled $1.537 million, or $1.34 per common share compared to $1.147 million, or $1.00 per common share for the nine months ended September 30, 2020.

Net interest income for the three months ended September 30, 2021 totaled $2.971 million, an increase of $255,000 from $2.716 million in the third quarter of 2020. For the nine months ended September 30, 2021, net interest income totaled $9.075 million compared to $8.311 million for the nine-month period of 2020. The increase in net interest income for both the three and nine-month periods results from interest income and net loan fee income recognized on Payroll Protection Program loans (“PPP”), higher interest income on commercial real estate loans and residential mortgage loans and a higher level of interest income on investments. The loan loss provision was $335,000 lower than last year’s three-month period and $271,000 lower than last year’s nine-month period as we did not record a provision in this year’s third quarter. The allowance for loan losses was 1.81% of total core loans (excludes PPP loans) at September 30, 2021 compared to 1.52% of total core loans at September 30, 2020 maintaining management’s continuing cautious approach to the uncertain impact of the economy and the coronavirus on our loan customer base.

Non-interest income for the three months ended September 30, 2021 was $36,000 higher than the same three-month period a year ago and $65,000 higher than the nine-month period last year. Higher service fee income, and higher gains on the sale of Other Real Estate Owned (“OREO”) (versus OREO losses in the 2020 three-month period) accounted for the increase in the three-month period. For the nine-month period, increases in the cash surrender value of Bank Owned Life Insurance (“BOLI”), higher fees on sold mortgages, increased debit card fee income and gains on the sale of OREO (versus OREO losses in the 2020 nine-month period) more than offset a decline in overdraft fee income.

Non-interest expenses were higher for the three and nine months ended September 30, 2021 versus the prior year periods by $22,000 and $531,000, respectively. Increases in professional fees, employment costs, occupancy and equipment expenses and miscellaneous expenses were partially offset by lower data processing costs, OREO expenses and loan related expenses.

Elmer Bancorp’s total assets at September 30, 2021 totaled $370.8 million, an increase of $44.2 million from the September 30, 2020 level of $326.6 million. Total core assets (excluding PPP related assets) totaled $361.3 million, an increase of $66.4 million from the September 30, 2020 total of $294.9 million. The increase in core assets results primarily from increases in overnight investments and the investment portfolio.

Loans totaled $261.1 million at September 30, 2021, a decrease of $28.0 million from the September 30, 2020 total of $289.1 million. Excluding PPP loan related balances of $9.5 million, total core loans were $251.6 million, $5.8 million lower than the September 30, 2020 total core loans of $257.4 million. At September 30, 2021, the allowance for loan losses was 1.81% of total core loans compared to 1.52% at September 30, 2020.

Deposits totaled $339.4 million at September 30, 2021, a $42.6 million increase over the September 30, 2020 total of $296.8 million, reflecting increases of $29.8 million and $12.8 million in interest bearing and non-interest bearing deposits, respectively. Stockholders’ equity totaled $29.4 million at September 30, 2021. The book value per share at September 30, 2021 was $25.61 compared to $24.46 per share at September 30, 2020 and $24.55 per share at December 31, 2020. The Company and the Bank met all regulatory capital requirements at September 30, 2021.

Brian W. Jones, President and Chief Executive Officer stated, “While we are pleased with the $604,000 of net income generated in the third quarter, which surpassed our second quarter level of performance, we continue to remain cautious regarding future results due to uncertainties surrounding the economy, the coronavirus pandemic which seems to linger on, and the effects, both short and long-term, on our customer base. Sluggish loan demand, inflation, and supply chain issues, among other things, are all contributors to these uncertainties. While we did not set aside a loan loss provision in the third quarter of 2021, we continue to maintain a strong allowance for loan losses at 1.81% of total core loans (net of PPP loans). In closing, we apologize for any inconvenience caused to our customer base regarding the recent temporary closures of some of our branch locations. These closings were out of an abundance of caution and in the best interests of our staff and our customers. As always, we are grateful to our loyal customer base, shareholders, and team members for their continued support.”

In addition, as previously announced on October 1, 2021, the Board of Directors declared a $0.20 per common share dividend payable on November 1, 2021 to shareholders of record as of the close of business on October 15, 2021. This dividend represents a 17.6% increase from the $0.17 per common share declared in April 2021.

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 toll free 1-877-358-8141.

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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