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 six months ended June 30, 2021.

For the three months ended June 30, 2021, Elmer Bancorp reported net income of $530,000, or $0.46 per common share, compared to $492,000, or $0.43 per common share for the three months ended June 30, 2020. For the six months ended June 30, 2021 net income totaled $933,000, or $0.81 per common share compared to $964,000, or $0.84 per common share for the six months ended June 30, 2020.

Net interest income for the three months ended June 30, 2021 totaled $2.952 million, an increase of $109,000 from $2.843 million in the second quarter of 2020. For the six months ended June 30, 2021, net interest income totaled $6.104 million compared to $5.595 million for the six-month period of 2020. The increase in net interest income for both the three and six-month periods results from interest income and net loan fee income recognized on Payroll Protection Program loans (“PPP”). The loan loss provision was $38,000 lower than last year’s three-month period and $64,000 higher than last year’s six-month period. The allowance for loan losses was 1.80% of total core loans (excludes PPP loans) at June 30, 2021 compared to 1.42% of total core loans at June 30, 2020 reflecting management’s continuing cautious approach to the uncertain impact of the coronavirus on our loan customer base.

Non-interest income for the three months ended June 30, 2021 was $23,500 higher than the same three-month period a year ago and $29,300 higher than the six-month period last year. Higher service fee income, and higher gains on the sale of Other Real Estate Owned (“OREO”) accounted for the increase in the three-month period. For the six-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 more than offset a decline in overdraft fee income.

Non-interest expenses were higher for the three and six months ended June 30, 2021 versus the prior year periods by $110,100 and $508,600, respectively. Increases in professional fees, employment costs, occupancy and equipment expenses and miscellaneous expenses were partially offset by lower advertising costs, data processing and OREO expenses.

Elmer Bancorp’s total assets at June 30, 2021 totaled $371.4 million, an increase of $44.5 million from the June 30, 2020 level of $326.9 million. Total core assets (excluding PPP related assets) totaled $352.1 million, an increase of $56.3 million from the June 30, 2020 total of $295.8 million. The increase in core assets results primarily from an increase in overnight investments.

Loans totaled $267.7 million at June 30, 2021, a decrease of $16.2 million from the June 30, 2020 total of $283.9 million. Excluding PPP loan related balances of $19.3 million, total core loans were $248.4 million, $4.4 million lower than the June 30, 2020 total core loans of $252.8 million reflecting the decline in loan demand during the pandemic. At June 30, 2021, the allowance for loan losses was 1.80% of total core loans compared to 1.42% at June 30, 2020.

Deposits totaled $340.5 million at June 30, 2021, a $43.7 million increase over the June 30, 2020 total of $296.8 million, reflecting increases of $27.9 million and $15.6 million in interest bearing and non-interest bearing deposits, respectively. Stockholders’ equity totaled $28.9 million at June 30, 2021. The book value per share at June 30, 2021 was $25.13 compared to $24.29 per share at June 30, 2020 and $24.55 per share at December 31, 2020. The Company and the Bank met all regulatory capital requirements at June 30, 2021.

Brian W. Jones, President and Chief Executive Officer stated, “We are pleased with the level of profitability in this second quarter. The $530,000 in net income is the highest level of quarterly earnings since the fourth quarter of 2019. We remain cautiously optimistic regarding earnings growth considering the uncertain economic outlook, sluggish loan demand and the overall effect of the pandemic on our customer base. While we reduced our loan loss provision in the second quarter of 2021, we continue to maintain a strong allowance for loan losses at 1.80% net of PPP loans. We wish to thank our loyal customers, shareholders, and team members for their continued support during the pandemic and we are pleased that we were able to re-open all our branch lobbies on May 10, 2021. Fully opening our branch system has resulted in more face-to-face meetings, assisting our employees in enhancing the outstanding customer service they provide. We remain hopeful that the worst is behind us and that we can get back to some sense of normalcy.”

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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