Elmer Bancorp, Inc. Announces Second Quarter 2020 Financial Results

ELMER BANCORP, INC. ("Elmer Bancorp" or the "Company") 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, 2020.

For the three months ended June 30, 2020, Elmer Bancorp reported net income of $492,000, or $0.43 per common share compared to $467,000, or $0.41 per common share for the quarter ended June 30, 2019. For the six months ended June 30, 2020 net income totaled $964,000, or $0.84 per common share compared to $930,000, or $0.81 per common share for the six months ended June 30, 2019.

Net interest income for the three months ended June 30, 2020 totaled $2.843 million, an increase of $58,000 from the three months ended June 30, 2019 total of $2.785 million. For the six months ended June 30, 2020, net interest income totaled $5.595 million compared to $5.589 million for the six-month period of 2019. An increase in interest income on loans resulting from core loan growth year-over-year and interest income related to the addition of $32.0 million in SBA PPP (Paycheck Protection Program) loans was almost entirely offset by a reduction in interest income on overnight investments resulting from the significant drop in interest rates during the period. The loan loss provision for the three months ended June 30, 2020 totaled $143,000 compared to $70,000 for the three months ended June 30, 2019, an increase of $73,000, or 104%, as management continues to remain cautious in the current operating environment by adding to the allowance for losses. The allowance for loan losses was 1.42% of total core loans (excluding PPP loans) at June 30, 2020 compared to 1.39% of total loans at December 31, 2019.

Non-interest income for the three months ended June 30, 2020 was $38,000 lower than the same three-month period last year and $12,000 lower than the six-month period last year. Significant declines in service charges on deposit accounts, primarily overdraft fees, were partially offset by an increase in the cash surrender value of Bank Owned Life Insurance ("BOLI") as the Company increased it's investment in BOLI year-over-year. In addition, fee income on the placement of mortgages increased year-over-year. Non-interest expenses were lower for the three and six months ended June 30, 2020 versus the prior year periods by $80,000 and $93,000, respectively. The 2019 periods included other real estate owned ("OREO") write-downs totaling $84,000 compared to $17,000 for the three and six months ended June 30, 2020. In addition, lower occupancy costs (building maintenance and repairs and snow removal costs) and miscellaneous expenses were partially offset by higher legal and professional fees and data processing expenses.

Elmer Bancorp's total assets at June 30, 2020 totaled $326.9 million compared to $282.8 million at June 30, 2019. Total core assets (excluding PPP related assets) totaled $294.5 million, an increase of $11.7 million over June 30, 2019 and $8.7 million higher than December 31, 2019. Loans totaled $283.9 million at June 30, 2020. Total core loans (excluding PPP loans) at June 30, 2020 were $252.8 million, $17.4 million higher than June 30, 2019 and $9.5 million higher than December 31, 2019. The growth in loans was attributable to increases in commercial real estate and construction loans.

Deposits saw a significant increase primarily resulting from the PPP loan program and other government stimulus programs. At June 30, 2020, total deposits were $296.8 million, an increase of $39.6 million over the December 31, 2019 total of $257.2 million. Increases in non-interest-bearing demand deposits, money market accounts and savings deposits contributed to the increase in deposit levels. Stockholders' equity at June 30, 2020 totaled $27.9 million compared to $26.8 million at December 31, 2019. Book value per share at June 30, 2020 was $24.29 per common share compared to $23.32 at December 31, 2019 and $22.71 at June 30, 2019. The Company and the Bank met all capital requirements at June 30, 2020.

Brian W. Jones, President and Chief Executive Officer, stated, "While we are pleased that our earnings performance for the second quarter and the year-to-date 2020 exceeded the results for the same periods of 2019, we remain cautious and diligent in the current operating environment. The coronavirus (COVID-19) pandemic has presented unique challenges in the banking industry, including the timely execution of the SBA PPP loan program. We are proud to have extended $32 million in PPP loans to 240 businesses which assisted in saving over 4,000 local jobs. At the same time, we are pleased to report the growth in our core loans and deposits. The coronavirus pandemic leaves much uncertainty about future economic conditions and the overall effect it will have on the capital of many financial institutions. Going forward, we anticipate increases in the provision for loan losses to bolster our allowance for possible loan losses related to the COVID-19 pandemic. As we continue to navigate through these trying times, we wish to thank our loyal customers, stockholders and employees for their continued support and wish you all good health."

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200724005396/en/