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 fourth quarter and full year ended December 31, 2022.

For the three months ended December 31, 2022, Elmer Bancorp reported net income of $1.025 million, or $0.89 per common share compared to $412,000, or $0.36 per common share for the quarter ended December 31, 2021. For the twelve months ended December 31, 2022, net income totaled $2.604 million, or $2.26 per common share compared to $1.949 million, or $1.70 per common share for the twelve months ended December 31, 2021.

Net interest income for the three months ended December 31, 2022 totaled $3.720 million, an increase of $922,000 from the three months ended December 31, 2021 total of $2.798 million. For the twelve months ended December 31, 2022, net interest income totaled $12.795 million, an increase of $923,000 from the twelve months ended December 31, 2021 total of $11.872 million. The increase in net interest income for the three-month period results from higher interest income on our overnight investments and higher interest income on loans resulting from core loan growth year-over-year. For the twelve-month period, the increase in interest income on our overnight investments was partially offset by lower loan interest income and net loan fee income recognized on PPP loans. The loan loss provision was reduced by $87,000 for the three months and $174,000 for the twelve months ended December 31, 2022 compared to no loan loss provision for the three months ended December 31, 2021 and a $300,000 provision for the twelve months ended December 31, 2021. The $174,000 represents a reversal of the provision that was specifically allocated to the COVID-19 pandemic ($87,000 reversal in the third quarter and $87,000 reversal in the fourth quarter of 2022). The allowance for loan losses was 1.57% of total core loans at December 31, 2022 compared to 1.83% of total core loans at December 31, 2021.

Non-interest income for the three months ended December 31, 2022 was $29,500 lower than the same three-month period a year ago and $9,000 higher than the twelve-month period last year. For the three-month period, a decrease in premiums on sold mortgages and no gains on the sale of Other Real Estate Owned (“OREO”) were partially offset by higher service fee income. For the twelve-month period, increases in service fee income more than offset a decline in premiums on sold mortgages and a decrease in gains on the sale of OREO.

Non-interest expenses were higher for the three and twelve months ended December 31, 2022 versus the prior year periods by $103,600 and $466,400, respectively. Increases in employment costs, occupancy and equipment expenses, data processing costs and miscellaneous expenses were partially offset by lower professional fees, loan related expenses and OREO expenses.

Elmer Bancorp’s total assets at December 31, 2022 totaled $371.5 million, a decrease of $4.2 million from the December 31, 2021 level of $375.7 million. Total core assets (excluding PPP related assets) totaled $371.5 million, an increase of $1.3 million over December 31, 2021. Total loans were $278.9 million at December 31, 2022, an increase of $24.9 million from the December 31, 2021 total of $254.0 million. Excluding December 31, 2021 PPP loan related balances of $5.5 million, total core loans at December 31, 2022 were $30.4 million higher than December 31, 2021. In addition, overnight investments decreased $26.6 million and investment securities decreased $3.5 million year-over-year.

Deposits totaled $340.3 million at December 31, 2022, a decrease of $4.2 million from the December 31, 2021 level of $344.5 million. The negative variance from December 31, 2021 resulted from decreases in certificates of deposit ($6.1 million), demand deposits ($2.3 million) and IRA accounts ($1.5 million) partially offset by an increase in savings deposits ($3.1 million) and an increase in interest-bearing checking and money market accounts ($2.6 million). This decrease in deposits is reflective of runoff that is starting to occur on deposits of government stimulus programs that have been artificially inflating our deposit totals. Stockholders’ equity totaled $29.3 million at December 31, 2022 compared to $29.5 million at December 31, 2021, a decrease of $169,300. Elmer Bancorp’s book value per common share at December 31, 2022 was $25.45 per share compared to $25.62 per share at December 31, 2021. The book value of the Company at December 31, 2022 was affected by the unrealized comprehensive loss on the balance sheet which is largely a function of the significant increases in interest rates. This loss is a book entry and would not be incurred unless, in the unlikely event, the Bank had to liquidate securities. The Company and the Bank met all regulatory capital requirements at December 31, 2022.

Brian W. Jones, President and Chief Executive Officer, commented, “As the bank enters 2023, we celebrate 120 years of serving the public and record earnings of over $2.6 million. It should also be noted that our 2022 fourth quarter net income figure of $1.025 million was the best single quarter in the bank’s history. Contributing to our 2022 results was an increase in our core loans, net of PPP loans, of $30.4 million or over 12%, which will prove to be a driving force in our continued effort to penetrate our target markets. Moving forward, we recognize the challenges ahead of us in 2023. A rising interest rate environment supplies both opportunities and challenges to our balance sheet, income statement, and our general operations. COVID-19 continues to present intermittent issues to our bank and to the general public. The economic environment remains uncertain as recessionary pressures must be accounted for and managed. The overriding good news is that we have positioned our institution to remain a strong and significant financial partner within our communities in 2023 and beyond. In summary, this past year proved to be an outstanding year, not just in terms of income, but in our ability to serve our clients and to make significant improvements in our infrastructure. I would like to thank you, our loyal customer base, and our outstanding team members who continue to provide unparalleled service to our clients. I would also like to thank our Board of Directors, specifically Chairman Boyer, for their consistent support and guidance, without such, our exceptional results would be impossible.”

Chairman, P. Scott Boyer, stated, “The Bank had a truly outstanding year in 2022. I would like to thank all of our employees for their hard work and service to our banking community which allowed us to achieve these great results.”

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, whether as a result of new information of future events, except as may be required by applicable law or regulation.

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