ELMER BANCORP, INC. ANNOUNCES SECOND CONSECUTIVE YEAR OF RECORD EARNINGS, FOURTH QUARTER AND 2023 ANNUAL FINANCIAL RESULTS

ELMER, NEW JERSEY – January 25, 2024 – 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, 2023.

For the three months ended December 31, 2023, Elmer Bancorp reported net income of $638,000, or $0.56 per common share compared to $1.025 million, or $0.89 per common share for the quarter ended December 31, 2022. For the twelve months ended December 31, 2023, net income totaled $3.181 million, or $2.77 per common share compared to $2.604 million, or $2.26 per common share for the twelve months ended December 31, 2022.

Net interest income for the three months ended December 31, 2023 totaled $3.776 million, an increase of $56,000 from the three months ended December 31, 2022 total of $3.720 million.   For the twelve months ended December 31, 2023, net interest income totaled $14.996 million, an increase of $2.201 million from the twelve months ended December 31, 2022 total of $12.795 million.  The increase in net interest income for the three- month period results from higher interest income on loans partially offset by lower interest income on our overnight investments and higher interest paid on deposits.  For the twelve-month period, the increase in net interest income is the result of higher interest income on loans resulting from core loan growth year-over-year and higher interest income on our overnight investments partially offset by higher interest paid on deposits.  The loan loss provision was reduced by $8,000 for the three months and increased by $5,000 for the twelve months ended December 31, 2023 compared to a reduction of $87,000 for the three months ended December 31, 2022 and a reduction of $174,000 for the twelve months ended December 31, 2022.  The $174,000 represents a reversal of the provision that was specifically allocated to the COVID-19 pandemic.  The allowance for loan losses was 1.41% of total core loans at December 31, 2023 compared to 1.57% of total core loans at December 31, 2022.

Non-interest income for the three months ended December 31, 2023 was $9,000 higher than the same three-month period a year ago and $16,000 lower than the twelve-month period last year.  For the three-month period, the increase was the result of higher premiums on sold mortgages and higher service fee income.  For the twelve-month period, a decline in premiums on sold mortgages was partially offset by increases in service fee income and increases in the cash surrender value of Bank Owned Life Insurance (‘BOLI”).

Non-interest expenses were higher for the three and twelve months ended December 31, 2023 versus the prior year periods by $534,000 and $1.166 million respectively.  Increases in employment costs, occupancy and equipment expenses, data processing costs, advertising and marketing expenses, Other Real Estate Owned (“OREO”) expenses, loan related expenses and miscellaneous expenses were partially offset by lower professional fees. In the fourth quarter of 2023, a parcel of bank-owned, underdeveloped land was written down by $279,000 which reflects its current appraised value.  Based on market conditions, the Bank expects to develop or liquidate this asset in the future.

Elmer Bancorp’s total assets at December 31, 2023 totaled $364.6 million, a decrease of $6.9 million from the December 31, 2022 level of $371.5 million.  Total core assets (excluding $14.4 million in overnight funds from a large temporary deposit) totaled $350.2 million, a decrease of $21.3 million over December 31, 2022. Total loans were $289.7 million at December 31, 2023, an increase of $10.8 million from the December 31, 2022 total of $278.9 million. The increase in loans was more than offset by a decrease in overnight investments of $17.0 million.

Deposits totaled $330.1 million at December 31, 2023, a decrease of $10.2 million from the December 31, 2022 level of $340.3 million.  Total core deposits (excluding the $14.4 million large temporary deposit) totaled $315.7 million, a decrease of $24.6 million over December 31, 2022.  The negative variance from December 31, 2022 resulted from decreases in money market accounts ($17.9 million), savings deposits ($11.5 million), demand deposits ($777,000) and IRA accounts ($851,000) partially offset by an increase in interest-bearing checking accounts ($12.9 million) and an increase in certificates of deposit ($7.9 million).   This decrease in deposits is reflective of the highly competitive nature of current interest rates as well as the Bank’s balance sheet continuing to adjust to pre-pandemic numbers.  The Bank will continue to evaluate the current deposit environment and adjust, as appropriate, to maintain its strong deposit base.  Stockholders’ equity totaled $32.7 million at December 31, 2023 compared to $29.3 million at December 31, 2022, an increase of $3.4 million. Elmer Bancorp’s book value per common share at December 31, 2023 was $28.62 per share compared to $25.45 per share at December 31, 2022.  The Company and the Bank met all regulatory capital requirements at December 31, 2023.

Brian W. Jones, President and Chief Executive Officer, commented, “We are very pleased to announce record earnings for the second year in a row.  We completed 2023 with earnings in excess of $3.1 million, $577,000 over our 2022 total income.  The increase in loan balances year-over-year contributed significantly to our outstanding 2023 results.  Our loan balances of $289.7 million at December 31, 2023 were the highest in the history of our institution.  Deposit retention remains extremely challenging with an excessive degree of volatility within our target market.  It is difficult to predict the economic and interest rate scenarios in the coming year, however, the Bank is in a strong position to respond to these market conditions. In closing, I wish to thank our loyal customers, shareholders and employees for their continued support and wish them all a happy, healthy New Year.”

Chairman, P. Scott Boyer, stated, “This past year proved to be yet another outstanding year for the Bank.  I appreciate all the hard work and dedication that our employees have shown and thank them for making this year such a success.”

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.

Cynthia L. Volk

Senior Vice President

Financial Officer

856-358-7000