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, 2020.
For the three months ended December 31, 2020, Elmer Bancorp reported net income of $322,000, or $0.28 per common share compared to $581,000, or $0.51 per common share for the quarter ended December 31, 2019. For the twelve months ended December 31, 2020, net income totaled $1.469 million, or $1.28 per common share compared to $2.067 million, or $1.80 per common share for the twelve months ended December 31, 2019.
Net interest income for the three months ended December 31, 2020 totaled $3.181 million, an increase of $417,000 from the three months ended December 31, 2019 total of $2.764 million benefiting from $263,000 of net loan recognition related to the Payroll Protection Program (PPP) loans. For the three months ended December 31, 2020 the loan loss provision totaled $360,000 whereas there was no loan loss provision for the three months ended December 31, 2019. At December 31, 2020, the allowance for loan losses was 1.64% of total core loans (excluding Paycheck Protection Program loans (PPP)) compared to 1.39% of total loans at December 31, 2019.
Non-interest income for the three months ended December 31, 2020 was $84,400 lower than the same period last year. Lower service fee income, premiums on sold mortgages and lower gains on the sale of Other Real Estate Owned (“OREO”) were partially offset by higher income from an increase in the cash surrender value of Bank Owned Life Insurance (“BOLI”). Non-interest expenses were higher for both the three and twelve months ended December 31, 2020 versus the prior year periods by $333,800 and $352,600, respectively. Higher employment costs, legal and professional services, regulatory assessments resulting from the growth in total assets and higher data processing expenses were partially offset by lower occupancy costs (building maintenance and repairs and snow removal costs), marketing costs, loan related expenses, lower write-downs on other real estate and lower other operating expenses.
For the twelve months ended December 31, 2020, net interest income totaled $11.492 million compared to $11.129 million for the twelve months ended December 31, 2019, an increase of $362,500. Non-interest income was $145,900 lower than the 2019 twelve-month period. Declines in service charges on deposit accounts of $147,300 resulting from a reduction in overdraft fees combined with losses on the sale of other real estate of $32,600 were partially offset by an increase of $43,800 in the cash surrender value of Bank Owned Life Insurance (“BOLI”) as the Company increased its investment in BOLI year-over-year. In addition, fee income on the placement of mortgages increased year-over-year. The 2019 year-to-date period included $27,200 of gains on the sale of other real estate owned. Total non-interest expenses were $352,600 higher for the twelve months ended December 31, 2020 versus the prior year period. Higher employment costs, data processing expenses and higher legal and professional services, including higher regulatory assessments, were partially offset by lower occupancy costs (building maintenance and repairs and snow removal costs), lower loan related expenses and lower travel and entertainment expenses resulting from the coronavirus restrictions placed on travel and large gatherings. In addition, there were fewer write-downs of other real estate in the 2020 year-to-date period.
Elmer Bancorp’s total assets at December 31, 2020 totaled $330.4 million, an increase of $44.6 million from the December 31, 2019 level of $285.8 million. Total core assets (excluding PPP related assets) totaled $306.3 million, an increase of $20.5 million higher than December 31, 2019. Total loans were $279.4 million at December 31, 2020, $36.1 million higher than the December 31, 2019 total of $243.3 million. Excluding PPP loan related balances of $24.1 million, total core loans were $255.3 million, $12.0 million higher than December 31, 2019. The allowance for loan losses was 1.64% of total core loans at December 31, 2020 compared to 1.39% at December 31, 2019. In addition, overnight investments increased $11.4 million and investments in BOLI increased $1.6 million year-over-year. The investment portfolio declined $3.7 million year-over-year.
Deposits totaled $300.4 million at December 31, 2020, an increase of $43.2 million from the December 31, 2019 level of $257.2 million. The positive variance from December 31, 2019 resulted from increases in demand deposits ($21.1 million), savings deposits ($11.0 million) and interest-bearing checking and money market accounts ($13.0 million), partially offset by a decline in certificates of deposit and IRA accounts ($2.2 million). Stockholders’ equity totaled $28.2 million at December 31, 2020 compared to $26.8 million at December 31, 2019, an increase of $1.4 million. Elmer Bancorp’s book value per common share at December 31, 2020 was $24.55 per share compared to $23.32 per share at December 31, 2019. The Company and the Bank met all regulatory capital requirements at December 31, 2020.
Brian W. Jones, President and Chief Executive Officer, stated, “To say that 2020 was a challenging year would be an understatement. While our earnings performance for the year was significantly impacted by higher loan loss provisions, professional fees, and a lower interest rate environment than in 2019, we remain a strong financial institution. Our core assets surpassed the $300 million plateau ending the year at $306.3 million and core loans totaled $255.3 million, $12.0 million higher than year-end 2019, representing a 4.9% increase. This core loan growth was accomplished while our loan staff was approving $32.0 million in PPP loans, administering the forbearance loan program, and then helping those loan customers requesting PPP forgiveness through the process. Deposits ended the year at a strong $300.4 million, a $43.2 million increase over year-end 2019. The COVID-19 coronavirus pandemic brought many challenges to our institution, our staff, and our customers. The untimely temporary closings of branch locations gave rise to staffing issues in trying to provide continued quality service to our customers. The slight disruption in service and the protocols adopted were necessary for the safety and well-being of our staff and our loyal customer base. As these measures may have caused some inconvenience, it was necessary for us to follow CDC and state government mandated guidelines to ensure everyone’s safety. As we begin a new year with COVID-19 outbreaks still occurring, we are hopeful, as everyone else is, that the vaccines along with continued diligence by all will aid in getting us back to normal operations soon. While we continue down this path of somewhat uncertainty, we ask for your understanding and wish to thank you, our loyal customers and our team members, for your continued support and diligence in these difficult times and we wish all a Safe, Healthy and Happy New Year.”
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 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, whether as a result of new information of future events, except as may be required by applicable law or regulation.
| ELMER BANCORP, INC. AND SUBSIDIARIES | ||||||||||||||||||
| SELECTED FINANCIAL DATA | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
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Twelve Months Ended |
| Three Months Ended | ||||||||||||||||
12/31/2020 |
| 12/31/2019 |
| 12/31/2020 |
| 9/30/2020 |
| 6/30/2020 |
| 3/31/2020 | ||||||||
| Statement of Income Data: | (dollars in thousands, except per share data) | |||||||||||||||||
| Interest income | $ | 12,422 | $ | 12,194 | $ | 3,403 | $ | 2,941 | $ | 3,075 | $ | 3,003 | ||||||
| Interest expense |
| 930 |
| 1,065 |
| 222 |
| 225 |
| 232 |
| 251 | ||||||
| Net interest income |
| 11,492 |
| 11,129 |
| 3,181 |
| 2,716 |
| 2,843 |
| 2,752 | ||||||
| Provision for loan losses |
| 931 |
| 198 |
| 360 |
| 335 |
| 143 |
| 93 | ||||||
Net interest income after provision for loan losses |
| 10,561 |
| 10,931 |
| 2,821 |
| 2,381 |
| 2,700 |
| 2,659 | ||||||
| Non-interest income |
| 928 |
| 1,074 |
| 242 |
| 220 |
| 220 |
| 246 | ||||||
| Non-interest expense |
| 9,492 |
| 9,139 |
| 2,614 |
| 2,368 |
| 2,250 |
| 2,260 | ||||||
| Income before income tax expense |
| 1,997 |
| 2,866 |
| 449 |
| 233 |
| 670 |
| 645 | ||||||
| Income tax expense |
| 528 |
| 799 |
| 127 |
| 50 |
| 178 |
| 173 | ||||||
| Net income | $ | 1,469 | $ | 2,067 | $ | 322 | $ | 183 | $ | 492 | $ | 472 | ||||||
| Earnings per share: | ||||||||||||||||||
| Basic | $ | 1.28 | $ | 1.80 | $ | 0.28 | $ | 0.16 | $ | 0.43 | $ | 0.41 | ||||||
| Diluted | $ | 1.28 | $ | 1.80 | $ | 0.28 | $ | 0.16 | $ | 0.43 | $ | 0.41 | ||||||
| Weighted average shares outstanding (y-t-d) |
| 1,148,373 |
| 1,147,279 |
| 1,148,373 |
| 1,148,271 |
| 1,148,066 |
| 1,147,454 | ||||||
| Statement of Condition Data (Period End): | 12/31/2020 | 12/31/2019 | 12/31/2020 | 9/30/2020 | 6/30/2020 | 3/31/2020 | ||||||||||||
| Total investments | $ | 8,472 | $ | 12,215 | $ | 8,472 | $ | 9,145 | $ | 9,950 | $ | 11,067 | ||||||
| Total gross loans | $ | 279,370 | $ | 243,309 | $ | 279,370 | $ | 289,147 | $ | 283,869 | $ | 253,129 | ||||||
| Allowance for loan losses | $ | 4,180 | $ | 3,391 | $ | 4,180 | $ | 3,922 | $ | 3,589 | $ | 3,453 | ||||||
| Total assets | $ | 330,417 | $ | 285,843 | $ | 330,417 | $ | 326,600 | $ | 326,859 | $ | 286,075 | ||||||
| Total deposits | $ | 300,424 | $ | 257,192 | $ | 300,424 | $ | 296,828 | $ | 296,767 | $ | 257,022 | ||||||
| Total stockholders' equity | $ | 28,201 | $ | 26,762 | $ | 28,201 | $ | 28,092 | $ | 27,902 | $ | 27,276 | ||||||
| Book value per share | $ | 24.55 | $ | 23.32 | $ | 24.55 | $ | 24.46 | $ | 24.29 | $ | 23.77 | ||||||
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