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PRESS RELEASE
OCEAN SHORE HOLDING CO. REPORTS 2004 AND 4TH QUARTER EARNINGS
Ocean City, New Jersey - January 26, 2005 - Ocean Shore Holding Co.
(NASDAQ: OSHC) today announced net income of $1.3 million for the year ended
December 31, 2004, as compared to $2.7 million for the year ended December 31,
2003. Net income for the quarter ended December 31, 2004 was a net loss of
$756,000 as compared to net income of $732,000 for the quarter ended December
31, 2003. The net loss for the fourth quarter of 2004 and the reduced income for
the fiscal year were due to the nonrecurring expense associated with the pretax
$2.0 million contribution ($1.3 million after tax) to the newly formed Ocean
City Home Charitable Foundation.
Ocean Shore Holding Co. (the "Company") is the holding company for
Ocean City Home Bank (the "Bank"), a federal savings bank headquartered in Ocean
City, New Jersey. The Bank operates a total of six full-service banking offices
in southern New Jersey.
On December 21, 2004, the Company completed its initial public
offering, issuing a total of 8,762,742 shares of the Company's common stock,
consisting of 4,761,000 shares to OC Financial MHC, the mutual holding company
parent of the Company, 343,499 shares to the Bank's Employee Stock Ownership
Plan, 166,492 shares to the Ocean City Home Charitable Foundation, and 3,491,751
shares to eligible depositors. The Company received $33 million of net proceeds
in the offering.
As part of the stock offering, the Company formed the Ocean City Home
Charitable Foundation, which was funded with $335,000 and 166,492 shares of the
Company's common stock. Ocean City Home Charitable Foundation will make grants
and donations to non-profit and community groups and projects located within the
Bank's market area. This stock and cash contribution was recorded as an expense
of $2.0 million, or approximately $1.3 million after income taxes.
"I am very pleased to report our earnings for 2004," said President and
Chief Executive Officer Steven E. Brady. "Excluding the effects of our one-time
contribution to the Ocean City Home Charitable Foundation, we generated strong
returns in a challenging economic environment. With the aid of our recently
completed public offering, we surpassed a half a billion in assets and
positioned the Company for continued growth."
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SOLID GROWTH IN NET INTEREST INCOME AND OTHER INCOME
Net interest income increased 6.6% for 2004 compared to 2003 and 4.9%
for the fourth quarter of 2004 compared to the fourth quarter of 2003. For the
full year, interest income increased 0.9% to $22.7 million while interest
expense decreased 6.2% to $9.4 million. The slight growth in interest income was
the result of growth in average interest-earning assets that was offset by a
decline in the average yield. The growth in assets generally came in the loan
portfolio, which experienced a decline in the average yield due to the
prevailing low interest rate environment. Interest expense declined as higher
cost deposits continued to roll off and the average balance of certificates of
deposit declined. For the fourth quarter, interest income increased 5.7% to $5.9
million while interest expense increased 6.8% to $2.5 million.
For 2004, other income increased 12.4% to $2.4 million. For the fourth
quarter, other income increased 12.9% to $630,000. For both the year and the
fourth quarter, the Company experienced increases in service charges and fees,
loan servicing fees from the Company's loan modification program and increases
in the surrender value of bank-owned life insurance. The Company did not record
any gains or losses on the sale of loans or securities in 2004.
CONTRIBUTION TO FOUNDATION IMPACTS OTHER EXPENSES
Other expenses totaled $11.0 million for 2004 and $3.0 million for the
fourth quarter before the $2.0 million expense for the contribution to the
charitable foundation. Salary and employee benefits expense increased over the
prior year due primarily to regular salary increases. The Company also
experienced increases in occupancy and equipment expense due to recent building
renovations and increased data processing expenses due to an increase in deposit
accounts.
TOTAL ASSETS GROW 10.2%
Total assets grew 10.2% to $528.9 million at December 31, 2004. This
growth was fueled by the recently completed stock offering and continued growth
in deposits. Loans receivable grew 12.9% to $340.6 million at December 31, 2004.
Mortgage loans increased 8.2%, commercial loans increased 20.4% and consumer
loans increased 39.5%. Investment and mortgage-backed securities decreased 3.6%
and 12.9%, respectively, as the Company invested excess liquidity in cash and
cash equivalents.
Deposits grew 6.4% in 2004 to $415.3 at December 31, 2004. The Company
continued its focus on non-interest-bearing deposits, which increased 31.3% to
$35.3 million. Federal Home Loan Bank advances and subordinated debt were
unchanged from December 31, 2003, while other borrowings declined 35.7% to $22.8
million at December 31, 2004. Following the completion of the stock offering,
the Company used a portion of the net proceeds to reduce securities sold under
agreements to repurchase.
Stockholders' equity increased $36.1 million, or 150.8%, to $60.1
million at December 31, 2004, primarily due to the net proceeds of the stock
offering.
ASSET QUALITY REMAINS EXCELLENT
The Company's asset quality remained excellent in 2004. Non-performing
assets totaled only $4,000 at December 31, 2004, compared to $406,000 at
December 31, 2003. Net charge-offs were $10,000 in 2004, compared to $19,000 in
2003. The allowance for loan losses was .43% of total loans at December 31, 2004
compared to .37% of total loans at the end of the previous year.
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This press release, as well as other written communications made from
time to time by the Company and its subsidiaries and oral communications made
from time to time by authorized officers of the Company, may contain statements
relating to the future results of the Company (including certain projections and
business trends) that are considered "forward-looking statements" as defined in
the Private Securities Litigation Reform Act of 1995 (the PSLRA). Such
forward-looking statements may be identified by the use of such words as
"believe," "expect," "anticipate," "should," "planned," "estimated," "intend"
and "potential." For these statements, the Company claims the protection of the
safe harbor for forward-looking statements contained in the PSLRA.
The Company cautions you that a number of important factors could cause
actual results to differ materially from those currently anticipated in any
forward-looking statement. Such factors include, but are not limited to:
prevailing economic and geopolitical conditions; changes in interest rates, loan
demand, real estate values and competition; changes in accounting principles,
policies, and guidelines; changes in any applicable law, rule, regulation or
practice with respect to tax or legal issues; and other economic, competitive,
governmental, regulatory and technological factors affecting the Company's
operations, pricing, products and services. The forward-looking statements are
made as of the date of this release, and, except as may be required by
applicable law or regulation, the Company assumes no obligation to update the
forward-looking statements or to update the reasons why actual results could
differ from those projected in the forward-looking statements.
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SELECTED FINANCIAL CONDITION DATA
DECEMBER 31,
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2004 2003 % CHANGE
------------------ ----------------- ------------------
(IN THOUSANDS)
Total assets....................................... $528,850 $479,844 10.2%
Cash and cash equivalents.......................... 47,649 28,759 65.7
Investment securities.............................. 63,085 65,436 (3.6)
Mortgage-backed securities ........................ 54,182 62,236 (12.9)
Loans receivable, net.............................. 340,585 301,778 12.9
Deposits. 415,328 390,274 6.4
FHLB advances...................................... 10,000 10,000 0.0
Subordinated debt.................................. 15,464 15,464 0.0
Other borrowings................................... 22,840 35,504 (35.7)
Stockholder equity................................. 60,119 23,975 150.8
SELECTED OPERATIONS DATA
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
----------------------------- -----------------------------
2004 2003 % CHANGE 2004 2003 % CHANGE
------------- -------------- ------------- --------------- ------------- ------------
(IN THOUSANDS, EXCEPT PER SHARE AND PER SHARE AMOUNTS)
Interest and dividend income.... $22,722 $22,516 0.9% $5,921 $5,601 5.7%
Interest expense................ 9,398 10,015 (6.2) 2,546 2,385 6.8
------- ------- ------ ------
Net interest income........ 13,324 12,501 6.6 3,375 3,216 4.9
Provision for loan losses....... 360 360 0.0 90 90 0.0
------- ------- ------ ------
Net interest income after
provision for loan losses.... 12,964 12,141 6.8 3,285 3,126 5.1
Other income.................... 2,389 2,126 12.4 630 558 12.9
Other expense................... 13,002 10,002 30.0 4,984 2,627 89.7
------- ------- ------ ------
Income before taxes............. 2,352 4,265 (44.9) (1,069) 1,057 NM
Provision for income taxes...... 1,045 1,551 (32.6) (313) 325 NM
------- ------- ------ ------
Net Income................. $ 1,306 $ 2,714 (51.9) $ (756) $ 732 NM
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Earnings per share:*
Basic........................ N/M N/A N/M N/A
Diluted...................... N/M N/A N/M N/A
Weighted average shares:
Basic........................ N/M N/A N/M N/A
Diluted...................... N/M N/A N/M N/A
Dividends paid per share........ 0 N/A 0 N/A
*Earnings per share for the quarter and year ended December 31, 2004 are not
meaningful because the Company completed its stock offering on December 21,
2004. Earnings per share for the quarter and year ended December 31, 2003 are
not applicable because there were no shares outstanding during those periods.
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ASSET QUALITY DATA
YEAR ENDED DECEMBER 31,
---------------------------------------
2004 2003
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(in thousands)
Allowance for loan losses at beginning
of period......................................... $1,116 $ 775
Provision for loan losses............................ 360 360
Recoveries........................................... 6 1
Charge-offs.......................................... 16 20
Net charge-offs...................................... 10 19
Allowance at end of period........................... 1,466 1,116
AT DECEMBER 31,
----------------------------------
2004 2003
---------------- ---------------
(in thousands)
Nonperforming Assets:
Nonaccrual loans:
Mortgage loans.................................... $ 0 $ 337
Commercial business loans......................... 0 0
Consumer loans.................................... 4 69
Total........................................ 4 406
Real estate owned.................................... 0 0
Other nonperforming assets........................... 0 0
Total nonperforming assets........................... 4 406
SELECTED FINANCIAL RATIOS
DECEMBER 31,
---------------------------------------
2004 2003
--------------------- -----------------
SELECTED PERFORMANCE RATIOS:
Return on average assets.................................................... 0.26% 0.58%
Return on average equity.................................................... 4.95% 11.80%
Interest rate spread........................................................ 2.79% 2.79%
Net interest margin......................................................... 2.90% 2.90%
Efficiency ratio............................................................ 82.74% 68.94%
ASSET QUALITY RATIOS:
Allowance for loan losses as a percent of total loans....................... 0.43% 0.37%
Allowance for loan losses as a percent of nonperforming loans............... N/M 275.21%
Nonperforming loans as a percent of total loans............................. N/M 0.13%
Nonperforming assets as a percent of total assets........................... N/M 0.08%
Contacts:
Steven E. Brady, (800) 771-7990
or
Donald F. Morgenweck, (800) 771-7990