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PRESS RELEASE
OCEAN SHORE HOLDING CO. REPORTS 1ST QUARTER EARNINGS
Ocean City, NJ - (BUSINESS WIRE) April 27, 2005 - Ocean Shore Holding
Co. (NASDAQ: OSHC-News) today announced net income of $742,000 or $.09 per share
for the quarter ended March 31, 2005, as compared to $690,000 for the first
quarter of 2004.
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 eastern New Jersey.
"I am pleased to report our earnings for our first full quarter as a
public company," said President and Chief Executive Officer Steven E. Brady. "We
are beginning the process of deploying the proceeds raised in our stock offering
and are announcing plans for two additional branches."
NET INTEREST INCOME AND OTHER INCOME IMPROVE OVER PRIOR YEAR
Net interest income increased 7.8% for the first quarter of 2005
compared to the first quarter of 2004. The 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 average balance
of the loan portfolio which increased by 12.6% over 2004. The impact of the
growth of the loan portfolio was somewhat offset by a decline in the average
yield on loans due to the prevailing low interest rate environment. Interest
expense increased as municipal deposit rates rose with the rise in short term
interest rates. Compared to the first quarter of 2004, interest income increased
8.6% to $6.1 million while interest expense increased 9.7% to $2.5 million.
Other income increased 5.4% to $568,000, as the Company experienced
increases in service charges and fees, loan servicing fees and increases in the
surrender value of bank-owned life insurance.
SALARIES, DATA PROCESSING AND PROFESSIONAL SERVICES IMPACT OTHER EXPENSES
The efficiency ratio rose to 69.5% in 2005 from 68.1% in 2004 due to
other expenses of $2.9 million for the quarter, compared to $2.7 million for the
first quarter of 2004. 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 increases in
data processing expenses related to improvements to network security and
increased accounting and legal services due to additional compliance
requirements associated with becoming a public company.
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TOTAL ASSETS REMAIN STEADY
Total assets grew 0.6% to $532.0 million at March 31, 2005 from
December 31, 2004. Loans receivable grew 1.9% to $347.1 million, while
investment and mortgage-backed securities remained essentially unchanged. Loan
growth was funded primarily with excess liquidity. Mortgage loans grew by $7.0
million and consumer loans grew by $1.6 million, while commercial loans
decreased by $2.1 million.
Deposits were essentially unchanged from December 31, 2004. The Company
continued its focus on non-interest-bearing deposits, which increased 18.8% to
$41.9 million. FHLB advances and subordinated debt were unchanged from December
31, 2004, while other borrowings increased 11.5% to $25.5 million at March 31,
2005.
ASSET QUALITY REMAINS EXCELLENT
The Company's asset quality continues to be excellent. Non-performing
assets totaled only $28,000 at March 31, 2005. Net charge-offs were $4,000 in
the first quarter, compared to $8,000 in the same period last year. The
allowance for loan losses was .44% of total loans at March 31, 2005 compared to
..39% of total loans at March 31, 2004.
BRANCH EXPANSION CONTINUES
The Bank has recently signed agreements for its seventh and eighth full
service offices. The Bank has entered into a lease for a facility in the
Northfield area of Egg Harbor Township. This lease will provide the Bank with
approximately 2,500 square feet and three drive through lanes. The Northfield
office is expected to open in the third quarter. The Bank has also entered into
a contract to purchase an office in Margate. The Bank's office will be on the
first floor of a condominium project currently in development. The Margate
office is expected to open in the 2nd quarter of 2006.
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
MARCH 31, DECEMBER 31,
2005 2004 % CHANGE
-------------- -------------- -------------
(IN THOUSANDS)
Total assets....................................... $532,042 $ 528,769 0.6%
Cash and cash equivalents.......................... 43,903 47,649 (7.9)
Investment securities.............................. 63,016 62,621 0.6
Mortgage-backed securities ........................ 54,083 54,182 (0.2)
Loans receivable, net.............................. 347,072 340,585 1.9
Deposits........................................... 416,284 415,328 0.2
FHLB advances...................................... 10,000 10,000 0.0
Subordinated debt.................................. 15,464 15,464 0.0
Other borrowings................................... 25,470 22,840 11.5
Stockholder's equity............................... 59,977 59,795 0.3
SELECTED OPERATIONS DATA
THREE MONTHS ENDED MARCH 31,
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2005 2004 % CHANGE
-------------- ------------- -------------
(IN THOUSANDS, EXCEPT PER SHARE AND PER SHARE AMOUNTS)
Interest and dividend income.... $ 6,091 $ 5,611 8.6%
Interest expense................ 2,472 2,254 9.7
Net interest income........ 3,619 3,357 7.8
Provision for loan losses....... 75 90 (16.7)
Net interest income after
provision for loan losses.... 3,544 3,267 8.5
Other income.................... 568 539 5.4
Other expense................... 2,911 2,652 9.8
Income before taxes............. 1,201 1,154 4.1
Provision for income taxes...... 459 464 (1.2)
Net income................. $ 742 $ 690 7.6
Earnings per share $ 0.09 N/A
Average shares outstanding 8,442,143 N/A
Earnings per share for the quarter ended March 31, 2004 are not applicable
because the Company was wholly owned by OC Financial MHC during that period.
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ASSET QUALITY DATA
THREE MONTHS ENDED
MARCH 31,
---------------------------------------
2005 2004
------------------- -----------------
Allowance for Loan Losses:
Allowance at beginning of period........................ $ 1,466,295 $ 1,116,156
Provision for loan losses............................... 75,000 90,000
Recoveries.............................................. 898 756
Charge-offs............................................. 4,466 7,947
Net charge-offs......................................... 3,568 7,191
Allowance at end of period.............................. $ 1,537,728 $ 1,198,965
Allowance for loan losses as a percent of total loans... 0.44% 0.39%
Allowance for loan losses as a percent of
nonperforming loans.................................. N/M N/M
MARCH 31, DECEMBER 31,
2005 2004
------------------- -----------------
(IN THOUSANDS)
Nonperforming Assets:
Nonaccrual loans:
Mortgage loans....................................... 0 0
Commercial business loans............................ 0 0
Consumer loans....................................... $ 28 $ 4
Total........................................... 28 4
Real estate owned....................................... 0 0
Other nonperforming assets.............................. 0 0
Total nonperforming assets.............................. $ 28 $ 4
Nonperforming loans as a percent of
total loans.......................................... N/M N/M
Nonperforming assets as a percent of
total assets......................................... N/M N/M
SELECTED FINANCIAL RATIOS
THREE MONTHS ENDED
MARCH 31,
-------------------------------
2005 2004
--------------- ---------------
SELECTED PERFORMANCE RATIOS:
Return on average assets (1)................................................ 0.56% 0.57%
Return on average equity (1)................................................ 4.92% 11.29%
Interest rate spread (1).................................................... 2.72% 2.98%
Net interest margin (1)..................................................... 2.98% 3.06%
Efficiency ratio............................................................ 69.53% 68.07%
(1) Annualized.
Contact:
Ocean Shore Holding Co.
Steven E. Brady, President and CEO
Donald F. Morgenweck, CFO
609-399-0012
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