PRESS RELEASE
OCEAN SHORE HOLDING CO. REPORTS FOURTH QUARTER EARNINGS
Ocean City, New Jersey - January 25, 2006 - Ocean Shore Holding Co.
(NASDAQ: OSHC) today announced net income of $765,000, or $.09 per share (basic
and diluted), for the quarter ended December 31, 2005, as compared to loss of
$756,000 for the fourth quarter of 2004. Net income for the year ended December
31, 2005 was $3,076,000, or $.37 per share basic and $.36 diluted, as compared
to $1,306,000 for the same period in 2004. Per share amounts for the prior year
are not applicable as Ocean Shore Holding Co. was wholly-owned by its mutual
holding company during those periods.
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 seven full-service banking
offices in eastern New Jersey.
NET INTEREST INCOME AND NET INTEREST MARGIN IMPROVE OVER PRIOR YEAR
Net interest income grew 16.4% for the fourth quarter of 2005 compared
to the fourth quarter of 2004 and 14.5% for 2005 compared to 2004. The growth in
net interest income was mainly the result of growth in average interest-earning
assets for both periods. The growth in average assets was generally due to the
loan portfolio, which increased in 2005 by 22.3% over the fourth quarter of 2004
and increased by 18.2% for 2005 over 2004.
Net interest margin increased to 3.10% from 2.79% for the fourth
quarter of 2005 compared to the fourth quarter of 2004 and to 3.06% from 2.90%
for 2005 compared to 2004. The average yield on the loan portfolio increased 27
basis points for the fourth quarter of 2005 compared to 2004 while increasing 9
basis points during 2005 compared to 2004. The average cost of interest-bearing
deposits increased as municipal and certificates of deposit rates rose with the
rise in short-term interest rates.
TOTAL ASSETS GROW ON STRONG LOAN ACTIVITY
Total assets grew 2.9% to $543.9 million at December 31, 2005 from
December 31, 2004. The loan portfolio grew 21.0% to $412.0 million, while
investment and mortgage-backed securities declined 19.4% to $94.2 million. Real
estate mortgage loans grew by $50.9 million, consumer loans grew by $9.2 million
and commercial and construction loans increased by $11.0 million.
OTHER EXPENSES DECREASE
Other expenses decreased in the fourth quarter of 2005 by $1.8 million
as decreases in charitable donations of $2.0 million and salaries and benefits
of $132,000 was offset by an increase in legal, accounting and professional
services of $198,000, an increase in occupancy and equipment expenses of $71,000
and an increase in all other expenses of $19,000.
Other expenses decreased in 2005 by $800,000 as decreases in charitable
donations of $2.0 million was offset by increases in salary and benefits of
$354,000, increases in occupancy equipment expenses of $254,000, increases of
legal, accounting and other professional services of $456,000 and an increase in
all other expenses of $136,000.
In December of 2004 a $2.0 million donation was made to form the Ocean
City Home Charitable Foundation as part of the company's initial public
offering. Salary and employee benefits increased in 2005 over the prior year due
primarily to regular salary increases and higher cost of employee benefits. The
Company also experienced increases in 2005 in occupancy and equipment expense
due to increases in data processing expenses related to improvements to network
security and increases associated with opening a new branch office. Increased
legal and accounting services were due to additional compliance requirements
associated with being a public company.
ASSET QUALITY REMAINS EXCELLENT
The Company's asset quality continues to be excellent. Non-performing
assets totaled $7,000 at December 31, 2005. Net charge-offs were $18,000 for
2005, compared to $16,000 in 2004. The allowance for loan losses was .41% of
total loans at December 31, 2005 compared to .43% of total loans at December 31,
2004.
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 and other factors that may be
described in the Company's annual report on Form 10-K and quarterly reports on
Form 10-Q as filed with the Securities and Exchange Commission. 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.
SELECTED FINANCIAL CONDITION DATA (UNAUDITED)
-------------------------------------
AS OF AS OF
12-31-2005 12-31-2004 % CHANGE
------------------ ------------------ ---------------
(IN THOUSANDS)
Total assets $543,846 $528,444 2.9
Cash and cash equivalents 13,400 47,396 -71.7
Investment securities 51,578 62,621 -17.6
Mortgage-backed securities 42,612 54,182 -21.4
Loans receivable, net 412,005 340,585 21.0
Deposits 416,914 415,328 0.4
FHLB advances 27,000 10,000 170.0
Subordinated debt 15,464 15,464 0.0
Other borrowings 18,460 22,840 -19.2
Stockholder's equity 60,568 59,795 1.3
THREE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
-------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
Loans $405,341 5.80% $331,445 5.53%
Investment securities 98,376 4.47% 111,025 4.11%
Other interest-earning assets 2,861 4.29% 40,737 1.98%
Interest-bearing deposits 392,682 2.37% 393,152 1.81%
Total borrowings 53,050 5.72% 59,095 5.18%
Interest rate spread 2.77% 2.65%
Net interest margin 3.10% 2.79%
YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
-------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
Loans $373,306 5.67% $315,904 5.57%
Investment securities 108,746 4.25% 114,145 4.11%
Other interest-earning assets 16,612 2.91% 29,700 1.47%
Interest-bearing deposits 386,463 2.10% 376,434 1.70%
Total borrowings 50,786 5.70% 60,359 4.99%
Interest rate spread 2.75% 2.79%
Net interest margin 3.06% 2.90%
SELECTED OPERATIONS DATA (UNAUDITED)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------- -----------------------------
2005 2004 % CHANGE 2005 2004 % CHANGE
-------------- ------------- ------------- --------------- ------------- ---------------
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
Interest and dividend income $ 7,012 $ 5,921 18.4 $ 26,272 $ 22,722 15.6
Interest expense 3,083 2,546 21.1 11,017 9,398 17.2
---------- --------- --------- ----------
Net interest income 3,929 3,375 16.4 15,255 13,324 14.5
Provision for loan losses 75 90 -16.7 300 360 -16.7
---------- --------- --------- ----------
Net interest income after
provision for loan losses 3,854 3,285 17.3 14,955 12,964 15.4
Other income 555 630 -11.9 2,316 2,389 -3.0
Other expense 3,140 4,984 -37.0 12,200 13,002 -6.2
---------- --------- --------- ----------
Income before taxes 1,269 (1,069) N/M 5,071 2,351 115.6
Provision for income taxes 504 (313) N/M 1,995 1,045 90.8
---------- --------- ---------- ----------
Net Income $ 765 ($ 756) N/M $ 3,076 $ 1,306 135.4
========== ========= ========== ==========
Earnings per share basic $ 0.09 N/A $ 0.37 N/A
Earnings per share diluted $ 0.09 N/A $ 0.36 N/A
Average shares outstanding:
Basic 8,290,881 N/A 8,405,677 N/A
Diluted 8,462,181 N/A 8,453,593 N/A
ASSET QUALITY DATA (UNAUDITED)
--------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2005 2004
--------------------------------------
(DOLLARS IN THOUSANDS)
Allowance for Loan Losses:
Allowance at beginning of period $ 1,466 $ 1,116
Provision for loan losses 300 360
Recoveries 5 6
Charge-offs 18 16
---------- ----------
Net charge-offs 13 10
---------- ----------
Allowance at end of period $ 1,753 $ 1,466
========== ==========
Allowance for loan losses as a percent of total loans 0.41% 0.43%
Allowance for loan losses as a percent of
nonperforming loans N/M N/M
AS OF AS OF
12-31-2005 12-31-2004
-------------------------------------
Nonperforming Assets: (DOLLARS IN THOUSANDS)
Nonaccrual loans:
Mortgage loans $ 0 $ 0
Commercial business loans 0 0
Consumer loans 7 4
---------- ----------
Total 7 4
Real estate owned 0 0
Other nonperforming assets 0 0
Total nonperforming assets $ 7 $ 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 (UNAUDITED)
-------------------------------------
YEAR ENDED YEAR ENDED
-------------------------------------
12-31-2005 12-31-2004
----------------- -------------------
SELECTED PERFORMANCE RATIOS:
Return on average assets 0.57% 0.26%
Return on average equity 5.07% 4.95%
Interest rate spread 2.75% 2.79%
Net interest margin 3.06% 2.90%
Efficiency ratio (1) 69.44% 82.74%
(1) The efficiency ratio for the year ended December 31, 2004 includes a
$2,000,000 donation to the Ocean City Home Charitable Foundation.
===============================
Contact:
Ocean Shore Holding Co.
Steven E. Brady, 609-399-0012
or
Donald F. Morgenweck, 609-399-0012