PRESS RELEASE
OCEAN SHORE HOLDING CO. REPORTS 2ND QUARTER EARNINGS
Ocean City, New Jersey - July 26, 2006 - Ocean Shore Holding Co.
(NASDAQ: OSHC) today announced net income of $700,000 or $.08 per basic and
diluted share for the quarter ended June 30, 2006, as compared to $790,000 or
$.09 per basic and diluted share for the second quarter of 2005. Net income for
the six months ended June 30, 2006 was $1,403,000 or $.17 per basic and diluted
share as compared to $1,532,000 or $.18 for the same period in 2005.
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 REMAINS STEADY AND OTHER INCOME IMPROVES OVER PRIOR YEAR
Net interest income was essentially unchanged at $3.8 million for the
second quarter of 2006 compared to the same quarter of 2005. Interest income
grew 14.6% over the prior year as a result of growth in interest earning assets
and an increase in the average yield on both loans and investments. However,
growth in interest expense, driven primarily by higher rates paid on deposits
and a larger average balance of borrowings, offset the increase in interest
income. For the quarter, the Company's interest rate spread was 2.59% compared
to 2.64% for the prior quarter and 2.75% for the same quarter last year.
For the first six months of 2006, net interest income increased 2.4% to
$7.6 million compared to the prior year. The growth in net interest income was
the result of an increase in average interest-earning assets that was partially
offset by a reduction in the interest rate spread to 2.61% from 2.73%.
Other income increased 4.8% for the second quarter of 2006 and 1.2% for
the first six months of 2006 compared to the same period in 2005, driven
primarily by increases in service charges due to a growing deposit base. Income
from services charges increased $21,000 to $404,000 for the quarter and $43,000
to $778,000 for the first six months of 2006 compared to the same periods in
2005.
TOTAL ASSETS GROW
Total assets grew $18.4 million, or 3.4%, to $562.3 million at June 30,
2006 from December 31, 2005. Loans receivable grew $17.0 million, or 4.1%, to
$429.0 million on steady loan activity. Real estate mortgage loans grew by $12.1
million, consumer loans grew by $3.7 million and commercial loans increased by
$1.2 million. Investment and mortgage-backed securities declined $13.0 million
or 13.9% during the first half of the year to $81.1 million due to normal
maturities and repayments of principal. Cash and cash equivalents rose $13.6
million, or 101.8%, to $27.0 million due to an increase of $7.0 million in
Overnight Federal Funds and an increase of $7.2 million in balances due from
other banks.
Deposits grew $11.0 million, or 2.6%, to $428.0 million at June 30,
2006 from December 31, 2005. The Company continued its focus on
non-interest-bearing deposits, which increased 9.5% to $43.7 million. FHLB
advances increased $17.0 million, or 63.0%, to $44.0 million while other
borrowings decreased $11.2 million, or 60.9%, to $7.2 million at June 30, 2006
from December 31, 2005.
ASSET QUALITY REMAINS EXCELLENT
The Company's asset quality continues to be excellent. Non-performing
assets totaled $61,000 at June 30, 2006. Net charge-offs were $6,000 in the
first six months of 2006, compared to $2,000 in the same period last year. The
allowance for loan losses was 0.44% of total loans at June 30, 2006 compared to
0.42% at December 31, 2005 and 0.43% of total loans at June 30, 2005.
OTHER EXPENSES INCREASE
Other expenses increased $187,000 to $3.2 million for the second
quarter of 2006 compared to $3.0 million for the same quarter in 2005 and
increased $406,000 to $6.3 million for the first six months of 2006 compared to
$5.9 million for the same period in 2005. Salaries and benefits expense
increased $137,000 for the second quarter and $291,000 for the first six months
of 2006 over the prior year as share-based compensation costs of $176,000 for
the second quarter and $352,000 for the first six months of 2006 for stock
awards made in August of 2005 were expensed, partially offset by decreases in
costs of other employee benefit plans. Occupancy expense increased $74,000 for
the quarter and $156,000 year to date over the prior year mostly from costs
associated with the opening of a new branch in September of 2005.
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
JUNE 30, DECEMBER 31,
2006 2005 % CHANGE
--------------------- ------------------- -----------------
(DOLLARS IN THOUSANDS)
Total assets.................................... $562,256 $543,846 3.4%
Cash and cash equivalents....................... 27,044 13,400 101.8
Investment securities........................... 43,314 51,578 (16.0)
Mortgage-backed securities ..................... 37,827 42,612 (11.2)
Loans receivable, net........................... 429,013 412,005 4.1
Deposits........................................ 427,955 416,914 2.6
FHLB advances................................... 44,000 27,000 63.0
Subordinated debt............................... 15,464 15,464 0.0
Other borrowings................................ 7,220 18,460 (60.9)
Stockholder's equity............................ 61,736 60,568 1.9
SELECTED OPERATING DATA
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------ ----------------------------
2006 2005 % CHANGE 2006 2005 % CHANGE
--------------- -------------- ------------- --------------- ------------ -----------
(IN THOUSANDS, EXCEPT PER SHARE AND PER SHARE AMOUNTS)
Interest and dividend income.... $ 7,347 $ 6,411 14.6 $ 14,498 $ 12,502 16.0
Interest expense ............... 3,557 2,626 35.4 6,913 5,098 35.6
---------- ---------- ---------- ----------
Net interest income........ 3,790 3,785 0.1 7,585 7,404 2.5
Provision for loan losses....... 75 75 0.0 150 150 0.0
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses.... 3,715 3,710 0.1 7,435 7,254 2.5
Other income.................... 599 572 4.8 1,154 1,140 1.2
Other expense................... 3,154 2,966 6.3 6,284 5,878 6.9
---------- ---------- ---------- ----------
Income before taxes............. 1,160 1,316 -11.8 2,305 2,516 -8.4
Provision for income taxes...... 460 526 -12.5 902 984 -8.3
---------- ---------- ---------- ----------
Net Income................. $ 700 $ 790 -11.4 $ 1,403 $ 1,532 -8.4
========== ========== ========== ==========
Earnings per share basic $ 0.08 $ 0.09 $ 0.17 $ 0.18
Earnings per share diluted $ 0.08 $ 0.09 $ 0.17 $ 0.18
Average shares outstanding basic 8,290,981 8,450,731 8,293,774 8,447,868
Average shares outstanding diluted 8,462,281 8,450,731 8,465,074 8,447,868
THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 2006 JUNE 30, 2005
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
-------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
Loans $422,708 5.92% $359,845 5.61%
Investment securities 82,182 4.87% 114,750 4.22%
Other interest-earning assets 7,390 4.95% 21,209 2.93%
Interest-bearing deposits 384,389 2.76% 383,268 2.00%
Total borrowings 67,263 5.37% 50,356 5.67%
Interest rate spread 2.59% 2.75%
Net interest margin 2.96% 3.05%
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2006 JUNE 30, 2005
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
-------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
Loans $418,429 5.87% $351,047 5.58%
Investment securities 85,873 4.80% 114,826 4.15%
Other interest-earning assets 6,692 4.70% 24,584 2.65%
Interest-bearing deposits 385,803 2.66% 381,705 1.93%
Total borrowings 66,026 5.40% 49,388 5.69%
Interest rate spread 2.61% 2.73%
Net interest margin 2.97% 3.02%
ASSET QUALITY DATA
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2006 DECEMBER 31, 2005
------------------- --------------------
(DOLLARS IN THOUSANDS)
Allowance for Loan Losses:
Allowance at beginning of period..................... $ 1,753 $ 1,466
Provision for loan losses............................ 150 300
Recoveries........................................... 1 5
Charge-offs.......................................... 7 18
------- -------
Net charge-offs...................................... 6 13
------- -------
Allowance at end of period........................... $ 1,897 $ 1,753
Allowance for loan losses as a percent of total
loans.............................................. 0.44% 0.42%
Allowance for loan losses as a percent of
nonperforming loans................................ N/M N/M
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2006 DECEMBER 31, 2005
------------------- ---------------------
(DOLLARS IN THOUSANDS)
Nonperforming Assets:
Nonaccrual loans:
Mortgage loans.................................... $ 59 $ 91
Commercial business loans......................... 0 0
Consumer loans.................................... 2 7
------ ------
Total........................................ 61 98
Real estate owned.................................... 0 0
Other nonperforming assets........................... 0 0
------ ------
Total nonperforming assets........................... $ 61 $ 98
Nonperforming loans as a percent of
total loans....................................... 0.01% 0.02%
Nonperforming assets as a percent of
total assets...................................... 0.01% 0.02%
SELECTED FINANCIAL RATIOS
SIX MONTHS ENDED
MARCH 30,
---------------------------
2006 2005
------------ ------------
SELECTED PERFORMANCE RATIOS:
Return on average assets (1)..................... 0.51% 0.57%
Return on average equity (1)..................... 4.56% 5.07%
Interest rate spread (1)......................... 2.61% 2.73%
Net interest margin (1).......................... 2.97% 3.02%
Efficiency ratio................................. 71.90% 68.79%
(1) Annualized.
- -------------------------
Contacts:
Ocean Shore Holding Co.
Steven E. Brady, (609) 399-0012
or
Donald F. Morgenweck, (609) 399-0012