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Contacts:
Steven E. Brady, President and CEO
Donald F. Morgenweck, CFO
(609) 399-0012
PRESS RELEASE
OCEAN SHORE HOLDING CO. REPORTS 2ND QUARTER EARNINGS
Ocean City, New Jersey - July 24, 2007 - Ocean Shore Holding Co.
(NASDAQ: OSHC) today announced net income of $619,000 or $.08 per basic and
diluted share for the quarter ended June 30, 2007, as compared to $700,000 or
$.08 per basic and diluted share for the quarter ended June 30, 2006. Net income
for the six months ended June 30, 2007 was $1,120,000 or $.14 per basic and
diluted share as compared to $1,403,000 or $.17 per basic and diluted share for
the same period in 2006.
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 eight full-service banking
offices in eastern New Jersey.
"While we are pleased to report continued growth of the loan portfolio,
the current interest rate environment has narrowed the available spreads
resulting in lower net interest income," said Steven E. Brady, President and
CEO. "Although our earnings have been impacted by this challenging environment,
we continue to make progress in growing the Bank and building our franchise."
TOTAL ASSETS GROW; DEPOSITS REMAIN STEADY
Total assets grew $20.0 million, or 3.6%, to $582.2 million at June 30,
2007 from December 31, 2006. Loans receivable, net, grew $32.5 million, or 7.5%,
to $465.8 million on steady loan activity, while investment and mortgage-backed
securities decreased $2.8 million, or 4.1%, to $65.3 million. Growth in real
estate loans of $35.1 million and consumer loans of $1.0 million was offset by a
decline in construction loans of $3.2 million and commercial loans of $400,000.
Deposits grew $400,000, or 0.1%, to $417.4 million at June 30, 2007
from December 31, 2006. FHLB advances increased $18.0 million, or 33.3%, to
$72.0 million. The proceeds from the additional borrowings were used to fund the
growth in the loan portfolio.
ASSET QUALITY REMAINS EXCELLENT
The Company's asset quality continues to be excellent. Non-performing
assets totaled only $321,000 at June 30, 2007. The Company experienced
charge-off activity of $1,000 for the six months of 2007, compared to $7,000 in
the same period last year. The allowance for loan losses was 0.47% of total
loans at June 30, 2007 compared to 0.47% at December 31, 2006 and 0.44% of total
loans at June 30, 2006.
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NET INTEREST INCOME DECREASES OVER PRIOR PERIODS
Net interest income decreased $117,000, or 3.1%, to $3.7 million for
the second quarter of 2007 compared to $3.8 million in the second quarter of
2006. Net interest margin decreased 22 basis points in the quarter ended June
30, 2007 to 2.74% from 2.96% for the quarter ended June 30, 2006. On a
linked-quarter basis, net interest margin decreased 5 basis points from 2.79%
for the first quarter of 2007. The growth in interest income for the second
quarter was the result of an increase in average interest-earning assets of
$23.4 million and an increase of 19 basis points in the average yield to 5.93%.
These increases were offset by an increase in average interest bearing
liabilities of $24.4 million and an increase of 43 basis points in the average
cost to 3.58%.
Net interest income decreased $277,000 for the first six months of
2007, or 3.7%, to $7.3 million compared to the same period in the prior year. A
decrease in net interest margin of 21 basis points from 2.97% to 2.76% was
caused by an increase in cost of interest-bearing liabilities of 50 basis points
offset by an increase in the yield on interest earning assets of 25 basis
points.
OTHER EXPENSES INCREASE
Other expenses increased $55,000, or 1.7%, to $3.20 million for the
second quarter of 2007 compared to $3.15 million for the second quarter of 2006
and $257,000, or 4.1%, to $6.5 million for the six months ended June 30, 2007
compared to $6.3 million for the six months ended June 30, 2006. On going
operating costs associated with the November 2006 opening of a new branch
represents $110,000 and $216,000 of the increase for the second quarter and year
to date respectively.
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.
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SELECTED FINANCIAL CONDITION DATA
JUNE 30, DECEMBER 31,
2007 2006 % CHANGE
---------- ------------- ----------
(DOLLARS IN THOUSANDS)
Total assets...................................... $582,246 $562,261 3.6%
Cash and cash equivalents......................... 19,531 33,357 (41.4)
Investment securities............................. 25,322 23,760 6.6
Mortgage-backed securities ....................... 39,988 44,371 (9.9)
Loans receivable, net............................. 465,849 433,342 7.5
Deposits.......................................... 417,420 417,024 0.1
FHLB advances..................................... 72,000 54,000 33.3
Subordinated debt................................. 15,464 15,464 0.0
Other borrowings.................................. 6,730 7,090 (5.1)
Stockholder's equity.............................. 62,701 62,551 0.2
SELECTED OPERATING DATA
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- --------------------------
2007 2006 % CHANGE 2007 2006 % CHANGE
------------ ------------ --------- ------------ ------------ ---------
(IN THOUSANDS, EXCEPT PER SHARE AND PER SHARE AMOUNTS)
Interest and dividend income.... $ 7,937 $ 7,347 8.0 $ 15,666 $ 14,498 8.1
Interest expense ............... 4,264 3,557 19.9 8,358 6,913 20.9
--------- --------- --------- ---------
Net interest income........ 3,673 3,790 (3.1) 7,308 7,585 (3.7)
Provision for loan losses....... 75 75 0.0 150 150 0.0
--------- --------- --------- ---------
Net interest income after
provision for loan losses.... 3,598 3,715 (3.2) 7,158 7,435 (3.7)
Other income.................... 637 599 6.3 1,235 1,154 7.0
Other expense................... 3,209 3,154 1.7 6,541 6,284 4.1
--------- --------- --------- ---------
Income before taxes............. 1,026 1,160 (11.6) 1,852 2,305 (19.7)
Provision for income taxes...... 407 460 (11.5) 732 902 (18.9)
--------- --------- --------- ---------
Net Income................. $ 619 $ 700 (11.6) $ 1,120 $ 1,403 (20.2)
========= ========= ========= =========
Earnings per share basic $0.08 $0.08 $0.14 $0.17
Earnings per share diluted $0.08 $0.08 $0.14 $0.17
Average shares outstanding basic 8,127,619 8,290,981 8,147,779 8,293,774
Average shares outstanding diluted 8,235,465 8,462,281 8,260,985 8,465,074
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THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 2007 JUNE 30, 2006
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
--------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Loans $ 452,846 5.97% $ 422,708 5.92%
Investment securities 67,018 5.72% 82,182 4.87%
Other interest-earning assets 15,856 5.43% 7,390 4.95%
Interest-bearing deposits 389,627 3.24% 384,389 2.76%
Total borrowings 86,451 5.14% 67,263 5.37%
Interest rate spread 2.34% 2.59%
Net interest margin 2.74% 2.96%
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2007 JUNE 30, 2006
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
--------------------------------------------------------------------
(DOLLARS IN THOUSANDS)
Loans $ 444,422 5.97% $ 418,429 5.87%
Investment securities 68,154 5.76% 85,873 4.80%
Other interest-earning assets 16,271 5.32% 6,692 4.70%
Interest-bearing deposits 388,440 3.22% 385,803 2.66%
Total borrowings 81,685 5.17% 66,026 5.40%
Interest rate spread 2.37% 2.61%
Net interest margin 2.76% 2.97%
ASSET QUALITY DATA
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2007 DECEMBER 31, 2006
-----------------------------------------
(DOLLARS IN THOUSANDS)
Allowance for Loan Losses:
Allowance at beginning of period..................... $ 2,050 $ 1,753
Provision for loan losses............................ 150 300
Recoveries........................................... 3 6
Charge-offs.......................................... 1 9
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Net charge-offs...................................... (2) 3
-------- --------
Allowance at end of period........................... $ 2,202 $ 2,050
Allowance for loan losses as a percent of total loans.... 0.47% 47%
Allowance for loan losses as a percent of
nonperforming loans...................................... 685.9% 385.5%
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SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 2007 2006
-------------------------------
(DOLLARS IN THOUSANDS)
Nonperforming Assets:
Nonaccrual loans:
Mortgage loans............................. $ 77 $ 416
Commercial business loans.................. 0 0
Consumer loans............................. 244 116
------ ------
Total................................. 321 532
Real estate owned............................. 0 0
Other nonperforming assets.................... 0 0
------ ------
Total nonperforming assets.................... $ 321 $ 532
Nonperforming loans as a percent of
total loans................................ 0.07% 0.12%
Nonperforming assets as a percent of 0.06% 0.09%
total assets...............................
SELECTED FINANCIAL RATIOS
SIX MONTHS ENDED
JUNE 30,
---------------------------
2007 2006
------------ ------------
SELECTED PERFORMANCE RATIOS:
Return on average assets (1)...................... 0.39% 0.51%
Return on average equity (1)...................... 3.55% 4.56%
Interest rate spread (1).......................... 2.36% 2.61%
Net interest margin (1)........................... 2.76% 2.97%
Efficiency ratio.................................. 76.68% 71.90%
(1) Annualized.
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