Contacts:
Steven E. Brady, President and CEO
Donald F. Morgenweck, CFO
(609) 399-0012
PRESS RELEASE
OCEAN SHORE HOLDING CO. REPORTS 4TH QUARTER 2007 AND YEAR-END RESULTS
Ocean City, New Jersey - January 29, 2008 - Ocean Shore Holding Co.
(NASDAQ: OSHC) today announced net income for quarter ended December 31, 2007
increased 49.1% to $859,000 or $.11 per basic and diluted share, as compared to
$576,000 or $.07 per basic and diluted share for the fourth quarter of 2006.
Net income for the year ended December 31, 2007 decreased 11.4% to
$2,791,000, or $.34 per share basic and diluted, as compared to $3,149,000, or
$.38 per share basic and $.37 per share diluted, for 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.
"Not withstanding the turmoil in the mortgage market last year and its
impact on general economic conditions, we continue to have success in growing
the loan portfolio and have maintained excellent asset quality with very few
problem loans and no sub-prime loans," said Steven E. Brady, President and CEO.
"We are pleased with our progress in growing the Bank and building our
franchise."
TOTAL ASSETS GROW
Total assets grew $67.3 million, or 12.0%, to $629.5 million at
December 31, 2007 from December 31, 2006. Loans receivable grew $94.7 million,
or 21.9%, to $528.1 million on record loan volume. Increases of $92.2 million in
real estate mortgage loans, $4.9 million in consumer loans and $0.5 million in
commercial loans were partially offset by a decrease of real estate construction
loans of $3.5 million. Investments and mortgage-backed securities declined $9.2
million, or 13.5%, during 2007 to $58.9 million due to normal maturities and
repayments of principal. Cash and cash equivalents decreased $23.8 million, or
71.4%, to $9.5 million due to a decrease in overnight Federal Funds of $17.7
million and a decrease of $6.1 million in balances due from other banks. Higher
levels of liquidity held at the end of 2006 were utilized to fund loan activity
in 2007. Asset growth was funded with FHLB borrowings, which increased to $120.2
million at December 31, 2007 from $54.0 million at December 31, 2006. Total
deposits were essentially unchanged year over year.
ASSET QUALITY REMAINS EXCELLENT
The Company's asset quality continues to be excellent as the ratio of
nonperforming loans to total assets at December 31, 2007 decreased 50% to 0.06%
from 0.12% at December 31, 2006. Net charge-offs were $4,000 for the year ended
2007, compared to $3,000 for the year ended 2006. The allowance for loan losses
was 0.44% of total loans at December 31, 2006 compared to 0.47% at December 31,
2006.
NET INTEREST INCOME
Net interest income increased $293,000 during the fourth quarter of
2007, or 7.8%, to $4.1 million compared to $3.8 million for the same quarter of
2006. For the year, net interest income decreased $81,000, or 0.5%, to $15.1
million compared to $15.2 million for the prior year. For the quarter, the
Company's interest rate spread was 2.47% compared to 2.38% for the prior quarter
and 2.47% for the same quarter last year. For the year ended 2007, the Company's
interest rate spread was 2.40%, compared to 2.56% for the year ended 2006.
During the fourth quarter, net interest income increased over the prior
quarter as a result of growth in interest earning assets and an increase in the
average yield on both loans and investments. This increase was partially offset
by an increase in interest expense, which was driven primarily by a larger
average balance of borrowings.
For the year ended 2007, increases in interest income 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 was offset by an increase in
interest expense, which was driven primarily by a larger average balance of
borrowings.
OTHER INCOME INCREASES
Other income increased $121,000, or 20.6%, to $707,000 for the fourth
quarter of 2007 compared to the same quarter in 2006 and increased $290,000, or
12.4%, for 2007 compared to 2006. The increase in other income resulted from
increases in deposit account fees, debit card commissions and income from bank
owned life insurance.
OTHER EXPENSES UP SLIGHTLY
Other expenses increased $53,000, or 1.6%, to $3.4 million for the
fourth quarter of 2007 compared to $3.3 million for the fourth quarter of 2006
and increased $263,000, or 2.1%, to $13.1 million for the year-ended 2007
compared to $12.8 million for the year-ended 2006.
INCOME TAXES INCREASE
Income taxes increased $91,000 for the fourth quarter of 2007 and
$343,000 for the year compared to the same periods in 2006. Fourth quarter 2007
taxes increased as a result of an increase in pretax income. Taxes for the year
ended 2007 increased compared to the year ended 2006 as a result of reduced
deferred taxes by a net $500,000, reflecting changes in the tax treatment of
bank owned life insurance and a valuation allowance for charitable contributions
carryover deduction during the third quarter of 2006.
STOCK REPURCHASE ACTIVITY
The Company repurchased 46,225 of its shares during the fourth quarter
of 2007 at an average price of $10.34 and 174,275 shares at an average price of
$11.53 under the second stock repurchase program announced in April of 2007.
During 2007, the Company repurchased 218,432 of its shares at an average price
of $11.92.
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
12-31-2007 12-31-2006 % CHANGE
------------------ ----------------- ------------------
(DOLLARS IN THOUSANDS)
Total assets....................................... $629,509 $562,261 12.0
Cash and cash equivalents.......................... 9,540 33,357 (71.4)
Investment securities.............................. 22,273 23,760 (6.3)
Mortgage-backed securities ........................ 36,643 44,371 (17.4)
Loans receivable, net.............................. 528,058 433,342 21.9
Deposits. 415,231 417,024 (0.4)
FHLB advances...................................... 120,230 54,000 122.6
Subordinated debt.................................. 15,464 15,464 0.0
Other borrowings................................... 8,000 7,090 12.8
Stockholder's equity............................... 63,047 62,551 0.8
SELECTED OPERATIONS DATA (UNAUDITED)
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------------------------------- ---------------------------------------------
2007 2006 % CHANGE 2007 2006 % CHANGE
-------------- ------------- ------------- --------------- ------------- ---------------
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
Interest and dividend income.... $ 8,704 $ 7,706 13.0 $ 32,619 $ 29,839 9.3
Interest expense ............... 4,654 3,949 17.9 17,481 14,620 19.6
---------- ---------- ---------- ----------
Net interest income........ 4,050 3,757 7.8 15,138 15,219 (0.5)
Provision for loan losses....... 62 75 (16.7) 261 300 (13.1)
---------- ---------- ---------- ----------
Net interest income after
provision for loan losses.... 3,988 3,682 8.3 14,877 14,919 (0.3)
Other income.................... 707 586 20.6 2,622 2,332 12.4
Other expense................... 3,356 3,303 1.6 13,069 12,806 2.1
---------- ---------- ---------- ----------
Income before taxes............. 1,339 965 38.8 4,430 4,445 (0.3)
Provision for income taxes...... 480 389 23.4 1,639 1,296 26.5
---------- ---------- ---------- ----------
Net Income................. $ 859 $ 576 49.1 $ 2,791 $ 3,149 (11.4)
========== ========== ========== ==========
Earnings per share basic........ $ 0.11 $ 0.07 $ 0.34 $ 0.38
Earnings per share diluted...... $ 0.11 $ 0.07 $ 0.34 $ 0.37
Average shares outstanding:
Basic........................... 8,034,359 8,196,193 8,104,373 8,259,473
Diluted......................... 8,137,004 8,313,853 8,227,103 8,410,151
THREE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
-------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
Loans $509,305 6.03% $433,236 5.98%
Investment securities 59,960 6.36% 67,306 5.50%
Other interest-earning assets 5,829 4.87% 22,988 5.26%
Interest-bearing deposits 400,011 3.17% 390,825 3.06%
Total borrowings 119,488 4.97% 71,031 5.40%
Interest rate spread 2.47% 2.47%
Net interest margin 2.82% 2.87%
YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
-------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
Loans $468,608 6.00% $425,262 5.93%
Investment securities 64,718 5.98% 78,981 5.03%
Other interest-earning assets 12,120 5.21% 12,641 5.08%
Interest-bearing deposits 391,340 3.21% 387,758 2.83%
Total borrowings 96,573 5.10% 67,613 5.41%
Interest rate spread 2.40% 2.56%
Net interest margin 2.78% 2.94%
ASSET QUALITY DATA (UNAUDITED)
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2007 2006
--------------------------------------
(DOLLARS IN THOUSANDS)
Allowance for Loan Losses:
Allowance at beginning of period............................ $ 2,050 $ 1,753
Provision for loan losses................................... 261 300
Recoveries.................................................. 4 6
Charge-offs................................................. 8 9
Net charge-offs............................................. 4 3
Allowance at end of period.................................. $ 2,307 $ 2,050
Allowance for loan losses as a percent of total loans....... 0.44% 0.47%
Allowance for loan losses as a percent of
nonperforming loans......................................... 779.88% 385.5%
AS OF AS OF
12-31-2007 12-31-2006
-------------------------------------
Nonperforming Assets: (DOLLARS IN THOUSANDS)
Nonaccrual loans:
Mortgage loans........................................... $ 295 $ 416
Commercial business loans................................ 0 0
Consumer loans........................................... 1 116
Total............................................... 296 532
Real estate owned........................................... 0 0
Other nonperforming assets.................................. 0 0
Total nonperforming assets.................................. $ 296 $ 532
Nonperforming loans as a percent of total net loans......... 0.06% 0.12%
Nonperforming assets as a percent of total assets........... 0.05% 0.09%
SELECTED FINANCIAL RATIOS (UNAUDITED)
YEAR ENDED YEAR ENDED
12-31-2007 12-31-2006
----------------- -----------------
SELECTED PERFORMANCE RATIOS:
Return on average assets .................................................. 0.47% 0.56%
Return on average equity .................................................. 4.42% 5.08%
Interest rate spread ...................................................... 2.40% 2.56%
Net interest margin ....................................................... 2.78% 2.94%
Efficiency ratio ........................................................... 73.59% 72.94%