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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 29, 2008 - Ocean Shore Holding Co.
(NASDAQ: OSHC) today announced net income of $1,089,000 or $.14 per basic and
$.13 diluted share for the quarter ended June 30, 2008, as compared to $619,000
or $.08 per basic and diluted share for the quarter ended June 30, 2007. Net
income for the six months ended June 30, 2008 was $1,819,000 or $.23 per basic
and $.22 diluted share as compared to $1,120,000 or $.14 per basic and diluted
share for the same period in 2007.
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.
"We are pleased to report our continuing success in growing our loan
portfolio and increasing earnings despite all of the negative news about the
economy and real estate markets," said Steven E. Brady, President and CEO. "This
quarter's net interest income and income before taxes are both record amounts
for the Company since going public."
"The Bank's asset quality remains excellent - nonperforming assets are
only 0.29% of total assets - and capital levels are well above what is required
to be considered well-capitalized," said Mr. Brady. "We are very proud of the
fact that the Bank has maintained a consistent, conservative approach throughout
the ups and downs of the recent lending cycle and has not engaged in subprime or
Alt-A lending. The capital and loan quality problems emerging at Fannie Mae and
Freddie Mac and certain other large institutions are not problems that we are
facing."
TOTAL ASSETS AND LOANS GROW; DEPOSITS REMAIN STEADY
Total assets grew $28.3 million, or 4.5%, to $657.8 million at June 30,
2008 from December 31, 2007. Loans receivable, net, grew $39.2 million, or 7.4%,
to $567.3 million on steady loan activity, while investment and mortgage-backed
securities decreased $15.5 million, or 26.3%, to $43.4 million. Growth in real
estate loans of $40.9 million and construction loans of $486,000 was offset by a
decline in consumer loans of $1.2 million and commercial loans of $1.0 million.
Deposits decreased $1.5 million, or 0.4%, to $413.7 million at June 30,
2008 from $415.2 million at December 31, 2007. FHLB advances increased $29.0
million, or 24.1%, to $149.2 million. The proceeds from the additional
borrowings were used to fund the growth in the loan portfolio.
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ASSET QUALITY REMAINS EXCELLENT
The Company's asset quality continues to be excellent. Non-performing
assets totaled only $1.9 million at June 30, 2008. The Company experienced no
charge-off activity for the six months of 2008, compared to $1,000 in the same
period last year. The allowance for loan losses was 0.44% of total loans at June
30, 2008, compared to 0.44% at December 31, 2007 and 0.47% of total loans at
June 30, 2007.
NET INTEREST INCOME INCREASES OVER PRIOR PERIODS
Net interest income increased $952,000, or 25.9%, to $4.6 million for
the second quarter of 2008 compared to $3.7 million in the second quarter of
2007. Net interest margin increased 26 basis points in the quarter ended June
30, 2008 to 3.00% from 2.74% for the quarter ended June 30, 2007. On a
linked-quarter basis, net interest margin increased 10 basis points from 2.90%
for the first quarter of 2008. The growth in interest income for the second
quarter was the result of an increase in average interest-earning assets of
$81.0 million and a decrease of 37 basis points in the average cost of interest
bearing liabilities to 3.21% offset by an increase in average interest bearing
liabilities of $60.8 million and a decrease of 13 basis points in the average
yield on earning assets to 5.80%.
Net interest income increased $1.6 million for the first six months of
2008, or 22.5%, to $9.0 million compared to the same period in the prior year.
An increase in net interest margin of 19 basis points to 2.95% from 2.76% was
the result of a decrease in cost of interest-bearing liabilities of 28 basis
points offset by a decrease in the yield on interest earning assets of 5 basis
points.
OTHER EXPENSES INCREASE
Other expenses increased $206,000, or 6.4%, to $3.4 million for the
second quarter of 2008 compared to $3.2 million for the second quarter of 2007
and $249,000, or 3.8%, to $6.8 million for the six months ended June 30, 2008
compared to $6.5 million for the six months ended June 30, 2007. The increases
in ongoing operating costs for both periods are consistent with variable
spending associated with our asset growth.
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
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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,
2008 2007 % CHANGE
---------- --------------- ----------
(DOLLARS IN THOUSANDS)
Total assets............................. $657,837 $629,509 4.5%
Cash and cash equivalents................ 10,978 9,540 15.1
Investment securities.................... 11,694 22,273 (47.5)
Mortgage-backed securities .............. 31,726 36,643 (13.4)
Loans receivable, net.................... 567,297 528,058 7.4
Deposits................................. 413,735 415,231 (0.4)
FHLB advances............................ 149,190 120,230 24.1
Subordinated debt........................ 15,464 15,464 0.0
Other borrowings......................... 7,250 8,000 (9.4)
Stockholder's equity..................... 63,551 63,047 0.8
SELECTED OPERATING DATA
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------ ----------------------------
2008 2007 % CHANGE 2008 % CHANGE
2007
--------------- -------------- ------------- --------------- ------------ -----------
(IN THOUSANDS, EXCEPT PER SHARE AND PER SHARE AMOUNTS)
Interest and dividend income.... $ 8,935 $ 7,937 12.6 $ 17,812 $ 15,666 13.7
Interest expense ............... 4,310 4,264 1.1 8,861 8,358 6.0
--------- --------- --------- ---------
Net interest income........ 4,625 3,673 25.9 8,951 7,308 22.5
Provision for loan losses....... 90 75 20.0 159 150 5.7
--------- --------- --------- ---------
Net interest income after
provision for loan losses.... 4,535 3,598 26.1 8,792 7,158 22.8
Other income.................... 666 637 4.7 977 1,235 (20.9)
Other expense................... 3,414 3,209 6.4 6,789 6,541 3.8
--------- --------- --------- ---------
Income before taxes............. 1,787 1,026 74.3 2,980 1,852 60.9
Provision for income taxes...... 698 407 71.7 1,161 732 58.6
--------- --------- --------- ---------
Net Income................. $ 1,089 $ 619 76.0 $ 1,819 $ 1,120 62.4
========= ========= ========= =========
Earnings per share basic $0.14 $0.08 $0.23 $0.14
Earnings per share diluted $0.13 $0.08 $0.22 $0.14
Average shares outstanding basic 7,990,246 8,127,619 7,995,153 8,147,779
Average shares outstanding diluted 8,079,285 8,235,465 8,088,756 8,260,985
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THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, 2008 JUNE 30, 2007
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AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
-------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
Loans $ 561,576 5.80% $ 452,846 5.97%
Investment securities 47,163 6.33% 67,018 5.72%
Other interest-earning assets 7,932 2.07% 15,856 5.43%
Interest-bearing deposits 372,733 2.71% 389,627 3.24%
Total borrowings 164,167 4.35% 86,451 5.14%
Interest rate spread 2.58% 2.34%
Net interest margin 3.00% 2.74%
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2008 JUNE 30, 2007
--------------------------------- --------------------------------
AVERAGE AVERAGE
BALANCE YIELD/COST BALANCE YIELD/COST
-------------- --------------- -------------- --------------
(DOLLARS IN THOUSANDS)
Loans $ 548,963 5.86% $ 444,422 5.97%
Investment securities 52,119 6.39% 68,154 5.76%
Other interest-earning assets 5,642 2.28% 16,271 5.32%
Interest-bearing deposits 384,901 2.80% 388,440 3.22%
Total borrowings 154,609 4.49% 81,685 5.17%
Interest rate spread 2.59% 2.37%
Net interest margin 2.95% 2.76%
ASSET QUALITY DATA
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 2008 2007
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(DOLLARS IN THOUSANDS)
Allowance for Loan Losses:
Allowance at beginning of period..................... $ 2,307 $ 2,050
Provision for loan losses............................ 159 261
Recoveries........................................... 2 4
Charge-offs.......................................... 0 8
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Net charge-offs...................................... (2) 4
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Allowance at end of period........................... $ 2,468 $ 2,307
Allowance for loan losses as a percent of total 0.44%
loans................................................ 0.44%
Allowance for loan losses as a percent of
nonperforming loans.................................. 129.06% 779.88%
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SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 2008 2007
--------------------------------------
(DOLLARS IN THOUSANDS)
Nonperforming Assets:
Nonaccrual loans:
Mortgage loans.................................... $ 320 $ 295
Commercial business loans......................... 1,551 0
Consumer loans.................................... 41 1
-------- --------
Total........................................ 1,912 296
Real estate owned.................................... 0 0
Other nonperforming assets........................... 0 0
-------- --------
Total nonperforming assets........................... $ 1,912 $ 296
Nonperforming loans as a percent of
total loans....................................... 0.34% 0.06%
Nonperforming assets as a percent of 0.29% 0.05%
total assets......................................
SELECTED FINANCIAL RATIOS
SIX MONTHS ENDED
JUNE 30,
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2008 2007
-------------- -----------
SELECTED PERFORMANCE RATIOS:
Return on average assets (1)........................ 0.56% 0.36%
Return on average equity (1)........................ 5.69% 3.18%
Interest rate spread (1)............................ 2.59% 2.40%
Net interest margin (1)............................. 2.95% 2.79%
Efficiency ratio.................................... 65.97% 78.70%
(1) Annualized.
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