Ocean Shore Holding Co. (NASDAQ:OSHC) today announced net income of $1,428,000, or $0.21 per basic and diluted share, for the quarter ended December 31, 2010 as compared to $1,314,000, or $0.19 per basic and diluted share, for the same quarter last year.

For the full year ended December 31, 2010, net income rose to $5,444,000, or $0.80 per basic share and diluted share, as compared to $4,211,000, or $0.60 per basic share and $0.59 per diluted share, for 2009.

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 ten full-service banking offices in eastern New Jersey.

“We are extremely proud to report that our net income for 2010 represents the Company’s best annual performance since becoming a public company in 2004. Notwithstanding a challenging operating environment, we have succeeded in growing our franchise this year, with asset growth of 9% based entirely on growth in customer deposits. We have accomplished this while maintaining strong asset quality in a depressed real estate market, which we believe speaks well for our conservative operating philosophy,” said Steven E. Brady, President and CEO.

Balance Sheet Review

Total assets grew $69.7 million, or 9.1%, to $839.9 million at December 31, 2010 from December 31, 2009. Loans receivable, net, decreased $3.3 million, or (0.5)%, to $660.3 million. The decrease in loans receivable resulted from decreases in real estate loans of $1.1 million, consumer loans of $3.6 million and commercial loans of $0.9 million offset by an increase in real estate construction loans of $3.0 million. Cash and cash equivalents increased $77.8 million to $110.9 million while investments and mortgage-backed securities decreased $5.7 million, or 19.4%, to $23.7 million.

Deposits grew $65.9 million, or 12.3%, to $603.3 million at December 31, 2010 from December 31, 2009. Total borrowings remained unchanged at $125.5 million, including $110.0 million of FHLB advances.

Asset Quality

The provision for loan losses totaled $76,000 for the fourth quarter of 2010 compared to $357,000 for the fourth quarter of 2009 and $125,000 for the third quarter of 2010. The decrease in the provision resulted from a decrease in specific reserves on non-performing loans in the fourth quarter of 2010 compared to 2009. The provision decreased to $892,000 for the year-ended 2010 compared to $1,251,000 for the year-ended 2009. The allowance for loan losses totaled $4.0 million, or 0.60% of total loans, at December 31, 2010 compared to $3.5 million, or 0.52% of total loans, at December 31, 2009. The Company experienced $380,000 in charge-off activity for 2010 compared to $460,000 for 2009.

Non-performing assets totaled $5.3 million, or 0.79% of total assets, at December 31, 2010, compared to $1.9 million, or 0.25% of total assets, at December 31, 2009. Non-performing assets consisted of twelve residential mortgages totaling $4.3 million, three commercial mortgages totaling $729,000, two commercial loans totaling $134,000, two consumer equity loans totaling $77,000 and one real estate owned property totaling $98,000. Specific reserves recorded for these loans at December 31, 2010 were $482,000.

Income Statement Analysis

Net interest income was unchanged at $5.9 million for the fourth quarter of 2010 compared to the fourth quarter of 2009. Net interest margin decreased one basis points in the quarter ended December 31, 2010 to 3.41% from 3.42% for the quarter ended December 31, 2009. On a linked-quarter basis, net interest margin increased 2 basis points from 3.39% in the third quarter of 2010. A slight increase in net interest income for the fourth quarter was the result of an increase in average interest-earning assets of $3.7 million and a decrease of 42 basis points in the average cost of interest-bearing liabilities to 1.95% from 2.37%, offset by an increase in average interest-bearing liabilities of $66.5 million and a decrease of 22 basis points in the average yield on interest-earning assets to 5.34% from 5.56%.

Net interest income increased $1.7 million, or 7.7%, for the full year to $23.9 million compared to the prior year. An increase in net interest margin of 11 basis points to 3.43% from 3.32% was mainly the result of a decrease in the cost of interest-bearing liabilities of 41 basis points offset by a decrease in the yield on interest-earning assets of 16 basis points.

Other expenses increased $129,000, or 3.0%, to $4.37 million for the fourth quarter of 2010, compared to $4.25 million for the fourth quarter of 2009. Other expenses increased $1.4 million, or 8.6%, to $17.5 million for the year ended December 31, 2010 compared to $16.1 million for the year-ended December 31, 2009. Other expenses increased in 2010 over the prior year as a result of additional expenses associated with the opening of a new branch in the fourth quarter of 2009 as well as normal increases in salaries and benefits, occupancy and equipment, marketing, other expenses, partially offset by decreases in FDIC deposit insurance and qualified deferred costs associated with closed loans.

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
 
  December 31,   December 31,  
2010 2009 % Change
(Dollars in thousands)
 
Total assets $ 839,857 $770,145 9.1 %
Cash and cash equivalents 110,865 33,028 235.7
Investment securities 23,721 29,427 (19.4)
Loans receivable, net 660,340 663,663 0.5
Deposits 603,334 537,422 12.3
FHLB advances 110,000 110,000 0.0
Subordinated debt 15,464 15,464 0.0
Stockholder’s equity 100,554 97,335 3.3
 
 

SELECTED OPERATING DATA
 
  Three Months Ended   Year Ended
December 31, December 31,
2010   2009   % Change   2010   2009     % Change  
(Dollars in thousands, except share and per share amounts)
 
Interest and dividend income $9,270 $9,586 (3.3 ) $37,716 $37,225 1.3
Interest expense 3,357 3,686 (8.9 ) 13,829 15,038   (8.0 )
Net interest income 5,912 5,900 0.2 23,887 22,187 7.7
 
Provision for loan losses 76 357 (78.7 ) 892 1,251   (28.7 )
 
Net interest income after

provision for loan losses

5,837

5,543

5.3

22,995

20,936

9.8
 
Other income 874 854 2.3 3,403 3,101 9.7
Impairment on investment securities - - - - (1,077 ) N/M
Other expense 4,377 4,248 3.0 17,523 16,134   8.6
 
Income before taxes 2,334 2,149 8.6 8,876 6,826 30.0
Provision for income taxes 906 835 8.5 3,431 2,615   31.2
 
Net Income $ 1,428 $ 1,314 8.7 $ 5,444 $ 4,211   29.3
 
Earnings per share basic $0.21 $0.19 $0.80 $0.60
Earnings per share diluted $0.21 $0.19 $0.80 $0.59
 

Average shares outstanding:
Basic 6,721,891 7,051,468 6,798,317 7,064,161
Diluted 6,769,445 7,081,593 6,798,317 7,112,526

N/M – not measurable
 
   
Three Months Ended Three Months Ended
December 31, 2010 December 31, 2009
Average   Average  
Balance Yield/Cost Balance Yield/Cost
(Dollars in thousands)
Loans $669,025 5.26% $660,236 5.51%
Investment securities 24,718 7.66% 29,771 6.65%
Total interest-earning assets 693,743 5.34% 690,007 5.56%
 
Interest-bearing deposits $563,510 1.30% 496,555 1.75%
Total borrowings 125,464 4.86% 125,893 4.83%
Total interest-bearing liabilities 688,974 1.95% 622,448 2.37%
 
Interest rate spread 3.40% 3.19%
Net interest margin 3.41% 3.42%
 
   
Year Ended Year Ended
December 31, 2010 December 31, 2009
Average   Average  
Balance   Yield/Cost   Balance   Yield/Cost
(Dollars in thousands)
Loans $668,910 5.37% $634,862 5.53%
Investment securities 26,623 6.86% 32,473 6.50%
Total interest-earning assets 695,533 5.42% 667,335 5.58%
 
Interest-bearing deposits $526,530 1.48% $456,398 1.96%
Total borrowings 125,464 4.83% 137,306 4.45%
Total interest-bearing liabilities 651,994 2.12% 593,704 2.53%
 
Interest rate spread 3.30% 3.05%
Net interest margin 3.43% 3.32%
 
 

ASSET QUALITY DATA
 
  Year Ended   Year Ended
December 31, December 31,
2010   2009  
(Dollars in thousands)
Allowance for Loan Losses:
Allowance at beginning of period $ 3,476 $ 2,684
Provision for loan losses 892 1,251
 
Charge-offs (380 ) (460 )
Recoveries - 1
Net charge-offs (380 ) (459 )
 
Allowance at end of period $ 3,988 $ 3,476
Allowance for loan losses as a percent of total loans 0.60 % 0.52 %
Allowance for loan losses as a percent of nonperforming loans 77.1 % 188.4 %
 
   
As of As of
December 31, December 31,
2010   2009
(Dollars in thousands)
Nonperforming Assets:
Nonaccrual loans:
Real estate mortgage - residential $ 4,282 $ 1,593
Real estate mortgage - commercial 729 139
Commercial 134 22
Consumer 77 91
Total 5,222 1,845
 
Real estate owned 98 98
Other nonperforming assets - -
 
Total nonperforming assets $ 5,320 $ 1,943
Nonperforming loans as a percent of total loans 0.79% 0.28%
Nonperforming assets as a percent of total assets 0.63% 0.25%
 
 

SELECTED FINANCIAL RATIOS
 
  Year Ended
December 31,   December 31,
2010 2009
 
Selected Performance Ratios:
Return on average assets 0.66 % 0.58 %
Return on average equity 5.45 % 6.20 %
Interest rate spread 3.30 % 3.05 %
Net interest margin 3.43 % 3.32 %
Efficiency ratio 64.21 % 63.70 %
 
 

OCEAN SHORE HOLDING COMPANY - QUARTERLY DATA
 
  Q4

2010
  Q3

2010
  Q2

2010
  Q1

2010
  Q4

2009
(In thousands except per share amounts)
Income Statement Data:        
Net interest income $5,913 $5,941 $6,053 $5,981 $5,900
Provision for loan losses 76 125 540 152 357
Net interest income after

provision for loan losses

5,837

5,816

5,513

5,829

5,543
Other income 874 836 886 807 854
Other expense 4,377 4,319 4,375 4,452 4,248
Income before taxes 2,334 2,333 2,024 2,184 2,149
Provision for income taxes 906 892 785 848 835
Net income $1,428 $1,441 $1,239 $1,336 $1,314
 
Share Data:
Earnings per share basic $0.21 $0.21 $0.18 $0.20 $0.19
Earnings per share diluted $0.21 $0.21 $0.18 $0.20 $0.19
Average shares outstanding basic 6,721,891 6,826,698 6,826,946 6,818,615 7,051,468
Average shares outstanding diluted 6,769,445 6,835,521 6,834,525 6,836,718 7,081,593
Total shares outstanding 7,296,780 7,296,904 7,307,590 7,307,590 7,308,118
 
Balance Sheet Data:
Total assets $839,863 $838,165 $798,790 $781,207 $770,145
Investment securities 23,721 25,363 27,960 27,576 29,427
Loans receivable, net 660,340 669,868 675,681 666,323 663,663
Deposits 603,334 603,547 563,258 546,988 537,422
FHLB advances 110,000 110,000 110,000 110,000 110,000
Subordinated debt 15,464 15,464 15,464 15,464 15,464
Stockholder’s equity 100,554 99,314 99,801 98,562 97,335
 
Asset Quality:
Non-performing assets $5,271 $4,052 $3,296 $2,578 $1,943
Non-performing loans to total loans 0.78% 0.59% 0.47% 0.37% 0.28%
Non-performing assets to total assets 0.63% 0.48% 0.41% 0.33% 0.25%
Allowance for loan losses $3,988 $3,982 $4,124 $3,601 $3,476
Allowance for loan losses to total loans 0.60% 0.59% 0.61% 0.54% 0.52%
Allowance for loan losses to non-performing loans 77.1% 100.7% 125.1% 139.70% 188.4%
 

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