Ocean Shore Holding Co. Reports 2nd Quarter Earnings

Ocean Shore Holding Co. (NASDAQ: OSHC) today announced net income of $1,297,000, or $0.19 per diluted share, for the quarter ended June 30, 2012, as compared to $1,158,000, or $0.17 per diluted share, for the second quarter of 2011. Net income for the six months ended June 30, 2012 was $2,651,000, or $0.39 per diluted share, as compared to $2,362,000, or $0.35 per diluted share, for the same period in 2011.

Ocean Shore Holding Co. is the holding company for Ocean City Home Bank, a federal savings bank headquartered in Ocean City, New Jersey. Ocean City Home Bank operates a total of twelve full-service banking offices in eastern New Jersey.

“Midway through the year, we are pleased with how we have fared in this uncertain economy,” said Steven E. Brady, President and CEO. “Notwithstanding the challenging interest rate environment and the high level of cash we are currently carrying on our balance sheet, our net interest income and net income has improved over the comparable quarter of the prior year and has declined only slightly from the first quarter of 2012. Finding quality loans remains a challenge, but we have not strayed from our goal of being our area’s premier lender and are maintaining the liquidity that will enable us to fulfill that mission. We are also pleased with the success we have had this year in reducing non-performing assets. This quarter we reduced non-performing assets, which were already low by industry standards, by $1.4 million to just 0.52% of total assets."

Balance Sheet Review

Total assets grew $31.5 million, or 3.2%, to $1,026.3 million at June 30, 2012 from December 31, 2011. Loans receivable, net, decreased $25.9 million, or 3.6%, to $701.7 million at June 30, 2012 from $727.6 million at December 31, 2011. Investment and mortgage-backed securities increased $39.8 million, or 75.4%, to $92.5 million during the first half of 2012. Cash and cash equivalents increased $18.2 million, or 11.7%, to $173.9 million at June 30, 2012 from December 31, 2011. The decrease in total net loans resulted from loan originations and other advances totaling $82.8 million offset by payoffs and payments received of $107.8 million. The increase in investments and mortgage-backed securities resulted from new purchases of short duration agency investments of $61.0 million offset by normal repayments, calls and payoffs of $21.2 million. Cash and cash equivalents increase resulted from increased deposit activity and cash flow from loans offset by increased investment activity.

Deposits grew $29.9 million, or 4.0%, to $782.4 million at June 30, 2012 from December 31, 2011. The Company continued its focus on core deposits, which increased $36.3 million, or 7.1%, to $544.9 million. Certificates of deposit decreased $6.4 million, or 2.6%, to $237.5 million at June 30, 2012 compared to December 31, 2011. Total borrowings were unchanged at $125.5 million for the period ended June 30, 2012.

During the quarter, the Company repurchased a total of 105,800 shares at a weighted average cost of $12.03.

Asset Quality

The provision for loan losses totaled $253,000 for the second quarter of 2012 compared to $128,000 for the second quarter of 2011 and $173,000 for the first quarter of 2012. The allowance for loan losses totaled $3.7 million, or 0.53% of total loans, at June 30, 2012 compared to $3.8 million, or 0.52% of total loans, at December 31, 2011. The Company experienced $490,000 in net charge-off activity for the first six months of 2012 as compared to $123,000 in net charge-off activity for the first six months of 2011.

Non-performing assets totaled $5.3 million, or 0.52% of total assets, at June 30, 2012, compared to $6.6 million, or 0.66% of total assets, at December 31, 2011. Non-performing assets consisted of sixteen residential mortgages totaling $3.0 million, four commercial mortgages totaling $1.4 million, four consumer equity loans totaling $283,000 and four real estate owned property totaling $572,000. Specific reserves recorded at June 30, 2012 were $391,000.

Income Statement Analysis

Net interest income increased $635,000, or 10.3%, to $6.8 million for the second quarter of 2012 compared to $6.2 million in the second quarter of 2011. Net interest margin decreased 7 basis points in the quarter ended June 30, 2012 to 3.42% versus 3.49% for the quarter ended June 30, 2011 and 11 basis points from 3.53% for the quarter ended March 31, 2012. The decrease in net interest income in the second quarter of 2012 compared to the second quarter of 2011 was the result of a decrease of 45 basis points in the average yield on interest-earning assets to 4.73% and an increase in average interest-bearing liabilities of $128.6 million offset by an increase in average interest-earning assets of $88.3 million and a decrease in the average cost of interest-bearing liabilities of 45 basis points to 1.26%.

Net interest income increased $1.5 million, or 12.7%, to $13.7 million for the first six months of 2012 compared to the same period in the prior year. A decrease in net interest margin of 1 basis point to 3.47% from 3.48% was the result of an increase in average interest bearing liabilities of $119.9 million and a decrease of 39 basis points in the average yield on earning assets to 4.83% offset by an increase in average interest-earning assets of $89.7 million and a decrease of 43 basis points in the average cost of interest bearing liabilities to 1.30%.

Other income increased $104,000 to $966,000 and $206,000 to $1.9 million, for the second quarter and first six months of 2012, respectively, compared to the same periods in 2011. The increase in other income resulted from increases in deposit account fees, cash surrender value of life insurance and debit card commissions over the prior period.

Other expenses increased $581,000, or 12.1%, to $5.4 million for the second quarter of 2012, compared to $4.8 million for the second quarter of 2011. Other expenses increased $1.3 million, or 14.0%, to $10.8 million for the six months ended June 30, 2012 compared to $9.5 million for the six months ended June 30, 2011. Costs associated with two branch locations added with last year’s acquisition of Select Bank totaled $320,000 for the second quarter of 2012 and $650,000 for the first six months of 2012. Additionally, increases in salaries and benefits, occupancy and equipment and other expenses of $333,000 and $770,000 were offset by decreases in FDIC insurance and marketing expenses of $72,000 and $120,000 for the second quarter of 2012 and first six months of 2012, respectfully.

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)
 
    June 30,     December 31,    
2012 2011 % Change
(Dollars in thousands)
 
Total assets $1,026,273 $ 994,730 3.2 %
Cash and cash equivalents 173,861 155,653 11.7
Investment securities 92,486 52,732 75.4
Loans receivable, net 701,750 727,626 (3.6 )
Deposits 782,351 752,455 4.0
FHLB advances 110,000 110,000 0.0
Subordinated debt 15,464 15,464 0.0
Stockholder’s equity 105,607 104,680 0.9
 
 

SELECTED OPERATING DATA (Unaudited)
 
    Three Months Ended

June 30,
        Six Months Ended

June 30,
   
2012     2011 % Change 2012     2011 % Change
(In thousands, except per share and per share amounts)
 
Interest and dividend income $9,413 $9,167 2.7 $19,024 $18,205 4.5
Interest expense 2,616 3,005 (12.9 ) 5,341 6,068 (12.0 )
Net interest income 6,797 6,162 10.3 13,683 12,137 12.7
 
Provision for loan losses 253 128 97.7 426 203 109.9
 
Net interest income after

provision for loan losses

6,544

6,034

8.5

13,257

11,934

11.1
 
Other income 966 862 11.9 1,870 1,664 12.4
Other expense 5,391 4,810 12.1 10,792 9,466 14.0
 
Income before taxes 2,119 2,086 1.6 4,335 4,132 4.9
Provision for income taxes 822 928 (11.4 ) 1,684 1,770 (4.9 )
 
Net Income $1,297 $1,158 12.0 $2,651 $2,362 12.2
 
Earnings per share basic $0.19 $0.17 $0.39 $0.35
Earnings per share diluted $0.19 $0.17 $0.39 $0.35
 
Average shares outstanding basic 6,742,591 6,738,827 6,760,448 6,734,602
Average shares outstanding diluted 6,797,333 6,809,077 6,820,495 6,805,216
 
               
Three Months Ended

June 30, 2012
Three Months Ended

June 30, 2011

Average

Balance
    Yield/Cost    

Average

Balance
    Yield/Cost
(Dollars in thousands)
Loans $709,651 4.92 % $661,680 5.22 %
Investment securities 85,765 3.18 % 45,409 4.74 %
 
Interest-bearing deposits 703,547 0.63 % 574,909 1.04 %
Total borrowings 125,464 4.82 % 125,464 4.82 %
 
Interest rate spread 3.47 % 3.47 %
Net interest margin 3.42 % 3.49 %
 
 
 
Six Months Ended

June 30, 2012
Six Months Ended

June 30, 2011

Average

Balance
    Yield/Cost    

Average

Balance
    Yield/Cost
(Dollars in thousands)
Loans $714,266 4.97 % $659,842 5.21 %
Investment securities 73,384 3.52 % 38,073 5.36 %
 
Interest-bearing deposits 694,447 0.67 % 574,507 1.07 %
Total borrowings 125,464 4.81 % 125,464 4.80 %
 
Interest rate spread 3.53 % 3.48 %
Net interest margin 3.47 % 3.48 %
 
 

ASSET QUALITY DATA (Unaudited)
 
   

Six Months

Ended

June 30, 2012
   

Year Ended

December 31,

2011
(Dollars in thousands)
Allowance for Loan Losses:
Allowance at beginning of period $ 3,762 $ 3,988
Provision for loan losses 426 473
 
Charge-offs (504 ) (700 )
Recoveries 14   1  
Net charge-offs (490 ) (699 )
 
Allowance at end of period $ 3,698   $ 3,762  

Allowance for loan losses as a percent of total loans
0.53 % 0.52 %
Allowance for loan losses as a percent of nonperforming loans

77.8

%
58.0 %
 
 
 

At June 30,

2012

At December 31,

2011
(Dollars in thousands)
Nonperforming Assets:
Nonaccrual loans:
Real estate mortgage - residential $ 3,039 $ 4,768
Real estate mortgage - commercial 1,429 392
Commercial business loans 318
Consumer loans 283   198  
Total 4,751 5,676
Trouble debt restructurings - nonaccrual   805  
Total nonaccrual loans 4,751 6,481
Real estate owned 572   98  
 
Total nonperforming assets $ 5,323   $ 6,579  

Nonperforming loans as a percent of total loans
0.68 % 0.89 %
Nonperforming assets as a percent of total assets 0.52 % 0.66 %
 
 
 

SELECTED FINANCIAL RATIOS (Unaudited)
 
Six Months Ended

June 30,
2012 2011
Selected Performance Ratios:
Return on average assets (1) 0.52 % 0.54 %
Return on average equity (1) 5.00 % 4.62 %
Interest rate spread (1) 3.53 % 3.48 %
Net interest margin (1) 3.47 % 3.48 %
Efficiency ratio 69.39 % 68.59 %
 

--(1) Annualized.
 
 

OCEAN SHORE HOLDING COMPANY - QUARTERLY DATA (Unaudited)
 
    Q2

2012
    Q1

2012
    Q4

2011
    Q3

2011
    Q2

2011
(In thousands except per share amounts)
Income Statement Data:
Net interest income $6,797 $6,885 $6,987 $6,777 $6,163
Provision for loan losses 253   173   129   141   128  

Net interest income after provision for loan losses

6,544

6,712

6,858

6,636

6,035
Other income 966 905 939 935 862
Other expense 5,391   5,401   5,389   5,521   4,810  
Income before taxes 2,119 2,216 2,408 2,050 2,087
Provision for income taxes 822   862   927   835   929  
Net income $1,297   $1,354   $1,481   $1,215   $1,158  
 
Share Data:
Earnings per share basic $0.19 $0.20 $0.22 $0.18 $0.17
Earnings per share diluted $0.19 $0.20 $0.22 $0.18 $0.17
Average shares outstanding basic 6,742,591 6,778,305 6,769,726 6,753,956 6,738,827
Average shares outstanding diluted 6,797,333 6,842,452 6,843,937 6,836,697 6,809,077
Total shares outstanding 7,185,843 7,291,643 7,291,643 7,291,643 7,296,780
 
Balance Sheet Data:
Total assets $1,026,273 $1,002,690 $994,926 $1,021,625 $860,269
Investment securities 92,486 75,266 53,732 49,679 47,474
Loans receivable, net 701,750 714,993 727,887 743,945 662,841
Deposits 782,351 758,806 752,455 780,564 621,189
FHLB advances 110,000 110,000 110,000 110,000 110,000
Subordinated debt 15,464 15,464 15,464 15,464 15,464
Stockholders’ equity 105,607 105,558 104,680 104,063 102,822
 
Asset Quality:
Non-performing assets $5,323 $6,703 $6,579 $5,297 $6,033
Non-performing loans to total loans 0.68 % 0.90 % 0.89 % 0.67 % 0.90 %
Non-performing assets to total assets 0.52 % 0.67 % 0.66 % 0.52 % 0.70 %
Allowance for loan losses $3,698 $3,895 $3,762 $4,119 $4,068
Allowance for loan losses to total loans 0.53 % 0.54 % 0.52 % 0.55 % 0.61 %
Allowance for loan losses to non-performing loans

77.8
% 60.3 % 58.0 % 82.6 % 68.5 %
 

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX