Ocean Shore Holding Co. (NASDAQ: OSHC) today announced net income of $1,481,000, or $0.22 per basic and diluted share, for the quarter ended December 31, 2011 as compared to $1,428,000, or $0.21 per basic and diluted share, for the same quarter last year. For the full year ended December 31, 2011, net income was $5,058,000, or $0.75 per basic share and $0.74 per diluted share, as compared to $5,444,000, or $0.80 per basic and diluted share, for 2010. Results reflect after tax expenses of $48,000 during the fourth quarter and $586,000 for the full year ended December 31, 2011 associated with the acquisition of CBHC Financialcorp, Inc. and its subsidiary Select Bank, compared to no similar expense during the same periods in 2010. The acquisition closed on August 1, 2011.

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 twelve full-service banking offices in eastern New Jersey.

"We are very pleased to report strong results for 2011," said Steven E. Brady, President and CEO. "Net income, which was again over $5.0 million, dipped slightly compared to last year due to the additional expenses incurred in connection with the acquisition of Select Bank. We completed the integration in the third quarter, so we look forward to seeing the benefit of the transaction in our full 2012 results."

Balance Sheet Review

Total assets grew $155.1 million, or 18.5%, to $994.9 million at December 31, 2011 from December 31, 2010. Loans receivable, net, increased $67.5 million, or 10.2%, to $727.9 million. The acquisition of Select Bank contributed $84.1 million of loans. Excluding the effects of the acquisition, the loan portfolio contracted slightly as repayments exceeded new originations due to lower loan demand. Cash and cash equivalents increased $44.8 million to $155.7 million while investments and mortgage-backed securities increased $29.0 million, or 122.3%, to $52.7 million, both increases primarily a result of the contributions of the acquisition of Select Bank.

Deposits grew $149.1 million, or 24.7%, to $752.5 million at December 31, 2011 from December 31, 2010. The acquisition of Select Bank contributed $122.9 million of deposits. Total borrowings remained unchanged at $125.5 million, including $110.0 million of FHLB advances.

Asset Quality

The provision for loan losses totaled $129,000 for the fourth quarter of 2011 compared to $76,000 for the fourth quarter of 2010 and $141,000 for the third quarter of 2011. The increase in the provision over the prior year quarter resulted from additional reserves required on higher loan delinquencies in 2011 compared to 2010. The provision decreased to $473,000 for the year-ended 2011 compared to $892,000 for the year-ended 2010. The decrease resulted from higher specific reserves on loans required in 2010 compared to 2011. The allowance for loan losses totaled $3.7 million, or 0.51% of total loans, at December 31, 2011 compared to $4.0 million, or 0.60% of total loans, at December 31, 2010. The Company experienced $772,000 in net charge-off activity for 2011 compared to $380,000 for 2010.

Non-performing assets totaled $5.9 million, or 0.60% of total assets, at December 31, 2011, compared to $5.3 million, or 0.63% of total assets, at December 31, 2010. Non-performing assets consisted of twenty one residential mortgages totaling $5.3 million, one commercial mortgage totaling $137,000, two commercial loans totaling $299,000, four consumer equity loans totaling $96,000 and one real estate owned property totaling $98,000. Specific reserves recorded for these loans at December 31, 2011 were $386,000.

Income Statement Analysis

Net interest income increased $1.1 million for the fourth quarter of 2011 compared to the fourth quarter of 2010. Net interest margin increased 13 basis points in the quarter ended December 31, 2011 to 3.54% from 3.41% for the quarter ended December 31, 2010. On a linked-quarter basis, net interest margin decreased 1 basis point from 3.55% in the third quarter of 2011. The increase in net interest income for the fourth quarter of 2011 was the result of an increase in average interest-earning assets of $95.4 million and a decrease of 55 basis points in the average cost of interest-bearing liabilities to 1.40% from 1.95%, offset by an increase in average interest-bearing liabilities of $136.4 million and a decrease of 33 basis points in the average yield on interest-earning assets to 5.01% from 5.34%.

Net interest income increased $2.0 million, or 8.4%, for the full year ended 2011 to $25.9 million compared to the same period in the prior year. An increase in net interest margin of 8 basis points to 3.51% from 3.43% was mainly the result of a decrease in the cost of interest-bearing liabilities of 50 basis points to 1.62%, offset by a decrease in the yield on interest-earning assets of 26 basis points to 5.16%.

Other income increased $65,000, or 7.4%, and $135,000, or 4.0%, to $939,000 and $3.5 million, for the fourth quarter and full year, respectively, compared to the same periods in 2010. The increase in other income resulted from increases in deposit and loan account fees and debit card commissions offset by decreases in cash surrender value of life insurance over the prior period.

Other expenses increased $1.0 million, or 23.1%, to $5.4 million for the fourth quarter of 2011, compared to $4.4 million for the fourth quarter of 2010. Other expenses increased $2.9 million, or 16.3%, to $20.4 million for the twelve months ended December 31, 2011 compared to $17.5 million for the twelve months ended December 31, 2010. Costs associated with the merger with CBHC Financialcorp and its subsidiary Select Bank accounted for increases totaling $90,000 for the fourth quarter of 2011 and $826,000 for the twelve months ended December 31, 2011. Additional increases of $319,000 in the fourth quarter and $516,000 in the twelve months ended 2011 resulted from the acquired operations of Select Bank. The remaining $603,000 for the fourth quarter and $1.5 million for the twelve months of 2011 resulted from normal increases in year over year operations.

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)

 
  December 31,   December 31,  
2011 2010 % Change
(Dollars in thousands)
 
Total assets $ 994,926 $ 839,857 18.5 %
Cash and cash equivalents 155,653 110,865 40.4
Investment securities 52,732 23,721 122.3
Loans receivable, net 727,887 660,340 10.2
Deposits 752,455 603,334 24.7
FHLB advances 110,000 110,000 0.0
Subordinated debt 15,464 15,464 0.0
Stockholder's equity 104,692 100,554 4.1
 
 

SELECTED OPERATING DATA (unaudited)

 
 

Three Months Ended
December 31,

  

Year Ended
December 31,

2011   2010   % Change 2011   2010   % Change
(Dollars in thousands, except share and per share amounts)
 
Interest and dividend income $9,883 $9,270 6.6% $38,087 $37,716 1.0%
Interest expense 2,896 3,357 (13.7) 12,186 13,829 (11.9)
Net interest income 6,987 5,913 18.2 25,901 23,887 8.4
 
Provision for loan losses 129 76 69.7 473 892 (47.0)
 
Net interest income after

provision for loan losses

6,858

5,837

17.5

25,428

22,995

10.6

 
Other income 939 874 7.4 3,538 3,403 4.0
Other expense 5,389 4,377 23.1 20,376 17,523 16.3
 
Income before taxes 2,408 2,334 3.2 8,590 8,875 (3.2)
Provision for income taxes 927 906 2.3 3,532 3,431 2.9
 
Net Income $ 1,481 $ 1,428 3.7 $ 5,058 $ 5,444 (7.1)
 
Earnings per share basic $0.22 $0.21 $0.75 $0.80
Earnings per share diluted $0.22 $0.21 $0.74 $0.80
 
Average shares outstanding:
Basic 6,769,726 6,721,891 6,748,334 6,798,317
Diluted 6,843,937 6,769,445 6,831,989 6,798,317
 
 
 

Three Months Ended
December 31, 2011

  

Three Months Ended
December 31, 2010

Average
Balance

   Yield/Cost  

Average
Balance

   Yield/Cost
(Dollars in thousands)
Loans $735,627   5.05% $669,025   5.26%
Investment securities 53,557 4.51% 24,718 7.66%
Total interest-earning assets 789,184 5.01% 693,743 5.34%
 
Interest-bearing deposits $699,942 0.78% $563,510 1.30%
Total borrowings 125,464 4.86% 125,464 4.86%
Total interest-bearing liabilities 825,406 1.40% 688,974 1.95%
 
Interest rate spread 3.61% 3.40%
Net interest margin 3.54% 3.41%
 
 
 

Year Ended
December 31, 2011

  

Year Ended
December 31, 2010

Average
Balance

   Yield/Cost  

Average
Balance

   Yield/Cost
(Dollars in thousands)
Loans $693,497   5.18% $668,910   5.37%
Investment securities 43,943 4.98% 26,623 6.86%
Total interest-earning assets 737,440 5.16% 695,533 5.42%
 
Interest-bearing deposits $625,732 0.98% $526,530 1.48%
Total borrowings 125,464 4.83% 125,464 4.83%
Total interest-bearing liabilities 751,196 1.62% 651,994 2.12%
 
Interest rate spread 3.54% 3.30%
Net interest margin 3.51% 3.43%
 
 

ASSET QUALITY DATA (unaudited)

 
 

Year Ended
December 31,
2011

  

Year Ended
December 31,
2010

(Dollars in thousands)
Allowance for Loan Losses:  
Allowance at beginning of period $ 3,988 $ 3,476
Provision for loan losses 473 892
 
Charge-offs (773) (380)
Recoveries 1 -
Net charge-offs (772) (380)
 
Allowance at end of period $ 3,689 $ 3,988
Allowance for loan losses as a percent of total loans 0.51% 0.60%
Allowance for loan losses as a percent of nonperforming loans 63.4% 76.4%
 
   

As of
December 31,
2011

  

As of
December 31,
2010

(Dollars in thousands)
Nonperforming Assets:
Nonaccrual loans:
Real estate mortgage - residential $ 5,291 $ 4,282
Real estate mortgage - commercial 137 729
Commercial 299 134
Consumer 96 77
Total 5,823 5,222
 
Real estate owned 98 98
Other nonperforming assets - -
 
Total nonperforming assets $ 5,921 $ 5,320
Nonperforming loans as a percent of total loans 0.80% 0.79%
Nonperforming assets as a percent of total assets 0.60% 0.63%
 
 

SELECTED FINANCIAL RATIOS (unaudited)

 
  Year Ended

December 31,
2011

  

December 31,
2010

 
Selected Performance Ratios:
Return on average assets 0.54 % 0.66 %
Return on average equity 4.90 % 5.45 %
Interest rate spread 3.54 % 3.30 %
Net interest margin 3.51 % 3.43 %
Efficiency ratio 69.21 % 64.21 %
 
 

OCEAN SHORE HOLDING COMPANY - QUARTERLY DATA (unaudited)

 
 

Q4
2011

  

Q3
2011

  

Q2
2011

  

Q1
2011

  

Q4
2010

(In thousands except per share amounts)
Income Statement Data:      
Net interest income $6,987 $6,778   $6,162 $5,975 $5,913
Provision for loan losses 129 141 128 75 76
Net interest income after

provision for loan losses

6,858

6,637

6,034

5,900

5,837

Other income 939 934 862 802 874
Other expense 5,389 5,521 4,810 4,656 4,377
Income before taxes 2,408 2,050 2,086 2,046 2,334
Provision for income taxes 927 835 928 841 906
Net income $1,481 $1,215 $1,158 $1,205 $1,428
 
Share Data:
Earnings per share basic $0.22 $0.18 $0.17 $0.18 $0.21
Earnings per share diluted $0.22 $0.18 $0.17 $0.18 $0.21
Average shares outstanding basic 6,769,726 6,753,956 6,738,827 6,730,331 6,721,891
Average shares outstanding diluted 6,843,937 6,836,697 6,809,077 6,801,558 6,769,445
Total shares outstanding 7,291,643 7,291,643 7,296,780 7,296,780 7,296,780
 
Balance Sheet Data:
Total assets $994,926 $1,021,625 $860,269 $861,365 $839,857
Investment securities 53,732 49,679 47,474 42,131 23,721
Loans receivable, net 727,887 743,945 662,841 660,385 660,340
Deposits 752,455 780,564 621,189 623,685 603,334
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 104,692 104,063 102,822 101,750 100,554
 
Asset Quality:
Non-performing assets $5,921 $5,297 $6,033 $5,910 $5,320
Non-performing loans to total loans 0.80% 0.67% 0.90% 0.88% 0.79%
Non-performing assets to total assets 0.60% 0.52% 0.70% 0.69% 0.63%
Allowance for loan losses $3,689 $4,119 $4,068 $4,063 $3,988
Allowance for loan losses to total loans 0.51% 0.55% 0.61% 0.62% 0.60%
Allowance for loan losses to non-performing loans 63.4% 82.6% 68.5% 69.9% 76.4%
 

Ocean Shore Holding Co.
Steven E. Brady, President and CEO
Donald F. Morgenweck, CFO
609-399-0012