Ocean Shore Holding Co. (NASDAQ: OSHC) today announced net
income of $1,192,000, or $0.18 per diluted share, for the quarter
ended September 30, 2012, as compared to $1,215,000, or $0.18 per
diluted share, for the quarter ended September 30, 2011. Net income
for the nine months ended September 30, 2012 was $3,843,000, or
$0.57 per diluted share, as compared to $3,577,000, or $0.52 per
diluted share, for the same period in 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.
“Earnings for the quarter were strong,” said Steven E. Brady,
President and CEO, “although lagging slightly behind our prior
quarter as heavy refinancing activity put pressure on our net
interest margin. Intense competition and the interest rate
environment have prompted another re-financing boom that has led to
increased pay-offs in our portfolio.”
“Asset quality remains very strong as non-performing assets were
$5.7 million, or 0.53% of total assets, at September 30, 2012,
compared to $6.6 million, or 0.66%, at December 31, 2011.”
Balance Sheet Review
Total assets grew $66.8 million, or 6.7%, to $1,061.5 million at
September 30, 2012 from December 31, 2011. Loans receivable, net,
decreased $36.0 million, or 4.9%, to $691.6 million at September
30, 2012 from $727.6 million at December 31, 2011. Investment and
mortgage-backed securities increased $41.6 million, or 78.8%, to
$94.3 million during the first nine months of 2012. Cash and cash
equivalents increased $59.1 million, or 38.0%, to $214.8 million at
September 30, 2012 from December 31, 2011. The decrease in total
net loans resulted from loan originations and other advances
totaling $116.6 million offset by payoffs and payments received of
$152.7 million. The increase in investments and mortgage-backed
securities resulted from new purchases of short duration agency
investments of $62.8 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 $67.0 million, or 8.9%, to $819.4 million at
September 30, 2012 from December 31, 2011. The Company continued
its focus on core deposits, which increased $85.6 million, or
16.8%, to $594.2 million. Certificates of deposit decreased $18.6
million, or 8.3%, to $225.2 million at September 30, 2012 compared
to December 31, 2011. Total borrowings were unchanged at $125.5
million for the period ended September 30, 2012.
Stock Repurchase Plan Completed
During the September 2012 quarter, the Company repurchased a
total of 228,600 shares at a weighted average cost of $13.31.
Subsequent to the end of the quarter, the Company purchased an
additional 30,600 shares, which completed its announced repurchase
of 365,000 shares at a weighted average cost of $12.96.
Asset Quality
The provision for loan losses totaled $148,000 for the third
quarter of 2012 compared to $141,000 for the third quarter of 2011
and $253,000 for the second quarter of 2012. The provision for loan
losses totaled $574,000 for the nine months ended September 30,
2012 compared to $344,000 for the nine months ended September 30,
2011. The allowance for loan losses totaled $3.7 million, or 0.53%
of total loans, at September 30, 2012 compared to $3.8 million, or
0.52% of total loans, at December 31, 2011. The Company experienced
$640,000 in net charge-off activity for the nine months ended
September 30, 2012 as compared to $213,000 in net charge-off
activity for the nine months ended September 30, 2011.
Non-performing assets totaled $5.7 million, or 0.53% of total
assets, at September 30, 2012, compared to $6.6 million, or 0.66%
of total assets, at December 31, 2011. Non-performing assets
consisted of seventeen residential mortgages totaling $3.6 million,
one commercial mortgage totaling $475,000, one residential
construction loan totaling $84,000, one commercial loan totaling
$200,000, five consumer equity loans totaling $299,000 and five
real estate owned properties totaling $968,000. Specific reserves
recorded at September 30, 2012 totaled $383,000.
Income Statement Analysis
Net interest income decreased $270,000, or 4.0%, to $6.5 million
for the third quarter of 2012 compared to $6.8 million in the third
quarter of 2011. Net interest margin decreased 23 basis points in
the quarter ended September 30, 2012 to 3.32% from 3.55% for the
quarter ended September 30, 2011. On a linked-quarter basis, net
interest margin decreased 10 basis points from 3.42% in the second
quarter of 2012. The decrease in net interest income for the third
quarter of 2012 as compared to the third quarter of 2011 was the
result of a decrease of 61 basis points in the average yield on
interest-earning assets to 4.63% and an increase in average
interest-bearing liabilities of $72.2 million offset by an increase
in average interest-earning assets of $20.8 million and a decrease
in the average cost of interest-bearing liabilities of 45 basis
points to 1.21%. Heavy refinancing activity resulted in a shift of
the mix of interest-earning assets to a higher percentage of
investment securities, which have lower yields than loans. Average
deposits were higher in the current quarter as a result of seasonal
activity in municipal deposits.
Net interest income increased $1.3 million, or 6.7%, for the
nine months ended September 30, 2012 to $20.2 million compared to
the same period in the prior year. A decrease in net interest
margin of 8 basis points to 3.42% from 3.50% was the result of a
decrease of 46 basis points in the average yield on earning assets
to 4.76% and an increase in average interest bearing liabilities of
$103.8 million offset by a decrease of 44 basis points in the
average cost of interest bearing liabilities to 1.27% and an
increase in average interest-earning assets of $66.5 million.
Other income increased $95,000 and $301,000 to $1.0 million and
$2.9 million for the three and nine months ended September 30,
2012, respectively, compared to the same periods in 2011. The
increase in other income resulted from increases in deposit and
loan account fees, debit card commissions, cash surrender value of
life insurance and gains on called securities over the prior
period.
Other expenses decreased $74,000, or 1.3%, to $5.4 million for
the third quarter of 2012, compared to $5.5 million for the third
quarter of 2011. Other expenses increased $1.3 million, or 8.4%, to
$16.2 million for the nine months ended September 30, 2012 compared
to $15.0 million for the nine months ended September 30, 2011.
Additional costs associated with two branch locations added with
last year’s acquisition of Select Bank totaled $110,000 for the
third quarter of 2012 and $760,000 for the nine months ended
September 30, 2012.
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)
September 30, December 31,
2012 2011 % Change (Dollars in
thousands) Total assets $1,061,543 $ 994,730 6.7 % Cash
and cash equivalents 214,774 155,653 38.0 Investment securities
94,292 52,732 78.8 Loans receivable, net 691,636 727,626 (4.9)
Deposits 819,414 752,455 8.9 FHLB advances 110,000 110,000 0.0
Subordinated debt 15,464 15,464 0.0 Stockholder’s equity 104,143
104,680 (0.5)
SELECTED OPERATING DATA
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2012 2011 % Change 2012
2011
% Change (In thousands, except per share amounts)
Interest and dividend income $9,075 $9,999 (9.2 ) $28,100
$28,204 (0.4 ) Interest expense
2,567
3,221 (20.3 )
7,909 9,289
(14.9 ) Net interest income 6,508 6,778 (4.0 ) 20,191 18,915 6.7
Provision for loan losses
148 141
5.0
574 344 66.9 Net interest
income after provision for loan losses 6,360 6,637 (4.2 ) 19,617
18,571 5.6 Other income 1,029 934 10.2 2,900 2,598 11.6
Other expense
5,447 5,521 (1.3 )
16,240 14,987 8.4 Income before
taxes 1,942 2,050 (5.3 ) 6,277 6,182 1.5 Provision for income taxes
750 835 (10.2 )
2,434
2,605 (6.6 ) Net Income
$1,192
$1,215 (1.9 )
$3,843 $3,577
7.4 Earnings per share basic $0.18 $0.18 $0.57 $0.53
Earnings per share diluted $0.18 $0.18 $0.57 $0.52 Average
shares outstanding basic 6,625,221 6,753,956 6,715,043 6,741,124
Average shares outstanding diluted 6,681,163 6,836,697 6,785,801
6,828,283
Three Months Ended
September 30, 2012
Three Months Ended
September 30, 2011
Average Average Balance
Yield/Cost Balance Yield/Cost
(Dollars in thousands) Loans $696,198 4.87% $717,630 5.26%
Investment securities
88,117 2.75%
45,876
4.93% Total interest-earning assets 784,315 4.63% 763,506 5.24%
Interest-bearing deposits $724,526 0.58% $652,300 1.04%
Total borrowings
125,464 4.82%
125,464
4.86% Total interest-bearing liabilities 849,990 1.21% 777,764
1.66% Interest rate spread 3.42% 3.58% Net interest margin
3.32% 3.55%
Nine Months Ended Nine
Months Ended September 30, 2012 September 30,
2011 Average Average Balance
Yield/Cost Balance
Yield/Cost (Dollars in thousands) Loans $708,200 4.93
% $679,317 5.22 % Investment securities
78,330 3.23 %
40,703 5.20 % Total interest-earning assets 786,530
4.76 % 720,020 5.22 % Interest-bearing deposits $704,547
0.64 % $600,723 1.06 % Total borrowings
125,464 4.82 %
125,464 4.82 % Total interest-bearing liabilities
830,011 1.27 % 726,187 1.71 % Interest rate spread 3.49 %
3.52 % Net interest margin 3.42 % 3.50 %
ASSET QUALITY DATA (Unaudited)
Nine Months Ended Year Ended
September 30, December 31, 2012
2011 (Dollars in thousands)
Allowance for Loan Losses: Allowance at beginning of period $ 3,762
$ 3,988 Provision for loan losses 574 473 Charge-offs (669 )
(700 ) Recoveries
29
1 Net charge-offs
(640
) (699 )
Allowance at end of period
$ 3,696
$ 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 78.9 % 58.0 %
September 30, December 31, 2012
2011 (Dollars in thousands) Nonperforming Assets:
Nonaccrual loans: Real estate mortgage - residential $ 3,626
$ 4,768 Real estate mortgage - commercial 475 392 Real estate
mortgage - construction 84
─
Commercial 200 318 Consumer
299
198 Total 4,684 5,676 Trouble debt
restructurings - nonaccrual
─
805 Total nonaccrual loans 4,684
6,481 Real estate owned
968
98 Total nonperforming assets
$
5,652 $ 6,579
Nonperforming loans as a percent of total loans 0.68 % 0.89
% Nonperforming assets as a percent of total assets 0.53 % 0.66 %
SELECTED FINANCIAL RATIOS
(Unaudited)
Nine Months Ended September 30, 2012
2011 Selected Performance Ratios: Return on
average assets (1) 0.50 % 0.53 % Return on average equity (1) 4.83
% 4.64 % Interest rate spread (1) 3.49 % 3.52 % Net interest margin
(1) 3.42 % 3.50 % Efficiency ratio 70.33 % 69.66 %
(1) Annualized.
OCEAN SHORE HOLDING COMPANY - QUARTERLY
DATA (Unaudited)
Q3 Q2 Q1
Q4 Q3 2012 2012 2012 2011
2011 (In thousands except per share amounts)
Income
Statement Data: Net interest income $6,508 $6,797 $6,885 $6,987
$6,777 Provision for loan losses
148 253
173 129 141
Net interest income after provision for
loan losses
6,360
6,544
6,712
6,858
6,636
Other income 1,029 966 905 939 935 Other expense
5,447
5,391 5,401 5,389
5,521 Income before taxes 1,942 2,119 2,216 2,408
2,050 Provision for income taxes
750 822
862 927 835 Net income
$1,192 $1,297 $1,354
$1,481 $1,215 Share Data:
Earnings per share basic $0.18 $0.19 $0.20 $0.22 $0.18 Earnings per
share diluted $0.18 $0.19 $0.20 $0.22 $0.18 Average shares
outstanding basic 6,625,221 6,742,591 6,778,305 6,769,726 6,753,956
Average shares outstanding diluted 6,681,163 6,797,333 6,842,452
6,843,937 6,836,697 Total shares outstanding 6,963,672 7,185,843
7,291,643 7,291,643 7,291,643
Balance Sheet Data:
Total assets $1,061,543 $1,026,273 $1,002,690 $994,926 $1,021,625
Investment securities 94,292 92,486 75,266 53,732 49,679 Loans
receivable, net 691,636 701,750 714,993 727,887 743,945 Deposits
819,414 782,351 758,806 752,455 780,564 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 104,143 105,607 105,558
104,680 104,063
Asset Quality: Non-performing assets
$5,652 $5,323 $6,703 $6,579 $5,297 Non-performing loans to total
loans 0.68% 0.68% 0.90% 0.89% 0.67% Non-performing assets to total
assets 0.53% 0.52% 0.67% 0.66% 0.52% Allowance for loan losses
$3,696 $3,698 $3,895 $3,762 $4,119 Allowance for loan losses to
total loans 0.53% 0.53% 0.54% 0.52% 0.55% Allowance for loan losses
to non-performing loans 78.9% 80.2% 60.3% 58.0% 82.6%
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