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Ocean Shore Holding Co. Reports 1st Quarter 2014 Earnings

OCEAN CITY, N.J., April 24, 2014 /PRNewswire/ -- Ocean Shore Holding Co. (NASDAQ: OSHC) today announced net income of $1.6 million for the quarter ended March 31, 2014 compared to $1.2 million earned in the first quarter of 2013.  Diluted earnings per share were $0.24 for the first quarter of 2014 compared to $0.18 in the first quarter of 2013. 

Ocean Shore Holding Co.

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 pleased to report a strong start to 2014," said Steven E. Brady, President and Chief Executive Officer.  "Net income increased 34.5% over the first quarter of 2014 and 6.8% over the prior quarter. Our loan portfolio increased 1.7% in the first quarter, which is typically a period of lower demand.  Asset quality remained excellent, as nonperforming assets declined from 0.55% at year end to 0.47% at the end of the first quarter."

Balance Sheet Review

Total assets grew $3.0 million, or 0.3%, to $1,023.0 million at March 31, 2014 from $1,020.0 million at December 31, 2013.  Loans receivable, net, increased $12.8 million, or 1.7%, to $757.6 million at March 31, 2014 from $744.8 million at December 31, 2013.  Investments and mortgage-backed securities decreased $3.9 million, or 3.1%, to $124.8 million during the first quarter of 2014.  Cash and cash equivalents decreased $5.2 million, or 5.9%, to $82.5 million at March 31, 2014 from $87.6 million at December 31, 2013.  Loan originations and other advances totaling $37.4 million were offset by payoffs and payments received of $24.6 million resulting in a $12.8 million increase in the portfolio.  The decrease in investments and mortgage-backed securities resulted from normal repayments, calls and maturities.   

Deposits grew $2.8 million, or 0.4%, to $783.4 million at March 31, 2014 from $780.6 million at December 31, 2013.  The Company continued its focus on core deposits, which increased $3.4 million, or 0.6%, to $593.7 million.  Certificates of deposit decreased $635,000, or 0.3%, to $189.7 million at March 31, 2014 compared to December 31, 2013.  Total borrowings were unchanged at $120.3 million

Stock Repurchase Plan Completed

During the March 2014 quarter, the Company repurchased a total of 147,000 shares at a weighted average cost of $13.94 which completed its announced repurchase of 210,000 shares at a weighted average cost of $13.95.

Asset Quality

The provision for loan losses totaled $88,000 for the first quarter of 2014 compared to $202,000 for the first quarter of 2013 and $177,000 for the fourth quarter of 2013.  The allowance for loan losses totaled $4.2 million, or 0.56% of total loans, at March 31, 2014 compared to $4.2 million, or 0.56% of total loans, at December 31, 2013.  The Company experienced $73,000 in net charge-off activity in the first quarter of 2014 as compared to $57,000 for the first quarter of 2013 and $189,000 for the fourth quarter of 2013. 

Non-performing assets totaled $4.9 million, or 0.47% of total assets, at March 31, 2014, compared to $5.6 million, or 0.55% of total assets, at December 31, 2013.  Non-performing assets consisted of fourteen real estate residential mortgages totaling $2.6 million, one real estate commercial mortgage totaling $354,000, nine consumer equity loans totaling $661,000, two TDR non-accrual loans totaling $936,000 and four real estate owned properties totaling $340,000.

Income Statement Analysis

Net interest income increased $481,000, or 7.4%, to $7.0 million for the first quarter of 2014 compared to $6.5 million in the first quarter of 2013.  Net interest margin increased 1 basis point in the quarter ended March 31, 2014 to 3.17% versus 3.16% for the quarters ended March 31, 2013 and December 31, 2013.  The increase in net interest income in the first quarter of 2014 compared to the first quarter of 2013 was the result of a decrease in the average cost of interest-bearing liabilities of 13 basis points to 0.94%, a decrease in average interest-bearing liabilities of $26.1 million and an increase in average interest-earning assets of $56.7 million offset by a decrease of 21 basis points in the average yield on interest-earning assets to 4.05%.

Other income decreased $96,000, or 8.7%, to $1.0 million for the first quarter of 2014 compared to $1.1 million in the first quarter of 2013.  The decrease in other income resulted from decreases in deposit account fees and cash surrender value of life insurance offset by increases in debit card commissions. 

Other expenses decreased $24,000, or 0.4%, to $5.4 million during the first quarter of 2014 compared to the first quarter of 2013.  Decreases in marketing, REO and other expenses of $130,000 were offset by increases in salaries and benefits, occupancy and equipment and FDIC insurance of $106,000

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)




March 31,


December 31,





2014


2013


% Change



(Dollars in thousands)










Total assets


$1,023,032


$1,020,048


0.3 %

Cash and cash equivalents


82,464


87,619


(5.9)

Investment securities


124,768


128,701


(3.1)

Loans receivable, net


757,639


744,802


1.7

Deposits


783,434


780,648


0.4

FHLB advances


110,000


110,000


0.0

Subordinated debt


10,309


10,309


0.0

Stockholders' equity


106,194


106,223


(0.1)








 

SELECTED OPERATING DATA (Unaudited)




Three Months Ended

March 31,





2014


2013


% Change



(Dollars in thousands, except per

share and share amounts)








Interest and dividend income


$ 8,871


$ 8,730


1.6

%

Interest expense


1,911


2,251


(15.1)


     Net interest income


6,960


6,479


7.4










Provision for loan losses


88


202


(56.4)










Net interest income after

   provision for loan losses


 

6,872


 

6,277


 

9.5










Other income


1,006


1,102


(8.7)


Other expense


5,446


5,470


(0.4)










Income before taxes


2,432


1,909


27.4


Provision for income taxes


845


729


15.9










     Net income


$1,587


$1,180


34.5

%









Earnings per share basic


$  0.25


$  0.18


38.9

%

Earnings per share diluted


$  0.24


$  0.18


33.3

%









Average shares outstanding basic


6,412,372


6,491,786




Average shares outstanding diluted


6,522,024


6,602,398




 


Three Months Ended

March 31, 2014


Three Months Ended

March 31, 2013


Average
Balance


Yield/Cost


Average
Balance


Yield/Cost


(Dollars in thousands)

Loans

$750,205


4.36%


$703,317


4.57%


Investment securities

126,813


2.17%


117,042


2.37%


   Total interest-earning assets

877,018


4.05%


820,359


4.26%











Interest-bearing deposits

695,984


0.37%


716,963


0.47%


Total borrowings

120,309


4.21%


125,464


4.51%


   Total interest-bearing liabilities

816,293


0.94%


842,427


1.07%











Interest rate spread



3.11%




3.19%


Net interest margin



3.17%




3.16%











 

ASSET QUALITY DATA (Unaudited)




Three Months

Ended

March 31, 2014

 

Year Ended

December 31,

2013



(Dollars in thousands)

Allowance for Loan Losses:




Allowance at beginning of period


$ 4,199


$ 3,997

Provision for loan losses


88


757






Charge-offs


(74)


(568)

Recoveries


1


13

Net charge-offs


(73)


(555)






Allowance at end of period


$ 4,214


$ 4,199

 

Allowance for loan losses as a percent of total loans


0.56%


0.56%

Allowance for loan losses as a percent of nonperforming loans


93.3%


82.8%













At March 31,
2014


At December 31,
2013



(Dollars in thousands)

Nonperforming Assets:





Nonaccrual loans:





   Real estate mortgage - residential


$ 2,568


$ 3,618

   Real estate mortgage - commercial


354


463

   Commercial business loans


-


-

   Consumer loans


661


674

        Total


3,583


4,755

Trouble debt restructurings - nonaccrual


936


316

        Total nonaccrual loans


4,519


5,071

Real estate owned


340


498

Total nonperforming assets


$ 4,859


$ 5,569

 

Nonperforming loans as a percent of total loans


0.60%


0.68%

Nonperforming assets as a percent of total assets


0.47%


0.55%

 

SELECTED FINANCIAL RATIOS (Unaudited)




Three Months Ended

March 31,



2014


2013






Selected Performance Ratios:





Return on average assets (1)


0.62

%


0.45

%

Return on average equity (1)


5.95

%


4.46

%

Interest rate spread (1)


3.11

%


3.19

%

Net interest margin (1)


3.17

%


3.16

%

Efficiency ratio


68.36

%


72.15

%


 (1) Annualized

 

OCEAN SHORE HOLDING COMPANY - QUARTERLY DATA (Unaudited)




Q1

2014


Q4

2013


Q3

2013


Q2

2013


Q1

2013



(In thousands except per share amounts)

Income Statement Data:











Net interest income


$6,960


$6,870


$6,581


$6,530


$6,479

Provision for loan losses


88


177


186


192


202

Net interest income after

   provision for loan losses


 

6,872


 

6,693


 

6,395


 

6,338


 

6,277

Other income


1,006


1,108


1,128


1,125


1,102

Other expense


5,446


5,550


5,503


5,449


5,470

Income before taxes


2,432


2,251


2,020


2,014


1,909

Provision for income taxes


845


765


696


655


729

Net income


$1,587


$1,486


$1,324


$1,359


$1,180












Share Data:











Earnings per share basic


$0.25


$0.23


$0.20


$0.21


$0.18

Earnings per share diluted


$0.24


$0.22


$0.20


$0.21


$0.18

Average shares outstanding basic


6,412,372


6,535,559


6,533,760


6,518,558


6,491,786

Average shares outstanding diluted


6,522,024


6,628,203


6,645,418


6,614,475


6,602,398

Total shares outstanding


6,757,072


6,903,352


6,964,952


6,970,746


6,970,346












Balance Sheet Data:











Total assets


$1,023,032


$1,020,048


$1,043,497


$1,031,999


$1,053,872

Investment securities


124,768


128,701


130,493


134,639


129,445

Loans receivable, net


757,639


744,802


727,618


718,925


709,337

Deposits


783,434


780,648


804,050


787,028


808,670

FHLB advances


110,000


110,000


110,000


110,000


110,000

Subordinated debt


10,309


10,309


10,309


15,464


15,464

Stockholders' equity


106,194


106,223


106,123


105,304


106,040












Asset Quality:











Non-performing assets


$4,859


$5,569


$6,355


$5,576


$6,374

Non-performing loans to total loans


0.60%


0.68%


0.75%


0.65%


0.76%

Non-performing assets to total assets


0.47%


0.55%


0.61%


0.54%


0.60%

Allowance for loan losses


$4,214


$4,199


$4,211


$4,091


$4,142

Allowance for loan losses to total loans


0.56%


0.56%


0.58%


0.57%


0.58%

Allowance for loan losses to non-performing loans


93.3%


82.8%


77.3%


87.7%


76.7%

 

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SOURCE Ocean Shore Holding Co.

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