Ocean Shore Holding Co. Reports 2nd Quarter Earnings

Jul 28, 2015, 17:00 ET from Ocean Shore Holding Co.

OCEAN CITY, N.J., July 28, 2015 /PRNewswire/ -- Ocean Shore Holding Co. (NASDAQ: OSHC) today announced net income of $1,739,000, or $0.29 per diluted share, for the quarter ended June 30, 2015, as compared to $1,532,000, or $0.24 per diluted share, for the second quarter of 2014.  Net income for the six months ended June 30, 2015 was $3,452,000, or $0.57 per diluted share, as compared to $3,119,000, or $0.48 per diluted share, for the same period in 2014.

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 eleven full-service banking offices in eastern New Jersey.

In a separate release, the Company announced the redemption of $7 million principal amount of its 8.67% Capital Securities issued by Ocean Shore Capital Trust I, a wholly-owned subsidiary of the Company.  The redemption date for the Capital Securities is August 26, 2015.  The Company will pay a redemption premium of $91,000 to be recorded in the third quarter of 2015.

"Our second quarter results reflect sustained performance following our solid first quarter earnings," said Steven E. Brady, President and CEO.   "We benefited from lower funding costs, an increase in fee income, and lower operating expenses."

"With the redemption of our trust preferred securities, which we announced yesterday, net interest income will benefit from the reduction of annual interest expense of $607,000 without a significant reduction in our strong capital levels," said Brady.

Balance Sheet Review

Total assets decreased $5.8 million, or 0.6%, to $1,019.0 million at June 30, 2015 from $1,024.8 million at December 31, 2014.  Loans receivable, net, increased $6.8 million, or 0.9%, to $780.8 million at June 30, 2015 from $774.0 million at December 31, 2014.  Investments and mortgage-backed securities increased $4.2 million, or 3.8%, to $115.6 million during the first six months of 2015.  Cash and cash equivalents decreased $16.4 million, or 20.5%, to $63.9 million at June 30, 2015 from $80.3 million at December 31, 2014.  Loan originations and other advances totaling $79.4 million were offset by payoffs and payments received of $72.6 million, resulting in a $6.8 million increase in the portfolio.  The increase in investments and mortgage-backed securities resulted from purchases offset by normal repayments, calls and maturities. Cash and cash equivalents were used to fund the increase in loans and investments and deposit withdrawals.

Deposits decreased $7.2 million, or 0.9%, to $779.9 million at June 30, 2015 from $787.1 million at December 31, 2014.  Checking accounts increased $11.4 million, savings accounts increased $3.5 million, certificates of deposit decreased $628,000 and municipal deposits decreased $21.5 million at June 30, 2015 compared to December 31, 2014.  Municipal deposits declined as a result of seasonal withdrawals.  Total borrowings were unchanged at $117.2 million.

Stock Repurchase Plan

During the June 2015 quarter, the Company repurchased a total of 49,200 shares at a weighted average cost of $14.91.   As of June 30, 2015, 16,400 shares remain to be purchased under the previously announced share repurchase plan.

Asset Quality

The provision for loan losses totaled $178,000 for the second quarter of 2015 compared to $50,000 for the second quarter of 2014 and $153,000 for the first quarter of 2015.  The allowance for loan losses totaled $3.4 million, or 0.43% of total loans, at June 30, 2015 compared to $3.8 million, or 0.49% of total loans, at December 31, 2014.  The Company experienced $699,000 in net charge-off activity for the first six months of 2015 as compared to $270,000 in net charge-off activity for the first six months of 2014.

Non-performing assets totaled $7.6 million, or 0.74% of total assets, at June 30, 2015, compared to $6.9 million, or 0.68% of total assets, at December 31, 2014.  Non-performing assets consisted of seventeen real estate residential mortgages totaling $2.7 million, five real estate commercial mortgage totaling $1.6 million, one real estate construction mortgage totaling $143,000, six consumer equity loans totaling $489,000, nine TDR non-accrual loans totaling $1.5 million and six real estate owned properties totaling $1.2 million.

Income Statement Analysis

Net interest income increased $171,000, or 2.5%, to $7.1 million for the second quarter of 2015 compared to $6.9 million in the second quarter of 2014.  Net interest margin increased 4 basis points in the quarter ended June 30, 2015 to 3.16% versus 3.12% for the quarter ended June 30, 2014 and decreased 3 basis points from 3.19% for the quarter ended March 31, 2015.  The increase in net interest income in the second quarter of 2015 compared to the second quarter of 2014 resulted from an increase in average interest-earning assets of $8.8 million and a decrease in average interest-bearing liabilities of $86.4 million offset by a decrease of 5 basis points in the average yield on interest-earning assets.  The average cost of interest-bearing liabilities remained stable at 0.94% over the comparable quarters.

Net interest income increased $302,000, or 2.2%, to $14.1 million for the first six months of 2015 compared to the same period in the prior year.  Net interest margin increased 4 basis points for the six months ended June 30, 2015 to 3.18% versus 3.14% for the six months ended June 30, 2014.  The increase in net interest income for the six month period was the result of a decrease in average interest-bearing liabilities of $82.8 million, an increase in average interest-earning assets of $9.9 million and a decrease in the average cost of interest-bearing liabilities of 1 basis point to 0.93%, offset by a decrease of 7 basis points in the average yield on interest-earning assets.

Other income increased $47,000 to $1.1 million and $90,000 to $2.2 million for the second quarter and first six months of 2015, respectively, compared to the same periods in 2014.  The increase in other income resulted from increases in deposit account fees and debit card commissions offset by decreases in other income over the prior periods.

Other expenses decreased $157,000, or 2.8%, to $5.4 million for the second quarter of 2015, compared to $5.5 million for the second quarter of 2014.  Other expenses decreased $162,000, or 1.5%, to $10.8 million for the six months ended June 30, 2015, compared to $11.0 million for the six months ended June 30, 2014.  For the second quarter of 2015 decreases in occupancy and equipment, REO and other expenses of $211,000 were offset by increases in salaries and benefits, FDIC insurance and marketing expenses of $54,000.  For the six months ended June 30, 2015 decreases in occupancy and equipment, REO and other expenses of $286,000 were offset by increases in salaries and benefits, FDIC insurance and marketing expenses of $124,000.

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)

June 30,

December 31,

2015

2014

% Change

(Dollars in thousands)

Total assets

$1,019,031

$1,024,754

(0.6)%

Cash and cash equivalents

63,853

80,307

(20.5)

Investment securities

115,564

111,317

3.8

Loans receivable, net

780,789

774,017

0.9

Deposits

779,859

787,078

(0.9)

FHLB advances

110,000

110,000

0.0

Subordinated debt

7,217

7,217

0.0

Stockholder's equity

106,883

105,811

1.0

 

 

SELECTED OPERATING DATA (Unaudited)

Three Months Ended

June 30,

Six Months Ended

June 30,

2015

2014

% Change

2015

2014

% Change

(In thousands, except per share and per share amounts)

Interest and dividend income

$8,764

$8,793

(0.3)%

$17,551

$17,665

(0.6)%

Interest expense

1,708

1,908

(10.5)

3,403

3,819

(10.9)

     Net interest income

7,056

6,885

2.5

14,148

13,846

2.2

Provision for loan losses

178

50

256.0

331

138

139.9

Net interest income after

   provision for loan losses

 

6,878

 

6,835

 

0.6

 

13,817

 

13,708

 

0.8

Other income

1,133

1,086

4.3

2,182

2,092

4.3

Other expense

5,373

5,530

(2.8)

10,814

10,976

(1.5)

Income before taxes

2,638

2,391

10.3

5,185

4,824

7.5

Provision for income taxes

899

859

4.7

1,733

1,705

1.6

     Net Income

$1,739

$1,532

13.5

$3,452

$3,119

10.7

Earnings per share basic

$0.29

$0.24

$0.58

$0.49

Earnings per share diluted

$0.29

$0.24

$0.57

$0.48

Average shares outstanding basic

5,920,475

6,361,499

5,952,732

6,386,799

Average shares outstanding diluted

6,036,007

6,495,037

6,062,866

6,507,498

.

 

Three Months Ended

June 30, 2015

Three Months Ended

June 30, 2014

Average Balance

Yield/Cost

Average Balance

Yield/Cost

(Dollars in thousands)

Loans

$776,880

4.21%

$762,364

4.27%

Investment securities

115,966

2.02%

121,709

2.14%

   Total interest-earning assets

892,846

3.93%

884,073

3.98%

Interest-bearing deposits

607,339

0.41%

690,693

0.36%

Total borrowings

117,217

3.73%

120,309

4.25%

   Total interest-bearing liabilities

724,556

0.94%

811,002

0.94%

Interest rate spread

2.98%

3.04%

Net interest margin

3.16%

3.12%

 

Six Months Ended

June 30, 2015

Six Months Ended

June 30, 2014

Average Balance

Yield/Cost

Average Balance

Yield/Cost

(Dollars in thousands)

Loans

$775,426

4.22%

$756,318

4.32%

Investment securities

115,004

2.09%

124,247

2.16%

   Total interest-earning assets

890,430

3.94%

880,565

4.01%

Interest-bearing deposits

613,601

0.40%

693,324

0.37%

Total borrowings

117,217

3.71%

120,309

4.23%

   Total interest-bearing liabilities

730,818

0.93%

813,633

0.94%

Interest rate spread

3.01%

3.07%

Net interest margin

3.18%

3.14%

 

 

ASSET QUALITY DATA (Unaudited)

Six Months Ended

June 30, 2015

Year Ended

December 31, 2014

(Dollars in thousands)

Allowance for Loan Losses:

Allowance at beginning of period

$ 3,760

$ 4,199

Provision for loan losses

331

462

Charge-offs

(699)

(977)

Recoveries

-

76

Net charge-offs

(699)

(901)

Allowance at end of period

$ 3,392

$ 3,760

 

Allowance for loan losses as a percent of total loans

0.43%

0.49%

Allowance for loan losses as a percent of nonperforming loans

53.1%

60.0%

 

At June 30,  2015

At December 31, 2014

(Dollars in thousands)

Nonperforming Assets:

Nonaccrual loans:

   Real estate mortgage - residential

$ 2,678

$ 3,626

   Real estate mortgage - commercial

1,580

803

   Real estate mortgage - construction

143

143

   Commercial business loans

501

   Consumer loans

489

502

        Total

4,890

5,575

Trouble debt restructurings - nonaccrual

1,496

694

        Total nonaccrual loans

6,386

6,269

Real estate owned

1,193

650

Total nonperforming assets

$ 7,579

$ 6,919

 

Nonperforming loans as a percent of total loans

0.82%

0.81%

Nonperforming assets as a percent of total assets

0.74%

0.68%

 

 

SELECTED FINANCIAL RATIOS (Unaudited)

Six Months Ended

June 30,

2015

2014

Selected Performance Ratios:

Return on average assets (1)

0.67

%

0.61

%

Return on average equity (1)

6.46

%

5.82

%

Interest rate spread (1)

3.01

%

3.07

%

Net interest margin (1)

3.18

%

3.14

%

Efficiency ratio

66.22

%

68.87

%

 --(1) Annualized.

 

 

 

OCEAN SHORE HOLDING COMPANY - QUARTERLY DATA (Unaudited)

Q2

2015

Q1

2015

Q4

2014

Q3

2014

Q2

2014

(In thousands except per share amounts)

Income Statement Data:

Net interest income

$7,056

$7,092

$6,997

$6,958

$6,885

Provision for loan losses

178

153

200

125

50

Net interest income after

   provision for loan losses

 

6,878

 

6,939

 

6,797

 

6,833

 

6,835

Other income

1,133

1,049

1,052

1,102

1,086

Other expense

5,373

5,442

5,337

5,451

5,530

Income before taxes

2,638

2,546

2,512

2,484

2,391

Provision for income taxes

899

833

914

904

859

Net income

$1,739

$1,713

$1,598

$1,580

$1,532

Share Data:

Earnings per share basic

$0.29

$0.29

$0.26

$0.25

$0.24

Earnings per share diluted

$0.29

$0.28

$0.26

$0.25

$0.24

Average shares outstanding basic

5,920,475

5,985,347

6,068,184

6,226,913

6,361,499

Average shares outstanding diluted

6,036,007

6,095,177

6,178,602

6,361,856

6,495,037

Total shares outstanding

6,257,899

6,251,912

6,393,344

6,469,943

6,759,423

Balance Sheet Data:

Total assets

$1,019,031

$1,029,809

$1,024,754

$1,040,029

$1,013,305

Investment securities

115,564

114,830

111,317

114,927

119,899

Loans receivable, net

780,789

770,261

774,017

773,796

769,556

Deposits

779,859

792,891

787,078

804,552

770,831

FHLB advances

110,000

110,000

110,000

110,000

110,000

Subordinated debt

7,217

7,217

7,217

7,217

10,309

Stockholders' equity

106,883

105,643

105,811

105,149

108,217

Asset Quality:

Non-performing assets

$7,579

$7,027

$6,919

$7,887

$7,349

Non-performing loans to total loans

0.82%

0.83%

0.81%

0.97%

0.91%

Non-performing assets to total assets

0.74%

0.68%

0.68%

0.76%

0.73%

Allowance for loan losses

$3,392

$3,384

$3,760

$4,029

$4,067

Allowance for loan losses to total       loans

0.43%

0.44%

0.49%

0.52%

0.53%

Allowance for loan losses to non-     performing loans

53.1%

52.7%

60.0%

53.7%

58.0%

 

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SOURCE Ocean Shore Holding Co.



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