Attached files
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| 8-K - Ocean Shore Holding Co. | v238983_8k.htm |
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Contacts:
Steven E. Brady, President and CEO
Donald F. Morgenweck, CFO
(609) 399-0012
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Press Release
Ocean Shore Holding Co. Reports 3rd Quarter Earnings
Ocean City, New Jersey – November 02, 2011 – Ocean Shore Holding Co. (NASDAQ: OSHC) today announced net income of $1,215,000, or $0.18 per diluted share, for the quarter ended September 30, 2011, as compared to $1,441,000, or $0.21 per diluted share, for the quarter ended September 30, 2010. Net income for the nine months ended September 30, 2011 was $3,577,000, or $0.52 per diluted share, as compared to $4,016,000, or $0.59 per diluted share, for the same period in 2010. Results reflect after tax expenses of $294,000 during the third quarter and $538,000 for the first nine months of 2011 associated with the acquisition of CBHC Financialcorp, Inc and its subsidiary Select Bank, compared to no activity 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 welcome the customers of Select Bank to Ocean City Home Bank," said Steven E. Brady, President and CEO. "We completed the systems conversion and the integration of offices in mid-September, so now all of our customers are able to utilize our full branch network, which has expanded to 12 locations. With this acquisition, the Company has surpassed the $1.0 billion mark in total assets."
Balance Sheet Review
Total assets grew $181.8 million, or 21.6%, to $1,021.6 million at September 30, 2011 from December 31, 2010 including $123.6 million in net assets acquired from Select Bank. Loans receivable, net, increased $83.6 million, or 12.7%, to $743.9 million. The increase in loans receivable resulted from $82.9 million of loans acquired from Select Bank. Cash and cash equivalents increased $64.2 million to $175.0 million including $38.8 million acquired from Select Bank. Investments and mortgage-backed securities increased $26.0 million, or 109.4%, to $49.7 million. The increase resulted from $20.0 million in purchases of agency securities and $6.0 million of investments acquired from Select Bank.
Deposits grew $177.2 million, or 29.4%, to $780.6 million at September 30, 2011 from December 31, 2010 including $122.7 million of deposits acquired from Select Bank. Additionally, core deposits grew $71.8 million during 2011 offset by a decrease in time deposits of $17.3 million. Total borrowings remained unchanged at $125.5 million, including $110.0 million of FHLB advances.
1
Asset Quality
The provision for loan losses totaled $141,000 for the third quarter of 2011 compared to $125,000 for the third quarter of 2010 and $128,000 for the second quarter of 2011. The provision decreased to $344,000 for the first nine months of 2011 compared to $816,000 for the same period in 2010. The allowance for loan losses was $4.1 million, or 0.55% of total loans, at September 30, 2011 compared to $4.0 million, or 0.60% of total loans, at December 31, 2010 and $4.0 million, or 0.59% of total loans, at September 30, 2010. The Company experienced $213,000 in charge-off activity for the first nine months of 2011 compared to $310,000 during the same period in 2010.
Non-performing assets totaled $5.3 million, or 0.52% of total assets, at September 30, 2011, compared to $5.3 million, or 0.79% of total assets, at December 31, 2010 and $4.1 million, or 0.48% of total assets, at September 30, 2010. Non-performing assets consisted of fourteen residential mortgages totaling $4.4 million, two commercial mortgages totaling $240,000, two commercial loans totaling $118,000, three consumer equity loans totaling $264,000 and two real estate owned properties totaling $313,000. Specific reserves recorded for these loans at September 30, 2011 were $930,000.
Income Statement Analysis
Net interest income increased $837,000, or 14.1%, to $6.8 million for the third quarter of 2011 compared to $5.9 million in the third quarter of 2010. Net interest margin increased 16 basis point in the quarter ended September 30, 2011 to 3.55% from 3.39% for the quarter ended September 30, 2010. On a linked-quarter basis, net interest margin increased 6 basis points from 3.49% in the second quarter of 2011. The increase in net interest income for the third quarter was the result of an increase in average interest-earning assets of $63.4 million and a decrease of 46 basis points in the average cost of interest-bearing liabilities to 1.66% from 2.12% offset by a decrease of 16 basis points in the average yield on interest-earning assets to 5.24% from 5.40% and an increase in average interest-bearing liabilities of $115.3 million.
Net interest income increased $940,000, or 5.2%, for the first nine months of 2011 to $18.9 million compared to the same period in the prior year. An increase in net interest margin of 6 basis points to 3.50% from 3.44% was the result of an increase in average interest-earning assets of $23.9 million and a decrease of 47 basis points in the average cost of interest bearing liabilities to 1.71%, offset by an increase in average interest bearing liabilities of $86.6 million and a decrease of 23 basis points in the average yield on earning assets to 5.22%.
Other income increased $98,000 and $68,000 to $934,000 and $2.6 million, for the third quarter and first nine months of 2011, 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 $1.2 million, or 27.8%, to $5.5 million for the third quarter of 2011, compared to $4.3 million for the third quarter of 2010. Other expenses increased $1.8 million, or 14.0%, to $15.0 million for the nine months ended September 30, 2011 compared to $13.1 million for the nine months ended September 30, 2010. Costs associated with the merger with CBCH Financialcorp and its subsidiary Select Bank accounted for increases totaling $433,000 for the third quarter of 2011 and $736,000 for the first nine months of 2011. Increases of $268,000 resulted from the acquired operations of Select Bank. The remaining $501,000 for the third quarter and $831,000 for the first nine months of 2011 resulted from normal increases in year over year operations.
2
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
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September 30,
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December 31,
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2011
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2010
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% Change
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(Dollars in thousands)
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||||||||||||
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Total assets
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$ | 1,021,625 | $ | 839,857 | 21.6 | % | ||||||
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Cash and cash equivalents
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175,024 | 110,865 | 57.9 | |||||||||
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Investment securities
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49,679 | 23,721 | 109.4 | |||||||||
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Loans receivable, net
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743,945 | 660,340 | 12.7 | |||||||||
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Deposits
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780,564 | 603,334 | 29.4 | |||||||||
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FHLB advances
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110,000 | 110,000 | 0.0 | |||||||||
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Subordinated debt
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15,464 | 15,464 | 0.0 | |||||||||
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Stockholder’s equity
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104,063 | 100,554 | 3.5 | |||||||||
3
SELECTED OPERATING DATA
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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2011
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2010
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% Change
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2011
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2010
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% Change
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(In thousands, except per share amounts)
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Interest and dividend income
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$ | 9,999 | $ | 9,447 | 5.8 | $ | 28,204 | $ | 28,446 | (0.9 | ) | |||||||||||||
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Interest expense
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3,221 | 3,506 | (8.1 | ) | 9,289 | 10,472 | (11.3 | ) | ||||||||||||||||
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Net interest income
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6,778 | 5,941 | 14.1 | 18,915 | 17,974 | 5.2 | ||||||||||||||||||
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Provision for loan losses
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141 | 125 | 12.8 | 344 | 816 | (57.8 | ) | |||||||||||||||||
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Net interest income after
provision for loan losses
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6,637 | 5,816 | 14.1 | 18,571 | 17,158 | 8.2 | ||||||||||||||||||
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Other income
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934 | 836 | 11.7 | 2,598 | 2,530 | 2.7 | ||||||||||||||||||
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Other expense
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5,521 | 4,319 | 27.8 | 14,987 | 13,146 | 14.0 | ||||||||||||||||||
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Income before taxes
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2,050 | 2,333 | (12.1 | ) | 6,182 | 6,542 | (5.5 | ) | ||||||||||||||||
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Provision for income taxes
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835 | 892 | (6.4 | ) | 2,605 | 2,526 | 3.1 | |||||||||||||||||
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Net Income
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$ | 1,215 | $ | 1,441 | (15.7 | ) | $ | 3,577 | $ | 4,016 | (10.9 | ) | ||||||||||||
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Earnings per share basic
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$ | 0.18 | $ | 0.21 | $ | 0.53 | $ | 0.59 | ||||||||||||||||
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Earnings per share diluted
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$ | 0.18 | $ | 0.21 | $ | 0.52 | $ | 0.59 | ||||||||||||||||
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Average shares outstanding basic
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6,753,956 | 6,826,698 | 6,741,124 | 6,824,073 | ||||||||||||||||||||
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Average shares outstanding diluted
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6,836,697 | 6,835,521 | 6,828,283 | 6,824,073 | ||||||||||||||||||||
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Three Months Ended
September 30, 2011
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Three Months Ended
September 30, 2010
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Average Balance
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Yield/Cost
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Average Balance
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Yield/Cost
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(Dollars in thousands)
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Loans
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$ | 717,630 | 5.26 | % | $ | 674,048 | 5.34 | % | ||||||||
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Investment securities
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45,876 | 4.93 | % | 26,074 | 6.80 | % | ||||||||||
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Total interest-earning assets
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763,506 | 5.24 | % | 700,122 | 5.40 | % | ||||||||||
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Interest-bearing deposits
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$ | 652,300 | 1.04 | % | $ | 536,706 | 1.48 | % | ||||||||
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Total borrowings
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125,464 | 4.86 | % | 125,464 | 4.86 | % | ||||||||||
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Total interest-bearing liabilities
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777,764 | 1.66 | % | 662,170 | 2.12 | % | ||||||||||
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Interest rate spread
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3.58 | % | 3.28 | % | ||||||||||||
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Net interest margin
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3.55 | % | 3.39 | % | ||||||||||||
4
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Nine Months Ended
September 30, 2011
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Nine Months Ended
September 30, 2010
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Average Balance
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Yield/Cost
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Average Balance
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Yield/Cost
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(Dollars in thousands)
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Loans
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$ | 679,317 | 5.22 | % | $ | 668,872 | 5.40 | % | ||||||||
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Investment securities
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40,703 | 5.20 | % | 27,264 | 6.62 | % | ||||||||||
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Total interest-earning assets
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720,020 | 5.22 | % | 696,136 | 5.45 | % | ||||||||||
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Interest-bearing deposits
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$ | 600,723 | 1.06 | % | $ | 514,068 | 1.54 | % | ||||||||
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Total borrowings
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125,464 | 4.82 | % | 125,464 | 4.82 | % | ||||||||||
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Total interest-bearing liabilities
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726,187 | 1.71 | % | 639,532 | 2.18 | % | ||||||||||
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Interest rate spread
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3.52 | % | 3.27 | % | ||||||||||||
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Net interest margin
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3.50 | % | 3.44 | % | ||||||||||||
ASSET QUALITY DATA
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Nine Months Ended
September 30, 2011
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Year Ended
December 31, 2010
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(Dollars in thousands)
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Allowance for Loan Losses:
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Allowance at beginning of period
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$ | 3,988 | $ | 3,476 | ||||
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Provision for loan losses
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344 | 892 | ||||||
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Charge-offs
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(213 | ) | (380 | ) | ||||
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Recoveries
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- | - | ||||||
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Net charge-offs
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(213 | ) | (380 | ) | ||||
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Allowance at end of period
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$ | 4,119 | $ | 3,988 | ||||
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Allowance for loan losses as a percent of total loans
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0.55 | % | 0.60 | % | ||||
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Allowance for loan losses as a percent of nonperforming loans
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82.6 | % | 76.4 | % | ||||
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September 30, 2011
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December 31, 2010
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(Dollars in thousands)
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Nonperforming Assets:
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Nonaccrual loans:
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Real estate mortgage - residential
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$ | 4,362 | $ | 4,282 | ||||
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Real estate mortgage - commercial
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240 | 729 | ||||||
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Commercial
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118 | 134 | ||||||
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Consumer
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264 | 77 | ||||||
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Total
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4,984 | 5,222 | ||||||
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Real estate owned
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313 | 98 | ||||||
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Other nonperforming assets
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- | - | ||||||
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Total nonperforming assets
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$ | 5,297 | $ | 5,320 | ||||
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Nonperforming loans as a percent of total loans
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0.67 | % | 0.79 | % | ||||
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Nonperforming assets as a percent of total assets
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0.52 | % | 0.63 | % | ||||
5
SELECTED FINANCIAL RATIOS
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Nine Months Ended
September 30,
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2011
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2010
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Selected Performance Ratios:
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Return on average assets (1)
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0.53 | % | 0.66 | % | ||||
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Return on average equity (1)
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4.64 | % | 5.37 | % | ||||
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Interest rate spread (1)
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3.52 | % | 3.27 | % | ||||
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Net interest margin (1)
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3.50 | % | 3.44 | % | ||||
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Efficiency ratio
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69.66 | % | 64.12 | % | ||||
(1) Annualized.
OCEAN SHORE HOLDING COMPANY - QUARTERLY DATA (Unaudited)
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Q3
2011
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Q2
2011
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Q1
2011
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Q4
2010
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Q3
2010
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(In thousands except per share amounts)
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Income Statement Data:
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Net interest income
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$ | 6,778 | $ | 6,162 | $ | 5,975 | $ | 5,913 | $ | 5,941 | ||||||||||
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Provision for loan losses
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141 | 128 | 75 | 76 | 125 | |||||||||||||||
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Net interest income after provision for loan losses
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6,637 | 6,034 | 5,900 | 5,837 | 5,816 | |||||||||||||||
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Other income
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934 | 862 | 802 | 874 | 836 | |||||||||||||||
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Other expense
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5,521 | 4,810 | 4,656 | 4,377 | 4,319 | |||||||||||||||
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Income before taxes
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2,050 | 2,086 | 2,046 | 2,334 | 2,333 | |||||||||||||||
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Provision for income taxes
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835 | 928 | 841 | 906 | 892 | |||||||||||||||
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Net income
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$ | 1,215 | $ | 1,158 | $ | 1,205 | $ | 1,428 | $ | 1,441 | ||||||||||
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Share Data:
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Earnings per share basic
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$ | 0.18 | $ | 0.17 | $ | 0.18 | $ | 0.21 | $ | 0.21 | ||||||||||
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Earnings per share diluted
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$ | 0.18 | $ | 0.17 | $ | 0.18 | $ | 0.21 | $ | 0.21 | ||||||||||
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Average shares outstanding basic
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6,753,956 | 6,738,827 | 6,730,331 | 6,721,891 | 6,826,698 | |||||||||||||||
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Average shares outstanding diluted
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6,836,697 | 6,809,077 | 6,801,558 | 6,769,445 | 6,835,521 | |||||||||||||||
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Total shares outstanding
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7,291,643 | 7,296,780 | 7,296,780 | 7,296,780 | 7,296,904 | |||||||||||||||
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Balance Sheet Data:
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Total assets
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$ | 1,021,625 | $ | 860,269 | $ | 861,365 | $ | 839,857 | $ | 838,165 | ||||||||||
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Investment securities
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49,679 | 47,474 | 42,131 | 23,721 | 25,363 | |||||||||||||||
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Loans receivable, net
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743,945 | 662,841 | 660,385 | 660,340 | 669,868 | |||||||||||||||
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Deposits
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780,564 | 621,189 | 623,685 | 603,334 | 603,547 | |||||||||||||||
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FHLB advances
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110,000 | 110,000 | 110,000 | 110,000 | 110,000 | |||||||||||||||
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Subordinated debt
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15,464 | 15,464 | 15,464 | 15,464 | 15,464 | |||||||||||||||
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Stockholders’ equity
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104,063 | 102,822 | 101,750 | 100,554 | 99,314 | |||||||||||||||
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Asset Quality:
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Non-performing assets
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$ | 5,297 | $ | 6,033 | $ | 5,910 | $ | 5,320 | $ | 4,052 | ||||||||||
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Non-performing loans to total loans
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0.67 | % | 0.90 | % | 0.88 | % | 0.79 | % | 0.59 | % | ||||||||||
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Non-performing assets to total assets
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0.52 | % | 0.70 | % | 0.69 | % | 0.63 | % | 0.48 | % | ||||||||||
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Allowance for loan losses
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$ | 4,119 | $ | 4,068 | $ | 4,063 | $ | 3,988 | $ | 3,982 | ||||||||||
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Allowance for loan losses to total loans
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0.55 | % | 0.61 | % | 0.62 | % | 0.60 | % | 0.59 | % | ||||||||||
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Allowance for loan losses to non-performing loans
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82.6 | % | 68.5 | % | 69.9 | % | 76.4 | % | 100.7 | % | ||||||||||
6