UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 30, 2013
OCEAN SHORE HOLDING CO.
(Exact name of registrant as specified in its charter)
| New Jersey | 0-53856 | 80-0282446 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1001 Asbury Avenue, Ocean City, New Jersey 08226
(Address of principal executive offices) (Zip Code)
(609) 399-0012
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On July 30, 2013, Ocean Shore Holding Co. (the “Company”) issued a news release announcing its financial results for the quarter ended June 30, 2013. A copy of the news release is included as Exhibit 99.1 to this report.
Item 8.01 Other Events
On July 30, 2013, the Company announced the partial redemption of $5 million principal amount of its 8.67% Capital Securities (the “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 30, 2013. A copy of the news release is included as Exhibit 99.2 to this report.
Item 9.01 Financial Statements and Exhibits
| Exhibits | |
| Number | Description |
| 99.1 | Press Release dated July 30, 2013 |
| 99.2 | Press Release dated July 30, 2013 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| OCEAN SHORE HOLDING CO. | ||
| (Registrant) | ||
| Date: July 30, 2013 | By: | /s/ Donald F. Morgenweck |
| Donald F. Morgenweck | ||
| Senior Vice President and | ||
| Chief Financial Officer | ||
| Contacts: | |
| Steven E. Brady, President and CEO | |
| Donald F. Morgenweck, CFO | |
| (609) 399-0012 |
Press Release
Ocean Shore Holding Co. Reports 2nd Quarter Earnings
Ocean City, New Jersey – July 30, 2013 – Ocean Shore Holding Co. (NASDAQ: OSHC) today announced net income of $1,359,000, or $0.21 per diluted share, for the quarter ended June 30, 2013, as compared to $1,297,000, or $0.19 per diluted share, for the second quarter of 2012. Net income for the six months ended June 30, 2013 was $2,539,000, or $0.38 per diluted share, as compared to $2,651,000, or $0.39 per diluted share, for the same period in 2012.
In a separate release, the Company announced the partial redemption of $5 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 30, 2013. The company will pay a redemption premium of $108,400 to be recorded in the third quarter of 2013.
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 twelve full-service banking offices in eastern New Jersey.
“We are pleased to report increased net income for the second quarter of 2013 compared to both the first quarter of 2013 and the second quarter of 2012,” said Steven E. Brady, President and CEO. “Growth in earning assets and continuing reductions in funding costs contributed to improved net interest income compared to the first quarter of 2013. Lower provisions for loan losses, an increase in other income and a reduction in operating expenses compared to the first quarter also contributed to higher net income.
“With the partial redemption of our trust preferred securities, which we announced today, net interest income will benefit from the reduction of annual interest expense of $434,000 without a significant reduction in our strong capital levels,” said Brady.
Balance Sheet Review
Total assets decreased $13.5 million, or 1.3%, to $1,032.0 million at June 30, 2013 from $1,045.5 million at December 31, 2012. Loans receivable, net, increased $15.0 million, or 2.1%, to $718.9 million at June 30, 2013 from $703.9 million at December 31, 2012. Investments and mortgage-backed securities increased $17.9 million, or 15.3%, to $134.6 million during the first six months of 2013. Cash and cash equivalents decreased $45.8 million, or 28.0%, to $117.7 million at June 30, 2013 from $163.4 million at December 31, 2012 as excess liquidity was deployed into loans and investments and used to fund deposit withdrawals. Loan originations and other advances totaling $95.6 million were offset by payoffs and payments received of $80.6 million resulting in a $15.0 million increase in the portfolio. The increase in investments and mortgage-backed securities resulted from purchases of $47.3 million offset by normal repayments, calls and payoffs of $29.4 million.
| 1 |
Deposits decreased $14.7 million, or 1.8%, to $787.0 million at June 30, 2013 from $801.8 million at December 31, 2012. Checking accounts increased $14.7 million, savings accounts increased $7.6 million, certificates of deposit decreased $14.4 million and municipal deposits decreased $22.6 million at June 30, 2013 compared to December 31, 2012. Municipal deposits declined as a result of seasonal withdrawals and one less depositor. Total borrowings were unchanged at $125.5 million for the period ended June 30, 2013.
Asset Quality
The provision for loan losses totaled $192,200 for the second quarter of 2013 compared to $253,000 for the second quarter of 2012 and $202,000 for the first quarter of 2013. The allowance for loan losses totaled $4.1 million, or 0.57% of total loans, at June 30, 2013 compared to $4.0 million, or 0.57% of total loans, at December 31, 2012. The Company experienced $300,000 in net charge-off activity for the first six months of 2013 as compared to $490,000 in net charge-off activity for the first six months of 2012.
Non-performing assets totaled $5.6 million, or 0.54% of total assets, at June 30, 2013, compared to $6.7 million, or 0.64% of total assets, at December 31, 2012. Non-performing assets consisted of nineteen real estate residential mortgages totaling $3.4 million, one real estate commercial mortgage totaling $471,000, one real estate construction loan totaling $84,000, one commercial loan totaling $519,000, five consumer equity loans totaling $222,000 and six real estate owned properties totaling $909,000.
Income Statement Analysis
Net interest income decreased $267,000, or 3.9%, to $6.5 million for the second quarter of 2013 compared to $6.8 million in the second quarter of 2012. Net interest margin decreased 33 basis points in the quarter ended June 30, 2013 to 3.09% versus 3.42% for the quarter ended June 30, 2012 and 7 basis points from 3.16% for the quarter ended March 31, 2013. The decrease in net interest income in the second quarter of 2013 compared to the second quarter of 2012 was the result of a decrease of 61 basis points in the average yield on interest-earning assets to 4.12% offset by a decrease in the average cost of interest-bearing liabilities of 21 basis points to 1.05%, a decrease in the average interest-bearing liabilities of $2.8 million and an increase in the average interest-earning assets of $49.5 million.
Net interest income decreased $674,000, or 4.9%, to $13.0 million for the first six months of 2013 compared to the same period in the prior year. Net interest margin decreased 35 basis points for the six months ended June 30, 2013 to 3.12% versus 3.47% for the six months ended June 30, 2012. The decrease in net interest income for the six month period was the result of decrease of 64 basis points in the average yield on interest-earning assets to 4.19% and an increase in average interest-bearing liabilities of $14.4 million. These changes were offset by a decrease in the average cost of interest-bearing liabilities of 24 basis points to 1.06% and an increase in the average interest-earning assets of $45.0 million.
| 2 |
Other income increased $159,000 to $1.1 million and $356,000 to $2.2 million, for the second quarter and first six months of 2013, respectively, compared to the same periods in 2012. The increase in other income resulted from increases in deposit account fees, cash surrender value of life insurance and debit card commissions over the prior periods.
Other expenses increased $58,000, or 1.1%, to $5.4 million for the second quarter of 2013, compared to $5.4 million for the second quarter of 2012. Other expenses increased $127,000, or 1.2%, to $10.9 million for the six months ended June 30, 2013 compared to $10.8 million for the six months ended June 30, 2012. For the second quarter of 2013 increases in salaries and benefits, occupancy and equipment, FDIC insurance and REO expenses of $100,000 was offset by decreases in marketing and other expenses of $42,000. For the six months ended June 30, 2013 increases in salaries and benefits, occupancy and equipment, FDIC insurance and REO expenses of $189,000 was offset by decreases in marketing and other expenses of $62,000.
Income tax expense decreased $167,000, or 20.3%, to $655,000 for the second quarter of 2013, compared to $822,000 for the second quarter of 2012. Income tax expense decreased $300,000, or 17.8%, to $1.4 million for the six months ended June 30, 2013 as compared to $1.7 million for the six months ended June 30, 2012. The effective tax rate decreased to 32.5% from 38.8% for the second quarter of 2013 compared to the same quarter in 2012 and to 35.3% from 38.9% for the six months ended 2013 compared to the same period in 2012. The decrease in the effective rate was based upon a reduction in state income tax expense as a result of forming a subsidiary real estate investment trust in the second quarter.
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.
| 3 |
SELECTED FINANCIAL CONDITION DATA (Unaudited)
| June 30, | December 31, | |||||||||||
| 2013 | 2012 | % Change | ||||||||||
| (Dollars in thousands) | ||||||||||||
| Total assets | $ | 1,031,999 | $ | 1,045,488 | (1.3 | )% | ||||||
| Cash and cash equivalents | 117,654 | 163,422 | (28.0 | ) | ||||||||
| Investment securities | 134,639 | 116,774 | 15.3 | |||||||||
| Loans receivable, net | 718,925 | 703,898 | 2.1 | |||||||||
| Deposits | 787,028 | 801,765 | (1.8 | ) | ||||||||
| FHLB advances | 110,000 | 110,000 | 0.0 | |||||||||
| Subordinated debt | 15,464 | 15,464 | 0.0 | |||||||||
| Stockholder’s equity | 105,304 | 104,728 | 0.5 | |||||||||
SELECTED OPERATING DATA (Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2013 | 2012 | % Change | 2013 | 2012 | % Change | |||||||||||||||||||
| (In thousands, except per share and per share amounts) | ||||||||||||||||||||||||
| Interest and dividend income | $ | 8,698 | $ | 9,413 | (7.6 | )% | $ | 17,429 | $ | 19,024 | (8.4 | )% | ||||||||||||
| Interest expense | 2,168 | 2,616 | (17.1 | ) | 4,420 | 5,341 | (17.2 | ) | ||||||||||||||||
| Net interest income | 6,530 | 6,797 | (3.9 | ) | 13,009 | 13,683 | (4.9 | ) | ||||||||||||||||
| Provision for loan losses | 192 | 253 | (24.1 | ) | 394 | 426 | (7.5 | ) | ||||||||||||||||
| Net interest income after provision for loan losses | 6,338 | 6,544 | (3.1 | ) | 12,615 | 13,257 | (4.8 | ) | ||||||||||||||||
| Other income | 1,125 | 966 | 16.5 | 2,227 | 1,870 | 19.1 | ||||||||||||||||||
| Other expense | 5,449 | 5,391 | 1.1 | 10,919 | 10,792 | 1.2 | ||||||||||||||||||
| Income before taxes | 2,014 | 2,119 | (5.0 | ) | 3,923 | 4,335 | (9.5 | ) | ||||||||||||||||
| Provision for income taxes | 655 | 822 | (20.3 | ) | 1,384 | 1,684 | (17.8 | ) | ||||||||||||||||
| Net Income | $ | 1,359 | $ | 1,297 | 4.8 | $ | 2,539 | $ | 2,651 | (4.2 | ) | |||||||||||||
| Earnings per share basic | $ | 0.21 | $ | 0.19 | $ | 0.39 | $ | 0.39 | ||||||||||||||||
| Earnings per share diluted | $ | 0.21 | $ | 0.19 | $ | 0.38 | $ | 0.39 | ||||||||||||||||
| Average shares outstanding basic | 6,518,558 | 6,742,591 | 6,505,246 | 6,760,448 | ||||||||||||||||||||
| Average shares outstanding diluted | 6,614,475 | 6,797,333 | 6,608,352 | 6,820,495 | ||||||||||||||||||||
| 4 |
| Three Months Ended June 30, 2013 | Three Months Ended June 30, 2012 | |||||||||||||||
| Average Balance | Yield/Cost | Average Balance | Yield/Cost | |||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Loans | $ | 712,496 | 4.47 | % | $ | 709,651 | 4.92 | % | ||||||||
| Investment securities | 132,386 | 2.21 | % | 85,765 | 3.18 | % | ||||||||||
| Total interest-earning assets | 844,882 | 4.12 | % | 795,416 | 4.73 | % | ||||||||||
| Interest-bearing deposits | 700,793 | 0.44 | % | 703,547 | 0.63 | % | ||||||||||
| Total borrowings | 125,464 | 4.43 | % | 125,464 | 4.82 | % | ||||||||||
| Total interest-bearing liabilities | 826,257 | 1.05 | % | 829,011 | 1.26 | % | ||||||||||
| Interest rate spread | 3.07 | % | 3.47 | % | ||||||||||||
| Net interest margin | 3.09 | % | 3.42 | % | ||||||||||||
| Six Months Ended June 30, 2013 | Six Months Ended June 30, 2012 | |||||||||||||||
| Average Balance | Yield/Cost | Average Balance | Yield/Cost | |||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| Loans | $ | 707,932 | 4.52 | % | $ | 714,266 | 4.97 | % | ||||||||
| Investment securities | 124,756 | 2.28 | % | 73,384 | 3.52 | % | ||||||||||
| Total interest-earning assets | 832,688 | 4.19 | % | 787,650 | 4.83 | % | ||||||||||
| Interest-bearing deposits | 708,834 | 0.46 | % | 694,447 | 0.67 | % | ||||||||||
| Total borrowings | 125,464 | 4.47 | % | 125,464 | 4.81 | % | ||||||||||
| Total interest-bearing liabilities | 834,298 | 1.06 | % | 819,911 | 1.30 | % | ||||||||||
| Interest rate spread | 3.13 | % | 3.53 | % | ||||||||||||
| Net interest margin | 3.12 | % | 3.47 | % | ||||||||||||
ASSET QUALITY DATA (Unaudited)
| Six Months Ended June 30, 2013 | Year Ended December 31, 2012 | |||||||
| (Dollars in thousands) | ||||||||
| Allowance for Loan Losses: | ||||||||
| Allowance at beginning of period | $ | 3,997 | $ | 3,762 | ||||
| Provision for loan losses | 394 | 893 | ||||||
| Charge-offs | (312 | ) | (691 | ) | ||||
| Recoveries | 12 | 33 | ||||||
| Net charge-offs | (300 | ) | (658 | ) | ||||
| Allowance at end of period | $ | 4,091 | $ | 3,997 | ||||
| Allowance for loan losses as a percent of total loans | 0.57 | % | 0.57 | % | ||||
| Allowance for loan losses as a percent of nonperforming loans | 87.7 | % | 69.5 | % | ||||
| 5 |
| At June 30, 2013 | At December 31, 2012 | |||||||
| (Dollars in thousands) | ||||||||
| Nonperforming Assets: | ||||||||
| Nonaccrual loans: | ||||||||
| Real estate mortgage - residential | $ | 3,371 | $ | 3,850 | ||||
| Real estate mortgage - commercial | 471 | 1,275 | ||||||
| Real estate mortgage - construction | 84 | 84 | ||||||
| Commercial business loans | 519 | 200 | ||||||
| Consumer loans | 222 | 342 | ||||||
| Total nonaccrual loans | 4,667 | 5,751 | ||||||
| Real estate owned | 909 | 906 | ||||||
| Total nonperforming assets | $ | 5,576 | $ | 6,657 | ||||
| Nonperforming loans as a percent of total loans | 0.65 | % | 0.82 | % | ||||
| Nonperforming assets as a percent of total assets | 0.54 | % | 0.64 | % | ||||
SELECTED FINANCIAL RATIOS (Unaudited)
| Six Months Ended June 30, | ||||||||
| 2013 | 2012 | |||||||
| Selected Performance Ratios: | ||||||||
| Return on average assets (1) | 0.48 | % | 0.52 | % | ||||
| Return on average equity (1) | 4.77 | % | 5.00 | % | ||||
| Interest rate spread (1) | 3.13 | % | 3.53 | % | ||||
| Net interest margin (1) | 3.12 | % | 3.47 | % | ||||
| Efficiency ratio | 71.67 | % | 69.39 | % | ||||
--(1) Annualized.
| 6 |
OCEAN SHORE HOLDING COMPANY - QUARTERLY DATA (Unaudited)
| Q2 2013 | Q1 2013 | Q4 2012 | Q3 2012 | Q2 2012 | ||||||||||||||||
| (In thousands except per share amounts) | ||||||||||||||||||||
| Income Statement Data: | ||||||||||||||||||||
| Net interest income | $ | 6,530 | $ | 6,479 | $ | 6,443 | $ | 6,508 | $ | 6,797 | ||||||||||
| Provision for loan losses | 192 | 202 | 320 | 148 | 253 | |||||||||||||||
| Net interest income after provision for loan losses | 6,338 | 6,277 | 6,123 | 6,360 | 6,544 | |||||||||||||||
| Other income | 1,125 | 1,102 | 1,104 | 1,029 | 966 | |||||||||||||||
| Other expense | 5,449 | 5,470 | 5,323 | 5,447 | 5,391 | |||||||||||||||
| Income before taxes | 2,014 | 1,909 | 1,904 | 1,942 | 2,119 | |||||||||||||||
| Provision for income taxes | 655 | 729 | 746 | 750 | 822 | |||||||||||||||
| Net income | $ | 1,359 | $ | 1,180 | $ | 1,158 | $ | 1,192 | $ | 1,297 | ||||||||||
| Share Data: | ||||||||||||||||||||
| Earnings per share basic | $ | 0.21 | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.19 | ||||||||||
| Earnings per share diluted | $ | 0.21 | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.19 | ||||||||||
| Average shares outstanding basic | 6,518,558 | 6,491,786 | 6,466,377 | 6,625,221 | 6,742,591 | |||||||||||||||
| Average shares outstanding diluted | 6,614,475 | 6,602,398 | 6,545,484 | 6,681,163 | 6,797,333 | |||||||||||||||
| Total shares outstanding | 6,970,746 | 6,970,346 | 6,936,733 | 6,963,672 | 7,185,843 | |||||||||||||||
| Balance Sheet Data: | ||||||||||||||||||||
| Total assets | $ | 1,031,999 | $ | 1,053,872 | $ | 1,045,488 | $ | 1,061,543 | $ | 1,026,273 | ||||||||||
| Investment securities | 134,639 | 129,445 | 116,774 | 94,292 | 92,486 | |||||||||||||||
| Loans receivable, net | 718,925 | 709,337 | 703,898 | 691,636 | 701,750 | |||||||||||||||
| Deposits | 787,028 | 808,670 | 801,765 | 819,414 | 782,351 | |||||||||||||||
| 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 | 105,304 | 106,040 | 104,728 | 104,143 | 105,607 | |||||||||||||||
| Asset Quality: | ||||||||||||||||||||
| Non-performing assets | $ | 5,576 | $ | 6,374 | $ | 6,657 | $ | 5,652 | $ | 5,323 | ||||||||||
| Non-performing loans to total loans | 0.65 | % | 0.76 | % | 0.82 | % | 0.68 | % | 0.68 | % | ||||||||||
| Non-performing assets to total assets | 0.54 | % | 0.60 | % | 0.64 | % | 0.53 | % | 0.52 | % | ||||||||||
| Allowance for loan losses | $ | 4,091 | $ | 4,142 | $ | 3,997 | $ | 3,696 | $ | 3,698 | ||||||||||
| Allowance for loan losses to total loans | 0.57 | % | 0.58 | % | 0.57 | % | 0.53 | % | 0.53 | % | ||||||||||
| Allowance for loan losses to non-performing loans | 87.7 | % | 76.7 | % | 69.5 | % | 78.9 | % | 77.8 | % | ||||||||||
| 7 |
OCEAN SHORE HOLDING CO. ANNOUNCES PARTIAL REDEMPTION OF TRUST PREFERRED SECURITIES
Ocean City, New Jersey – July 30, 2013 – Ocean Shore Holding Co. (NASDAQ: OSHC) today announced the partial redemption of $5 million principal amount of its 8.67% Capital Securities (the “Capital Securities”) issued by Ocean Shore Capital Trust I (“Capital Trust I”), a wholly-owned subsidiary of the Company. The redemption date for the Capital Securities is August 30, 2013 (the “Redemption Date”).
The redemption price for each of the Capital Securities will equal 102.168% of the $1,000.00 liquidation amount per security, plus all accumulated and unpaid distributions per security to the Redemption Date. All interest accruing on the Capital Securities called for redemption will cease to accrue on and after the Redemption Date.
The Capital Securities are being redeemed, along with a pro rata number of common securities issued by Capital Trust I and held by the Company, as a result of the concurrent redemption of the 8.67% Junior Subordinated Deferrable Interest Debentures held by Capital Trust I, which underlie the Capital Securities. Deutsche Bank Trust Company Americas, as property trustee of Capital Trust I, will notify holders of the Capital Securities called for redemption.
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 twelve full-service banking offices in eastern New Jersey.
Contacts:
Steven E. Brady, President and CEO
Donald F. Morgenweck, CFO
(609) 399-0012