OCEAN CITY, N.J.--(BUSINESS WIRE)-- Ocean Shore Holding Co. (NASDAQ:OSHC) today announced quarterly net income of $1,313,000, or $0.16 per basic and diluted share, for the quarter ended September 30, 2009, as compared to $341,000, or $0.04 per basic and diluted share, for the quarter ended September 30, 2008. This represents the Company's best quarterly performance since becoming a public company in 2004.

Net income for the nine months ended September 30, 2009 was $2,897,000, or $0.36 per share basic and diluted, as compared to $2,160,000, or $0.27 per share basic and diluted, for the same period in 2008.

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 ten full-service banking offices in eastern New Jersey including the recently opened de novo branch office in Galloway Township.

"We are very pleased with our results this quarter, especially in view of the continuing difficult economic conditions. While we are not immune from the effects of the recession, we believe that our results, particularly our low level of non-performing assets, speaks well for our conservative operating philosophy," said Steven E. Brady, President and CEO.

Balance Sheet Review

Total assets grew $64.2 million, or 9.5%, to $742.6 million at September 30, 2009 from December 31, 2008. Loans receivable, net, increased $61.1 million, or 10.3%, to $655.5 million on steady loan activity. The increase in loans receivable reflected growth in all loan categories: real estate loans increased $57.5 million, consumer loans increased $2.3 million and commercial loans increased $1.7 million. Cash and cash equivalents increased $7.9 million to $16.5 million while investments and mortgage-backed securities decreased $7.1 million, or 18.9%, to $30.3 million.

Deposits grew $76.9 million, or 16.9%, to $532.8 million at September 30, 2009 from December 31, 2008. Total borrowings decreased $15.9 million, or 10.7%, to $133.4 million. The proceeds from the additional deposits were used to fund the growth in the loan portfolio and pay off short-term borrowings.

Asset Quality

The provision for loan losses totaled $490,000 for the third quarter of 2009 compared to $114,000 for the third quarter of 2008 and $252,000 for the second quarter of 2009. The increase in the provision resulted from reserves deemed necessary due to loan growth and specific reserves for two loans in foreclosure.

Charge-offs for the three and nine months ended September 2009 totaled $101,000 compared to no activity for the same periods in 2008. The allowance for loan losses was 0.53% of total loans and 137.7% of non-performing loans at September 30, 2009, compared to 0.45% of total loans and 136.0% of non-performing loans at December 31, 2008.

Non-performing assets totaled $2.7 million, or 0.36%, of total assets, at September 30, 2009, compared to $4.6 million, or 0.63% of total assets, at June 30, 2009.

Income Statement Analysis

Net interest income increased $887,000, or 18.2%, to $5.8 million for the third quarter of 2009 compared to $4.9 million in the third quarter of 2008. Net interest margin increased 25 basis points in the quarter ended September 30, 2009 to 3.40% from 3.15% for the quarter ended September 30, 2008. On a linked-quarter basis, net interest margin increased 13 basis points from 3.27% in the second quarter of 2009. The growth in interest income for the third quarter was the result of an increase in average interest-earning assets of $59.5 million and a decrease of 67 basis points in the average cost of interest-bearing liabilities to 2.48% from 3.15%, offset by an increase in average interest-bearing liabilities of $66.9 million and a decrease of 27 basis points in the average yield on interest-earning assets to 5.61% from 5.88%.

Net interest income increased $2.5 million, or 17.8%, for the first nine months of 2009 to $16.3 million compared to the same period in the prior year. An increase in net interest margin of 27 basis points to 3.29% from 3.02% was the result of a decrease in the cost of interest-bearing liabilities of 65 basis points offset by a decrease in the yield on interest-earning assets of 28 basis points.

Other expenses increased $408,000, or 11.6%, to $3.9 million for the third quarter of 2009, compared to $3.5 million for the third quarter of 2008. Other expenses increased $1.6 million, or 15.2%, to $11.9 million for the nine months ended September 30, 2009 compared to $10.3 million for the nine months ended September 30, 2008. FDIC deposit insurance expense increased $124,000 in the third quarter of 2009 over 2008 and $566,000 year to date in 2009 over the same period in 2008. Other expenses increased $128,000 in the third quarter and $373,000 year to date over the prior year as a result of additional expenses associated with the opening of a new branch in the fourth quarter of 2008.

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

$742,630

(18.9

)

(11.9

)

SELECTED OPERATING DATA

September 30,

September 30,

2008

% Change

Provision for loan losses

Net interest income after provision for loan losses

5,267

4,756

10.7

15,392

13,548

13.6

Other income

N/M - not measurable

September 30, 2009

September 30, 2008

Average

Balance

Average

Balance

-  

September 30, 2009

September 30, 2008

Average

Balance

Average

Balance

-  

ASSET QUALITY DATA

Nine Months

Ended

September 30,

2009

Year Ended

December 31,

2008

Nine Months

Ended

September 30,

2009

Year Ended

December 31,

2008

SELECTED FINANCIAL RATIOS

Nine Months Ended

September 30,

(1) Annualized.

OCEAN SHORE HOLDING COMPANY - QUARTERLY DATA

2009

2009

2009

2008

2008

provision for loan losses

5,267

5,127

4,999

4,905

4,756