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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2007

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number: 0-51000



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OCEAN SHORE HOLDING CO.

(Exact name of registrant as specified in its charter)



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|                                                              |  |                                    
|------------------------------------------------------------- |  | -----------------------------------
|United States                                                 |  | 22-3584037                         
|(State or other jurisdiction ofincorporation or organization) |  | (I.R.S. EmployerIdentification 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, former address and former fiscal year, if changed since last report)



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Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of large accelerated filer and accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ̈Accelerated Filer ̈Non-accelerated Filer   x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x

Indicate the number of shares outstanding of
each of the Issuers classes of common stock as of the latest practicable date:

At July 30, 2007, the registrant had 8,507,962 shares of $0.01
par value common stock outstanding.



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##### Table of Contents

OCEAN SHORE HOLDING CO.

FORM 10-Q

INDEX



|           |  |                                                                                                                                |  |     
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ----
|           |  |                                                                                                                                |  | Page
|PART I.    |  | FINANCIAL INFORMATION                                                                                                          |  |     
|           |  |                                                                                                                               
|Item 1.    |  | Financial Statements                                                                                                           |  |     
|           |  |                                                                                                                               
|           |  | Unaudited Condensed Consolidated Statements of Financial Condition at June 30, 2007 and December 31, 2006                      |  | 1   
|           |  |                                                                                                                               
|           |  | Unaudited Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2007 and 2006         |  | 2   
|           |  |                                                                                                                               
|           |  | Unaudited Condensed Consolidated Statements of Changes in Stockholders Equity for the six months ended June 30, 2007 and 2006 |  | 3   
|           |  |                                                                                                                               
|           |  | Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006                      |  | 4   
|           |  |                                                                                                                               
|           |  | Notes to Unaudited Condensed Consolidated Financial Statements                                                                 |  | 5   
|           |  |                                                                                                                               
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                          |  | 16  
|           |  |                                                                                                                               
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                                                     |  | 28  
|           |  |                                                                                                                               
|Item 4.    |  | Controls and Procedures                                                                                                        |  | 28  
|           |  |                                                                                                                               
|PART II.   |  | OTHER INFORMATION                                                                                                              |  |     
|           |  |                                                                                                                               
|Item 1.    |  | Legal Proceedings                                                                                                              |  | 28  
|           |  |                                                                                                                               
|Item 1A.   |  | Risk Factors                                                                                                                   |  | 28  
|           |  |                                                                                                                               
|Item 2.    |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                    |  | 29  
|           |  |                                                                                                                               
|Item 3.    |  | Defaults upon Senior Securities                                                                                                |  | 29  
|           |  |                                                                                                                               
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                                            |  | 29  
|           |  |                                                                                                                               
|Item 5.    |  | Other Information                                                                                                              |  | 30  
|           |  |                                                                                                                               
|Item 6.    |  | Exhibits                                                                                                                       |  | 30  
|           | 
|SIGNATURES |  | 31                                                                                                                            



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##### Table of Contents

PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

OCEAN SHORE HOLDING CO. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION



|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ----------- | - | ---------------- | - | ----------- | -
|ASSETS                                                                                                                                                                               |  | June 30, 2007 |             |   | December 31,2006 |  
|Cash and amounts due from depository institutions                                                                                                                                    |  | $             | 15,841,495  |   |                  | $ | 15,656,934  |  
|Federal funds sold                                                                                                                                                                   |  |               | 3,690,000   |   |                  |   | 17,700,000  |  
|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|Cash and cash equivalents                                                                                                                                                            |  |               | 19,531,495  |   |                  |   | 33,356,934  |  
|Investment securities held to maturity (estimated fair value$3,013,422 at June 30, 2007; $0 at December 31,
2006)                                                                   |  |               | 3,011,555   |   |                  |   |            |  
|Investment securities available for sale (amortized cost $22,434,594 at June 30, 2007; $23,683,154 at December 31,
2006)                                                            |  |               | 22,310,490  |   |                  |   | 23,759,615  |  
|Mortgage-backed securities held to maturity (estimated fair value$4,782,628 at June 30, 2007; $5,152,021 at December 31, 2006)                                                      |  |               | 4,987,682   |   |                  |   | 5,266,063   |  
|Mortgage-backed securities available for sale (amortized cost$35,749,661 at June 30, 2007; $39,608,982 at December 31, 2006)                                                        |  |               | 35,000,438  |   |                  |   | 39,105,325  |  
|Loansnet of allowance for loan losses of $2,202,030 at June 30, 2007 and $2,049,913 at December 31, 2006                                                                            |  |               | 465,848,586 |   |                  |   | 433,342,427 |  
|Accrued interest receivable:                                                                                                                                                         |  |               |             |   |                  |   |             |  
|Loans                                                                                                                                                                                |  |               | 1,897,024   |   |                  |   | 1,761,993   |  
|Mortgage-backed securities                                                                                                                                                           |  |               | 177,473     |   |                  |   | 194,588     |  
|Investment securities                                                                                                                                                                |  |               | 316,878     |   |                  |   | 308,590     |  
|Federal Home Loan Bank stockat cost                                                                                                                                                 |  |               | 4,348,100   |   |                  |   | 3,480,900   |  
|Office properties and equipmentnet                                                                                                                                                  |  |               | 9,862,758   |   |                  |   | 10,181,236  |  
|Prepaid expenses and other assets                                                                                                                                                    |  |               | 3,690,711   |   |                  |   | 2,585,881   |  
|Cash surrender value of life insurance                                                                                                                                               |  |               | 9,771,047   |   |                  |   | 7,600,447   |  
|Deferred tax asset                                                                                                                                                                   |  |               | 1,491,844   |   |                  |   | 1,316,049   |  
|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|TOTAL ASSETS                                                                                                                                                                         |  | $             | 582,246,081 |   |                  | $ | 562,260,048 |  
|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                 |  |               |             |   |                  |   |             |  
|                                                                                                                                                                                     |  |              
|LIABILITIES:                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|Non-interest bearing deposits                                                                                                                                                        |  | $             | 36,152,066  |   |                  | $ | 35,223,842  |  
|Interest bearing deposits                                                                                                                                                            |  |               | 381,268,315 |   |                  |   | 381,800,409 |  
|Advances from Federal Home Loan Bank                                                                                                                                                 |  |               | 72,000,000  |   |                  |   | 54,000,000  |  
|Junior subordinated debentures                                                                                                                                                       |  |               | 15,464,000  |   |                  |   | 15,464,000  |  
|Securities sold under agreements to repurchase                                                                                                                                       |  |               | 6,730,000   |   |                  |   | 7,090,000   |  
|Advances from borrowers for taxes and insurance                                                                                                                                      |  |               | 2,776,869   |   |                  |   | 2,356,247   |  
|Accrued interest payable                                                                                                                                                             |  |               | 1,014,455   |   |                  |   | 904,205     |  
|Other liabilities                                                                                                                                                                    |  |               | 4,138,697   |   |                  |   | 2,870,831   |  
|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|Total liabilities                                                                                                                                                                    |  |               | 519,544,402 |   |                  |   | 499,709,534 |  
|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                                                        |  |               |             |   |                  |   |             |  
|                                                                                                                                                                                     |  |              
|STOCKHOLDERS EQUITY:                                                                                                                                                                |  |               |             |   |                  |   |             |  
|Preferred stock, $.01 par value, 5,000,000 shares authorized, none issued                                                                                                            |  |               |            |   |                  |   |            |  
|Common stock, $.01 par value, 25,000,000 shares authorized, 8,762,742 shares issued; 8,507,962 and 8,593,819 shares outstanding at June 30,
2007 and December 31, 2006, respectively |  |               | 87,627      |   |                  |   | 87,627      |  
|Additional paid-in capital                                                                                                                                                           |  |               | 37,673,294  |   |                  |   | 37,299,692  |  
|Retained earningspartially restricted                                                                                                                                               |  |               | 31,901,896  |   |                  |   | 30,781,914  |  
|Treasury stock  at cost: 254,780 shares at June 30, 2007; 168,923 shares at December 31, 2006                                                                                       |  |               | (3,347,385  | ) |                  |   | (2,190,882  | )
|Common stock acquired by employee benefits plans                                                                                                                                     |  |               | (2,633,490  | ) |                  |   | (2,747,990  | )
|Deferred compensation plans trust                                                                                                                                                    |  |               | (446,500    | ) |                  |   | (416,420    | )
|Accumulated other comprehensive loss                                                                                                                                                 |  |               | (533,763    | ) |                  |   | (263,427    | )
|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|Total stockholders equity                                                                                                                                                           |  |               | 62,701,679  |   |                  |   | 62,550,514  |  
|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                           |  | $             | 582,246,081 |   |                  | $ | 562,260,048 |  
|                                                                                                                                                                                     |  |               |             |   |                  |   |             |  

See notes to unaudited condensed consolidated financial statements.



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##### Table of Contents

OCEAN SHORE HOLDING CO. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME



|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|------------------------------------------------------------------------------------------------------------- | ---- | --------------------------- | --------- | ------------------------- | ---- | --------- | ---- | - | ---------- |  | - | ----------
|                                                                                                              |      | Three Months Ended June 30, |           | Six Months Ended June 30,
|                                                                                                              | 2007 |                             | 2006      |                           | 2007 |           | 2006
|INTEREST AND DIVIDEND INCOME:                                                                                 |      |                             |           |                           |      |           |      |   |            |  |   |           
|Taxable interest and fees on loans                                                                            |      | $                           | 6,763,276 |                           | $    | 6,254,632 |      | $ | 13,268,772 |  | $ | 12,280,841
|Taxable interest on mortgage-backed securities                                                                |      |                             | 509,548   |                           |      | 444,976   |      |   | 1,041,440  |  |   | 915,507   
|Non-taxable interest on municipal securities                                                                  |      |                             | 36,070    |                           |      | 46,476    |      |   | 72,140     |  |   | 157,110   
|Interest and dividends on investment securities                                                               |      |                             | 628,037   |                           |      | 600,547   |      |   | 1,283,788  |  |   | 1,144,528 
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|Total interest and dividend income                                                                            |      |                             | 7,936,931 |                           |      | 7,346,631 |      |   | 15,666,140 |  |   | 14,497,986
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|INTEREST EXPENSE:                                                                                             |      |                             |           |                           |      |           |      |   |            |  |   |           
|Deposits                                                                                                      |      |                             | 3,153,520 |                           |      | 2,654,698 |      |   | 6,245,948  |  |   | 5,131,788 
|Advances from Federal Home Loan Bank, securities sold under agreements to repurchase and other borrowed money |      |                             | 1,110,785 |                           |      | 902,264   |      |   | 2,112,337  |  |   | 1,780,854 
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|Total interest expense                                                                                        |      |                             | 4,264,305 |                           |      | 3,556,962 |      |   | 8,358,285  |  |   | 6,912,642 
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|NET INTEREST INCOME                                                                                           |      |                             | 3,672,626 |                           |      | 3,789,669 |      |   | 7,307,855  |  |   | 7,585,344 
|                                                                                                              |      |                             |           |                          
|PROVISION FOR LOAN LOSSES                                                                                     |      |                             | 75,000    |                           |      | 75,000    |      |   | 150,000    |  |   | 150,000   
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                                                           |      |                             | 3,597,626 |                           |      | 3,714,669 |      |   | 7,157,855  |  |   | 7,435,344 
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|                                                                                                              |      |                             |           |                          
|OTHER INCOME:                                                                                                 |      |                             |           |                           |      |           |      |   |            |  |   |           
|Service charges                                                                                               |      |                             | 397,879   |                           |      | 404,270   |      |   | 773,359    |  |   | 777,821   
|Cash surrender value of life insurance                                                                        |      |                             | 92,700    |                           |      | 64,645    |      |   | 170,600    |  |   | 130,145   
|Other                                                                                                         |      |                             | 146,120   |                           |      | 129,983   |      |   | 290,918    |  |   | 245,899   
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|Total other income                                                                                            |      |                             | 636,699   |                           |      | 598,898   |      |   | 1,234,877  |  |   | 1,153,865 
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|OTHER EXPENSE:                                                                                                |      |                             |           |                           |      |           |      |   |            |  |   |           
|Salaries and employee benefits                                                                                |      |                             | 1,832,833 |                           |      | 1,855,364 |      |   | 3,837,283  |  |   | 3,749,251 
|Occupancy and equipment                                                                                       |      |                             | 719,242   |                           |      | 656,519   |      |   | 1,430,239  |  |   | 1,321,552 
|Federal insurance premiums                                                                                    |      |                             | 12,629    |                           |      | 13,112    |      |   | 25,530     |  |   | 27,621    
|Advertising                                                                                                   |      |                             | 120,503   |                           |      | 114,636   |      |   | 234,074    |  |   | 202,724   
|Professional services                                                                                         |      |                             | 167,937   |                           |      | 155,245   |      |   | 320,343    |  |   | 297,490   
|Other operating expenses                                                                                      |      |                             | 355,498   |                           |      | 358,741   |      |   | 693,117    |  |   | 685,216   
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|Total other expenses                                                                                          |      |                             | 3,208,642 |                           |      | 3,153,617 |      |   | 6,540,586  |  |   | 6,283,854 
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|INCOME BEFORE INCOME TAXES                                                                                    |      |                             | 1,025,683 |                           |      | 1,159,950 |      |   | 1,852,146  |  |   | 2,305,355 
|INCOME TAX EXPENSE                                                                                            |      |                             | 407,075   |                           |      | 459,827   |      |   | 732,164    |  |   | 902,486   
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|NET INCOME                                                                                                    |      | $                           | 618,608   |                           | $    | 700,123   |      | $ | 1,119,982  |  | $ | 1,402,869 
|                                                                                                              |      |                             |           |                           |      |           |      |   |            |  |   |           
|Earnings per share basic:                                                                                     |      | $                           | 0.08      |                           | $    | 0.08      |      | $ | 0.14       |  | $ | 0.17      
|Earnings per share diluted:                                                                                   |      | $                           | 0.08      |                           | $    | 0.08      |      | $ | 0.14       |  | $ | 0.17      



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##### Table of Contents

OCEAN SHORE HOLDING CO. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2007



|                                                                                           |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|------------------------------------------------------------------------------------------ |  | ------------ | ------ | -------------------------- | - | ---------- | ---------------------------------------- |  | -------------- | ---------- |  | -------------------------------------------- | ---------- | - | --------------------------------- | - | ---------- | --------------------------------------------- |  | - | ------------ | - |  | - | -------- | - |  | - | ---------- | -
|                                                                                           |  | Common Stock |        | Additional Paid-In Capital |   |            | Retained Earnings - Partially
Restricted |  | Treasury Stock |            |  | Common StockAcquired byEmployeeBenefits Plan |            |   | Deferred Compensation Plans Trust |   |            | Accumulated Other Comprehensive Income (Loss) |  |   | Total Equity |  
|BALANCEJanuary 1, 2007                                                                    |  | $            | 87,627 |                            | $ | 37,299,692 |                                          |  | $              | 30,781,914 |  | $                                            | (2,190,882 | ) |                                   | $ | (2,747,990 | )                                             |  | $ | (416,420     | ) |  | $ | (263,427 | ) |  | $ | 62,550,514 |  
|Comprehensive income:                                                                      |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|Net income                                                                                 |  |              |        |                            |   |            |                                          |  |                | 1,119,982  |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 1,119,982  |  
|Other comprehensive loss                                                                  |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|                                                                                           |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|Unrealized holding (loss)  available for sale securities                                  |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   | (270,336 | ) |  |   | (270,336   | )
|                                                                                           |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|(net of tax $175,794)                                                                      |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|Comprehensive income:                                                                      |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 849,646    |  
|Purchase of treasury stock                                                                 |  |              |        |                            |   |            |                                          |  |                |            |  |                                              | (1,156,503 | ) |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | (1,156,503 | )
|Restricted stock APIC adjustment                                                           |  |              |        |                            |   | 18,296     |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 18,296     |  
|Unallocated ESOP shares committed to employees                                             |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   | 114,500    |                                               |  |   |              |   |  |   |          |   |  |   | 114,500    |  
|Excess of fair value above cost of ESOP shares committed to be released                    |  |              |        |                            |   | 36,755     |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 36,755     |  
|Restricted stock shares                                                                    |  |              |        |                            |   | 198,712    |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 198,712    |  
|Stock options                                                                              |  |              |        |                            |   | 119,839    |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 119,839    |  
|Purchase of shares by deferred compensation plans trust                                    |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   | (30,080      | ) |  |   |          |   |  |   | (30,080    | )
|                                                                                           |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|BALANCEJune 30, 2007                                                                      |  | $            | 87,627 |                            | $ | 37,673,294 |                                          |  | $              | 31,901,896 |  | $                                            | (3,347,385 | ) |                                   | $ | (2,633,490 | )                                             |  | $ | (446,500     | ) |  | $ | (533,763 | ) |  | $ | 62,701,679 |  
|                                                                                           |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|FOR THE SIX MONTHS ENDED JUNE 30, 2006                                                     | 
|BALANCEJanuary 1, 2006                                                                    |  | $            | 87,627 |                            | $ | 38,392,348 |                                          |  | $              | 27,633,345 |  | $                                            |           |   |                                   | $ | (4,798,480 | )                                             |  | $ | (373,607     | ) |  | $ | (372,951 | ) |  | $ | 60,568,282 |  
|Comprehensive income:                                                                      |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|Net income                                                                                 |  |              |        |                            |   |            |                                          |  |                | 1,402,869  |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 1,402,869  |  
|Net change in unrealized loss on securities available for sale, net of taxes of $(109,522) |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   | (341,211 | ) |  |   | (341,211   | )
|                                                                                           |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|Comprehensive income                                                                       |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 1,061,658  |  
|Reclassification upon adoption of SFAS 123(R)                                              |  |              |        |                            |   | (1,821,490 | )                                        |  |                |            |  |                                              |            |   |                                   |   | 1,821,490  |                                               |  |   |              |   |  |   |          |   |  |   |           |  
|Excess of fair market value above cost of ESOP shares committed to be released             |  |              |        |                            |   | 23,644     |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 23,644     |  
|Unallocated ESOP shares committed to employees                                             |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   | 114,500    |                                               |  |   |              |   |  |   |          |   |  |   | 114,500    |  
|Purchase of treasury stock                                                                 |  |              |        |                            |   |            |                                          |  |                |            |  |                                              | (362,204   | ) |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | (362,204   | )
|Restricted stock shares                                                                    |  |              |        |                            |   | 198,712    |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 198,712    |  
|Stock options                                                                              |  |              |        |                            |   | 153,018    |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   | 153,018    |  
|Purchase of shares by deferred compensation plans trust                                    |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   | (21,483      | ) |  |   |          |   |  |   | (21,483    | )
|                                                                                           |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  
|BALANCEJune 30, 2006                                                                      |  | $            | 87,627 |                            | $ | 36,946,232 |                                          |  | $              | 29,036,214 |  | $                                            | (362,204   | ) |                                   | $ | (2,862,490 | )                                             |  | $ | (395,090     | ) |  | $ | (714,162 | ) |  | $ | 61,736,127 |  
|                                                                                           |  |              |        |                            |   |            |                                          |  |                |            |  |                                              |            |   |                                   |   |            |                                               |  |   |              |   |  |   |          |   |  |   |            |  

See notes to unaudited condensed consolidated financial statements.



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OCEAN SHORE HOLDING CO. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



|                                                                                   |  |                           |             |   |      |   |             |  
|---------------------------------------------------------------------------------- |  | ------------------------- | ----------- | - | ---- | - | ----------- | -
|                                                                                   |  | Six Months Ended June 30, |            
|                                                                                   |  | 2007                      |             |   | 2006 |  
|OPERATING ACTIVITIES:                                                              |  |                           |             |   |      |   |             |  
|Net income                                                                         |  | $                         | 1,119,982   |   |      | $ | 1,402,869   |  
|Adjustments to reconcile net income to net cash provided by operating activities:  |  |                           |             |   |      |   |             |  
|Depreciation and amortization                                                      |  |                           | 847,818     |   |      |   | 577,343     |  
|Provision for loan losses                                                          |  |                           | 150,000     |   |      |   | 150,000     |  
|Deferred income taxes                                                              |  |                           |            |   |      |   | 34,691      |  
|Stock based compensation expense                                                   |  |                           | 488,101     |   |      |   | 489,875     |  
|Loss on disposal of office properties and equipment                                |  |                           | 408         |   |      |   | 229         |  
|Cash surrender value of life insurance                                             |  |                           | (170,600    | ) |      |   | (130,145    | )
|Changes in assets and liabilities which provided (used) cash:                      |  |                           |             |   |      |   |             |  
|Accrued interest receivable                                                        |  |                           | (126,204    | ) |      |   | (30,691     | )
|Prepaid expenses and other assets                                                  |  |                           | (1,104,830  | ) |      |   | (147,776    | )
|Accrued interest payable                                                           |  |                           | 110,250     |   |      |   | 28,125      |  
|Other liabilities                                                                  |  |                           | 1,267,866   |   |      |   | 135,101     |  
|                                                                                   |  |                           |             |   |      |   |             |  
|Net cash provided by operating activities                                          |  |                           | 2,582,791   |   |      |   | 2,509,621   |  
|                                                                                   |  |                           |             |   |      |   |             |  
|INVESTING ACTIVITIES:                                                              |  |                           |             |   |      |   |             |  
|Principal collected on:                                                            |  |                           |             |   |      |   |             |  
|Mortgage-backed securities available for sale                                      |  |                           | 3,825,312   |   |      |   | 4,312,160   |  
|Mortgage-backed securities held to maturity                                        |  |                           | 277,562     |   |      |   | 434,468     |  
|Loans originated, net of repayments                                                |  |                           | (31,357,456 | ) |      |   | (17,302,998 | )
|Purchases of: Loans receivable                                                     |  |                           | (1,484,000  | ) |      |   |             |  
|Mortgage-backed securities held to maturity                                        |  |                           |            |   |      |   | (523,429    | )
|Investment securities held to maturity                                             |  |                           | (2,955,673  | ) |      |   | (788,431    | )
|Investment securities available for sale                                           |  |                           | (2,000,000  | ) |      |   |            |  
|Federal Home Loan Bank stock                                                       |  |                           | (988,700    | ) |      |   | (1,231,600  | )
|Office properties and equipment                                                    |  |                           | (116,945    | ) |      |   | (308,533    | )
|Life insurance contracts                                                           |  |                           | (2,000,000  | ) |      |   |            |  
|Proceeds from sales of:                                                            |  |                           |             |   |      |   |             |  
|Federal Home Loan Bank stock                                                       |  |                           | 121,500     |   |      |   | 823,500     |  
|Proceeds from maturities of:                                                       |  |                           |             |   |      |   |             |  
|Investment securities held to maturity                                             |  |                           |            |   |      |   | 4,292,600   |  
|Investment securities available for sale                                           |  |                           | 3,000,000   |   |      |   | 4,730,713   |  
|                                                                                   |  |                           |             |   |      |   |             |  
|Net cash (used in) investing activities                                            |  |                           | (33,678,400 | ) |      |   | (5,561,550  | )
|                                                                                   |  |                           |             |   |      |   |             |  
|FINANCING ACTIVITIES:                                                              |  |                           |             |   |      |   |             |  
|Increase in deposits                                                               |  |                           | 396,131     |   |      |   | 11,040,923  |  
|(Decrease) in securities sold under agreements to repurchase                       |  |                           | (360,000    | ) |      |   | (11,240,000 | )
|Advances from the Federal Home Loan Bank                                           |  |                           | 18,000,000  |   |      |   | 17,000,000  |  
|Purchase of treasury stock                                                         |  |                           | (1,156,503  | ) |      |   | (362,204    | )
|Purchase of shares by deferred compensation plans trust                            |  |                           | (30,080     | ) |      |   | (21,483     | )
|Increase in advances from borrowers for taxes and insurance                        |  |                           | 420,622     |   |      |   | 278,292     |  
|                                                                                   |  |                           |             |   |      |   |             |  
|Net cash provided by financing activities                                          |  |                           | 17,270,170  |   |      |   | 16,695,528  |  
|                                                                                   |  |                           |             |   |      |   |             |  
|NET (DECREASE)INCREASE IN CASH AND CASH EQUIVALENTS                                |  |                           | (13,825,439 | ) |      |   | 13,643,599  |  
|                                                                                   |  |                          
|CASH AND CASH EQUIVALENTSBeginning of period                                      |  |                           | 33,356,934  |   |      |   | 13,400,085  |  
|                                                                                   |  |                           |             |   |      |   |             |  
|CASH AND CASH EQUIVALENTSEnd of period                                            |  | $                         | 19,531,495  |   |      | $ | 27,043,684  |  
|                                                                                   |  |                           |             |   |      |   |             |  
|                                                                                   |  |                          
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATIONCash paid during the period for: |  |                           |             |   |      |   |             |  
|Interest                                                                           |  | $                         | 8,248,035   |   |      | $ | 6,884,517   |  
|                                                                                   |  |                           |             |   |      |   |             |  
|Income taxes                                                                       |  | $                         | 715,000     |   |      | $ | 1,000,000   |  
|                                                                                   |  |                           |             |   |      |   |             |  

See notes to unaudited condensed consolidated financial statements.



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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement PresentationThe unaudited condensed consolidated financial statements include the accounts of Ocean Shore
Holding Co. (the Company) and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements were prepared in
accordance with instructions to Form 10-Q, and therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations, changes in stockholders equity and cash flows in conformity
with accounting principles generally accepted in the United States of America. However, all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the consolidated financial statements have been
included. These financial statements should be read in conjunction with the audited consolidated financial statements and the accompanying notes thereto included in the Companys Annual Report on Form 10-K for the period ended December 31,
2006. The results for the three and six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2007 or any other period.

Use of Estimates in the Preparation of Financial StatementsThe preparation of the consolidated financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting period. The most significant estimates relate to the allowance for loan losses and deferred income taxes. Actual results could differ from those estimates.

New Accounting PronouncementsIn February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments.
This statement amends FASB Statements No. 133, Accounting for Derivative Instruments and Hedging Activities, and No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. This statement
resolves issues addressed in Statement 133 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interest in Securitized Financial Assets. This Statement is effective for all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006. The adoption of SFAS No. 155 did not have a material effect on the Companys financial position or results of operations.

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets  an amendment of FASB Statement No. 140.
This statement addresses the recognition and measurement of separately recognized servicing rights. The statement clarifies when a servicing right should be separately recognized, requires servicing rights to be initially measured at fair
value, and allows an entity to choose to subsequently measure its servicing rights at fair value. The Statement is effective as of the beginning of an entitys first fiscal year that begins after September 15, 2006. The adoption
of SFAS No. 156 did not have a material effect on the Companys financial position or results of operations.

In July 2006, the FASB issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement No. 109 ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an
enterprises financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. This Interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN
48 is effective for fiscal years beginning after December 15, 2006. The adoption of FIN



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48 did not have an effect on the Companys financial position or results of operations. When applicable, accrued interest and any related accrued
penalties on uncertain income tax positions are recognized in the provision for income taxes. As of January 1, 2007, the company had no unrecognized tax benefits. As of January 1, 2007, the tax years ended December 31, 2003, 2004,
2005 and 2006, remain subject to examination by all major tax jurisdictions. As of June 30, 2007, no audits were in process by a major tax jurisdiction that, if completed during the next twelve months, would be expected to result in a material
change to the Company's unrecognized tax benefits.

In September 2006, the FASB issued Statement No. 157, Fair Value
Measurements (SFAS No. 157). SFAS No. 157 (i) defines fair value, (ii) establishes a framework for measuring fair value in GAAP and (iii) expands disclosure requirements about fair value measurements.
SFAS No. 157 is effective for all financial statements issued for fiscal years beginning after November 15, 2007. The Company currently is considering the impact from the adoption of SFAS No. 157.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan amendment of
FASB Statements No. 87, 88, 106 and 132(R). This standard requires an employer to recognize the overfunded or underfunded status of a defined benefit and postretirement plan as an asset or liability in its statement of financial
position and to recognize changes in that funded status in the year in which the changes occur as a component of comprehensive income. The standard also requires an employer to measure the funded status of a plan as of the date of its year-end
statement of financial position. The requirement to recognize the funded status of a defined benefit postretirement plan is effective as of the end of the fiscal year ending after December 15, 2006. The impact of this pronouncement and guidance
did not have an effect on the Companys financial position or results of operations. The requirement to measure plan assets and benefit obligations as of the date of the employers fiscal year-end statement of financial position is
effective for the fiscal years ending after December 15, 2008. The Company is continuing to evaluate the impact of this pronouncement and does not expect that the guidance will have an effect on the Companys financial position or results
of operations.

The EITF reached a consensus on EITF Issue No. 06-4, The Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life Insurance Arrangements (EITF 06-4). EITF 06-4 addresses whether the postretirement benefit associated with an endorsement split-dollar life insurance arrangement is effectively settled
in accordance with Statement of Financial Accounting Standards No. 106, Employers Accounting for Postretirement Benefits Other Than Pensions and APB Opinion No. 12 Omnibus Opinion1967 upon entering into
such an arrangement. EITF 06-4 is effective for fiscal years beginning after December 15, 2007. The Company is considering the impact, if any, that may result from the adoption of EITF 06-4.

The EITF reached a consensus on EITF Issue No. 06-5, Accounting for Purchases of Life InsuranceDetermining the Amount that Could be Realized in
Accordance with FASB Technical Bulletin No. 85-4 (EITF 06-5). EITF 06-5 addresses (i) whether a policyholder should consider any additional amounts included in the contractual terms of the insurance policy other than
the cash surrender value in determining the amount that could be realized under the insurance contract in accordance with Technical Bulletin 85-4, (ii) whether a policyholder should consider the contractual ability to surrender all of the
individual-life policies (or certificates in a group policy) at the same time in determining the amount that could be realized under the insurance contract in accordance with Technical Bulletin 85-4 and (iii) whether the cash surrender value
component of the amount that could be realized under the insurance contract in accordance with Technical Bulletin 85-4 Accounting for Purchases of Life Insurance should be discounted in accordance with APB Opinion No. 21
Interest on Receivables and Payables, when contractual limitations on the ability to surrender a policy exist. EITF 06-5 is effective for fiscal years beginning after December 15, 2006. The Company has concluded that the adoption of
EITF 06-5 effective January 1, 2007, does not have a material impact to our consolidated financial statements.



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In February 2007, the FASB issued Statement No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities, (SFAS No. 159). SFAS No. 159 permits entities to choose to measure financial instruments and certain other items at fair value. Items eligible for fair value measurement option established by
this statement are (i) recognized financial assets and financial liabilities (with some exceptions), (ii) firm commitments that would otherwise not be recognized at inception and that involve only financial instruments,
(iii) nonfinancial insurance contracts and warranties that the insurer can settle by paying a third party to provide those goods or services and (iv) host financial instruments resulting from separation of an embedded nonfinancial
derivative instrument from a nonfinancial hybrid instrument. SFAS No. 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007. The Company is considering the impact, if any, that may
result from the adoption of SFAS No. 159.

2. INVESTMENT SECURITIES

Investment securities are summarized as follows:



|                                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|------------------------------------ |  | ----------------- | ---------- | ------------------- | - | ------------------- |  | ------------------- | ------- |  | - | ----------
|                                     |  | June 30, 2007    
|                                     |  | AmortizedCost     |            | GrossUnrealizedGain |   | GrossUnrealizedLoss |  | EstimatedFair Value
|Held to Maturity                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Debt securities:                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|U.S. Government                      |  | $                 | 2,493,446  |                     | $ | 1,867               |  | $                   |        |  | $ | 2,495,313 
|Municipal securities                 |  |                   | 518,109    |                     |   |                    |  |                     |        |  |   | 518,109   
|                                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Totals                               |  | $                 | 3,011,555  |                     | $ | 1,867               |  | $                   |        |  | $ | 3,013,422 
|                                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Available for Sale                   |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Debt securities:                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|U.S. Government and Federal Agencies |  | $                 | 1,273,291  |                     | $ |                    |  | $                   | 35,446  |  | $ | 1,237,845 
|Municipal securities                 |  |                   | 2,955,827  |                     |   | 37,199              |  |                     |        |  |   | 2,993,026 
|Corporate                            |  |                   | 10,193,304 |                     |   | 200,862             |  |                     | 224,177 |  |   | 10,169,989
|Mutual Funds                         |  |                   | 8,012,172  |                     |   | 175,428             |  |                     | 277,970 |  |   | 7,909,630 
|                                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Totals                               |  | $                 | 22,434,594 |                     | $ | 413,489             |  | $                   | 537,593 |  | $ | 22,310,490
|                                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|                                     | 
|                                     |  | December 31, 2006
|                                     |  | AmortizedCost     |            | GrossUnrealizedGain |   | GrossUnrealizedLoss |  | EstimatedFair Value
|Available for Sale                   |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Debt securities:                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|U.S. Government and Federal Agencies |  | $                 | 1,358,777  |                     | $ |                    |  | $                   | 39,981  |  | $ | 1,318,796 
|Municipal securities                 |  |                   | 2,954,971  |                     |   | 53,948              |  |                     |        |  |   | 3,008,919 
|Corporate                            |  |                   | 11,357,234 |                     |   | 231,557             |  |                     | 128,283 |  |   | 11,460,508
|Mutual Funds                         |  |                   | 8,012,172  |                     |   | 192,094             |  |                     | 232,874 |  |   | 7,971,392 
|                                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Totals                               |  | $                 | 23,683,154 |                     | $ | 477,599             |  | $                   | 401,138 |  | $ | 23,759,615
|                                     |  |                   |            |                     |   |                     |  |                     |         |  |   |           



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The following table provides the gross unrealized losses and fair value, aggregated by investment category and length of
time the individual securities have been in a continuous unrealized loss position at June 30, 2007 and December 31, 2006:



|                                     |  |                     |           |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |        
|------------------------------------ |  | ------------------- | --------- | ------------------- | - | ------------------- |  | ------------------- | ---------- | ------------------- | - | ------------------- |  | - | ---------- |  | - | -------
|                                     |  | June 30, 2007      
|                                     |  | Less Than 12 Months |           | 12 Months or Longer |   | Total              
|                                     |  | EstimatedFair Value |           | GrossUnrealizedLoss |   | EstimatedFair Value |  | GrossUnrealizedLoss |            | EstimatedFair Value |   | GrossUnrealizedLoss
|Debt securities -                    |  |                     |           |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |        
|U.S. Government and Federal Agencies |  | $                   |          |                     | $ |                    |  | $                   | 1,237,845  |                     | $ | 35,446              |  | $ | 1,237,845  |  | $ | 35,446 
|Corporate                            |  |                     |          |                     |   |                    |  |                     | 2,286,282  |                     |   | 224,177             |  |   | 2,286,282  |  |   | 224,177
|Mutual Funds                         |  |                     |          |                     |   |                    |  |                     | 7,731,606  |                     |   | 277,971             |  |   | 7,731,606  |  |   | 277,971
|                                     |  |                     |           |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |        
|Totals                               |  | $                   |          |                     | $ |                    |  | $                   | 11,255,733 |                     | $ | 537,594             |  | $ | 11,255,733 |  | $ | 537,594
|                                     |  |                     |           |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |        
|                                     | 
|                                     |  | December 31, 2006  
|                                     |  | Less Than 12 Months |           | 12 Months or Longer |   | Total              
|                                     |  | EstimatedFair Value |           | GrossUnrealizedLoss |   | EstimatedFair Value |  | GrossUnrealizedLoss |            | EstimatedFair Value |   | GrossUnrealizedLoss
|Debt securities -                    |  |                     |           |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |        
|U.S. Government and Federal Agencies |  | $                   |          |                     | $ |                    |  | $                   | 1,318,796  |                     | $ | 39,981              |  | $ | 1,318,796  |  | $ | 39,981 
|Corporate                            |  |                     | 2,110,976 |                     |   | 27,517              |  |                     | 2,409,891  |                     |   | 100,766             |  |   | 4,520,867  |  |   | 128,283
|Mutual Funds                         |  |                     |          |                     |   |                    |  |                     | 7,776,702  |                     |   | 232,874             |  |   | 7,776,702  |  |   | 232,874
|                                     |  |                     |           |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |        
|Totals                               |  | $                   | 2,110,976 |                     | $ | 27,517              |  | $                   | 11,505,389 |                     | $ | 373,621             |  | $ | 13,616,365 |  | $ | 401,138
|                                     |  |                     |           |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |        

Management believes that the estimated fair value of the securities is dependent upon the movement in market
interest rate and the underlying credit rating of investee and that the unrealized losses are temporary. The determination of whether a decline in market value is other than temporary is necessarily a matter of subjective judgment. The timing and
amount of any realized losses reported in the Companys financial statements could vary if conclusions other than those made by management were to determine whether an other than temporary impairment exists.

At June 30, 2007, two debt securities had aggregate depreciation of 8.93% from the Companys amortized cost basis for 12 months or longer. The unrealized loss
on debt securities relates principally to the changes in market interest rates. U.S. Government and federal agencies securities represent U.S. treasury and federal agency issues and are currently rated AAA by at least one bond credit rating
agency. The corporate securities have no identified credit issues and have a current average credit rating of A. As management has the ability and intent to hold these debt securities until a forecasted recovery, which may be maturity, no
decline is deemed to be other than temporary.

At June 30, 2007, two mutual fund holdings had aggregate depreciation of 3.47% from the Companys
amortized cost basis for 12 months or longer. Although the mutual fund holdings have unrealized losses, no credit issues have been identified that cause management to believe that declines in market value are other than temporary as the securities
in the portfolios of the mutual fund holdings are AAA rated



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government or agencies bonds. Although the fair value of the mutual fund holdings will fluctuate as the market interest rates move, management believes
that the fair value will recover as the securities held in the mutual fund portfolios mature and are reinvested at market rate yielding investments. Management has the ability and intent to hold these mutual funds until such time that the
values recover.

The amortized cost and estimated fair value of debt securities held to maturity and available for sale at June 30, 2007 by
contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



|                                   |  |                  |           |                               |   |               |  |                     |            |  |   |           
|---------------------------------- |  | ---------------- | --------- | ----------------------------- | - | ------------- |  | ------------------- | ---------- |  | - | ----------
|                                   |  | June 30, 2007   
|                                   |  | Held to Maturity |           | Available for Sale Securities
|                                   |  | AmortizedCost    |           | EstimatedFair Value           |   | AmortizedCost |  | EstimatedFair Value
|Due within 1 year                  |  | $                | 3,011,555 |                               | $ | 3,013,422     |  | $                   |            |  | $ |           
|Due after 1 year through 5 years   |  |                  |           |                               |   |               |  |                     | 1,273,291  |  |   | 1,237,845 
|Due after 5 years through 10 years |  |                  |           |                               |   |               |  |                     | 1,000,000  |  |   | 795,000   
|Due after 10 years                 |  |                  |           |                               |   |               |  |                     | 12,149,131 |  |   | 12,368,015
|                                   |  |                  |           |                               |   |               |  |                     |            |  |   |           
|Totals                             |  | $                | 3,011,555 |                               | $ | 3,013,422     |  | $                   | 14,422,422 |  | $ | 14,400,860
|                                   |  |                  |           |                               |   |               |  |                     |            |  |   |           

Mutual funds had an amortized cost of $8,012,172 and a fair value of $7,909,630 as of June 30, 2007.



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3. MORTGAGE-BACKED SECURITIES

Mortgage-backed securities are summarized as follows:



|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|------------------------------------------ |  | ----------------- | ---------- | ------------------- | - | ------------------- |  | ------------------- | ------- |  | - | ----------
|                                           |  | June 30, 2007    
|                                           |  | AmortizedCost     |            | GrossUnrealizedGain |   | GrossUnrealizedLoss |  | EstimatedFair Value
|Held to Maturity                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|GNMA pass-through certificates             |  | $                 | 110,640    |                     | $ | 2,950               |  | $                   |        |  | $ | 113,590   
|FHLMC pass-through certificates            |  |                   | 519,473    |                     |   | 144                 |  |                     | 2,726   |  |   | 516,891   
|FNMA pass-through certificates             |  |                   | 4,357,568  |                     |   |                    |  |                     | 205,421 |  |   | 4,152,147 
|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Totals                                     |  | $                 | 4,987,681  |                     | $ | 3,094               |  | $                   | 208,147 |  | $ | 4,782,628 
|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Available for Sale                         |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|FHLMC pass-through certificates            |  | $                 | 2,887,730  |                     | $ | 40,210              |  | $                   | 6,179   |  | $ | 2,921,761 
|GNMA pass-through certificates             |  |                   | 8,713,313  |                     |   | 7,671               |  |                     | 255,463 |  |   | 8,465,521 
|FNMA pass-through certificates             |  |                   | 24,148,618 |                     |   | 17,608              |  |                     | 553,070 |  |   | 23,613,156
|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Totals                                     |  | $                 | 35,749,661 |                     | $ | 65,489              |  | $                   | 814,712 |  | $ | 35,000,438
|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|                                           | 
|                                           |  | December 31, 2006
|                                           |  | AmortizedCost     |            | GrossUnrealizedGain |   | GrossUnrealizedLoss |  | EstimatedFair Value
|Held to Maturity                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|GNMA pass-through certificates             |  | $                 | 130,408    |                     | $ | 3,225               |  | $                   |        |  | $ | 133,663   
|FHLMC pass-through certificates            |  |                   | 523,747    |                     |   | 5,799               |  |                     |        |  |   | 529,546   
|FNMA pass-through certificates             |  |                   | 4,611,908  |                     |   | 1,090               |  |                     | 124,186 |  |   | 4,488,812 
|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Totals                                     |  | $                 | 5,266,063  |                     | $ | 10,144              |  | $                   | 124,186 |  | $ | 5,152,021 
|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Available for Sale                         |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|FHLMC pass-through certificates            |  | $                 | 9,577,848  |                     | $ | 9,060               |  | $                   | 192,407 |  | $ | 9,394,501 
|GNMA pass-through certificates             |  |                   | 3,643,514  |                     |   | 28,973              |  |                     | 22,071  |  |   | 3,650,416 
|FNMA pass-through certificates             |  |                   | 26,381,481 |                     |   | 32,278              |  |                     | 359,437 |  |   | 26,054,322
|Small Business Administration certificates |  |                   | 6,139      |                     |   |                    |  |                     | 53      |  |   | 6,086     
|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           
|Totals                                     |  | $                 | 39,608,982 |                     | $ | 70,311              |  | $                   | 573,968 |  | $ | 39,105,325
|                                           |  |                   |            |                     |   |                     |  |                     |         |  |   |           



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The following table provides the gross unrealized losses and estimated fair value, aggregated by investment category and
length of time the individual securities have been in a continuous unrealized loss position, at June 30, 2007 and December 31, 2006:



|                                                   |  |                     |            |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |          
|-------------------------------------------------- |  | ------------------- | ---------- | ------------------- | - | ------------------- |  | ------------------- | ---------- | ------------------- | - | ------------------- |  | - | ---------- |  | - | ---------
|                                                   |  | June 30, 2007      
|                                                   |  | Less Than 12 Months |            | 12 Months or Longer |   | Total              
|                                                   |  | EstimatedFair Value |            | GrossUnrealizedLoss |   | EstimatedFair Value |  | GrossUnrealizedLoss |            | EstimatedFair Value |   | GrossUnrealizedLoss
|FHLMC pass-through certificates- held-to- maturity |  | $                   | 514,903    |                     | $ | 2,726               |  | $                   |           |                     | $ |                    |  | $ | 514,903    |  | $ | 2,726    
|FNMA pass-through certificates- held-to- maturity  |  |                     | 120,422    |                     |   | 133                 |  |                     | 4,031,725  |                     |   | 205,288             |  |   | 4,152,147  |  |   | 205,421  
|FHLMC pass-through certificates                    |  |                     | 1,372,891  |                     |   | 9,418               |  |                     | 6,619,902  |                     |   | 246,045             |  |   | 7,992,793  |  |   | 255,463  
|GNMA pass-through certificates                     |  |                     |           |                     |   |                    |  |                     | 692,458    |                     |   | 6,179               |  |   | 692,458    |  |   | 6,179    
|FNMA pass-through certificates                     |  |                     | 10,424,075 |                     |   | 255,943             |  |                     | 10,137,449 |                     |   | 297,128             |  |   | 20,561,524 |  |   | 553,070  
|                                                   |  |                     |            |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |          
|Totals                                             |  | $                   | 12,432,291 |                     | $ | 268,220             |  | $                   | 21,481,534 |                     | $ | 754,640             |  | $ | 33,913,825 |  | $ | 1,022,859
|                                                   |  |                     |            |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |          
|                                                   | 
|                                                   |  | December 31, 2006  
|                                                   |  | Less Than 12 Months |            | 12 Months or Longer |   | Total              
|                                                   |  | EstimatedFair Value |            | GrossUnrealizedLoss |   | EstimatedFair Value |  | GrossUnrealizedLoss |            | EstimatedFair Value |   | GrossUnrealizedLoss
|FNMA pass-through certificates-held-to- maturity   |  | $                   |           |                     | $ |                    |  | $                   | 4,358,260  |                     | $ | 124,186             |  | $ | 4,358,260  |  | $ | 124,186  
|SBA pass-through certificates                      |  |                     |           |                     |   |                    |  |                     | 6,086      |                     |   | 53                  |  |   | 6,086      |  |   | 53       
|FHLMC pass-through certificates                    |  |                     |           |                     |   |                    |  |                     | 8,600,208  |                     |   | 192,407             |  |   | 8,600,208  |  |   | 192,407  
|GNMA pass-through certificates                     |  |                     |           |                     |   |                    |  |                     | 1,090,169  |                     |   | 22,071              |  |   | 1,090,169  |  |   | 22,071   
|FNMA pass-through certificates                     |  |                     | 11,102,703 |                     |   | 66,259              |  |                     | 12,792,146 |                     |   | 293,178             |  |   | 23,894,849 |  |   | 359,437  
|                                                   |  |                     |            |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |          
|Totals                                             |  | $                   | 11,102,703 |                     | $ | 66,259              |  | $                   | 26,846,869 |                     | $ | 631,895             |  | $ | 37,949,572 |  | $ | 698,154  
|                                                   |  |                     |            |                     |   |                     |  |                     |            |                     |   |                     |  |   |            |  |   |          

Management believes that the estimated fair value of the securities is dependent upon the movement in market
interest rates and that the unrealized losses are temporary. At June 30, 2007, 21 mortgage-backed securities had aggregate depreciation of 3.05% from the Companys amortized cost basis for 12 months or longer. The unrealized
losses relate principally to the changes in market interest rates. These securities represent asset backed federal agency issues and are currently rated AAA by at least one bond credit rating agency. As management has the ability and
intent to hold these debt securities until a forecasted recovery, which may be maturity, no declines are deemed to be other than temporary.



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4. LOANS RECEIVABLE  NET

Loans receivable consist of the following:



|                                                         |  |                           |             |   |                   |   |             |  
|-------------------------------------------------------- |  | ------------------------- | ----------- | - | ----------------- | - | ----------- | -
|                                                         |  | June 30, 2007             |             |   | December 31, 2006 |  
|Real estatemortgage:                                    |  |                           |             |   |                   |   |             |  
|One-to-four family residential                           |  | $                         | 352,028,418 |   |                   | $ | 316,567,389 |  
|Commercial and multi-family                              |  |                           | 32,328,991  |   |                   |   | 32,661,642  |  
|                                                         |  |                           |             |   |                   |   |             |  
|Total real estate-mortgage                               |  |                           | 384,357,409 |   |                   |   | 349,229,031 |  
|                                                         |  |                           |             |   |                   |   |             |  
|Real estateconstruction:                                |  |                           |             |   |                   |   |             |  
|Residential                                              |  |                           | 6,769,053   |   |                   |   | 6,983,084   |  
|Commercial                                               |  |                           | 3,694,993   |   |                   |   | 6,803,828   |  
|                                                         |  |                           |             |   |                   |   |             |  
|Total real estateconstruction                           |  |                           | 10,464,046  |   |                   |   | 13,786,912  |  
|                                                         |  |                           |             |   |                   |   |             |  
|Commercial                                               |  |                           | 16,264,317  |   |                   |   | 16,824,623  |  
|                                                         |  |                           |             |   |                   |   |             |  
|Consumer:                                                |  |                           |             |   |                   |   |             |  
|Home equity                                              |  |                           | 54,263,405  |   |                   |   | 53,178,740  |  
|Other consumer loans                                     |  |                           | 944,784     |   |                   |   | 938,184     |  
|                                                         |  |                           |             |   |                   |   |             |  
|Total consumer loans                                     |  |                           | 55,208,189  |   |                   |   | 54,116,924  |  
|                                                         |  |                           |             |   |                   |   |             |  
|Total loans                                              |  |                           | 466,293,961 |   |                   |   | 433,957,490 |  
|Net deferred loan cost                                   |  |                           | 1,756,656   |   |                   |   | 1,434,850   |  
|Allowance for loan losses                                |  |                           | (2,202,030  | ) |                   |   | (2,049,913  | )
|                                                         |  |                           |             |   |                   |   |             |  
|Net total loans                                          |  | $                         | 465,848,586 |   |                   | $ | 433,342,427 |  
|                                                         |  |                           |             |   |                   |   |             |  
|                                                        
|Changes in the allowance for loan losses are as follows: | 
|                                                         | 
|                                                         |  | Six Months Ended June 30, |            
|                                                         |  | 2007                      |             |   | 2006              |  
|Balance, beginning of period                             |  | $                         | 2,049,913   |   |                   | $ | 1,752,667   |  
|Provision for loan loss                                  |  |                           | 150,000     |   |                   |   | 150,000     |  
|Charge-offs                                              |  |                           | (747        | ) |                   |   | (7,105      | )
|Recoveries                                               |  |                           | 2,864       |   |                   |   | 1,292       |  
|                                                         |  |                           |             |   |                   |   |             |  
|Balance, end of period                                   |  | $                         | 2,202,030   |   |                   | $ | 1,896,854   |  
|                                                         |  |                           |             |   |                   |   |             |  



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5. DEPOSITS

Deposits
consist of the following major classifications:



|                                       |  |               |             |                              |                   |   |        |   |                              |  |      |  
|-------------------------------------- |  | ------------- | ----------- | ---------------------------- | ----------------- | - | ------ | - | ---------------------------- |  | ---- | -
|                                       |  | June 30, 2007 |             |                              | December 31, 2006 |  
|                                       |  | Amount        |             | WeightedAverageInterest Rate |                   |   | Amount |   | WeightedAverageInterest Rate | 
|NOW and other demand deposit accounts  |  | $             | 202,584,609 |                              | 2.12              | % |        | $ | 205,337,742                  |  | 1.99 | %
|Passbook savings and club accounts     |  |               | 59,285,236  |                              | 1.12              | % |        |   | 61,616,971                   |  | 1.13 | %
|                                       |  |               |             |                              |                   |   |        |   |                              |  |      |  
|Subtotal                               |  |               | 261,869,846 |                              |                   |   |        |   | 266,954,713                  |  |      |  
|                                       |  |               |             |                              |                   |   |        |   |                              |  |      |  
|Certificates with original maturities: |  |               |             |                              |                   |   |        |   |                              |  |      |  
|Within one year                        |  |               | 77,604,980  |                              | 4.77              | % |        |   | 74,507,694                   |  | 4.58 | %
|One to three years                     |  |               | 41,611,013  |                              | 4.60              | % |        |   | 35,873,119                   |  | 4.15 | %
|Three years and beyond                 |  |               | 36,334,542  |                              | 4.75              | % |        |   | 39,688,725                   |  | 4.87 | %
|                                       |  |               |             |                              |                   |   |        |   |                              |  |      |  
|Total certificates                     |  |               | 155,550,535 |                              |                   |   |        |   | 150,069,538                  |  |      |  
|                                       |  |               |             |                              |                   |   |        |   |                              |  |      |  
|Total                                  |  | $             | 417,420,381 |                              |                   |   |        | $ | 417,024,251                  |  |      |  
|                                       |  |               |             |                              |                   |   |        |   |                              |  |      |  

The aggregate amount of certificate accounts in denominations of $100,000 or more at June 30, 2007 and
December 31, 2006 amounted to $50,477,858 and $49,573,074, respectively.

Municipal demand deposit accounts in denominations of $100,000 or more at
June 30, 2007 and December 31, 2006 amounted to $61,618,777 and $67,786,672, respectively.

6. EARNINGS PER SHARE

Basic net income per share is based upon the weighted average number of common shares outstanding, while diluted net income per share is based upon the weighted average
number of common shares outstanding and common share equivalents that would arise from the exercise of dilutive securities.

The difference between the
common shares issued and basic average shares outstanding, for the purposes of calculating basic earnings per share (EPS), is a result of subtracting unallocated ESOP shares, unvested restricted stock shares and treasury stock purchases
from issued shares.

The calculated basic and dilutive EPS are as follows:



|                                    |  |                             |           |                           |   |           |  |      |           |  |   |          
|----------------------------------- |  | --------------------------- | --------- | ------------------------- | - | --------- |  | ---- | --------- |  | - | ---------
|                                    |  | Three Months Ended June 30, |           | Six Months Ended June 30,
|                                    |  | 2007                        |           | 2006                      |   | 2007      |  | 2006
|Numerator                           |  | $                           | 618,608   |                           | $ | 700,123   |  | $    | 1,119,982 |  | $ | 1,402,869
|Denominators:                       |  |                             |           |                           |   |           |  |      |           |  |   |          
|Basic average shares outstanding    |  |                             | 8,127,619 |                           |   | 8,290,981 |  |      | 8,147,779 |  |   | 8,293,774
|Effect of diluted securities        |  |                             | 107,846   |                           |   | 171,300   |  |      | 113,206   |  |   | 171,300  
|                                    |  |                             |           |                           |   |           |  |      |           |  |   |          
|Dilutive average shares outstanding |  |                             | 8,235,465 |                           |   | 8,462,281 |  |      | 8,260,985 |  |   | 8,465,074
|Earnings per share:                 |  |                             |           |                           |   |           |  |      |           |  |   |          
|Basic                               |  | $                           | 0.08      |                           | $ | 0.08      |  | $    | 0.14      |  | $ | 0.17     
|Diluted                             |  | $                           | 0.08      |                           | $ | 0.08      |  | $    | 0.14      |  | $ | 0.17     

At June 30, 2007 there were 380,038 outstanding options that were anti-dilutive.



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7. STOCK BASED COMPENSATION

The Companys 2005 Equity Based Incentive Plan (the Equity Plan) provides for the grant of shares of common stock of the Company to certain officers, directors and employees of the Company. In order to fund the grant of
shares under the Equity Plan, the Equity Plan Trust (the Trust) purchased 171,300 shares of the Companys common stock in the open market for approximately $2.0 million, an average price of $11.70 per share. The Company made
sufficient contributions to the Trust to fund these purchases. No additional purchases are expected to be made by the Trust under this plan. Pursuant to the terms of the plan, all 171,300 shares acquired by the Trust were granted to certain officers
and directors of the Company in August 2005. The Equity Plan shares will generally vest at the rate of 20% per year over five years. As of June 30, 2007, 34,260 shares were fully vested and no shares were forfeited.

Compensation expense related to the shares granted is recognized ratably over the five-year vesting period in an amount which totals the market price of the
Companys stock at the date of grant. During the three and six months ended June 30, 2007, approximately $99,000 and $199,000 was recognized in compensation expense for the plan, respectively.

The Equity Plan also authorizes the grant of stock options to officers, employees and directors of the Company to acquire shares of common stock with an exercise price
equal to the fair market value of the common stock on the grant date. Options will generally become vested and exercisable at the rate of 20% per year over five years. A total of 429,374 shares of common stock have been reserved for future
issuance pursuant to the Equity Plan, of which 396,000 were awarded on August 10, 2005 and 24,000 were awarded on November 21, 2006. As of June 30, 2007, 390,000 options were outstanding. During the three and six months ended
June 30, 2007, approximately $60,000 and $120,000, respectively, was recognized in compensation expense for the plan.

On January 1, 2006, the
Company adopted Statement of Financial Accounting Standards (SFAS) 123(R) using a modified prospective application. Accordingly, prior period amounts have not been restated. The adoption required a reclassification to additional paid in
capital of $(1,821,000) from common stock acquired by employee benefits plans trust. As of June 30, 2007, expenses totaling $363,000 remain to be recognized over the next 4.3 years.

The estimated fair value of options granted during 2006 was $2.52 per share. The fair value was estimated on the date of grant using the Black-Scholes Single Option Pricing Model with the following weighted average
assumptions used:



|                         |  |                              |  
|------------------------ |  | ---------------------------- | -
|                         |  | Year Ended December 31, 2006 |  
|Dividend yield           |  | 0.00                         | %
|Expected volatility      |  | 19.79                        | %
|Risk-free interest rate  |  | 4.50                         | %
|Expected life of options |  | 5.0                          |  

The dividend yield is zero because the Company has not declared any dividends and does not expect to declare any
over the life of the options. The risk-free interest rate used was based on the rates of treasury securities with maturities equal to the expected lives of the options.



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A summary of the status of the Companys stock options under the Equity Plan as of June 30, 2007 and changes
during the six months ended June 30, 2007 are presented below:



|                                           |                  |                                |   |                                 |   |      
|------------------------------------------ | ---------------- | ------------------------------ | - | ------------------------------- | - | -----
|                                           |                  | Six Months Ended June 30, 2007
|                                           | Number of shares |                                |   | Weighted average exercise price
|Outstanding at the beginning of the period |                  | 397,500                        |   |                                 | $ | 11.68
|Granted                                    |                  |                               |   |                                 |   |      
|Exercised                                  |                  |                               |   |                                 |   |      
|Forfeited                                  |                  | (7,500                         | ) |                                 | $ | 11.60
|Outstanding at the end of the period       |                  | 390,000                        |   |                                 | $ | 11.69
|Exercisable at the end of the period       |                  | 73,200                         |   |                                 | $ | 11.60

The following table summarizes all stock options outstanding under the Equity Plan as of June 30, 2007:



|               |                 |                     |                                |  |                                             |       |  |               
|-------------- | --------------- | ------------------- | ------------------------------ |  | ------------------------------------------- | ----- |  | --------------
|Exercise Price |                 | Options Outstanding
|               | Number ofShares |                     | Weighted AverageExercise Price |  | Weighted Average Remaining Contractual
Life
|$              | 11.60           |                     | 366,000                        |  | $                                           | 11.60 |  | 8.1 (in years)
|$              | 13.00           |                     | 24,000                         |  | $                                           | 13.00 |  | 9.4 (in years)



|8. | STOCK REPURCHASE PLAN
|-- | ---------------------

On April 18, 2007, the Companys
Board of Directors approved the repurchase of 200,000 shares of the Companys common stock in the open market. As of June 30, 2007, 41,700 shares had been purchased.



|9. | INCOME TAXES
|-- | ------------

Income taxes were $732,000 for an effective tax rate
of 39.5% for the six months ended June 30, 2007 compared to $902,000 for an effective tax rate of 39.1% from the same period in 2006.



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|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT

This Quarterly Report may contain forward-looking
statements within the meaning of the federal securities laws. These statements are not historical facts, but rather are statements based on Ocean Shore Holdings current expectations regarding its business strategies and their intended results
and its future performance. Forward-looking statements are preceded by terms such as expects, believes, anticipates, intends and similar expressions.

Managements ability to predict results or the effect of future plans or strategies is inherently uncertain. These factors include, but are not limited to, general
economic conditions, changes in the interest rate environment, legislative or regulatory changes that may adversely affect our business, changes in accounting policies and practices, changes in competition and demand for financial services, adverse
changes in the securities markets and changes in the quality or composition of the Companys loan or investment portfolios. Additional factors that may affect our results are discussed in our Annual Report on Form 10-K for the year ended
December 31, 2006 under Item 1. Business  Risk Factors. These factors should be considered in evaluating the forward-looking statements and undue reliance should not be placed on such statements. Ocean Shore Holding
assumes no obligation to update any forward-looking statements.

GENERAL

Ocean Shore Holding Co. (Ocean Shore Holding or the Company) is a federally chartered savings and loan holding company established in 1998 to be the holding company for Ocean City Home Bank
(the Bank). Ocean Shore Holdings business activity is the ownership of the outstanding capital stock of Ocean City Home Bank. Accordingly, the information set forth in this report, including the consolidated financial statements
and related financial data, relates primarily to the Bank.

The Bank is a federally chartered savings bank. We operate as a community-oriented financial
institution offering a wide range of financial services to consumers and businesses in our market area. We attract deposits from the general public, small businesses and municipalities and use those funds to originate real estate loans, small
commercial loans and consumer loans, which we hold primarily for investment.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2007 AND DECEMBER 31, 2006

Total assets of the Company increased by $20.0 million to $582.2 million at June 30, 2007, from $562.3 million at December 31, 2006. Loans
receivable, net, increased $32.5 million, investment and mortgage-backed securities decreased $2.8 million and cash and cash equivalents decreased by $13.8 million.

Investments

Investments increased $1.6 million to $25.3 million at June 30, 2007 from $23.8 million at
December 31, 2006. The increase was the result of purchases of $2.9 million offset by $1.3 million of called corporate bonds and decreases in valuation allowances. Mortgage-backed securities decreased by $4.4 million to $40.0 million from $44.4
million at December 31, 2006 due to normal monthly payments received. The Company had no mortgage backed securities with underlying collateral that would be considered subprime, which is defined as mortgage loans advanced to borrowers who do
not qualify for market interest rates because of problems with their credit history. All mortgage-backed securities owned by the Company as of June 30, 2007 possessed the highest possible investment credit rating.



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##### Table of Contents

Loans

Loans
receivable, net, increased $32.5 million to $465.8 million at June 30, 2007 from $433.3 million at December 31, 2006. Loan originations totaled $74.3 million for the six months ended June 30, 2007 resulting in a 28.1% increase over
the $58.0 million originated in six months ended June 30, 2006. Real estate mortgage loan originations totaled $52.8 million, real estate construction originations totaled $5.4 million, consumer loan originations totaled $12.5 million and
commercial loan originations totaled $3.6 million for the quarter-ended June 2007. Origination activity was offset by $41.6 million of normal loan payments and payoffs.

The following table summarizes changes in the loan portfolio in the six months ended June 30, 2007.



|                                 |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|-------------------------------- | ---------------------- | ------------- | ------- | - | ---------------- | - | ------- | -------- |  | - | -------- | - |  | ----- | -
|                                 |                        | June 30, 2007 |         |   | December 31,2006 |   |         | $ change |  |   | % change |  
|                                 | (Dollars in thousands) |              
|Real estate  mortgage:          |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|One-to-four-family residential   |                        | $             | 352,028 |   |                  | $ | 316,567 |          |  | $ | 35,461   |   |  | 11.2  | %
|Commercial and multi-family      |                        |               | 32,329  |   |                  |   | 32,662  |          |  |   | (333     | ) |  | (1.0  | )
|                                 |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|Total real estate  mortgage     |                        |               | 384,357 |   |                  |   | 349,229 |          |  |   | 35,128   |   |  | 10.1  |  
|Real estate  construction:      |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|Residential                      |                        |               | 6,769   |   |                  |   | 6,983   |          |  |   | (214     | ) |  | (3.1  | )
|Commercial                       |                        |               | 3,695   |   |                  |   | 6,804   |          |  |   | (3,109   | ) |  | (45.7 | )
|                                 |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|Total real estate  construction |                        |               | 10,464  |   |                  |   | 13,787  |          |  |   | (3,323   | ) |  | (24.1 | )
|Commercial                       |                        |               | 16,264  |   |                  |   | 16,825  |          |  |   | (560     | ) |  | (3.3  | )
|Consumer                         |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|Home equity                      |                        |               | 54,263  |   |                  |   | 53,179  |          |  |   | 1,085    |   |  | 2.0   |  
|Other consumer loans             |                        |               | 945     |   |                  |   | 938     |          |  |   | 6        |   |  | 0.7   |  
|                                 |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|Total consumer loans             |                        |               | 55,208  |   |                  |   | 54,117  |          |  |   | 1,091    |   |  | 2.0   |  
|Total loans                      |                        |               | 466,294 |   |                  |   | 433,957 |          |  |   | 32,337   |   |  | 7.5   |  
|                                 |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|Net deferred loan cost           |                        |               | 1,757   |   |                  |   | 1,435   |          |  |   | 322      |   |  | 22.4  |  
|Allowance for loan losses        |                        |               | (2,202  | ) |                  |   | (2,050  | )        |  |   | (152     | ) |  | (7.4  | )
|                                 |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  
|Net total loans                  |                        | $             | 465,849 |   |                  | $ | 433,342 |          |  | $ | 32,507   |   |  | 7.5   |  
|                                 |                        |               |         |   |                  |   |         |          |  |   |          |   |  |       |  

Non-Performing Assets

Non-performing assets totaled $321,000 at June 30, 2007. Net charge-offs (recoveries) were ($2,000) in the six months ended June 30, 2006, compared to $6,000 in the same period last year. The allowance for loan losses was 0.47% of
total loans at June 30, 2007 versus 0.44% and June 30, 2006.

The secondary mortgage market has been adversely impacted during the second quarter
of 2007 and through the filing date of this Form 10-Q by deteriorating investor demand for mortgage loan products, particularly with regard to subprime products, as investors are tightening credit standards and offering less favorable
pricing. For the three and six month periods ended June 30, 2007 and through the date of this filing, the Company has not experienced a decline in credit quality based on trends in net charge-offs, delinquencies, and nonperforming
assets. At both June 30, 2007 and December 31, 2006, the Company had no real estate loans that would be considered subprime loans, which is defined as mortgage loans advanced to borrowers who do not qualify for market interest rates
because of problems with their credit history. The Company does not originate subprime loans. The Company's lending standards are discussed in Item 1 of its Form 10-K for the year ended December 31, 2006.



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|                                                               |                |                          |       |      |  |   |       |  
|-------------------------------------------------------------- | -------------- | ------------------------ | ----- | ---- |  | - | ----- | -
|                                                               |                | Six Months EndedJune 30, |      
|                                                               | 2007           |                          |       | 2006 | 
|                                                               | (In thousands) |                         
|Allowance for loan losses:                                     |                |                          |       |      |  |   |       |  
|Allowance at beginning of period                               |                | $                        | 2,050 |      |  | $ | 1,753 |  
|Provision for loan losses                                      |                |                          | 150   |      |  |   | 150   |  
|Recoveries                                                     |                |                          | 3     |      |  |   | 1     |  
|Charge-offs                                                    |                |                          | 1     |      |  |   | 7     |  
|                                                               |                |                          |       |      |  |   |       |  
|Net (recoveries)charge-offs                                    |                |                          | (2    | )    |  |   | 6     |  
|                                                               |                |                          |       |      |  |   |       |  
|Allowance at end of period                                     |                | $                        | 2,202 |      |  | $ | 1,897 |  
|                                                               |                |                          |       |      |  |   |       |  
|Allowance for loan losses as a percent of total Loans          |                |                          | 0.47  | %    |  |   | 0.44  | %
|Allowance for loan losses as a percent of Non-performing loans |                |                          | 685.9 | %    |  |   | 385.5 | %



|                                                                             |                |               |      |   |                  |   |      |  
|---------------------------------------------------------------------------- | -------------- | ------------- | ---- | - | ---------------- | - | ---- | -
|                                                                             |                | June 30, 2007 |      |   | December 31,2006 |  
|                                                                             | (In thousands) |              
|Nonaccrual loans:                                                            |                |               |      |   |                  |   |      |  
|Real estate mortgage loans                                                   |                | $             | 77   |   |                  | $ | 415  |  
|Commercial                                                                   |                |               |     |   |                  |   |     |  
|Consumer loans                                                               |                |               | 244  |   |                  |   | 116  |  
|                                                                             |                |               |      |   |                  |   |      |  
|Total of non-accrual and 90 days or more past due loans                      |                | $             | 321  |   |                  | $ | 531  |  
|                                                                             |                |               |      |   |                  |   |      |  
|Total non-performing loans to total loans                                    |                |               | 0.07 | % |                  |   | 0.12 | %
|Total non-performing loans to total assets                                   |                |               | 0.06 | % |                  |   | 0.09 | %
|Total non-performing assets and troubled debt restructurings to total assets |                |               | 0.06 | % |                  |   | 0.09 | %

Deposits

Deposits increased by $396,000, or 0.1%, to $417.4 million at June 30, 2007 from $417.0 million at December 31, 2006. Non-interest bearing checking accounts increased $928,000, interest bearing demand deposits decreased $3.7
million, time deposits increased $5.5 million and savings accounts decreased $2.3 million. The company continued its focus on attracting core deposits. Customers are trending toward higher interest rate products.

The following table summarizes changes in deposits in the six months ended June 30, 2007.



|                                    |                        |              |         |                  |   |          |  |   |          |   |  |      |  
|----------------------------------- | ---------------------- | ------------ | ------- | ---------------- | - | -------- |  | - | -------- | - |  | ---- | -
|                                    |                        | June 30,2007 |         | December 31,2006 |   | $ change |  |   | % change |  
|                                    | (Dollars in thousands) |             
|Noninterest-bearing demand deposits |                        | $            | 36,152  |                  | $ | 35,224   |  | $ | 928      |   |  | 2.6  | %
|Interest-bearing demand deposits    |                        |              | 166,433 |                  |   | 170,114  |  |   | (3,681   | ) |  | (2.2 | )
|Savings accounts                    |                        |              | 59,285  |                  |   | 61,617   |  |   | (2,332   | ) |  | (3.8 | )
|Certificates of deposit             |                        |              | 155,551 |                  |   | 150,070  |  |   | 5,481    |   |  | 3.7  |  
|                                    |                        |              |         |                  |   |          |  |   |          |   |  |      |  
|Total                               |                        | $            | 417,421 |                  | $ | 417,025  |  | $ | 396      |   |  | 0.1  | %
|                                    |                        |              |         |                  |   |          |  |   |          |   |  |      |  



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Borrowings

Federal
Home Loan Bank advances increased $18.0 million, or 33.3%, at June 30, 2007 from December 31, 2006. Other borrowings decreased $360,000 to $22.2 million at June 30, 2007 from $22.6 million at December 31, 2006. The increase in
Federal Home Loan Bank borrowings was used to fund new loan originations.

Stockholders Equity

Stockholders equity increased by $151,000 to $62.7 million at June 30, 2007, from $62.6 million at December 31, 2006. The increase was the result of
current period earning on $1.1 million, offset by purchases of treasury stock and changes to accumulated other comprehensive income.

COMPARISON OF
OPERATING RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006

Net income was $619,000 for the three months ended June 30, 2007 as
compared to $700,000 for the three months ended June 30, 2006. The $81,000, or 11.6%, decrease in 2007 from 2006 was due to a decrease in net interest income of $117,000 and an increase in other expenses of $55,000, offset by an increase in
other income of $38,000 and a decrease in income tax expense of $53,000.

Net income was $1,120,000 for the six months ended June 30, 2007 as compared
to $1,403,000 for the six months ended June 30, 2006. The $283,000, or 20.2%, decrease in 2007 from 2006 was due to a decrease in net interest income of $277,000 and an increase in other expenses of $257,000, offset by an increase in other
income of $81,000 and a decrease in income tax expense of $170,000.



|                                      |                                              |                            |      |                                              |                          |   |      |   |  |      |       |   |  |   |       |  
|------------------------------------- | -------------------------------------------- | -------------------------- | ---- | -------------------------------------------- | ------------------------ | - | ---- | - |  | ---- | ----- | - |  | - | ----- | -
|                                      |                                              | Three Months EndedJune 30, |      |                                              | Six Months EndedJune 30, |  
|                                      | 2007                                         |                            |      | 2006                                         |                          |   | 2007 |   |  | 2006 |      
|                                      | (Dollars in thousands,except per share data) |                            |      | (Dollars in thousands,except per share data) |                         
|Net income                            |                                              | $                          | 619  |                                              |                          | $ | 700  |   |  | $    | 1,120 |   |  | $ | 1,403 |  
|Basic and diluted earnings per share  |                                              | $                          | 0.08 |                                              |                          | $ | 0.08 |   |  | $    | 0.14  |   |  | $ | 0.17  |  
|Return on average assets (annualized) |                                              |                            | 0.43 | %                                            |                          |   | 0.50 | % |  |      | 0.39  | % |  |   | 0.51  | %
|Return on average equity (annualized) |                                              |                            | 3.91 | %                                            |                          |   | 4.53 | % |  |      | 3.55  | % |  |   | 4.56  | %

Net Interest Income

The following table summarizes changes in interest income and interest expense for the three-month periods ended June 30, 2007 and 2006.



|                              |                        |                            |       |          |   |       |          |   |      |   |  |       |  
|----------------------------- | ---------------------- | -------------------------- | ----- | -------- | - | ----- | -------- | - | ---- | - |  | ----- | -
|                              |                        | Three MonthsEnded June 30, |       | $ Change |   |       | % Change |  
|                              | 2007                   |                            | 2006  |          |  
|                              | (Dollars in thousands) |                            |       |          |   |       |         
|INTEREST INCOME:              |                        |                            |       |          |   |       |          |   |      |   |  |       |  
|Loans                         |                        | $                          | 6,763 |          | $ | 6,255 |          |   | 509  |   |  | 8.1   | %
|Investment securities         |                        |                            | 959   |          |   | 1,001 |          |   | (42  | ) |  | (4.2  | )
|Other interest-earning assets |                        |                            | 215   |          |   | 91    |          |   | 124  |   |  | 136.3 |  
|                              |                        |                            |       |          |   |       |          |   |      |   |  |       |  
|Total interest income         |                        | $                          | 7,937 |          | $ | 7,347 |          |   | 590  |   |  | 8.0   |  
|                              |                        |                            |       |          |   |       |          |   |      |   |  |       |  
|INTEREST EXPENSE:             |                        |                            |       |          |   |       |          |   |      |   |  |       |  
|Deposits                      |                        | $                          | 3,154 |          | $ | 2,655 |          |   | 499  |   |  | 18.8  |  
|Borrowings                    |                        |                            | 1,110 |          |   | 902   |          |   | 209  |   |  | 23.1  |  
|                              |                        |                            |       |          |   |       |          |   |      |   |  |       |  
|Total interest expense        |                        |                            | 4,264 |          |   | 3,557 |          |   | 707  |   |  | 19.9  |  
|                              |                        |                            |       |          |   |       |          |   |      |   |  |       |  
|Net interest income           |                        | $                          | 3,673 |          | $ | 3,790 |          | $ | (117 | ) |  | (3.1  | )
|                              |                        |                            |       |          |   |       |          |   |      |   |  |       |  



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Interest income increased by $590,000 in the second quarter of 2007 compared to the second quarter of 2006, including a
$540,000 increase in mortgage loan income, a $43,000 increase in consumer loan income, and a $124,000 increase in income on other interest-earning assets partially offset by a $74,000 decrease in commercial loan income and a $42,000 decrease in
investment securities income. The increase in loan income resulted from an increase in the average balance of loans of $30.1 million and an increase in the average yield of 5 basis points. The decrease in investment income resulted from a decrease
in the average balance of $15.2 million was offset by an increase in the average yield of 85 basis points. The increase in income in federal funds resulted from an increase in the average balance of $8.5 million and an increase in the average yield
of 48 basis points.

Interest expense increased by $738,000, including an increase in municipal deposit expense of $105,000, an increase in time deposit
expense of $314,000 and an increase in interest expense on borrowings of $209,000. Municipal deposit expense increased as a result of higher balances and higher interest rates, while time deposit expense increased as a result of deposit growth and
an increase in the average rate paid. Overall, the cost of deposits increased 48 basis points to 3.24% from 2.76% in second quarter of 2007 versus 2006, while the average balance of deposits rose $5.2 million. Borrowing expense increased as a result
of a higher average balance of borrowings of $19.2 million, offset by a lower average rate paid of 23 basis points.

The interest rate spread and net
interest margin were 2.34% and 2.74%, respectively, for the three months ended June 30, 2007 compared to 2.59% and 2.96% for the same period in 2006. The increase in average earning assets of $23.4 million and the increase in average yield of
19 basis points was offset by a rise of average interest bearing liabilities of $24.4 million and an increase in the average cost paid on these liabilities of 43 basis points. New loans and investments at rates higher than the existing portfolio
were offset by a rise in short-term interest rates paid in the first quarter of 2007 compared to 2006, increasing the cost of interest expense on deposits and borrowings.

The following table summarizes changes in interest income and interest expense for the six-month periods ended June 30, 2007 and 2006.



|                              |                        |                          |        |          |   |        |          |   |       |   |  |       |  
|----------------------------- | ---------------------- | ------------------------ | ------ | -------- | - | ------ | -------- | - | ----- | - |  | ----- | -
|                              |                        | Six Months EndedJune 30, |        | $ Change |   |        | % Change |  
|                              | 2007                   |                          | 2006   |          |  
|                              | (Dollars in thousands) |                          |        |          |   |        |         
|INTEREST INCOME:              |                        |                          |        |          |   |        |          |   |       |   |  |       |  
|Loans                         |                        | $                        | 13,269 |          | $ | 12,281 |          | $ | 988   |   |  | 8.0   | %
|Investment securities         |                        |                          | 1,964  |          |   | 2,060  |          |   | (96   | ) |  | (4.6  | )
|Other interest-earning assets |                        |                          | 433    |          |   | 157    |          |   | 276   |   |  | 175.8 |  
|                              |                        |                          |        |          |   |        |          |   |       |   |  |       |  
|Total interest income         |                        | $                        | 15,666 |          | $ | 14,498 |          | $ | 1,168 |   |  | 8.1   |  
|                              |                        |                          |        |          |   |        |          |   |       |   |  |       |  
|INTEREST EXPENSE:             |                        |                          |        |          |   |        |          |   |       |   |  |       |  
|Deposits                      |                        | $                        | 6,246  |          | $ | 5,132  |          | $ | 1,114 |   |  | 21.7  |  
|Borrowings                    |                        |                          | 2,112  |          |   | 1,781  |          |   | 330   |   |  | 18.6  |  
|                              |                        |                          |        |          |   |        |          |   |       |   |  |       |  
|Total interest expense        |                        |                          | 8,358  |          |   | 6,913  |          |   | 1,445 |   |  | 20.9  |  
|                              |                        |                          |        |          |   |        |          |   |       |   |  |       |  
|Net interest income           |                        | $                        | 7,308  |          | $ | 7,585  |          | $ | (277  | ) |  | (3.6  | )
|                              |                        |                          |        |          |   |        |          |   |       |   |  |       |  

Interest income increased by $1.2 million in the six months ended June 30, 2007 compared to the same period
in 2006, including a $948,000 increase in mortgage loan income, a $141,000 increase in consumer loan income, and a $276,000 increase in income on other interest-earning assets, partially offset by a



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##### Table of Contents

$101,000 decrease in commercial loan income and a $96,000 decrease in investment securities income. The increase in loan income resulted from an increase in
the average balance of loans of $26.0 million and an increase in the average yield of 10 basis points. The decrease in investment income resulted from a decrease in the average balance of $17.7 million, and was offset by an increase in the average
yield of 96 basis points. The increase in income in federal funds resulted from an increase in the average balance of $9.6 million and an increase in the average yield of 62 basis points.

Interest expense increased by $1.4 million, including an increase in municipal deposit expense of $308,000, an increase in time deposit expense of $681,000, and increase
in all other deposits of $125,000 and an increase in interest expense on borrowings of $330,000. Municipal deposit expense increased as a result of higher balances and higher interest rates, while time deposit expense increased as a result of
deposit growth and an increase in the average rate paid. Overall, the cost of deposits increased 56 basis points to 3.22% from 2.66% in second quarter of 2007 versus 2006, while the average balance of deposits rose $2.6 million. Borrowing expense
increased as a result of higher average balance of borrowings of $15.7 million, offset by a lower average rate paid of 22 basis points.

The interest rate
spread and net interest margin of the Company were 2.37% and 2.76%, respectively, for the six months ended June 30, 2007 compared to 2.61% and 2.97% for the same period in 2006. The increase in average earning assets of $17.9 million and the
increase in average yield of 25 basis points was offset by a rise of average interest bearing liabilities of $18.3 million and an increase in the average cost paid on these liabilities of 50 basis points. New loans and investments at rates higher
than the existing portfolio were offset by a rise in short-term interest rates paid in the first quarter of 2007 compared to 2006, increasing the cost of interest expense on deposits and borrowings.

The following table presents information regarding average balances of assets and liabilities, the total dollar amounts of interest income and dividends from average
interest-earning assets, the total dollar amounts of interest expense on average interest-bearing liabilities, and the resulting average yields and costs. The yields and costs for the periods indicated are derived by dividing income or expense by
the average balances of assets or liabilities, respectively, for the periods presented. The balances of yields and costs are annualized for presentation purposes. For purposes of this table, average balances have been calculated using the average
daily balances and nonaccrual loans are included in average balances only. Loan fees are included in interest income on loans and are insignificant. Interest income on loans and investment securities has not been calculated on a tax equivalent basis
because the impact would be insignificant.



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|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|----------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------- | - | ---------------------- |  | ---- | -------------- |  | - | --------------------- | - | ----------- | - | ----- |  | ---- | -
|Average Balance Tables                                                  |  | Three Months Ended June 30,2007 |         |   | Three Months Ended June 30,2006 |  
|                                                                        |  | AverageBalance                  |         |   | Interest andDividends           |   | Yield/ Cost            |  |      | AverageBalance |  |   | Interest andDividends |   | Yield/ Cost |  
|                                                                        |  | (Dollars in thousands)          |         |   |                                 |   | (Dollars in thousands) |  |      |               
|Assets:                                                                 |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Interest-earning assets:                                                |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Loans                                                                   |  | $                               | 452,846 |   |                                 | $ | 6,763                  |  | 5.97 | %              |  | $ | 422,708               |   |             | $ | 6,255 |  | 5.92 | %
|Investment securities                                                   |  |                                 | 67,018  |   |                                 |   | 959                    |  | 5.72 | %              |  |   | 82,182                |   |             |   | 1,001 |  | 4.87 | %
|Other interest-earning assets                                           |  |                                 | 15,857  |   |                                 |   | 215                    |  | 5.43 | %              |  |   | 7,390                 |   |             |   | 91    |  | 4.95 | %
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Total interest-earning assets                                           |  |                                 | 535,721 |   |                                 |   | 7,937                  |  | 5.93 | %              |  |   | 512,280               |   |             |   | 7,347 |  | 5.74 | %
|Noninterest-earning assets                                              |  |                                 | 42,227  |   |                                 |   |                        |  |      |                |  |   | 42,738                |   |             |   |       |  |      |  
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Total assets                                                            |  | $                               | 577,948 |   |                                 |   |                        |  |      |                |  | $ | 555,018               |   |             |   |       |  |      |  
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Liabilities and equity:                                                 |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Interest-bearing liabilities:                                           |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Interest-bearing demand deposits                                        |  | $                               | 175,916 |   |                                 | $ | 1,192                  |  | 2.71 | %              |  | $ | 170,086               |   |             | $ | 972   |  | 2.29 | %
|Savings accounts                                                        |  |                                 | 59,904  |   |                                 |   | 167                    |  | 1.11 | %              |  |   | 71,611                |   |             |   | 203   |  | 1.13 | %
|Certificates of deposit                                                 |  |                                 | 153,807 |   |                                 |   | 1,794                  |  | 4.67 | %              |  |   | 142,692               |   |             |   | 1,480 |  | 4.15 | %
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Total interest-bearing deposits                                         |  |                                 | 389,627 |   |                                 |   | 3,153                  |  | 3.24 | %              |  |   | 384,389               |   |             |   | 2,655 |  | 2.76 | %
|FHLB advances                                                           |  |                                 | 64,397  |   |                                 |   | 686                    |  | 4.26 | %              |  |   | 43,011                |   |             |   | 451   |  | 4.19 | %
|Securities sold under agreements to repurchase                          |  |                                 | 6,590   |   |                                 |   | 90                     |  | 5.44 | %              |  |   | 8,788                 |   |             |   | 116   |  | 5.29 | %
|Subordinated debt                                                       |  |                                 | 15,464  |   |                                 |   | 335                    |  | 8.67 | %              |  |   | 15,464                |   |             |   | 335   |  | 8.67 | %
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Total borrowings                                                        |  |                                 | 86,451  |   |                                 |   | 1,111                  |  | 5.14 | %              |  |   | 67,263                |   |             |   | 902   |  | 5.37 | %
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Total interest-bearing liabilities                                      |  |                                 | 476,078 |   |                                 |   | 4,264                  |  | 3.58 | %              |  |   | 451,652               |   |             |   | 3,557 |  | 3.15 | %
|Noninterest-bearing liabilities                                         |  |                                 | 38,584  |   |                                 |   |                        |  |      |                |  |   | 41,489                |   |             |   |       |  |      |  
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Total liabilities                                                       |  |                                 | 514,662 |   |                                 |   |                        |  |      |                |  |   | 493,141               |   |             |   |       |  |      |  
|Stockholders equity                                                    |  |                                 | 63,286  |   |                                 |   |                        |  |      |                |  |   | 61,877                |   |             |   |       |  |      |  
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Total liabilities and stockholders equity                              |  | $                               | 577,948 |   |                                 |   |                        |  |      |                |  | $ | 555,018               |   |             |   |       |  |      |  
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Net interest income                                                     |  |                                 |         |   |                                 | $ | 3,673                  |  |      |                |  |   |                       |   |             | $ | 3,790 |  |      |  
|                                                                        |  |                                 |         |   |                                 |   |                        |  |      |                |  |   |                       |   |             |   |       |  |      |  
|Interest rate spread                                                    |  |                                 |         |   |                                 |   |                        |  | 2.34 | %              |  |   |                       |   |             |   |       |  | 2.59 | %
|Net interest margin                                                     |  |                                 |         |   |                                 |   |                        |  | 2.74 | %              |  |   |                       |   |             |   |       |  | 2.96 | %
|Average interest-earning assets to average interest-bearing liabilities |  |                                 | 112.53  | % |                                 |   |                        |  |      |                |  |   | 113.42                | % |             |   |       |  |      |  



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|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|----------------------------------------------------------------------- | ---------------------- | ------------------------------ | ------- | - | ------------------------------ | ---------------------- | ----------- |  | ---- | -------------- |  | - | -------------------- | - | ----------- | - | ------ |  | ---- | -
|Average Balance Tables                                                  |                        | Six Months Ended June 30, 2007 |         |   | Six Months Ended June 30, 2006 |                       
|                                                                        |                        | AverageBalance                 |         |   | Interest andDividends          |                        | Yield/ Cost |  |      | AverageBalance |  |   | InterestandDividends |   | Yield/ Cost |  
|                                                                        | (Dollars in thousands) |                                |         |   |                                | (Dollars in thousands) |             |  |     
|Assets:                                                                 |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Interest-earning assets:                                                |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Loans                                                                   |                        | $                              | 444,422 |   |                                | $                      | 13,269      |  | 5.97 | %              |  | $ | 418,429              |   |             | $ | 12,281 |  | 5.87 | %
|Investment securities                                                   |                        |                                | 68,154  |   |                                |                        | 1,964       |  | 5.76 | %              |  |   | 85,873               |   |             |   | 2,060  |  | 4.80 | %
|Other interest-earning assets                                           |                        |                                | 16,271  |   |                                |                        | 433         |  | 5.32 | %              |  |   | 6,692                |   |             |   | 157    |  | 4.70 | %
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Total interest-earning assets                                           |                        |                                | 528,847 |   |                                |                        | 15,666      |  | 5.92 | %              |  |   | 510,994              |   |             |   | 14,498 |  | 5.67 | %
|Noninterest-earning assets                                              |                        |                                | 42,123  |   |                                |                        |             |  |      |                |  |   | 42,922               |   |             |   |        |  |      |  
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Total assets                                                            |                        | $                              | 570,970 |   |                                |                        |             |  |      |                |  | $ | 553,916              |   |             |   |        |  |      |  
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Liabilities and equity:                                                 |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Interest-bearing liabilities:                                           |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Interest-bearing demand deposits                                        |                        | $                              | 176,510 |   |                                | $                      | 2,414       |  | 2.74 | %              |  | $ | 171,914              |   |             | $ | 1,898  |  | 2.21 | %
|Savings accounts                                                        |                        |                                | 60,313  |   |                                |                        | 335         |  | 1.11 | %              |  |   | 73,954               |   |             |   | 419    |  | 1.13 | %
|Certificates of deposit                                                 |                        |                                | 151,617 |   |                                |                        | 3,497       |  | 4.61 | %              |  |   | 139,935              |   |             |   | 2,815  |  | 4.02 | %
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Total interest-bearing deposits                                         |                        |                                | 388,440 |   |                                |                        | 6,246       |  | 3.22 | %              |  |   | 385,803              |   |             |   | 5,132  |  | 2.66 | %
|FHLB advances                                                           |                        |                                | 59,227  |   |                                |                        | 1,253       |  | 4.23 | %              |  |   | 36,952               |   |             |   | 762    |  | 4.12 | %
|Securities sold under agreements to repurchase                          |                        |                                | 6,994   |   |                                |                        | 189         |  | 5.41 | %              |  |   | 13,610               |   |             |   | 349    |  | 5.12 | %
|Subordinated debt                                                       |                        |                                | 15,464  |   |                                |                        | 670         |  | 8.67 | %              |  |   | 15,464               |   |             |   | 670    |  | 8.67 | %
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Total borrowings                                                        |                        |                                | 81,685  |   |                                |                        | 2,112       |  | 5.17 | %              |  |   | 66,026               |   |             |   | 1,781  |  | 5.39 | %
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Total interest-bearing liabilities                                      |                        |                                | 470,125 |   |                                |                        | 8,358       |  | 3.56 | %              |  |   | 451,829              |   |             |   | 6,913  |  | 3.06 | %
|Noninterest-bearing liabilities                                         |                        |                                | 37,663  |   |                                |                        |             |  |      |                |  |   | 40,508               |   |             |   |        |  |      |  
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Total liabilities                                                       |                        |                                | 507,789 |   |                                |                        |             |  |      |                |  |   | 492,337              |   |             |   |        |  |      |  
|Stockholders equity                                                    |                        |                                | 63,181  |   |                                |                        |             |  |      |                |  |   | 61,579               |   |             |   |        |  |      |  
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Total liabilities and stockholders equity                              |                        | $                              | 570,970 |   |                                |                        |             |  |      |                |  | $ | 553,916              |   |             |   |        |  |      |  
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Net interest income                                                     |                        |                                |         |   |                                | $                      | 7,308       |  |      |                |  |   |                      |   |             | $ | 7,585  |  |      |  
|                                                                        |                        |                                |         |   |                                |                        |             |  |      |                |  |   |                      |   |             |   |        |  |      |  
|Interest rate spread                                                    |                        |                                |         |   |                                |                        |             |  | 2.37 | %              |  |   |                      |   |             |   |        |  | 2.61 | %
|Net interest margin                                                     |                        |                                |         |   |                                |                        |             |  | 2.76 | %              |  |   |                      |   |             |   |        |  | 2.97 | %
|Average interest-earning assets to average interest-bearing liabilities |                        |                                | 112.49  | % |                                |                        |             |  |      |                |  |   | 113.09               | % |             |   |        |  |      |  

Provision for Loan Losses

We review the level of the allowance for loan losses on a monthly basis and establish the provision for loan losses based on the volume and types of lending, delinquency levels, loss experience, the amount of
classified loans, economic conditions and other factors related to the collectibility of the loan portfolio. The provision for loan losses was $75,000 and $150,000 for the three and six months ended June 30, 2007, respectively, compared to
$75,000 and $150,000 for the three and six months ended June 30, 2006, respectively. The provision for loan loses was primarily to maintain an allowance level deemed appropriate by management in light of factors such as the level of
non-performing loans and the current market conditions.



23



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Other Income

The
following table summarizes other income for the three months ended June 30, 2007 and 2006 and the changes between the periods.



|                                       |  |                             |     |          |   |     |  |      |   
|-------------------------------------- |  | --------------------------- | --- | -------- | - | --- |  | ---- | --
|                                       |  | Three Months Ended June 30, |     | % Change |  
|                                       |  | 2007                        |     | 2006     |  
|                                       |  | (Dollars in thousands)      |     |          |  
|OTHER INCOME:                          |  |                             |     |          |   |     |  |      |   
|Service charges                        |  | $                           | 398 |          | $ | 404 |  | (1.6 | )%
|Cash surrender value of life insurance |  |                             | 93  |          |   | 65  |  | 43.4 |   
|Other                                  |  |                             | 146 |          |   | 130 |  | 12.4 |   
|                                       |  |                             |     |          |   |     |  |      |   
|Total other income                     |  | $                           | 637 |          | $ | 599 |  | 6.3  |   
|                                       |  |                             |     |          |   |     |  |      |   

Other income increased $38,000, or 6.3%, to $637,000 for the three-month period ended June 30, 2007 from the
same period in 2006. The increase in income resulted from additional income earned on the cash surrender value of bank-owned life insurance and additional commissions.

The following table summarizes other income for the six months ended June 30, 2007 and 2006 and the changes between the periods.



|                                       |  |                           |       |         |   |       |  |      |   
|-------------------------------------- |  | ------------------------- | ----- | ------- | - | ----- |  | ---- | --
|                                       |  |                          
|                                       |  | Six Months Ended June 30, |       | % Chang |  
|                                       |  | 2007                      |       | 2006    |  
|                                       |  | (Dollars in thousands)    |       |         |  
|OTHER INCOME:                          |  |                           |       |         |   |       |  |      |   
|Service charges                        |  | $                         | 773   |         | $ | 778   |  | (0.6 | )%
|Cash surrender value of life insurance |  |                           | 171   |         |   | 130   |  | 31.1 |   
|Other                                  |  |                           | 291   |         |   | 246   |  | 18.3 |   
|                                       |  |                           |       |         |   |       |  |      |   
|Total other income                     |  | $                         | 1,235 |         | $ | 1,154 |  | 7.0  |   
|                                       |  |                           |       |         |   |       |  |      |   

Other income increased $81,000, or 7.0%, to $1.2 million for the six-month period ended June 30, 2007 from
the same period in 2006. The increase was the result of additional income earned on the cash surrender value of bank-owned life insurance and additional fees and commissions.

Other Expense

The following table summarizes other expense for the three months ended June 30, 2007 and 2006
and the changes between the periods.



|                               |  |                             |       |          |   |       |  |      |   
|------------------------------ |  | --------------------------- | ----- | -------- | - | ----- |  | ---- | --
|                               |  |                            
|                               |  | Three Months Ended June 30, |       | % Change |  
|                               |  | 2007                        |       | 2006     |  
|                               |  | (Dollars in thousands)      |       |          |  
|OTHER EXPENSE:                 |  |                             |       |          |   |       |  |      |   
|Salaries and employee benefits |  | $                           | 1,833 |          | $ | 1,855 |  | (1.2 | )%
|Occupancy and equipment        |  |                             | 719   |          |   | 657   |  | 9.6  |   
|Federal insurance premiums     |  |                             | 13    |          |   | 13    |  | (3.7 | ) 
|Advertising                    |  |                             | 121   |          |   | 115   |  | 5.1  |   
|Professional services          |  |                             | 168   |          |   | 155   |  | 8.2  |   
|Other operating expense        |  |                             | 355   |          |   | 359   |  | (0.9 | ) 
|                               |  |                             |       |          |   |       |  |      |   
|Total other expense            |  | $                           | 3,209 |          | $ | 3,154 |  | 1.7  |   
|                               |  |                             |       |          |   |       |  |      |   

Other expenses increased $55,000 to $3.2 million for the three-month period ended June 30, 2007 from the same
period in 2006. Increase costs associated with the opening in a new branch office in November



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of 2006 accounted for $110,000 in other expenses. In addition, excluding the costs associated with the new branch, salaries and employee benefits decreased
$86,000 due to lower employee benefits and higher credits of deferred costs due to higher loan volume in the second quarter of 2007 from the same period in 2006. Occupancy and equipment increased $21,000 and professional services increased $13,000
due to normal increases.

The following table summarizes other expense for the six months ended June 30, 2007 and 2006 and the changes between the
periods.



|                               |                        |                          |       |          |   |       |  |      |  
|------------------------------ | ---------------------- | ------------------------ | ----- | -------- | - | ----- |  | ---- | -
|                               |                        | Six Months EndedJune 30, |       | % Change |  
|                               | 2007                   |                          | 2006  |         
|                               | (Dollars in thousands) |                         
|OTHER EXPENSE:                 |                        |                          |       |          |   |       |  |      |  
|                               |                        |                          |      
|Salaries and employee benefits |                        | $                        | 3,837 |          | $ | 3,749 |  | 2.3  | %
|Occupancy and equipment        |                        |                          | 1,430 |          |   | 1,322 |  | 8.2  |  
|Federal insurance premiums     |                        |                          | 26    |          |   | 28    |  | (7.6 | )
|Advertising                    |                        |                          | 234   |          |   | 203   |  | 15.5 |  
|Professional services          |                        |                          | 320   |          |   | 297   |  | 7.7  |  
|Other operating expense        |                        |                          | 693   |          |   | 685   |  | 1.2  |  
|                               |                        |                          |       |          |   |       |  |      |  
|Total other expense            |                        | $                        | 6,541 |          | $ | 6,284 |  | 4.1  |  
|                               |                        |                          |       |          |   |       |  |      |  

Other expenses increased $257,000 to $6.5 million for the six-month period ended June 30, 2007 from the same
period in 2005. Increase costs associated with the opening in a new branch office in November of 2006 accounted for $216,000 in other expenses. In addition, excluding the costs associated with the new branch, salaries and employee benefits decreased
$38,000 due to higher credits of deferred costs due to higher loan volume in the second quarter of 2007 from the same period in 2006. Occupancy and equipment, advertising, professional services and other operating expenses accounted for the
remaining $81,000 increase due to normal activity.

Income Taxes

Income taxes decreased $53,000 to $407,000 for an effective tax rate of 39.7% for the three months ended June 30, 2007 compared to $460,000 for an effective tax rate of 39.6% for the same period in 2006. The
decrease was a result of lower taxable income in 2007 compared to the same period in 2006.

Income taxes decreased $170,000 to $732,000 for an effective
tax rate of 39.5% for the six months ended June 30, 2007 compared to $902,000 for an effective tax rate of 39.1% for the same period in 2006. The decrease was a result of lower taxable income in 2007 compared to the same period in 2006.

Liquidity and Capital Resources

Liquidity is the
ability to meet current and future financial obligations of a short-term nature. Our primary sources of funds consist of deposit inflows, loan repayments, maturities and sales of investment securities and borrowings from the Federal Home Loan Bank
of New York. While maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions and competition.

We regularly adjust our investments in liquid assets based upon our assessment of (1) expected loan demand, (2) expected deposit flows,
(3) yields available on interest-earning deposits and securities and (4) the objectives of our asset/liability management policy.



25



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##### Table of Contents

Our most liquid assets are cash and cash equivalents and interest-bearing deposits. The levels of these assets depend on
our operating, financing, lending and investing activities during any given period. At June 30, 2007, cash and cash equivalents totaled $19.5 million. Securities classified as available-for-sale whose market value exceeds our cost, which
provide additional sources of liquidity, totaled $16.9 million at June 30, 2007. In addition, at June 30, 2007, we had the ability to borrow a total of approximately $133.1 million from the Federal Home Loan Bank of New York, which
included available overnight lines of credit of $53.6 million. On that date, we had no overnight advances outstanding.

At June 30, 2007, we had $45.4
million in loan commitments outstanding, which included $11.7 million in undisbursed loans, $23.3 million in unused home equity lines of credit and $10.4 million in commercial lines of credit. Certificates of deposit due within one year of
June 30, 2007 totaled $102.5 million, or 65.9% of certificates of deposit. We believe, however, based on past experience that a significant portion of our certificates of deposit will remain with us. We have the ability to attract and retain
deposits by adjusting the interest rates offered.

At June 30, 2007, the Bank exceeded all of its regulatory capital requirements with tangible
capital of $59.3 million, or 10.52% of total adjusted assets, which is above the required level of $8.5 million or 1.5%; core capital of $59.3 million, or 10.52% of total adjusted assets which is above the required level of $22.5 million or 4.0%;
and risk-based capital of $61.5 million, or 18.89% of risk-weighted assets, which is above the required level of $26.0 million or 8.0%. The Bank is considered a well-capitalized institution under the Office of Thrift Supervisions
prompt corrective action regulations.

On April 18, 2007, the Company announced that its board of directors approved the repurchase of up to 200,000
shares of the Company's outstanding common stock, which is approximately 5% of outstanding shares not held by OC Financial MHC. The program began on April 30, 2007. Repurchases, which will be conducted through open market purchases or privately
negotiated transactions, will be made from time to time depending on market conditions and other factors. Repurchased shares will be held in treasury. As of the close of business on July 27, 2007, the Company had repurchased 41,700 shares under
this plan.

MARKET RISK MANAGEMENT

Net Interest
Income Simulation Analysis

We analyze our interest rate sensitivity position to manage the risk associated with interest rate movements through the use
of interest income simulation. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are interest sensitive. An asset or liability is said to be interest rate sensitive within
a specific time period if it will mature or reprice within that time period.

Simulation analysis is only an estimate of our interest rate risk exposure at
a particular point in time. We continually review the potential effect changes in interest rates could have on the repayment of rate sensitive assets and funding requirements of rate sensitive liabilities.

The following table reflects changes in estimated net interest income only for Ocean Shore Holding.



|                                  |           |                                                                        |    |           |       |   
|--------------------------------- | --------- | ---------------------------------------------------------------------- | -- | --------- | ----- | --
|                                  |           | At June 30, 2007Percentage Change in EstimatedNet Interest Income Over |   
|                                  | 12 Months |                                                                        |    | 24 Months |      
|200 basis point increase in rates |           | (2.54                                                                  | )% |           | (8.38 | )%
|100 basis point decrease in rates |           | 1.09                                                                   | %  |           | 0.98  |   



26



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##### Table of Contents

The 200 and 100 basis point change in rates in the above table is assumed to occur evenly over the following twelve
months. Based on the scenario above, net interest income would be adversely affected (within our internal guidelines) in the twelve-month and twenty-four month period if rates rose by 200 basis points. In addition, if rates declined by 100 basis
points, net interest income would be positively affected in the twelve-month and twenty-four month period. The reason for the increase in the twelve-month and twenty-four month period is that more short-term deposits will reprice faster at lower
rates than assets.

Net Portfolio Value Analysis

In
addition to a net interest income simulation analysis, we use an interest rate sensitivity analysis prepared by the Office of Thrift Supervision to review our level of interest rate risk. This analysis measures interest rate risk by computing
changes in net portfolio value of our cash flows from assets, liabilities and off-balance sheet items in the event of a range of assumed changes in market interest rates. Net portfolio value represents the market value of portfolio equity and is
equal to the market value of assets minus the market value of liabilities, with adjustments made for off-balance sheet items. This analysis assesses the risk of loss in market risk sensitive instruments in the event of a sudden and sustained 100 to
300 basis point increase or decrease in market interest rates with no effect given to any steps that we might take to counter the effect of that interest rate movement. We measure interest rate risk by modeling the changes in net portfolio value
over a variety of interest rate scenarios. The following table, which is based on information that we provide to the Office of Thrift Supervision, presents the change in our net portfolio value at June 30, 2007 that would occur in the event of
an immediate change in interest rates based on Office of Thrift Supervision assumptions, with no effect given to any steps that we might take to counteract that change.



|                                   |          |                                            |        |          |                                                     |   |          |   |  |           |    |  |        |   |  |      |     
|---------------------------------- | -------- | ------------------------------------------ | ------ | -------- | --------------------------------------------------- | - | -------- | - |  | --------- | -- |  | ------ | - |  | ---- | ----
|Basis Point (bp) Change in Rates |          | Net Portfolio Value (Dollars in Thousands) |        |          | Net Portfolio Valueas % of PortfolioValue of Assets |  
|                                   | $ Amount |                                            |        | $ Change |                                                     |   | % Change |   |  | NPV Ratio |    |  | Change |  
|300 bp                             |          | $                                          | 46,844 |          |                                                     | $ | (36,192  | ) |  | (44       | )% |  | 8.41   | % |  | (535 | ) bp
|200                                |          |                                            | 58,717 |          |                                                     |   | (24,318  | ) |  | (29       | )  |  | 10.26  |   |  | (350 | )   
|100                                |          |                                            | 72,147 |          |                                                     |   | (10,888  | ) |  | (13       | )  |  | 12.25  |   |  | (151 | )   
|0                                  |          |                                            | 83,036 |          |                                                     |   |         |   |  |          |    |  | 13.76  |   |  |     |     
|(100)                              |          |                                            | 86,333 |          |                                                     |   | 3,297    |   |  | 4         |    |  | 14.11  |   |  | 35   |     
|(200)                              |          |                                            | 79,965 |          |                                                     |   | (3,070   | ) |  | (4        | )  |  | 13.06  |   |  | (70  | )   
|(300)                              |          |                                            | 69,696 |          |                                                     |   | (13,339  | ) |  | (16       | )  |  | 11.41  |   |  | (235 | )   

The Office of Thrift Supervision uses certain assumptions in assessing the interest rate risk of savings
associations. These assumptions relate to interest rates, loan prepayment rates, deposit decay rates, and the market values of certain assets under differing interest rate scenarios, among others. As with any method of measuring interest rate risk,
certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in
market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally,
certain assets, such as adjustable-rate mortgage loans, have features that restrict changes in interest rates on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, expected rates of prepayments on
loans and early withdrawals from certificates could deviate significantly from those assumed in calculating the table.



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OFF-BALANCE SHEET ARRANGEMENTS

In the normal course of operations, we engage in a variety of financial transactions that, in accordance with generally accepted accounting principles, are not recorded in our financial statements. These transactions
involve, to varying degrees, elements of credit, interest rate and liquidity risk. Such transactions are used primarily to manage customers requests for funding and take the form of loan commitments and lines of credit.

For the three and six months ended June 30, 2007, we engaged in no off-balance sheet transactions reasonably likely to have a material effect on our financial
condition, results of operations or cash flows.



|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

The
information required by this item is included in Item 2 of this report under Market Risk Management.



|Item 4. | Controls and Procedures
|------- | -----------------------

The Companys management, including
the Companys principal executive officer and principal financial officer, have evaluated the effectiveness of the Companys disclosure controls and procedures, as such term is defined in Rule 13a-15(e) promulgated under the
Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, the
Companys disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange
Commission (the SEC) (1) is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms, and (2) is accumulated and communicated to the Companys management, including
its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Periodically, there have been
various claims and lawsuits against us, such as claims to enforce liens, condemnation proceedings on properties in which we hold security interests, claims involving the making and servicing of real property loans and other issues incident to our
business. We are not a party to any pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows.

Item 1A. Risk Factors

There have been no material changes in the risk factors previously disclosed in
the Companys Annual Report on Form 10-K for the year ended December 31, 2006.



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##### Table of Contents

|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------



|                                              |  |                                               |  |                                           |       |                                                                                             |        |                                                                                                                                |        
|--------------------------------------------- |  | --------------------------------------------- |  | ----------------------------------------- | ----- | ------------------------------------------------------------------------------------------- | ------ | ------------------------------------------------------------------------------------------------------------------------------ | -------
|Period                                        |  | (a) Total number ofShares (or Units)Purchased |  | (b) Average Price Paidper Share (or Unit) |       | (c) Total Number ofShares (or units)Purchased as Part ofPublicly AnnouncedPlans or Programs |        | (d) Maximum Number (orAppropriate Dollar Value) ofShares (or units) that MayYet Be Purchased Under thePlans or Programs (1)(2)
|Month #1 April 1, 2007 through April 30, 2007 |  | 0                                             |  |                                           | N/A   |                                                                                             | 0      |                                                                                                                                | 200,449
|                                              |  |                                               |  |                                          
|Month #2 May 1, 2007 through May 31, 2007     |  | 33,550                                        |  | $                                         | 13.52 |                                                                                             | 33,550 |                                                                                                                                | 166,899
|                                              |  |                                               |  |                                          
|Month #3 June 1, 2007 through June 30, 2007   |  | 8,125                                         |  | $                                         | 13.36 |                                                                                             | 8,125  |                                                                                                                                | 158,749
|                                              |  |                                               |  |                                          
|Total                                         |  | 41,700                                        |  | $                                         | 13.49 |                                                                                             | 41,700 |                                                                                                                                |        

---

|(1) | On August 10, 2005, the Companys Board of Directors approved the formation and funding of a trust that will purchase 171,749 shares of the Companys common stock in
the open market with funds contributed by the Company. As of September 23, 2005, 171,300 shares were purchased. The remaining 449 shares have not been awarded and may be purchased from time to time at the discretion of the independent trustee
of the trust and the shares will be used to fund restricted stock awards under the Companys 2005 Equity Incentive Plan.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | On April 18, 2007, the Company announced that its board of directors approved the repurchase of up to 200,000 shares of the Company's outstanding common stock, which is
approximately 5% of outstanding shares not held by OC Financial MHC. The program began on April 30, 2007. Repurchases, which will be conducted through open market purchases or privately negotiated transactions, will be made from time to time
depending on market conditions and other factors. Repurchased shares will be held in treasury.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

Not applicable.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

The Annual Meeting of Stockholders of the Company was held on May 16, 2007. The results of the vote on the matters presented at the meeting are as follows:



| | 1. | The following individuals were elected as directors, each for a three-year term:
| | -- | --------------------------------------------------------------------------------



|                |  |           |  |              
|--------------- |  | --------- |  | -------------
|                |  | Votes for |  | VotesWithheld
|Steven E. Brady |  | 8,004,950 |  | 78,900       
|Samuel R. Young |  | 8,002,450 |  | 81,400       



| | 2. | The appointment of Deloitte & Touche LLP as auditors for the Company for the fiscal year ending December 31, 2007 was ratified by stockholders by the following vote:
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                    |  |                   
|------------------- |  | ------------------
|For:     8,063,908; |  | Against:    13,333

Broker non-votes totaled none.



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|Item 5. | Other Information
|------- | -----------------

None.



|Item 6. | Exhibits
|------- | --------



| | 31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
| | ---- | -----------------------------------------------------------------

| | 31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
| | ---- | -----------------------------------------------------------------

| | 32.0 | Section 1350 Certification of Chief Executive Officer and Chief Financial Officer
| | ---- | ---------------------------------------------------------------------------------



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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 thereunto duly authorized.



|                      |  |                                                  
|--------------------- |  | -------------------------------------------------
|                      |  | OCEAN SHORE HOLDING CO.                          
|                      |  | (Registrant)                                     
|                      | 
|Date: August 13, 2007 |  | /s/ Steven E. Brady                              
|                      |  | Steven E. Brady                                  
|                      |  | President and Chief Executive Officer            
|                      | 
|Date: August 13, 2007 |  | /s/ Donald F. Morgenweck                         
|                      |  | Donald F. Morgenweck                             
|                      |  | Chief Financial Officer and Senior Vice President



31