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Hingham Institution For Savings Reports 18% Increase In Annual Earnings

Hingham Institution for Savings (Nasdaq – HIFS), Hingham, Massachusetts announced its earnings for 2011. Net income for the year ended December 31, 2011 was $12,062,000 or $5.68 per share basic and $5.67 per share diluted as compared to $10,228,000 or $4.81 per share (basic and diluted) for 2010. Net income for the fourth quarter 2011 was $3,107,000 or $1.46 per share (basic and diluted) as compared to $2,698,000 or $1.27 per share (basic and diluted) for the fourth quarter 2010. The Bank’s return on average equity for the year ending December 31, 2011 was 15.32%, and the return on average assets was 1.14%.

Deposits increased by $58 million, or 8%, net loans increased by 7% and total assets by 11% from December 31, 2010 to December 31, 2011. Total assets were $1,127,276,000 at December 31, 2011 as compared to $1,017,845,000 at December 31, 2010. Book value per share increased to $38.70 per share at December 31, 2011 from $34.24 per share at December 31, 2010. At December 31, 2011 non-performing assets totaled 0.92% of total assets compared to 0.91% of total assets at December 31, 2010.

President Robert H. Gaughen, Jr. stated, “We are pleased to report another year of record earnings, representing an 18% increase over those of 2010. Over the past several years, despite the challenging business environment, we have developed a track record for delivering consistently strong performance. The continued improvement in our net interest margin, combined with effective cost control and prudent lending standards, have produced real bottom line results. We remain focused on increasing both shareholder value and ongoing dividends through quality growth and diligent cost control.”

Hingham Institution for Savings is a Massachusetts-chartered savings bank located in Hingham, Massachusetts. Incorporated in 1834, it is the oldest financial institution headquartered in Hingham and one of the oldest in the Commonwealth. The Bank’s main office is located on Main Street, Hingham, Massachusetts. The Bank also maintains branch offices in South Hingham and the neighboring towns of Cohasset, Hull, Scituate, Weymouth and Norwell as well as the South End of Boston. In October 2011, the Bank opened its 10 th branch in the Beacon Hill/Back Bay area of Boston.

The Bank’s shares of common stock are listed and traded on The NASDAQ Stock Market under the symbol HIFS.

     

HINGHAM INSTITUTION FOR SAVINGS

Consolidated Balance Sheets

 

(Dollars in thousands except per share data)

December 31, 2011

December 31, 2010

(Unaudited)
ASSETS
 
Cash and due from banks $ 8,918 $ 6,298
Short-term investments 107,422 61,566
Cash and cash equivalents 116,340 67,864
 
Certificates of deposit 13,405 13,929
Securities available for sale, at fair value 96,689 95,071
Federal Home Loan Bank stock, at cost 13,373 13,373
Loans, net of allowance for loan losses of $7,516 at

December 31, 2011 and $6,905 at December 31, 2010

849,776

792,910

Foreclosed assets 3,629 3,559
Bank-owned life insurance 14,524 14,074
Premises and equipment, net 10,597 7,985
Accrued interest receivable 2,858 2,992
Prepaid FDIC assessment 1,871 2,474
Deferred income tax asset, net 3,425 2,803
Other assets 789 811
Total assets $ 1,127,276 $ 1,017,845
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 
Deposits $ 787,573 $ 729,960
Federal Home Loan Bank advances 247,471 207,580
Mortgage payable 1,107 1,147
Mortgagors’ escrow accounts 2,517 2,344
Accrued interest payable 475 591
Other liabilities 5,868 3,487
Total liabilities 1,045,011 945,109
 
Stockholders’ equity:
Preferred stock, $1.00 par value,

2,500,000 shares authorized, none issued

Common stock, $1.00 par value, 5,000,000 shares

authorized; 2,125,750 shares issued and outstanding at

December 31, 2011 and 2,124,250 shares issued and

outstanding at December 31, 2010

 

 

2,126

 

 

2,124

Additional paid-in capital 10,500 10,417
Undivided profits 69,404 59,999
Accumulated other comprehensive income 235 196
Total stockholders’ equity 82,265 72,736
Total liabilities and stockholders’ equity $ 1,127,276 $ 1,017,845
         
 

HINGHAM INSTITUTION FOR SAVINGS

Consolidated Statements of Income

 

 

Three Months Ended

Twelve Months Ended

 

December 31,

 

 

December 31,

 

2011

 

 

2010

 

2011

 

 

 

2010

(Unaudited) (In thousands, except per share amounts)
Interest and dividend income:
Loans $ 11,943 $ 11,584 $ 47,191 $ 44,879
Debt securities 146 264 749 1,418
Equity securities 52 25 153 106
Short-term investments and certificates of deposit 90 92 351 422
  Total interest and dividend income 12,231 11,965 48,444 46,825
Interest expense:
Deposits 1,547 1,907 6,751 8,125
Federal Home Loan Bank advances 1,348 1,643 5,799 6,903
Mortgage payable 17 17 68 70
Total interest expense 2,912 3,567 12,618 15,098
Net interest income 9,319 8,398 35,826 31,727
Provision for loan losses 225 300 1,100 1,300
Net interest income, after provision for loan losses 9,094 8,098 34,726 30,427
Other income:
  Customer service fees on deposits 259 257 987 893
Increase in bank-owned life insurance 108 117 450 459
Miscellaneous 79 89 263 275
Total other income 446 463 1,700 1,627
Operating expenses:
Salaries and employee benefits 2,263 2,132 8,894 8,371
Data processing 224 226 883 853
Occupancy and equipment 413 324 1,528 1,280
Deposit insurance 159 257 701 1,074
Foreclosure 429 246 1,038 726
Marketing 171 142 650 501
Other general and administrative 626 519 2,397 2,173
Total operating expenses 4,285 3,846 16,091 14,978
Income before income taxes 5,255 4,715 20,335 17,076
Income tax provision 2,148 2,017 8,273 6,848
Net income $ 3,107 $ 2,698 $ 12,062 $ 10,228
 
Weighted average common shares outstanding:
Basic 2,126 2,124 2,125 2,124
Diluted 2,127 2,125 2,126 2,125
 
Earnings per common share:
Basic $ 1.46 $ 1.27 $ 5.68 $ 4.81
Diluted $ 1.46 $ 1.27 $ 5.67 $ 4.81
 

HINGHAM INSTITUTION FOR SAVINGS

Net Interest Income Analysis

 

 

Three Months Ended December 31,

 

2011

   

 

2010

 

AVERAGE BALANCE

   

 

INTEREST

   

YIELD/ RATE

 

AVERAGE BALANCE

   

 

INTEREST

   

YIELD/ RATE

(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 849,581 $ 11,943 5.62 % $ 791,475 $ 11,584 5.85 %
Securities (3) (4) 90,661 198 0.87 106,723 289 1.08
Short-term investments and certificates of deposit 120,079 90 0.30 75,293 92 0.49
Total earning assets 1,060,321 12,231 4.61 973,491 11,965 4.92
Other assets 37,655 35,589
Total assets $ 1,097,976 $ 1,009,080
 
Interest-bearing deposits (5) $ 710,878 1,547 0.87 $ 670,648 1,907 1.14
Borrowed funds 237,863 1,365 2.30 207,511 1,660 3.20
Total interest-bearing liabilities 948,741 2,912 1.23 878,159 3,567 1.62
Demand deposits 63,801 54,497
Other liabilities 3,156 3,739
Total liabilities 1,015,698 936,395
Stockholders’ equity 82,278 72,685
Total liabilities and stockholders’ equity $ 1,097,976 $ 1,009,080
Net interest income $ 9,319 $ 8,398
 
Weighted average spread 3.38 % 3.30 %
 
Net interest margin (6) 3.52 % 3.45 %
 
Average interest-earning assets to average

interest-bearing liabilities (7)

111.76

%

110.86

%

   

(1) Before allowance for loan losses.

(2) Includes non-accrual loans.

(3) Excludes the impact of the average net unrealized gain or loss on securities available for sale.

(4) Includes Federal Home Loan Bank stock.

(5) Includes mortgagors' escrow accounts.

(6) Net interest income divided by average total earning assets.

(7) Total earning assets divided by total interest-bearing liabilities.

                       

HINGHAM INSTITUTION FOR SAVINGS

Net Interest Income Analysis

 

 

Twelve Months Ended December 31,

 

2011

 

2010

 

AVERAGE BALANCE

 

INTEREST

YIELD/ RATE

 

AVERAGE BALANCE

 

INTEREST

YIELD/ RATE

(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 828,460 $ 47,191 5.70 % $ 757,147 $ 44,879 5.93 %
Securities (3) (4) 99,888 902 0.90 104,920 1,524 1.45
Short-term investments and certificates of deposit 93,867 351 0.37 79,615 422 0.53
Total earning assets 1,022,215 48,444 4.74 941,682 46,825 4.97
Other assets 35,612 34,344
Total assets $ 1,057,827 $ 976,026
 
Interest-bearing deposits (5) $ 699,897 6,751 0.96 $ 639,072 8,125 1.27
Borrowed funds 217,324 5,867 2.70 213,138 6,973 3.27
Total interest-bearing liabilities 917,221 12,618 1.38 852,210 15,098 1.77
Demand deposits 58,885 51,034
Other liabilities 3,002 3,074
Total liabilities 979,108 906,318
Stockholders’ equity 78,719 69,708
Total liabilities and stockholders’ equity $ 1,057,827 $ 976,026
Net interest income $ 35,826 $ 31,727
 
Weighted average spread 3.36 % 3.20 %
 
Net interest margin (6) 3.50 % 3.37 %
 
Average interest-earning assets to average

interest-bearing liabilities (7)

111.45

%

110.50

%

 

(1) Before allowance for loan losses.

(2) Includes non-accrual loans.

(3) Excludes the impact of the average net unrealized gain or loss on securities available for sale.

(4) Includes Federal Home Loan Bank stock.

(5) Includes mortgagors' escrow accounts.

(6) Net interest income divided by average total earning assets.

(7) Total earning assets divided by total interest-bearing liabilities.

         

HINGHAM INSTITUTION FOR SAVINGS

Selected Financial Ratios

 
Three Months Ended

December 31,

Twelve Months Ended

December 31,

2011     2010 2011     2010
(Unaudited)
 
Key Performance Ratios
Return on average assets (1) 1.13 % 1.07 % 1.14 % 1.05 %
Return on average equity (1) 15.10 14.85 15.32 14.67
Interest rate spread (1) (2) 3.38 3.30 3.36 3.20
Net interest margin (1) (3) 3.52 3.45 3.50 3.37
Non-interest expense to average assets (1) 1.56 1.52 1.52 1.53
Efficiency ratio (4) 43.88 43.40 42.88 44.91
Average equity to average assets 7.49 7.20 7.44 7.14
Average interest-bearing assets to average interest

bearing liabilities

111.76

110.86

111.45

110.50

           

 

December 31, 2011

 

December 31, 2010

 
(Unaudited)
 
Asset Quality Ratios
Allowance for loan losses/total loans 0.88 % 0.86 %
Allowance for loan losses/non-performing loans 111.30 120.25
 
Non-performing loans/total loans 0.79 0.72
Non-performing loans/total assets 0.60 0.56
Non-performing assets/total assets 0.92 0.91
 
Share Related
Book value per share $ 38.70 $ 34.24
Market value per share $ 47.80 $ 44.50
Shares outstanding at end of period 2,125,750 2,124,250

 

 
 

(1) Annualized(2) Interest rate spread represents the difference between the yield on earning assets and cost of interest-bearing liabilities.(3) Net interest margin represents net interest income divided by average earning assets.(4) The efficiency ratio represents non-interest expense, divided by the sum of net interest income and non-interest income.

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