Hingham Institution for Savings (Nasdaq – HIFS), Hingham, Massachusetts, announced second quarter earnings for 2010. Net income for the quarter ended June 30, 2010 was $2,421,000 or $1.14 per share (basic and diluted) as compared to $2,023,000 or $0.95 per share (basic and diluted) for the same period last year. The Bank’s return on average equity for the second quarter of 2010 was 14.15%, and the return on average assets was 1.00%. Net income for the first half of 2010 was $4,736,000 or $2.23 per share (basic and diluted) as compared to $3,595,000 or $1.69 per share (basic and diluted) for the same period last year. The Bank’s return on average equity for the first half of 2010 was 14.01% compared to 11.70% for the same period in 2009.

Strong growth trends of recent years continued, as deposits increased by $96.7 million representing a 17% increase from June 30, 2009. Net loans increased by 8% and total assets increased by 13% over those for the second quarter of 2009. Stockholders’ equity increased to $69.0 million as of June 30, 2010 representing a 10% increase from June 30, 2009 with a related increase in book value per share from $29.40 to $32.47.

At June 30, 2010 non-performing assets totaled 1.57% of total assets, up from 1.36% at December 31, 2009. For the quarter ended June 30, 2010, a provision of $300,000 was made to the allowance for loan loss allowance compared to $450,000 for the same period in 2009. Foreclosure related expenses totaled $161,000 for the quarter ended June 30, 2010 compared to $62,000 for the quarter ended June 30, 2009.

President Robert H. Gaughen, Jr. stated, “We’re pleased to report continued growth and consistent strength as our quarterly earnings represent a 20% increase over the same period last year and our earnings for the first half of 2010 represent a 32% increase over the first half of 2009. This is on top of a 43% increase in second quarter earnings from 2008 to 2009 and a 33% increase in earnings for the first half of the year from 2008 to 2009. Although non-performing assets increased to 1.57% of total assets from 1.36% at December 31, 2009, significant progress has been made on several non-performing loans which are now in the final stages of being resolved. We are actively pursuing resolution on these credits and believe that our conservative underwriting standards will continue to provide sufficient protection.

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.

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
 
June 30, June 30,
2010 2009
(Unaudited) ($ in thousands except per share amounts)
ASSETS
 
Cash and due from banks $ 6,565 $ 15,023
Short-term investments 61,919 10,370
Cash and cash equivalents 68,484 25,393
 
Certificates of deposit 13,564 13,399
Securities available for sale, at fair value 95,053 92,710
Federal Home Loan Bank stock, at cost 13,373 13,373
Loans, net of allowance for loan losses of
$6,426,000 in 2010 and $5,550,000 in 2009 744,410 692,274
Bank-owned life insurance 13,843 13,389
Premises and equipment, net 5,698 5,456
Accrued interest receivable 3,214 3,375
Deferred income tax asset, net 2,039 1,431
Other real estate owned 7,393 --
Other assets 4,708 1,163
Total assets $ 971,779 $ 861,963
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Deposits $ 682,612 $ 585,914
Federal Home Loan Bank advances 214,132 207,068
Mortgage payable 1,166 1,202
Mortgagors' escrow accounts 2,056 1,761
Accrued interest payable 645 638
Other liabilities 2,199 2,919
Total liabilities 902,810 799,502
 
 
 
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; shares issued and outstanding: 2,124,250
at both June 30, 2010 and 2009 2,124 2,124
Additional paid-in capital 10,417 10,412
Undivided profits 56,058 49,272
Accumulated other comprehensive income 370 653
Total stockholders' equity 68,969 62,461
 
Total liabilities and stockholders' equity $ 971,779 $ 861,963
 
Book value per share $ 32.47 $ 29.40
 
 
HINGHAM INSTITUTION FOR SAVINGS
         
Consolidated Statements of Income
 
Three Months Ended Six Months Ended
June 30, June 30,
(In Thousands, Except for Per Share Amounts) 2010     2009 2010     2009
(Unaudited)
 
Interest and dividend income:
Loans $ 10,961 $ 10,431 $ 21,834 $ 20,582
Debt securities 400 503 849 1,065
Equity securities 27 30 55 60
Short-term investments and certificates of deposit 114 125 224 248
Total interest and dividend income 11,502 11,089 22,962 21,955
Interest expense:
Deposits 2,053 2,649 4,221 5,527
Federal Home Loan Bank advances 1,742 1,724 3,551 3,585
Mortgage payable 17 18 35 36
Total interest expense 3,812 4,391 7,807 9,148
Net interest income 7,690 6,698 15,155 12,807
Provision for loan losses 300 450 700 1,000
Net interest income after provision for loan losses 7,390 6,248 14,455 11,807
Other income:
Customer service fees on deposits 204 215 404 430
Increase in bank-owned life insurance 114 121 228 232
Gain on sale of loans -- 318 -- 318
Miscellaneous 62 52 125 104
Total other income 380 706 757 1,084
Operating expenses:
Salaries and employee benefits 2,097 1,873 4,141 3,817
Data processing 210 216 425 438
Occupancy and equipment 316 324 660 687
Deposit insurance 275 614 555 791
Foreclosure 161 62 287 140
Marketing 138 119 246 219
Other general and administrative 595 483 1,125 1,000
Total operating expenses 3,792 3,691 7,439 7,092
Income before income taxes 3,978 3,263 7,773 5,799
Income tax provision 1,557 1,240 3,037 2,204
Net income $ 2,421 $ 2,023 $ 4,736 $ 3,595
 
Cash dividends declared per common share $ 0.23 $ 0.21 $ 0.46 $ 0.42
 
Weighted average shares outstanding:
Basic 2,124 2,124 2,124 2,123
Diluted 2,124 2,124 2,124 2,124
 
Earnings per share:
Basic $ 1.14 $ 0.95 $ 2.23 $ 1.69
Diluted $ 1.14 $ 0.95 $ 2.23 $ 1.69
 
Return on average equity 14.15 % 13.02 % 14.01 % 11.70 %

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