Hingham Institution For Savings: 28% Increase In Quarterly Earnings

HINGHAM INSTITUTION FOR SAVINGS (Nasdaq – HIFS), Hingham, Massachusetts announced third quarter earnings for 2010. Net income for the quarter ended September 30, 2010 was $2,794,000 or $1.32 per share (basic and diluted) as compared to $2,183,000 or $1.03 per share (basic and diluted) for the same period last year. The Bank’s annualized return on average equity for the third quarter of 2010 was 15.82%, and the return on average assets was 1.14%. Net income for the nine months ended September 30, 2010 was $7,530,000 or $3.54 per share (basic and diluted) as compared to $5,778,000 or $2.72 per share (basic and diluted) for the same period last year. The Bank’s annualized return on average equity for the first nine months of 2010 was 14.61% and the return on average assets was 1.04%.

Strong growth trends of recent years continued, as deposits increased by $75 million from December 31, 2009 and $77 million from September 30, 2009, representing 12% growth both year to date and from September 30, 2009. Net loans increased by $57 million from December 31, 2009 and $75 million from September 30, 2009 representing 8% growth year to date and 11% growth from the third quarter 2009. Total assets increased by $66 million from December 31, 2009 and $77 million from September 30, 2009, representing a 7% and 8% growth, respectively. Stockholders’ equity increased to $71.3 million as of September 30, 2010 representing a 9% growth year to date and an 11% increase from September 30, 2009. Book value per share increased to $33.54 per share at September 30, 2010 from $30.74 per share at December 31, 2009 and $30.25 per share at September 30, 2009.

At September 30, 2010 non-performing assets totaled 0.92% of total assets, down from 1.36% at December 31, 2009 and 1.35% at September 30, 2009. For the quarter ended September 30, 2010, a provision of $300,000 was made to the allowance for loan loss allowance compared to $400,000 for the same period in 2009. Foreclosure related expenses totaled $193,000 for the quarter ended September 30, 2010 compared to $166,000 for the quarter ended September 30, 2009.

President Robert H. Gaughen, Jr. stated, “We’re pleased to report continued growth and consistent strength as our quarterly earnings represent a 28% increase over the same period last year and our earnings for the first nine months of 2010 represent a 30% increase over the first nine months of 2009. Additionally, during the quarter we have made significant progress in resolving several non-performing assets. At September 30, 2010 non-performing assets decreased to 0.92% of total assets from 1.57% at June 30, 2010 and 1.36% at December 31, 2009. We continue to aggressively pursue resolution of problem credits and believe that our conservative underwriting standards have served the Bank well in these difficult times.”

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
(Unaudited)
 
September 30, December 31, September 30,
2010 2009 2009
($ in thousands except per share amounts)
ASSETS
 
Cash and due from banks $ 5,651 $ 7,372 $ 7,062
Short-term investments 54,215 45,265 45,188
Cash and cash equivalents 59,866 52,637 52,250
 
Certificates of deposit 14,064 13,150 12,975
Securities available for sale, at fair value 94,606 96,374 91,578
Federal Home Loan Bank stock, at cost 13,373 13,373 13,373
Loans held for sale -- -- 14,371
Loans, net of allowance for loan losses of
$6,645,000 at September 30, 2010, $5,737,000 at
December 31, 2009 and $5,463,000 at September 30, 2009 775,013 718,242 700,463
Bank-owned life insurance 13,957 13,615 13,503
Premises and equipment, net 6,520 5,434 5,480
Accrued interest receivable 3,203 3,392 3,283
Deferred income tax asset, net 2,038 1,990 1,387
Other real estate owned 4,860 3,185 4,084
Other assets 3,820 4,168 1,119
Total assets $ 991,320 $ 925,560 $ 913,866
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Deposits $ 705,786 631,087 $ 628,819
Federal Home Loan Bank advances 208,106 222,636 214,853
Mortgage payable 1,156 1,184 1,193
Mortgagors' escrow accounts 2,208 1,968 1,952
Accrued interest payable 631 714 660
Other liabilities 2,177 2,678 2,128
Total liabilities 920,064 860,267 849,605
 
 
 
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 2,124 2,124 2,124
Additional paid-in capital 10,417 10,412 10,412
Undivided profits 58,342 52,299 50,987
Accumulated other comprehensive income 373 458 738
Total stockholders' equity 71,256 65,293 64,261
 
Total liabilities and stockholders' equity $ 991,320 925,560 $ 913,866
 
Book value per share $ 33.54 30.74 $ 30.25
 
 
 
HINGHAM INSTITUTION FOR SAVINGS
 
Consolidated Statements of Income
(Unaudited)
 
Three Months Ended Nine Months Ended
September 30, September 30,
(In Thousands, Except for Per Share Amounts) 2010   2009 2010   2009
 
Interest and dividend income:
Loans $ 11,461 $ 10,837 $ 33,295 $ 31,420
Debt securities 305 480 1,154 1,544
Equity securities 26 29 81 88
Short-term investments and certificates of deposit 106 115 330 364
Total interest and dividend income 11,898 11,461 34,860 33,416
Interest expense:
Deposits 1,997 2,513 6,218 8,040
Federal Home Loan Bank advances 1,709 1,781 5,260 5,366
Mortgage payable 18 18 53 54
Total interest expense 3,724 4,312 11,531 13,460
Net interest income 8,174 7,149 23,329 19,956
Provision for loan losses 300 400 1,000 1,400
Net interest income after provision for loan losses 7,874 6,749 22,329 18,556
Other income:
Customer service fees on deposits 232 214 636 644
Increase in bank-owned life insurance 114 114 342 346
Gain on sale of loans -- -- -- 318
Miscellaneous 61 54 186 158
Total other income 407 382 1,164 1,466
Operating expenses:
Salaries and employee benefits 2,098 1,886 6,239 5,703
Data processing 202 208 627 645
Occupancy and equipment 296 323 956 1,010
Deposit insurance 262 293 817 1,084
Foreclosure 193 166 480 306
Marketing 113 134 359 354
Other general and administrative 529 571 1,654 1,571
Total operating expenses 3,693 3,581 11,132 10,673
Income before income taxes 4,588 3,550 12,361 9,349
Income tax provision 1,794 1,367 4,831 3,571
Net income $ 2,794 $ 2,183 $ 7,530 $ 5,778
 
Cash dividends declared per common share $ 0.24 $ 0.22 $ 0.70 $ 0.64
 
Weighted average shares outstanding:
Basic 2,124 2,124 2,124 2,124
Diluted 2,125 2,124 2,125 2,124
 
Earnings per share:
Basic $ 1.32 $ 1.03 $ 3.54 $ 2.72
Diluted $ 1.32 $ 1.03 $ 3.54 $ 2.72
 
Return on average equity 15.82 % 13.67 % 14.61 % 12.37 %
 
 
             
HINGHAM INSTITUTION FOR SAVINGS
 
Net Interest Income Analysis
(Unaudited)
 
 
Three Months Ended September 30,
2010 2009
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST

RATE
 
(Dollars in thousands)
 
Loans (1) (2) $ 764,759 $ 11,461 5.99 % $ 715,144 $ 10,837 6.06 %
Securities (3) (4) 103,424 331 1.28 102,663 509 1.98
Short-term investments and certificates of deposit 75,970 106 0.56 42,016 115 1.09
Total earning assets 944,153 11,898 5.04 859,823 11,461 5.33
Other assets 36,079 30,259
Total assets $ 980,232 $ 890,082
 
Interest-bearing deposits (5) $ 643,618 1,997 1.24 $ 558,862 2,513 1.80
Borrowed funds 211,098 1,727 3.27 217,766 1,799 3.30
Total interest-bearing liabilities 854,716 3,724 1.74 776,628 4,312 2.22
Demand deposits 52,183 46,124
Other liabilities 2,706 3,469
Total liabilities 909,605 826,221
Stockholders' equity 70,627 63,861
Total liabilities and stockholders' equity $ 980,232 $ 890,082
Net interest income $ 8,174 $ 7,149
 
Weighted average rate spread 3.30 %

3.11
%
 
Net interest margin (6) 3.46 %

3.33
%
 
Average interest earning assets to average
interest-bearing liabilities (7) 110.46 %

110.71
%
 
(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
(Unaudited)
 
 
Nine Months Ended September 30,
2010 2009
AVERAGE YIELD/ AVERAGE YIELD/

 
BALANCE   INTEREST RATE BALANCE   INTEREST

RATE
 
(Dollars in thousands)
 
Loans (1) (2) $ 745,578 $ 33,295 5.95 % $ 685,242 $ 31,420 6.11 %
Securities (3) (4) 104,312 1,235 1.58 97,715 1,632 2.23
Short-term investments and certificates of deposit 80,964 330 0.54 39,311 364 1.23
Total earning assets 930,854 34,860 4.99 822,268 33,416 5.42
Other assets 34,033 28,566
Total assets $ 964,887 $ 850,834
 
Interest-bearing deposits (5) $ 628,430 6,218 1.32 $ 528,890 8,040 2.03
Borrowed funds 215,034 5,313 3.29 212,705 5,420 3.40
Total interest-bearing liabilities 843,464 11,531 1.82 741,595 13,460 2.42
Demand deposits 49,867 43,690
Other liabilities 2,841 3,291
Total liabilities 896,172 788,576
Stockholders' equity 68,715 62,258
Total liabilities and stockholders' equity $ 964,887 $ 850,834
Net interest income $ 23,329 $ 19,956
 
Weighted average rate spread 3.17 %

 

3.00
%

 
Net interest margin (6) 3.34 %

3.24
%
 
Average interest earning assets to average
interest-bearing liabilities (7) 110.36 %

110.88
%
 
(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
(Unaudited)
 
 
Three Months Ended Nine Months Ended
September 30, September 30,
2010 2009 2010 2009
 
Key Performance Ratios
Return on average assets (1) 1.14 % 0.98 % 1.04 % 0.91 %
Return on average equity (1) 15.82 13.67 14.61 12.37
Interest rate spread (1) (2) 3.30 3.11 3.17 3.00
Net interest margin (1) (3) 3.46 3.33 3.34 3.24
Non-interest expense to average assets (1) 1.51 1.61 1.54 1.67
Efficiency ratio (4) 43.04 47.55 45.45 49.82
Average equity to average assets 7.21 7.17 7.12 7.32
Average interest-bearing assets to average
interest-bearing liabilities (5) 110.46 110.71 110.36 110.88
 
 
September 30, 2010 December 31, 2009 September 30, 2009
 
Asset Quality Ratios
Allowance for loan losses/total loans 0.85 % 0.79 % 0.77 %
Allowance for loan losses/non-performing loans 155.62 61.03 66.55
 
Non-performing loans/total loans 0.55 1.30 1.16
Non-performing loans/total assets 0.43 1.02 0.90
Non-performing assets/total assets 0.92 1.36 1.35
 
Share Related
Book value per share $ 33.54 $ 30.74 $ 30.25
Market value per share 37.62 30.69 31.23
Shares outstanding at end of period 2,124,250 2,124,250 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 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.
 
(5) Total earning assets divided by total interest-bearing liabilities.
 
 

Copyright Business Wire 2010

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX