HINGHAM INSTITUTION FOR SAVINGS (Nasdaq – HIFS), Hingham, Massachusetts announced its earnings for 2010. Net income for the year ended December 31, 2010 was a record $10,228,000 or $4.81 per share (basic and diluted) as compared to $8,045,000 or $3.79 per share (basic and diluted) in 2009. Net income for the fourth quarter ended December 31, 2010 was $2,698,000 or $1.27 per share (basic and diluted) as compared to $2,267,000 or $1.07 per share (basic and diluted) for the fourth quarter ended December 31, 2009. The Bank’s return on average equity for 2010 was 14.67%, and the return on average assets was 1.05%.

Strong growth trends of recent years continued in 2010. Deposits increased by $98.9 million or 16%, net loans increased by 10%, and total assets increased by 10%. Total assets as of December 31, 2010 were $1,017,845,000 as compared to $925,560,000 at December 31, 2009. Stockholders’ equity increased from $65,293,000 at December 31, 2009 to $72,736,000 at December 31, 2010. Book value per share increased over the same period from $30.74 to $34.24. At December 31, 2010, non-performing assets totaled 0.91% of total assets and were relatively flat from 0.92% at September 30, 2010, and down from 1.36% at December 31, 2009.

President Robert H. Gaughen, Jr. stated, “We’re excited to report another year of record earnings representing a 27% increase over the prior year. We reached a major milestone by exceeding one billion dollars in total assets. This is a tribute to our stability and trusted status within the communities we serve. The challenging financial conditions of the past few years have brought us tremendous opportunity. Our continued strength in balance sheet growth, conservative underwriting standards, and diligent cost controls have allowed us to report these remarkable results.”

President Gaughen added, “We remain committed to the conservative strategies and practices that have made the 2010 performance possible. Our goal remains to promote organic growth, vigorously manage asset quality, effectively control costs and protect and increase our earnings.”

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 02043, phone (781) 749-2200.

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
 
December 31,
(Dollars in thousands except per share data) 2010   2009
(Unaudited)
ASSETS
 
Cash and due from banks $ 6,298 $ 7,372
Short-term investments 61,566 45,265
Cash and cash equivalents 67,864 52,637
 
Certificates of deposit 13,929 13,150
Securities available for sale, at fair value 95,071 96,374
Federal Home Loan Bank stock, at cost 13,373 13,373

Loans, net of allowance for loan losses of $6,905 in 2010 and $5,737 in 2009

792,910

718,242
Foreclosed assets 3,559 3,185
Bank-owned life insurance 14,074 13,615
Premises and equipment, net 7,985 5,434
Accrued interest receivable 2,992 3,392
Prepaid FDIC assessment 2,474 3,409
Deferred income tax asset, net 2,803 1,990
Other assets 811 759
$ 1,017,845 $ 925,560
 

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Deposits $ 729,960 $ 631,087
Federal Home Loan Bank advances 207,580 222,636
Mortgage payable 1,147 1,184
Mortgagors’ escrow accounts 2,344 1,968
Accrued interest payable 591 714
Other liabilities 3,487 2,678
Total liabilities 945,109 860,267
 
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; 2,124,250 shares issued and outstanding at both December 31, 2010 and 2009

 

2,124

 

2,124
Additional paid in capital 10,417 10,412
Undivided profits 59,999 52,299
Accumulated other comprehensive income 196 458
Total stockholders’ equity 72,736 65,293
$ 1,017,845 $ 925,560
 
Book value per share $ 34.24 $ 30.74
 
 

HINGHAM INSTITUTION FOR SAVINGS

Consolidated Statements of Income
   

Three Months Ended December 31,

Twelve Months Ended December 31,
(Dollars in thousands, except per share amounts) 2010   2009   2010   2009
(Unaudited)
 
Income and dividend income:
Loans $ 11,584 $ 10,780 $ 44,879 $ 42,199
Debt securities 264 458 1,418 2,003
Equity securities 25 28 106 117

Short-term investments and certificates of deposit
92 116 422 479

Total interest and dividend income
11,965 11,382 46,825 44,798
 
Interest expense:
Deposits 1,907 2,294 8,125 10,334
Federal Home Loan Bank advances 1,643 1,827 6,903 7,193
Mortgage payable 17 18 70 72
Total interest expense 3,567 4,139 15,098 17,599
Net interest income 8,398 7,243 31,727 27,199
Provision for loan losses 300 300 1,300 1,700
Net interest income after provision for loan losses 8,098 6,943 30,427 25,499
Other income:
Customer service fees on deposits 257 213 893 857
Increase in bank-owned life insurance 117 112 459 458
Gain on sale of loans 136 454
Miscellaneous 89 82 275 239
Total other income 463 543 1,627 2,008
Operating expenses:
Salaries and employee benefits 2,132 2,012 8,371 7,715
Data processing 226 213 853 859
Occupancy and equipment 324 324 1,280 1,333
Deposit insurance 257 251 1,074 1,335
Foreclosure 246 372 726 678
Marketing 142 107 501 461
Other general and administrative 519 420 2,173 1,990
Total operating expenses 3,846 3,699 14,978 14,371
Income before income taxes 4,715 3,787 17,076 13,136
Income tax provision 2,017 1,520 6,848 5,091
Net income $ 2,698 $ 2,267 $ 10,228 $ 8,045
 
Cash dividends declared per common share $ 0.49 $ 0.45 $ 1.19 $ 1.09
 
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 $ 1.27 $ 1.07 $ 4.81

$
3.79
Diluted $ 1.27 $ 1.07 $ 4.81

$
3.79
 
Return on average equity 14.85 % 13.93 % 14.67 % 12.78 %
 
 

HINGHAM INSTITUTION FOR SAVINGS

Net Interest Income Analysis
 
Three Months Ending December 31,
2010   2009

AVERAGE BALANCE
 

INTEREST
 

YIELD/ RATE

AVERAGE BALANCE
 

INTEREST
 

YIELD/ RATE
(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 791,475 $ 11,584 5.85 % $ 712,947 $ 10,780 6.05 %
Securities (3) (4) 106,723 289 1.08 102,022 486 1.91

Short-term investments and certificates of deposit
75,293 92 0.49 66,613 116 0.70
Total earning assets 973,491 11,965 4.92 881,582 11,382 5.16
Other assets 35,589 32,726
Total assets $ 1,009,080 $ 914,308
 
Interest-bearing deposits (5) $ 670,648 1,907 1.14 $ 583,800 2,294 1.57
Borrowed funds 207,511 1,660 3.20 213,245 1,845 3.46
Total interest-bearing liabilities 878,159 3,567 1.62 797,045 4,139 2.08
Demand deposits 54,497 48,683
Other liabilities 3,739 3,470
Total liabilities 936,395 849,198
Stockholders’ equity 72,685 65,110
Total liabilities and stockholders’ equity $ 1,009,080 $ 914,308
Net interest income $ 8,398 $ 7,243
 
Weighted average spread 3.30 % 3.08 %
 
Net interest margin (6) 3.45 % 3.29 %
 

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

110.86

%

110.61

%
 
 

(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 Ending December 31,
2010   2009

AVERAGE BALANCE
 

INTEREST
 

YIELD/ RATE

AVERAGE BALANCE
 

INTEREST
 

YIELD/ RATE
(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 757,147 $ 44,879 5.93 % $ 692,227 $ 42,199 6.10 %
Securities (3) (4) 104,920 1,524 1.45 85,427 2,120 2.48

Short-term investments and certificates of deposit
79,615 422 0.53 46,251 479 1.04
Total earning assets 941,682 46,825 4.97 823,905 44,798 5.44
Other assets 34,344 42,928
Total assets $ 976,026 $ 866,833
 
Interest-bearing deposits (5) $ 639,072 8,125 1.27 $ 542,810 10,334 1.90
Borrowed funds 213,138 6,973 3.27 212,841 7,265 3.41
Total interest-bearing liabilities 852,210 15,098 1.77 755,651 17,599 2.33
Demand deposits 51,034 42,873
Other liabilities 3,074 5,338
Total liabilities 906,318 803,862
Stockholders’ equity 69,708 62,971
Total liabilities and stockholders’ equity $ 976,026 $ 866,833
Net interest income $ 31,727 $ 27,199
 
Weighted average spread 3.20 % 3.11 %
 
Net interest margin (6) 3.37 % 3.30 %
 

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

110.50

%

109.03

%
 
 

(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,
2010   2009 2010   2009
(Unaudited)
 
Key Performance Ratios
Return on average assets (1) 1.07 % 0.99 % 1.05 % 0.93 %
Return on average equity (1) 14.85 13.93 14.67 12.78
Interest rate spread (1) (2) 3.30 3.08 3.20 3.11
Net interest margin (1) (3) 3.45 3.29 3.37 3.30
Non-interest expense to average assets (1) 1.52 1.62 1.53 1.66
Efficiency ratio (4) 43.40 47.51 44.91 49.20
Average equity to average assets 7.20 7.12 7.14 7.26

Average interest-bearing assets to average interest bearing liabilities

110.86

110.61

110.50

109.03
 
  December 31,
2010   2009
(Unaudited)
 
Asset Quality Ratios
Allowance for loan losses/total loans 0.86 % 0.79 %
Allowance for loan losses/non-performing loans 120.25 61.03
 
Non-performing loans/total loans 0.72 1.30
Non-performing loans/total assets 0.56 1.02
Non-performing assets/total assets 0.91 1.36
 
Share Related
Book value per share $ 34.24

$

30.74
Market value per share $ 44.50

$

30.69
Shares outstanding at end of period 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