Hingham Institution for Savings (NASDAQ – HIFS), Hingham, Massachusetts announced first quarter earnings for 2011. Net income for the quarter ended March 31, 2011 was $2,880,000 or $1.36 per share (basic and diluted) as compared to $2,315,000 or $1.09 per share (basic and diluted) for the same period last year. The Bank’s return on average equity for the first quarter of 2011 was 15.37%, and the return on average assets was 1.13%.

Strong growth trends of recent years continued, as deposits increased by $62.9 million representing a 9% increase from March 31, 2010. Net loans increased by 10% and total assets increased by 7% over those for the first quarter of 2010. Stockholders’ equity increased to $75.0 million as of March 31, 2011 representing a 12% increase from March 31, 2010 with a related increase in book value per share from $31.56 to $35.31.

At March 31, 2011 non-performing assets totaled 0.92% of total assets, relatively flat with the 0.91% at December 31, 2010 and down from the 1.34% at March 31, 2010. For the quarter ended March 31, 2011, a provision of $300,000 was made to the allowance for loan losses compared to $400,000 for the same period in 2010. Foreclosure related expenses totaled $168,000 for the quarter ended March 31, 2011 compared to $126,000 for the quarter ended March 31, 2010.

President Robert H. Gaughen, Jr. stated, “Our quarterly earnings represent a 24% increase over the same period last year. The growth in our balance sheet combined with a favorable interest rate environment and stringent expense control allowed us to achieve these strong results.”

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
 

(Dollars in thousands except per share data)

March 31, 2011

December 31, 2010

March 31, 2010
(Unaudited)
ASSETS
 
Cash and due from banks $ 7,037 $ 6,298 $ 10,170
Short-term investments   65,420   61,566   77,861
Cash and cash equivalents 72,457 67,864 88,031
 
Certificates of deposit 13,980 13,929 13,610
Securities available for sale, at fair value 94,053 95,071 92,009
Federal Home Loan Bank stock, at cost 13,373 13,373 13,373
Loans, net of allowance for loan losses of $7,205

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

and $6,127 at March 31, 2010

 

803,653

 

792,910

 

727,698
Foreclosed assets 3,044 3,559 2,685
Bank-owned life insurance 14,190 14,074 13,729
Premises and equipment, net 9,106 7,985 5,448
Accrued interest receivable 3,208 2,992 3,246
Prepaid FDIC assessment 2,173 2,474 3,185
Deferred income tax asset, net 2,852 2,803 2,033
Other assets   923   811   1,340
Total assets $ 1,033,012 $ 1,017,845 $ 966,387
 

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Deposits $ 738,204 $ 729,960 $ 675,347
Federal Home Loan Bank advances 211,553 207,580 216,417
Mortgage payable 1,137 1,147 1,175
Mortgagors’ escrow accounts 2,443 2,344 2,078
Accrued interest payable 571 591 697
Other liabilities   4,093   3,487   3,635
Total liabilities   958,001   945,109   899,349
 
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

2,124

2,124

2,124
Additional paid-in capital 10,417 10,417 10,412
Undivided profits 62,369 59,999 54,125
Accumulated other comprehensive income   101   196   377
Total stockholders’ equity   75,011   72,736   67,038
Total liabilities and stockholders’ equity $ 1,033,012 $ 1,017,845 $ 966,387
 
 

HINGHAM INSTITUTION FOR SAVINGS

Consolidated Statements of Income
 
Three Months Ended

March 31,
(Dollars in thousands, except per share amounts) 2011   2010
(Unaudited)
 
Interest and dividend income:
Loans $ 11,568 $ 10,873
Debt securities 239 449
Equity securities 34 28
Short-term investments and certificates of deposit   82   110
Total interest and dividend income   11,923   11,460
 
Interest expense:
Deposits 1,758 2,168
Federal Home Loan Bank advances 1,492 1,809
Mortgage payable   17   18
Total interest expense   3,267   3,995
Net interest income 8,656 7,465
Provision for loan losses   300   400
Net interest income, after provision for loan losses   8,356   7,065
Other income:
Customer service fees on deposits 235 200
Increase in Bank-owned life insurance 116 114
Miscellaneous   60   63
Total other income   411   377
Operating expenses:
Salaries and employee benefits 2,150 2,044
Data processing 221 215
Occupancy and equipment 355 344
Deposit insurance 319 280
Foreclosure 168 126
Marketing 111 108
Other general and administrative   587   530
Total operating expenses   3,911   3,647
Income before income taxes 4,856 3,795
Income tax provision   1,976   1,480
Net income $ 2,880 $ 2,315
 
Cash dividends declared per common share $ 0.24 $ 0.23
 
Weighted average shares outstanding:
Basic   2,124   2,124
Diluted   2,125   2,124
 
Earnings per share:
Basic $ 1.36 $ 1.09
Diluted $ 1.36 $ 1.09

 

HINGHAM INSTITUTION FOR SAVINGS

Net Interest Income Analysis
 
Three Months Ending March 31,
2011   2010

AVERAGE BALANCE
 

INTEREST
 

YIELD/ RATE

AVERAGE BALANCE
 

INTEREST
 

YIELD/ RATE
(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 806,714 $ 11,568 5.74 % $ 729,559 $ 10,873 5.96 %
Securities (3) (4) 107,945 273 1.01 104,347 477 1.83

Short-term investments and certificates ofdeposit
  72,365   82 0.45   81,355   110 0.54
Total earning assets 987,024   11,923 4.83 915,261   11,460 5.01
Other assets   34,203   32,933
Total assets $ 1,021,227 $ 948,194
 
Interest-bearing deposits (5) $ 682,247 1,758 1.03 $ 610,151 2,168 1.42
Borrowed funds   206,527   1,509 2.92   220,584   1,827 3.31
Total interest-bearing liabilities 888,774   3,267 1.47 830,735   3,995 1.92
Demand deposits 54,222 47,056
Other liabilities   3,266   3,677
Total liabilities 946,262 881,468
Stockholders’ equity   74,965   66,726
Total liabilities and stockholders’ equity $ 1,021,227 $ 948,194
Net interest income $ 8,656 $ 7,465
 
Weighted average spread 3.36 % 3.09 %
 
Net interest margin (6) 3.51 % 3.26 %
 

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

 

111.05

%

110.17

%
 
(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

March 31,
2011   2010
(Unaudited)
 
Key Performance Ratios
Return on average assets (1) 1.13 % 0.98 %
Return on average equity (1) 15.37 13.88
Interest rate spread (1) (2) 3.36 3.09
Net interest margin (1) (3) 3.51 3.26
Non-interest expense to average assets (1) 1.53 1.54
Efficiency ratio (4) 43.13 46.51
Average equity to average assets 7.34 7.04
Average interest-bearing assets to average interest

bearing liabilities

111.05

110.17
 
  March 31,

2011
 

December 31, 2010
March 31,

2010
(Unaudited)
 
Asset Quality Ratios
Allowance for loan losses/total loans 0.89 % 0.86 %   0.84 %
Allowance for loan losses/non-performing loans 110.80 120.25 59.42
 
Non-performing loans/total loans 0.81 0.72 1.41
Non-performing loans/total assets 0.63 0.56 1.07
Non-performing assets/total assets 0.92 0.91 1.34
 
Share Related
Book value per share $ 35.31 $ 34.24 $ 31.56
Market value per share $ 51.51 $ 44.50 $ 34.67
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 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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