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.
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HINGHAM INSTITUTION FOR SAVINGS Consolidated Balance Sheets |
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(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 |
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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 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | |
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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 |
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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 |
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HINGHAM INSTITUTION FOR SAVINGS Consolidated Statements of Income |
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| | 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 |
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Cash dividends declared per common share | | $ | 0.24 | | $ | 0.23 |
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Weighted average shares outstanding: | | | | | | |
Basic | | | 2,124 | | | 2,124 |
Diluted | | | 2,125 | | | 2,124 |
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Earnings per share: | | | | | | |
Basic | | $ | 1.36 | | $ | 1.09 |
Diluted | | $ | 1.36 | | $ | 1.09 |
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HINGHAM INSTITUTION FOR SAVINGS Net Interest Income Analysis |
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| | 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 | % |
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(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. |
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HINGHAM INSTITUTION FOR SAVINGS Selected Financial Ratios |
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| | 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 | |
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| | 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 | |
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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 | |
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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 | |
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(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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