Hingham Institution For Savings Reports 23% Increase In Quarterly Earnings

Hingham Institution for Savings (NASDAQ – HIFS), Hingham, Massachusetts announced second quarter earnings for 2011. Net income for the quarter ended June 30, 2011 was $2,967,000 or $1.40 per share (basic and diluted) as compared to $2,421,000 or $1.14 per share (basic and diluted) for the same period last year. The Bank’s return on average equity for the second quarter of 2011 was 15.32%, and the return on average assets was 1.13%. Net income for the six months ended June 30, 2011 was $5,847,000 or $2.75 per share (basic and diluted) as compared to $4,736,000 or $2.23 per share (basic and diluted) for the same period last year. The Bank’s annualized return on average equity for the first six months of 2011 was 15.34% and the return on average assets was 1.13%.

Strong growth trends of recent years continued, as deposits increased by $26 million from December 31, 2010 and $73 million from June 30, 2010, representing a 7% annualized growth year to date and 11% from June 30, 2010. Net loans increased by $34 million from December 31, 2010 and $82 million from June 30, 2010 representing 9% annualized growth year to date and 11% growth from the second quarter 2010. Total assets increased by $49 million from December 31, 2010 and $95 million from June 30, 2010, representing a 10% annualized growth year to date and 10% from the second quarter 2010. Stockholders’ equity increased to $77.6 million as of June 30, 2011, representing a 13% annualized growth year to date and a 13% increase from June 30, 2010. Book value per share increased to $36.54 per share at June 30, 2011 from $34.24 per share at December 31, 2010 and $32.47 per share at June 30, 2010.

At June 30, 2011 non-performing assets totaled 1.10% of total assets, an increase from the 0.91% at December 31, 2010 and down from the 1.57% at June 30, 2010. For the quarter ended June 30, 2011, a provision of $300,000 was made to the allowance for loan losses compared to $300,000 for the same period in 2010. Foreclosure related expenses totaled $185,000 for the quarter ended June 30, 2011 compared to $161,000 for the quarter ended June 30, 2010.

President Robert H. Gaughen, Jr. stated, “We are pleased to report that our current quarterly and year to date earnings represent a 23% increase over the second quarter and first half of 2010. We continue to see strong performance year over year, reflecting our continued commitment to shareholder value through quality growth and effective cost control.”

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 anticipates opening its 10 th branch in the Beacon Hill/Back Bay area of Boston in late summer.

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)

June 30,2011

December 31, 2010

June 30,2010
(Unaudited)
ASSETS
 
Cash and due from banks $ 5,315 $ 6,298 $ 6,565
Short-term investments   82,873   61,566   61,919
Cash and cash equivalents 88,188 67,864 68,484
 
Certificates of deposit 14,228 13,929 13,564
Securities available for sale, at fair value 87,556 95,071 95,053
Federal Home Loan Bank stock, at cost 13,373 13,373 13,373
Loans, net of allowance for loan losses of $7,222

at June 30, 2011, $6,905 at December 31, 2010

and $6,426 at June 30, 2010

 

826,877

 

792,910

 

744,410
Foreclosed assets 3,277 3,559 7,393
Bank-owned life insurance 14,304 14,074 13,843
Premises and equipment, net 9,977 7,985 5,698
Accrued interest receivable 2,990 2,992 3,214
Prepaid FDIC assessment 1,929 2,474 2,927
Deferred income tax asset, net 2,784 2,803 2,039
Other assets   1,115   811   1,781
Total assets $ 1,066,598 $ 1,017,845 $ 971,779
 

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Deposits $ 755,621 $ 729,960 $ 682,612
Federal Home Loan Bank advances 227,019 207,580 214,132
Mortgage payable 1,127 1,147 1,166
Mortgagors’ escrow accounts 2,319 2,344 2,056
Accrued interest payable 535 591 645
Other liabilities   2,356   3,487   2,199
Total liabilities   988,977   945,109   902,810
 
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 10,447 10,417 10,417
Undivided profits 64,805 59,999 56,058
Accumulated other comprehensive income   245   196   370
Total stockholders’ equity   77,621   72,736   68,969
Total liabilities and stockholders’ equity $ 1,066,598 $ 1,017,845 $ 971,779
 

     

HINGHAM INSTITUTION FOR SAVINGS

Consolidated Statements of Income
 
Three Months Ended Six Months Ended
June 30, June 30,
  2011     2010 2011   2010
(Unaudited) (In thousands, except per share amounts)
Interest and dividend income:    
Loans $ 11,743 $ 10,961 $ 23,311 $ 21,834
Debt securities 215 400 454 849
Equity securities 35 27 69 55
Short-term investments and certificates of deposit 96 114 178 224
Total interest and dividend income 12,089 11,502 24,012 22,962
Interest expense:
Deposits 1,764 2,053 3,522 4,221
Federal Home Loan Bank advances 1,487 1,742 2,979 3,551
Mortgage payable 17 17 34 35
Total interest expense 3,268 3,812 6,535 7,807
Net interest income 8,821 7,690 17,477 15,155
Provision for loan losses 300 300 600 700
Net interest income, after provision for loan losses 8,521 7,390 16,877 14,455
Other income:
  Customer service fees on deposits 247 204 482 404
Increase in bank-owned life insurance 114 114 230 228
Miscellaneous 60 62 120 125
Total other income 421 380 832 757
Operating expenses:
Salaries and employee benefits 2,205 2,097 4,355 4,141
Data processing 217 210 438 425
Occupancy and equipment 349 316 704 660
Deposit insurance 263 275 582 555
Foreclosure 185 161 353 287
Marketing 142 138 253 246
Other general and administrative 598 595 1,185 1,125
Total operating expenses 3,959 3,792 7,870 7,439
Income before income taxes 4,983 3,978 9,839 7,773
Income tax provision 2,016 1,557 3,992 3,037
Net income $ 2,967 $ 2,421 $ 5,847 $ 4,736
 
Weighted average common shares outstanding:
Basic 2,124 2,124 2,124 2,124
Diluted 2,126 2,124 2,125 2,124
 
Earnings per common share:
Basic $ 1.40 $ 1.14 $ 2.75 $ 2.23
Diluted $ 1.40 $ 1.14 $ 2.75 $ 2.23
 

 

HINGHAM INSTITUTION FOR SAVINGS

Net Interest Income Analysis
 
Three Months Ended June 30,
2011   2010

AVERAGEBALANCE
 

INTEREST
 

YIELD/RATE

AVERAGEBALANCE
 

INTEREST
 

YIELD/RATE
(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 819,037 $ 11,743 5.74 % $ 742,030 $ 10,961 5.91 %
Securities (3) (4) 104,597 250 0.96 105,176 427 1.62
Short-term investments and certificates of deposit   92,929   96 0.41   85,782   114 0.53
Total earning assets 1,016,563   12,089 4.76 932,988   11,502 4.93
Other assets   34,913   32,894
Total assets $ 1,051,476 $ 965,882
 
Interest-bearing deposits (5) $ 705,540 1,764 1.00 $ 630,787 2,053 1.30
Borrowed funds   208,568   1,504 2.88   213,523   1,759 3.30
Total interest-bearing liabilities 914,108   3,268 1.43 844,310   3,812 1.81
Demand deposits 56,883 50,293
Other liabilities   3,028   2,820
Total liabilities 974,019 897,423
Stockholders’ equity   77,457   68,459
Total liabilities and stockholders’ equity $ 1,051,476 $ 965,882
Net interest income $ 8,821 $ 7,690
 
Weighted average spread 3.33 % 3.12 %
 
Net interest margin (6) 3.47 % 3.30 %
 
Average interest-earning assets to average

interest-bearing liabilities (7)

111.21

%

111.50

%
(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
 
Six Months Ended June 30,
2011   2010

AVERAGEBALANCE
 

INTEREST
 

YIELD/RATE

AVERAGEBALANCE
 

INTEREST
 

YIELD/RATE
(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 812,909 $ 23,311 5.74 % $ 735,829 $ 21,834 5.93 %
Securities (3) (4) 106,262 523 0.98 104,764 904 1.73
Short-term investments and certificates of deposit   82,704   178 0.43   83,501   224 0.54
Total earning assets 1,001,875   24,012 4.79 924,094   22,962 4.97
Other assets   34,560   32,993
Total assets $ 1,036,435 $ 957,087
 
Interest-bearing deposits (5) $ 693,958 3,522 1.02 $ 620,710 4,221 1.36
Borrowed funds   207,553   3,013 2.90   217,034   3,586 3.30
Total interest-bearing liabilities 901,511   6,535 1.45 837,744   7,807 1.86
Demand deposits 55,560 48,689
Other liabilities   3,146   3,062
Total liabilities 960,217 889,495
Stockholders’ equity   76,218   67,592
Total liabilities and stockholders’ equity $ 1,036,435 $ 957,087
Net interest income $ 17,477 $ 15,155
 
Weighted average spread 3.34 % 3.11 %
 
Net interest margin (6) 3.49 % 3.28 %
 

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

 

111.13

%

110.30

%
(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 EndedJune 30,

Six Months EndedJune 30,
2011   2010 2011   2010
(Unaudited)
 
Key Performance Ratios
Return on average assets (1) 1.13 % 1.00 % 1.13 % 0.99 %
Return on average equity (1) 15.32 14.15 15.34 14.01
Interest rate spread (1) (2) 3.33 3.12 3.34 3.11
Net interest margin (1) (3) 3.47 3.30 3.49 3.28
Non-interest expense to average assets (1) 1.51 1.57 1.52 1.55
Efficiency ratio (4) 42.84 46.99 42.98 46.75
Average equity to average assets 7.37 7.09 7.35 7.06

Average interest-bearing assets to average interestbearing liabilities

 

111.21

110.50

111.13

110.30
 

 

June 30,2011
 

December 31,2010

June 30, 2010
(Unaudited)
 
Asset Quality Ratios
Allowance for loan losses/total loans 0.87 % 0.86 %   0.86 %
Allowance for loan losses/non-performing loans 85.77 120.25 81.26
 
Non-performing loans/total loans 1.01 0.72 1.05
Non-performing loans/total assets 0.79 0.56 0.81
Non-performing assets/total assets 1.10 0.91 1.57
 
Share Related
Book value per share $ 36.54 $ 34.24 $ 32.47
Market value per share $ 52.93 $ 44.50 $ 36.93
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.
 

Copyright Business Wire 2010

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