Stockwatch

HINGHAM INSTITU FOR SAVINGS
Symbol	HIFS
Recent Sedar+ Documents

Hingham Institution for Savings: 27% Increase in Annual Earnings

2011-01-21 13:28 ET - News Release

Over $1 Billion in Total Assets

HINGHAM, Mass. -- (Business Wire)

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.

Contacts:

Hingham Institution for Savings
Robert H. Gaughen, Jr., 781-749-2200
President
or
William M. Donovan, Jr., 781-749-2200
Vice President-Administration

Source: Hingham Institution for Savings