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HINGHAM INSTITU FOR SAVINGS
Symbol	HIFS
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Hingham Institution for Savings Reports 13% Increase in Quarterly Earnings

2012-04-19 09:29 ET - News Release

HINGHAM, Mass. -- (Business Wire)

HINGHAM INSTITUTION FOR SAVINGS (NASDAQ – HIFS), Hingham, Massachusetts announced first quarter earnings for 2012. Net income for the quarter ended March 31, 2012 was $3,241,000 or $1.52 per share (basic and diluted) as compared to $2,880,000 or $1.36 per share basic and $1.35 per share diluted for the same period last year. The Bank’s return on average equity for the first quarter of 2012 was 15.30%, and the return on average assets was 1.15%.

Strong growth trends of recent years continued, as deposits increased by $69.5 million representing a 9% increase from March 31, 2011. Net loans increased by 8% and total assets increased by 11% over those for the first quarter of 2011. Stockholders’ equity increased to $84.9 million as of March 31, 2012 representing a 13% increase from March 31, 2011 with a related increase in book value per share from $35.31 to $39.94.

At March 31, 2012 non-performing assets totaled 0.89% of total assets, down from 0.92% of total assets at both December 31, 2011 and March 31, 2011. For the quarter ended March 31, 2012, a provision of $225,000 was made to the allowance for loan losses compared to $300,000 for the same period in 2011. Foreclosure related expenses totaled $200,000 for the quarter ended March 31, 2012 compared to $168,000 for the quarter ended March 31, 2011.

President Robert H. Gaughen, Jr. stated, “Our quarterly earnings represent a 13% increase over the same period last year. We continue to experience consistent organic growth in our balance sheet. This growth, when combined with our outstanding efficiency, has again produced some of the strongest earnings in our industry.”

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 two branches in 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

	March 31, 2012		December 31, 2011			March 31, 2011
(Dollars in thousands except per share data)
(Unaudited)
ASSETS

Cash and due from banks	$	8,146	$	8,918		$	7,037
Short-term investments		108,345		107,422			65,420
Cash and cash equivalents		116,491		116,340			72,457

Certificates of deposit		13,754		13,405			13,980
Securities available for sale, at fair value		99,772		96,689			94,053
Federal Home Loan Bank stock, at cost		13,159		13,373			13,373
Loans, net of allowance for loan losses of $7,639 at March 31, 2012, $7,516 at December 31, 2011 and $7,205 at March 31, 2011		869,051		849,776			803,653
Foreclosed assets		3,884		3,629			3,044
Bank-owned life insurance		14,621		14,524			14,190
Premises and equipment, net		10,509		10,597			9,106
Accrued interest receivable		2,973		2,858			3,208
Prepaid FDIC assessment		1,755		1,871			2,173
Deferred income tax asset, net		3,462		3,425			2,852
Other assets		1,049		789			923
Total assets	$	1,150,480	$	1,127,276		$	1,033,012

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits	$	807,730	$	787,573	$		738,204
Federal Home Loan Bank advances		246,442		247,471			211,553
Mortgage payable		1,097		1,107			1,137
Mortgagors’ escrow accounts		2,709		2,517			2,443
Accrued interest payable		472		475			571
Other liabilities		7,121		5,868			4,093
Total liabilities		1,065,571		1,045,011			958,001

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; 2,125,750 shares issued and outstanding as of March 31, 2012 and December 31, 2011 and 2,124,250 shares issued and outstanding as of March 31, 2011		2,126		2,126			2,124
Additional paid-in capital		10,500		10,500			10,417
Undivided profits		72,114		69,404			62,369
Accumulated other comprehensive income		169		235			101
Total stockholders’ equity		84,909		82,265			75,011
Total liabilities and stockholders’ equity	$	1,150,480	$	1,127,276	$		1,033,012



HINGHAM INSTITUTION FOR SAVINGS Consolidated Statements of Income

	Three Months Ended March 31,
(Dollars in thousands, except per share amounts)	2012		2011
(Unaudited)

Interest and dividend income:
Loans	$	11,843	$	11,568
Debt securities		149		239
Equity securities		42		34
Short-term investments and certificates of deposit		89		82
Total interest and dividend income		12,123		11,923

Interest expense:
Deposits		1,506		1,758
Federal Home Loan Bank advances		1,240		1,492
Mortgage payable		16		17
Total interest expense		2,762		3,267
Net interest income		9,361		8,656
Provision for loan losses		225		300
Net interest income, after provision for loan losses		9,136		8,356
Other income:
Customer service fees on deposits		253		235
Increase in Bank-owned life insurance		97		116
Miscellaneous		57		60
Total other income		407		411
Operating expenses:
Salaries and employee benefits		2,335		2,150
Data processing		231		221
Occupancy and equipment		419		355
Deposit insurance		133		319
Foreclosure		200		168
Marketing		134		111
Other general and administrative		625		587
Total operating expenses		4,077		3,911
Income before income taxes		5,466		4,856
Income tax provision		2,225		1,976
Net income	$	3,241	$	2,880

Cash dividends declared per common share	$	0.25	$	0.24

Weighted average shares outstanding:
Basic		2,126		2,124
Diluted		2,127		2,125

Earnings per share:
Basic	$	1.52	$	1.36
Diluted	$	1.52	$	1.35



HINGHAM INSTITUTION FOR SAVINGS Net Interest Income Analysis

	Three Months Ending March 31,
	2012						2011
	AVERAGE BALANCE		INTEREST		YIELD/ RATE		AVERAGE BALANCE		INTEREST		YIELD/ RATE
(Dollars in thousands)
(Unaudited)

Loans (1) (2)	$	864,131	$	11,843	5.48	%	$	806,714	$	11,568	5.74	%
Securities (3) (4)		97,387		191	0.78			107,945		273	1.01
Short-term investments and certificates of deposit		115,706		89	0.31			72,365		82	0.45
Total earning assets		1,077,224		12,123	4.50			987,024		11,923	4.83
Other assets		46,899						34,203
Total assets	$	1,124,123					$	1,021,227

Interest-bearing deposits (5)	$	735,651		1,506	0.82		$	682,247		1,758	1.03
Borrowed funds		236,817		1,256	2.12			206,527		1,509	2.92
Total interest-bearing liabilities		972,468		2,762	1.14			888,774		3,267	1.47
Demand deposits		63,352						54,222
Other liabilities		3,547						3,266
Total liabilities		1,039,367						946,262
Stockholders’ equity		84,756						74,965
Total liabilities and stockholders’ equity	$	1,124,123					$	1,021,227
Net interest income			$	9,361					$	8,656

Weighted average spread					3.36	%					3.36	%

Net interest margin (6)					3.48	%					3.51	%

Average interest-earning assets to average interest-bearing liabilities (7)					110.77	%					111.05	%

(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,
				2012				2011
(Unaudited)

Key Performance Ratios
Return on average assets (1)				1.15			%	1.13		%
Return on average equity (1)				15.30				15.37
Interest rate spread (1) (2)				3.36				3.36
Net interest margin (1) (3)				3.48				3.51
Non-interest expense to average assets (1)				1.45				1.53
Efficiency ratio (4)				41.74				43.13
Average equity to average assets				7.54				7.34
Average interest-bearing assets to average interest bearing liabilities				110.77				111.05

	March 31, 2012				December 31, 2011			March 31, 2011
(Unaudited)

Asset Quality Ratios
Allowance for loan losses/total loans		0.87	%		0.88		%		0.89	%
Allowance for loan losses/non-performing loans		120.09			111.30				110.80

Non-performing loans/total loans		0.73			0.79				0.81
Non-performing loans/total assets		0.55			0.60				0.63
Non-performing assets/total assets		0.89			0.92				0.92

Share Related
Book value per share	$	39.94			$	38.70		$ 35.31
Market value per share	$	56.44			$	47.80		$ 51.51
Shares outstanding at end of period		2,125,750				2,125,750		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.

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