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HINGHAM INSTITU FOR SAVINGS
Symbol	HIFS
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Hingham Institution for Savings Reports 24% Increase in Quarterly Earnings

2011-04-19 10:21 ET - News Release

HINGHAM, Mass. -- (Business Wire)

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 of deposit		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 average interest-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.

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