Hingham Savings Announces Record Annual Earnings and 30% Increase in Quarterly Earnings
January 16 2015 - 9:24AM
HINGHAM INSTITUTION FOR SAVINGS (Nasdaq:HIFS) announced record
earnings for 2014. Net income for the year ended December 31, 2014
was $22,264,000 or $10.46 per share basic and $10.44 per share
diluted as compared to $13,371,000 or $6.28 per share (basic and
diluted) for 2013. Net income for the fourth quarter of 2014 was
$4,535,000 or $2.13 per share basic and $2.12 per share diluted; a
30% increase over $3,488,000 or $1.64 per share (basic and diluted)
for the fourth quarter of 2013. The Bank's return on average equity
for the year ended December 31, 2014 was 19.30%, and the return on
average assets was 1.52%.
Net income for 2014 included a one-time net gain of
approximately $5.7 million related to non-taxable life insurance
death benefit income of $6,302,000 less an accrual of $949,000 for
a contractual death benefit liability, and $388,000 in related
income tax benefit. Excluding this event, the Bank earned
$16,523,000 or $7.76 per share basic and $7.75 per share diluted
for 2014, representing a 24% increase in net income over the
previous year. Excluding the income statement impact of this event,
the Bank's return on average equity was 14.32% and return on
average assets was 1.13% in 2014, as compared to 13.52% and 1.07%
in 2013.
The Bank also produced record increases in both deposits and
loans. Deposits increased by $148.3 million, or 16%. Net loans
increased by $159.8 million, or 15%, and total assets increased by
14% from December 31, 2013 to December 31, 2014. Total assets were
$1.552 billion at December 31, 2014 as compared to $1.356 billion
at December 31, 2013. Book value per share increased by 17.7% to
$57.08 per share at December 31, 2014 from $48.49 per share at
December 31, 2013. This increase in book value per share excludes
capital returned to the ownership through regular and special
dividends; the Bank declared $2.10 per share in regular and special
dividends in 2014.
Key credit and operational metrics continued to improve in 2014
as compared to 2013. At December 31, 2014, non-performing assets
totaled 0.20% of total assets compared to 0.46% of total assets at
December 31, 2013. Non-performing loans as a percentage of the
total loan portfolio totaled 0.18% at December 31, 2014 as compared
to 0.55% at December 31, 2013. The efficiency ratio improved to
37.19% in 2014 as compared to 43.23% in 2013. Non-interest expense
as a percentage of average assets fell to 1.37% in 2014 as compared
to 1.40% in 2013. Both the efficiency ratio and non-interest
expense as a percentage of average assets reached record lows in
2014 and reflect the Bank's particular focus on disciplined expense
management.
Robert H. Gaughen Jr., President and Chairman of the Board of
Directors, stated "At Hingham, we take our role as stewards of the
shareholders' capital seriously. We are pleased to report an
outstanding return on that capital in 2014. Our emphasis on
conservative underwriting, careful capital allocation, and measured
growth continues to serve our shareholders well. More important
than performance in any one year, however, is our record of
compounding shareholder capital over time. On this measure, our
team continues to set a very high bar."
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 continuously operating banks in the
United States. The Bank's main offices are 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, Norwell, Weymouth as well as branches
in the South End of Boston, Beacon Hill and the island of
Nantucket.
The Bank's shares of common stock are listed and traded on The
NASDAQ Stock Market under the symbol HIFS.
HINGHAM INSTITUTION FOR
SAVINGS |
Selected Financial
Ratios |
|
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|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Key Performance Ratios |
|
|
|
|
Return on average assets (1) |
1.18% |
1.06% |
1.52% |
1.07% |
Return on average equity (1) |
15.01 |
13.62 |
19.30 |
13.52 |
Interest rate spread (1) (2) |
3.12 |
3.02 |
3.13 |
3.08 |
Net interest margin (1) (3) |
3.23 |
3.14 |
3.23 |
3.19 |
Non-interest expense to average assets
(1) |
1.24 |
1.37 |
1.37 |
1.40 |
Efficiency ratio (4) |
37.95 |
43.03 |
37.19 |
43.23 |
Average equity to average assets |
7.83 |
7.75 |
7.87 |
7.89 |
Average interest-bearing assets to average
interest |
|
|
|
|
bearing liabilities |
115.74 |
114.01 |
114.92 |
113.95 |
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
December 31, |
|
|
|
2014 |
2013 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
|
Allowance for loan losses/total loans |
|
0.73% |
0.78% |
|
Allowance for loan losses/non-performing
loans |
|
397.04 |
143.37 |
|
|
|
|
|
|
Non-performing loans/total loans |
|
0.18 |
0.55 |
|
Non-performing loans/total assets |
|
0.15 |
0.44 |
|
Non-performing assets/total assets |
|
0.20 |
0.46 |
|
|
|
|
|
|
Share Related |
|
|
|
|
Book value per share |
|
$ 57.08 |
$ 48.49 |
|
Market value per share |
|
$ 87.01 |
$ 78.49 |
|
Shares outstanding at end of period |
|
2,128,750 |
2,128,750 |
|
|
|
|
|
|
(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. |
|
HINGHAM INSTITUTION FOR
SAVINGS |
Consolidated Balance
Sheets |
|
|
|
|
|
|
|
December 31,
2014 |
December 31,
2013 |
(Dollars in thousands except per share
data) |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
|
Cash and due from banks |
$ 6,917 |
$ 11,922 |
Short-term investments |
170,305 |
90,925 |
Cash and cash equivalents |
177,222 |
102,847 |
|
|
|
Certificates of deposit |
12,926 |
13,011 |
Securities available for sale, at fair
value |
70,570 |
106,369 |
Federal Home Loan Bank stock, at cost |
17,855 |
15,978 |
Loans, net of allowance for loan losses of
$9,108 at |
|
|
December 31, 2014 and $8,509 at
December 31, 2013 |
1,238,656 |
1,078,879 |
Foreclosed assets |
786 |
271 |
Bank-owned life insurance |
11,416 |
15,375 |
Premises and equipment, net |
15,211 |
15,854 |
Accrued interest receivable |
2,959 |
2,792 |
Deferred income tax asset, net |
2,642 |
2,934 |
Other assets |
1,962 |
2,131 |
Total assets |
$ 1,552,205 |
$ 1,356,441 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Deposits |
$ 1,089,217 |
$ 940,906 |
Federal Home Loan Bank advances |
329,602 |
302,732 |
Mortgage payable |
973 |
1,020 |
Mortgagors' escrow accounts |
4,476 |
3,709 |
Accrued interest payable |
350 |
490 |
Other liabilities |
6,072 |
4,367 |
Total liabilities |
1,430,690 |
1,253,224 |
|
|
|
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; 2,128,750 shares
issued and outstanding at December 31, 2014 and December
31, 2013 |
|
|
|
2,129 |
2,129 |
Additional paid-in capital |
10,942 |
10,659 |
Undivided profits |
108,243 |
90,449 |
Accumulated other comprehensive
income |
201 |
(20) |
Total stockholders' equity |
121,515 |
103,217 |
Total liabilities and
stockholders' equity |
$ 1,552,205 |
$ 1,356,441 |
|
HINGHAM INSTITUTION FOR
SAVINGS |
Consolidated Statements
of Net Income |
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
December
31, |
|
2014 |
2013 |
2014 |
2013 |
(Unaudited) |
(In thousands, except per share
amounts) |
Interest and dividend income: |
|
|
|
|
Loans |
$ 14,392 |
$ 12,455 |
$ 54,990 |
$ 48,455 |
Debt securities |
73 |
92 |
336 |
407 |
Equity securities |
145 |
65 |
491 |
181 |
Short-term investments and
certificates of deposit |
130 |
86 |
376 |
299 |
Total interest and dividend
income |
14,740 |
12,698 |
56,193 |
49,342 |
Interest expense: |
|
|
|
|
Deposits |
1,760 |
1,430 |
6,314 |
5,660 |
Federal Home Loan Bank
advances |
760 |
1,177 |
3,562 |
4,779 |
Mortgage payable |
15 |
16 |
60 |
63 |
Total interest expense |
2,535 |
2,623 |
9,936 |
10,502 |
Net interest income |
12,205 |
10,075 |
46,257 |
38,840 |
Provision for loan losses |
150 |
90 |
625 |
380 |
Net interest income, after
provision for loan losses |
12,055 |
9,985 |
45,632 |
38,460 |
Other income: |
|
|
|
|
Customer service fees on
deposits |
258 |
261 |
1,014 |
1,019 |
Increase in bank-owned life
insurance |
70 |
107 |
308 |
430 |
Life insurance death
benefit |
— |
— |
6,302 |
— |
Miscellaneous |
69 |
65 |
296 |
214 |
Total other income |
397 |
433 |
7,920 |
1,663 |
Operating expenses: |
|
|
|
|
Salaries and employee
benefits |
2,846 |
2,773 |
12,424 |
10,602 |
Data processing |
304 |
261 |
1,197 |
1,015 |
Occupancy and equipment |
496 |
480 |
1,968 |
1,853 |
Deposit insurance |
211 |
175 |
803 |
684 |
Foreclosure |
29 |
(32) |
263 |
186 |
Marketing |
203 |
167 |
557 |
557 |
Other general and
administrative |
694 |
700 |
2,934 |
2,615 |
Total operating expenses |
4,783 |
4,524 |
20,146 |
17,512 |
Income before income taxes |
7,669 |
5,894 |
33,406 |
22,611 |
Income tax provision |
3,134 |
2,406 |
11,142 |
9,240 |
Net income |
$ 4,535 |
$ 3,488 |
$ 22,264 |
$ 13,371 |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
2,129 |
2,129 |
2,129 |
2,128 |
Diluted |
2,136 |
2,131 |
2,133 |
2,130 |
|
|
|
|
|
Earnings per common share: |
|
|
|
|
Basic |
$ 2.13 |
$ 1.64 |
$ 10.46 |
$ 6.28 |
Diluted |
$ 2.12 |
$ 1.64 |
$ 10.44 |
$ 6.28 |
|
HINGHAM INSTITUTION FOR
SAVINGS |
Net Interest Income
Analysis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, |
|
2014 |
2013 |
|
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE |
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE |
(Dollars in thousands) |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1) (2) |
$ 1,228,130 |
$ 14,392 |
4.69% |
$ 1,053,754 |
$ 12,455 |
4.73% |
Securities (3) (4) |
96,852 |
218 |
0.90 |
116,233 |
157 |
0.54 |
Short-term investments and certificates of
deposit |
185,211 |
130 |
0.28 |
114,398 |
86 |
0.30 |
Total earning assets |
1,510,193 |
14,740 |
3.90 |
1,284,385 |
12,698 |
3.95 |
Other assets |
33,565 |
|
|
37,525 |
|
|
Total assets |
$ 1,543,758 |
|
|
$ 1,321,910 |
|
|
|
|
|
|
|
|
|
Interest-bearing deposits (5) |
$ 965,990 |
1,760 |
0.73 |
$ 833,128 |
1,430 |
0.69 |
Borrowed funds |
338,841 |
775 |
0.91 |
293,442 |
1,193 |
1.63 |
Total interest-bearing
liabilities |
1,304,831 |
2,535 |
0.78 |
1,126,570 |
2,623 |
0.93 |
Demand deposits |
111,821 |
|
|
88,294 |
|
|
Other liabilities |
6,245 |
|
|
4,571 |
|
|
Total liabilities |
1,422,897 |
|
|
1,219,435 |
|
|
Stockholders' equity |
120,861 |
|
|
102,475 |
|
|
Total liabilities and
stockholders' equity |
$ 1,543,758 |
|
|
$ 1,321,910 |
|
|
Net interest income |
|
$ 12,205 |
|
|
$ 10,075 |
|
|
|
|
|
|
|
|
Weighted average spread |
|
|
3.12% |
|
|
3.02% |
|
|
|
|
|
|
|
Net interest margin (6) |
|
|
3.23% |
|
|
3.14% |
|
|
|
|
|
|
|
Average interest-earning assets to
average |
|
|
|
|
|
|
interest-bearing liabilities
(7) |
|
|
115.74% |
|
|
114.01% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
Ended December 31, |
|
2014 |
2013 |
|
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE |
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE |
(Dollars in thousands) |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1) (2) |
$ 1,179,865 |
$ 54,990 |
4.66% |
$ 1,000,412 |
$ 48,455 |
4.84% |
Securities (3) (4) |
110,021 |
827 |
0.75 |
115,476 |
588 |
0.51 |
Short-term investments and certificates of
deposit |
140,393 |
376 |
0.27 |
100,527 |
299 |
0.30 |
Total earning assets |
1,430,279 |
56,193 |
3.93 |
1,216,415 |
49,342 |
4.06 |
Other assets |
35,824 |
|
|
36,866 |
|
|
Total assets |
$ 1,466,103 |
|
|
$ 1,253,281 |
|
|
|
|
|
|
|
|
|
Interest-bearing deposits (5) |
$ 923,550 |
6,314 |
0.68 |
$ 806,728 |
5,660 |
0.70 |
Borrowed funds |
321,068 |
3,622 |
1.13 |
260,817 |
4,842 |
1.86 |
Total interest-bearing
liabilities |
1,244,618 |
9,936 |
0.80 |
1,067,545 |
10,502 |
0.98 |
Demand deposits |
101,974 |
|
|
83,222 |
|
|
Other liabilities |
4,130 |
|
|
3,626 |
|
|
Total liabilities |
1,350,722 |
|
|
1,154,393 |
|
|
Stockholders' equity |
115,381 |
|
|
98,888 |
|
|
Total liabilities and
stockholders' equity |
$ 1,466,103 |
|
|
$ 1,253,281 |
|
|
Net interest income |
|
$ 46,257 |
|
|
$ 38,840 |
|
|
|
|
|
|
|
|
Weighted average spread |
|
|
3.13% |
|
|
3.08% |
|
|
|
|
|
|
|
Net interest margin (6) |
|
|
3.23% |
|
|
3.19% |
|
|
|
|
|
|
|
Average interest-earning assets to
average |
|
|
|
|
|
|
interest-bearing liabilities
(7) |
|
|
114.92% |
|
|
113.95% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
CONTACT: Robert A. Bogart, Vice President-Treasurer (781) 749-2200
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