Hingham Savings Reports 24% Increase in Net Operating Earnings, Excluding Last Year's $5.7 Million of Net Income From One-Tim...
April 16 2015 - 4:05PM
HINGHAM INSTITUTION FOR SAVINGS (Nasdaq:HIFS), Hingham,
Massachusetts announced first quarter earnings for 2015. Net income
for the quarter ended March 31, 2015 was $4,515,000 or $2.12 per
share basic and $2.11 per share diluted as compared to $9,375,000
or $4.40 per share (basic and diluted) for the same period last
year. Earnings for the first quarter of 2014 included a 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
$3,634,000 or $1.71 per share (basic and diluted) for the first
quarter of 2014.
The Bank's return on average equity for the first quarter of
2015 was 14.52%, and the return on average assets was 1.15%
compared to a return on average equity of 18.87% and the return on
assets of 1.47% for the same period in 2014. Excluding the one-time
event, the Bank's return on average equity for the first quarter of
2014 was 13.53%, and the return on average assets was 1.05%.
Strong growth trends of recent years continued, as deposits
increased by $125.5 million representing a 12% increase from March
31, 2014. Net loans increased by 11% and total assets increased by
9% as compared to March 31, 2014. Stockholders' equity increased
$13.3 million from March 31, 2014 to March 31, 2015, representing a
12% increase, with a related increase in book value per share from
$52.70 to $58.95.
Key credit and operational metrics continued to improve. At
March 31, 2015, non-performing assets totaled 0.17% of total
assets, a decrease from 0.20% at December 31, 2014 and 0.51% at
March 31, 2014. Non-performing loans as a percentage of the total
loan portfolio totaled 0.16% at March 31, 2015 compared to 0.18% at
December 31, 2014 and 0.56% at March 31, 2014. The efficiency ratio
improved to 38.31% for the first quarter of 2015 as compared to
42.98% for the same period in 2014. Non-interest expense as a
percentage of average assets fell to 1.23% for the first quarter of
2015 as compared to 1.45% for the same period in 2014. These
reductions reflect the Bank's particular focus on disciplined
expense management and effective credit management.
President Robert H. Gaughen Jr. stated, "We continue to
emphasize conservative underwriting, cost discipline, careful
capital allocation and measured growth. We remain committed to the
fundamentally conservative strategies that have produced long-term
value for our shareholders."
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 continually 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, Norwell, Scituate and Weymouth, as well as
branches in the South End of Boston and on Beacon Hill and on 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 |
Consolidated Balance
Sheets |
|
|
|
|
|
|
|
|
(In thousands) |
March 31,
2015 |
December 31,
2014 |
March 31,
2014 |
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
|
Cash and due from banks |
$ 5,901 |
$ 6,917 |
$ 17,409 |
Short-term investments |
182,399 |
170,305 |
110,830 |
Cash and cash
equivalents |
188,300 |
177,222 |
128,239 |
|
|
|
|
Certificates of deposit |
10,722 |
12,926 |
12,763 |
Securities available for sale, at fair
value |
66,853 |
70,570 |
105,443 |
Federal Home Loan Bank stock, at cost |
17,855 |
17,855 |
16,007 |
Loans, net of allowance for loan losses of
$9,284 at March 31, 2015, $9,108 at December 31, 2014 and
$8,660 at March 31, 2014 |
1,254,913 |
1,238,656 |
1,130,902 |
Foreclosed assets |
586 |
786 |
983 |
Bank-owned life insurance |
11,486 |
11,416 |
11,201 |
Premises and equipment, net |
15,091 |
15,211 |
15,686 |
Accrued interest receivable |
3,001 |
2,959 |
2,877 |
Deferred income tax asset, net |
2,632 |
2,642 |
2,842 |
Other assets |
2,491 |
1,962 |
12,630 |
Total assets |
$ 1,573,930 |
$ 1,552,205 |
$ 1,439,573 |
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Deposits |
$ 1,135,850 |
$ 1,089,217 |
$ 1,010,347 |
Federal Home Loan Bank advances |
300,568 |
329,602 |
303,715 |
Mortgage payable |
960 |
973 |
1,008 |
Mortgagors' escrow accounts |
4,411 |
4,476 |
3,993 |
Accrued interest payable |
341 |
350 |
424 |
Other liabilities |
6,307 |
6,072 |
7,905 |
Total liabilities |
1,448,437 |
1,430,690 |
1,327,392 |
|
|
|
|
Stockholders' equity: |
|
|
|
Preferred stock, $1.00 par
value, 2,500 shares authorized, none issued |
— |
— |
— |
Common stock, $1.00 par value,
5,000 shares authorized; 2,129 shares issued and
outstanding |
2,129 |
2,129 |
2,129 |
Additional paid-in
capital |
10,965 |
10,942 |
10,659 |
Undivided profits |
112,162 |
108,243 |
99,250 |
Accumulated other comprehensive
income |
237 |
201 |
143 |
Total stockholders' equity |
125,493 |
121,515 |
112,181 |
Total liabilities and
stockholders' equity |
$ 1,573,930 |
$ 1,552,205 |
$ 1,439,573 |
|
|
HINGHAM INSTITUTION FOR
SAVINGS |
Consolidated Statements
of Income |
|
|
|
Three Months
Ended March 31, |
(In thousands, except per share amounts) |
2015 |
2014 |
(Unaudited) |
|
|
|
|
|
Interest and dividend income: |
|
|
Loans |
$ 14,538 |
$ 12,946 |
Debt securities |
62 |
91 |
Equity securities |
155 |
114 |
Short-term investments and
certificates of deposit |
136 |
69 |
Total interest and dividend
income |
14,891 |
13,220 |
|
|
|
Interest expense: |
|
|
Deposits |
1,827 |
1,437 |
Federal Home Loan Bank
advances |
721 |
1,055 |
Mortgage payable |
14 |
15 |
Total interest expense |
2,562 |
2,507 |
Net interest income |
12,329 |
10,713 |
Provision for loan losses |
175 |
150 |
Net interest income,
after provision for loan losses |
12,154 |
10,563 |
Other income: |
|
|
Customer service fees on
deposits |
228 |
243 |
Increase in cash surrender
value of life insurance |
70 |
93 |
Life insurance death
benefit |
— |
6,302 |
Miscellaneous |
59 |
54 |
Total other income |
357 |
6,692 |
Operating expenses: |
|
|
Salaries and employee
benefits |
2,904 |
3,786 |
Data processing |
296 |
283 |
Occupancy and equipment |
554 |
496 |
Deposit insurance |
217 |
190 |
Foreclosure |
77 |
190 |
Marketing |
121 |
136 |
Other general and
administrative |
691 |
640 |
Total operating expenses |
4,860 |
5,721 |
Income before income taxes |
7,651 |
11,534 |
Income tax provision |
3,136 |
2,159 |
Net income |
$ 4,515 |
$ 9,375 |
|
|
|
Cash dividends declared per common share |
$ 0.28 |
$ 0.27 |
|
|
|
Weighted average shares outstanding: |
|
|
Basic |
2,129 |
2,129 |
Diluted |
2,140 |
2,131 |
|
|
|
Earnings per share: |
|
|
Basic |
$ 2.12 |
$ 4.40 |
Diluted |
$ 2.11 |
$ 4.40 |
|
|
|
|
|
HINGHAM INSTITUTION FOR
SAVINGS |
Net Interest Income
Analysis |
|
|
Three Months
Ended March 31, |
|
2015 |
2014 |
|
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE* |
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE* |
(Dollars in thousands) |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1) (2) |
$ 1,250,321 |
$ 14,538 |
4.65% |
$ 1,114,240 |
$ 12,946 |
4.65% |
Securities (3) (4) |
87,063 |
217 |
1.00 |
119,187 |
205 |
0.69 |
Short-term investments and certificates of
deposit |
204,586 |
136 |
0.27 |
107,030 |
69 |
0.26 |
Total earning assets |
1,541,970 |
14,891 |
3.86 |
1,340,457 |
13,220 |
3.94 |
Other assets |
32,692 |
|
|
38,193 |
|
|
Total assets |
$ 1,574,662 |
|
|
$ 1,378,650 |
|
|
|
|
|
|
|
|
|
Interest-bearing deposits (5) |
$ 1,005,824 |
1,827 |
0.73 |
$ 869,209 |
1,437 |
0.66 |
Borrowed funds |
324,979 |
735 |
0.90 |
307,325 |
1,070 |
1.39 |
Total interest-bearing
liabilities |
1,330,803 |
2,562 |
0.77 |
1,176,534 |
2,507 |
0.85 |
Demand deposits |
114,755 |
|
|
92,206 |
|
|
Other liabilities |
4,750 |
|
|
2,438 |
|
|
Total liabilities |
1,450,308 |
|
|
1,271,178 |
|
|
Stockholders' equity |
124,354 |
|
|
107,472 |
|
|
Total liabilities and
stockholders' equity |
$ 1,574,662 |
|
|
$ 1,378,650 |
|
|
Net interest income |
|
$ 12,329 |
|
|
$ 10,713 |
|
|
|
|
|
|
|
|
Weighted average spread |
|
|
3.09% |
|
|
3.09% |
|
|
|
|
|
|
|
Net interest margin (6) |
|
|
3.20% |
|
|
3.20% |
|
|
|
|
|
|
|
Average interest-earning assets to average
interest-bearing liabilities (7) |
|
|
115.87% |
|
|
113.93% |
|
* Annualized |
(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, |
|
|
2015 |
2014 |
(Unaudited) |
|
|
|
|
|
|
|
Key Performance Ratios |
|
|
|
Return on average assets (1) |
|
1.15% |
1.47% |
Return on average equity (1) |
|
14.52 |
18.87 |
Interest rate spread (2) |
|
3.09 |
3.09 |
Net interest margin (3) |
|
3.20 |
3.20 |
Non-interest expense to average assets
(1) |
|
1.23 |
1.45 |
Efficiency ratio (4) |
|
38.31 |
42.98 |
Average equity to average assets |
|
7.90 |
7.80 |
Average interest-bearing assets to average
interest bearing liabilities |
|
115.87 |
113.93 |
|
|
|
|
|
|
|
|
|
March 31, |
December 31, |
March 31, |
|
2015 |
2014 |
2014 |
(Unaudited) |
|
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
Allowance for loan losses/total loans |
0.74% |
0.73% |
0.76% |
Allowance for loan losses/non-performing
loans |
447.64 |
397.04 |
135.12 |
|
|
|
|
Non-performing loans/total loans |
0.16 |
0.18 |
0.56 |
Non-performing loans/total assets |
0.13 |
0.15 |
0.45 |
Non-performing assets/total assets |
0.17 |
0.20 |
0.51 |
|
|
|
|
Share Related |
|
|
|
Book value per share |
$ 58.95 |
$ 57.08 |
$ 52.70 |
Market value per share |
$ 99.00 |
$ 87.01 |
$ 78.50 |
Shares outstanding at end of period |
2,128,750 |
2,128,750 |
2,128,750 |
|
|
|
|
(1) Annualized, except for
the applicable elements of the $5.7 million event in 2014 which
were included but not annualized. |
(2) Annualized. Interest rate spread represents the
difference between the yield on earning assets and cost of
interest-bearing liabilities. |
(3) Annualized. Net
interest margin represents net interest income divided by average
earning assets. |
(4) The efficiency ratio
represents operating expenses divided by the sum of net interest
income and other income. The ratio for 2014 excludes the $6.3
million life insurance death benefit from other income and $949,000
in salaries and benefits expense for the related accrual of a
contractual death benefit liability. |
CONTACT: Robert A. Bogart, Vice President & Treasurer (781) 749-2200
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