Hingham Savings Announces 18% Increase in Earnings per Share, 15% Return on Equity
April 12 2016 - 1:04PM
HINGHAM INSTITUTION FOR SAVINGS (NASDAQ:HIFS), Hingham,
Massachusetts announced first quarter earnings for 2016. Net income
for the quarter ended March 31, 2016 was $5,324,000 or $2.50 per
share basic and $2.48 per share diluted as compared to $4,515,000
or $2.12 per share basic and $2.11 per share diluted for the same
period last year. For the first quarter of 2016, the Bank’s
return on average equity was 15.03% and the return on average
assets was 1.19% as compared to 14.52% and 1.15% for the same
period in 2015.
Strong growth trends of recent years continued, as deposits
increased to $1.268 billion, representing a 12% increase from March
31, 2015 and a 17% increase on an annualized basis for the first
quarter. Net loans increased to $1.454 billion, representing a 16%
increase from March 31, 2015 and a 14% increase on an annualized
basis for the first quarter. Total assets increased to $1.850
billion, an 18% increase from March 31, 2015, primarily driven by
the Bank’s larger loan portfolio and cash holdings at the Federal
Reserve. Book value per share was $67.21 as of March 31,
2016, a 14% increase from the same time last year.
Key credit and operational metrics remained steady in the first
quarter. At March 31, 2016, non-performing assets totaled
0.19% of total assets, compared to 0.10% at December 31, 2015 and
0.17% at March 31, 2015. Non-performing loans as a percentage of
the total loan portfolio totaled 0.22% at March 31, 2016 compared
to 0.13% at December 31, 2015 and 0.16% at March 31, 2015. At
March 31, 2016, the Bank owned only one piece of foreclosed
residential real estate valued at $168,000. The efficiency
ratio improved to 34.38% for the first quarter of 2016, as compared
to 38.26% for the same period last year. Non-interest expense
as a percentage of average assets fell to 1.09% in the first
quarter, as compared to 1.23% for the same period last year.
These metrics reflect the Bank’s disciplined focus on credit and
expense management.
Robert H. Gaughen Jr., President and Chairman of the Board of
Directors, in releasing these results, stated, “We are pleased to
report that our current quarterly earnings per share represent an
18% increase over the same period in 2015 and a 15% return on
average equity. At Hingham, we take our role as stewards of
the owners’ capital seriously. We remain focused on careful capital
allocation, conservative underwriting, and disciplined cost control
– strategies that have served our owners well in fair weather and
foul.”
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
in Hingham. 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, 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 |
Selected Financial Ratios |
|
|
Three Months EndedMarch
31, |
|
2015 |
|
2016 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Key Performance
Ratios |
|
|
|
|
|
Return on average
assets (1) |
1.15 |
% |
|
1.19 |
% |
Return on average
equity (1) |
14.52 |
|
|
15.03 |
|
Interest rate spread
(2) |
3.09 |
|
|
3.03 |
|
Net interest margin
(3) |
3.20 |
|
|
3.14 |
|
Non-interest expense to
average assets (1) |
1.23 |
|
|
1.09 |
|
Efficiency ratio
(4) |
38.26 |
|
|
34.38 |
|
Average equity to
average assets |
7.90 |
|
|
7.89 |
|
Average
interest-earning assets to average interest bearing
liabilities |
115.87 |
|
|
116.13 |
|
|
March 31, 2015 |
|
December 31, 2015 |
|
March 31, 2016 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans |
|
0.74 |
% |
|
0.70 |
% |
|
0.70 |
% |
Allowance for loan
losses/non-performing loans |
|
447.64 |
|
|
540.37 |
|
|
311.79 |
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans/total
loans |
|
0.16 |
|
|
0.13 |
|
|
0.22 |
|
Non-performing loans/total
assets |
|
0.13 |
|
|
0.10 |
|
|
0.18 |
|
Non-performing
assets/total assets |
|
0.17 |
|
|
0.10 |
|
|
0.19 |
|
|
|
|
|
|
|
|
|
|
|
Share
Related |
|
|
|
|
|
|
|
|
|
Book value per share |
$ |
58.95 |
|
|
$ |
64.83 |
|
$ |
67.21 |
|
Market value per
share |
$ |
99.00 |
|
|
$ |
119.80 |
|
$ |
119.11 |
|
Shares outstanding at end
of period |
|
2,128,750 |
|
|
|
2,128,750 |
|
|
2,130,750 |
|
(1) 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.
|
HINGHAM INSTITUTION FOR SAVINGS |
Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
(In thousands, except per
share amounts) |
2015 |
|
2015 |
|
2016 |
(Unaudited) |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks |
$ |
5,901 |
|
$ |
6,944 |
|
$ |
7,643 |
Short-term
investments |
|
182,399 |
|
|
254,069 |
|
|
290,414 |
Cash and cash
equivalents |
|
188,300 |
|
|
261,013 |
|
|
298,057 |
|
|
|
|
|
|
|
|
|
Certificates of
deposit |
|
10,722 |
|
|
6,206 |
|
|
4,469 |
Securities available for
sale, at fair value |
|
66,853 |
|
|
40,603 |
|
|
37,400 |
Federal Home Loan Bank
stock, at cost |
|
17,855 |
|
|
19,796 |
|
|
20,679 |
Loans, net of allowance
for loan losses of $9,284 |
|
|
|
|
|
|
|
|
at March 31, 2015,
$9,905 at December 31, 2015 |
|
|
|
|
|
|
|
|
and $10,158 at
March 31, 2016 |
|
1,254,913 |
|
|
1,405,533 |
|
|
1,453,722 |
Foreclosed
assets |
|
586 |
|
|
— |
|
|
168 |
Bank-owned life
insurance |
|
11,486 |
|
|
11,697 |
|
|
11,764 |
Premises and equipment,
net |
|
15,091 |
|
|
15,094 |
|
|
14,921 |
Accrued interest
receivable |
|
3,001 |
|
|
3,270 |
|
|
3,435 |
Deferred income tax asset,
net |
|
2,632 |
|
|
3,281 |
|
|
3,127 |
Other assets |
|
2,491 |
|
|
2,035 |
|
|
2,188 |
Total assets |
$ |
1,573,930 |
|
$ |
1,768,528 |
|
$ |
1,849,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
$ |
1,135,850 |
|
$ |
1,217,027 |
|
$ |
1,268,301 |
Federal Home Loan Bank
advances |
|
300,568 |
|
|
402,464 |
|
|
425,429 |
Mortgage
payable |
|
960 |
|
|
922 |
|
|
909 |
Mortgagors’ escrow
accounts |
|
4,411 |
|
|
4,850 |
|
|
4,995 |
Accrued interest
payable |
|
341 |
|
|
303 |
|
|
324 |
Other liabilities |
|
6,307 |
|
|
4,947 |
|
|
6,770 |
Total
liabilities |
|
1,448,437 |
|
|
1,630,513 |
|
|
1,706,728 |
|
|
|
|
|
|
|
|
|
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 at March |
|
|
|
|
|
|
|
|
31, 2015 and
December 31, 2015 and 2,131 shares issued |
|
|
|
|
|
|
|
|
and
outstanding at March 31, 2016 |
|
2,129 |
|
|
2,129 |
|
|
2,131 |
Additional paid-in
capital |
|
10,965 |
|
|
11,052 |
|
|
11,260 |
Undivided
profits |
|
112,162 |
|
|
124,481 |
|
|
129,166 |
Accumulated other
comprehensive income |
|
237 |
|
|
353 |
|
|
645 |
Total stockholders’ equity |
|
125,493 |
|
|
138,015 |
|
|
143,202 |
Total liabilities
and stockholders’ equity |
$ |
1,573,930 |
|
$ |
1,768,528 |
|
$ |
1,849,930 |
HINGHAM INSTITUTION FOR SAVINGS |
Consolidated Statements of Income |
|
|
Three Months EndedMarch
31, |
(In thousands, except
per share amounts) |
2015 |
|
2016 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income: |
|
|
|
|
|
Loans |
$ |
14,538 |
|
$ |
16,430 |
Debt
securities |
|
62 |
|
|
28 |
Equity
securities |
|
155 |
|
|
244 |
Short-term
investments and certificates of deposit |
|
136 |
|
|
326 |
Total interest and dividend
income |
|
14,891 |
|
|
17,028 |
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Deposits |
|
1,827 |
|
|
2,290 |
Federal Home
Loan Bank advances |
|
721 |
|
|
890 |
Mortgage
payable |
|
14 |
|
|
14 |
Total interest expense |
|
2,562 |
|
|
3,194 |
Net interest income |
|
12,329 |
|
|
13,834 |
Provision for loan
losses |
|
175 |
|
|
255 |
Net interest income, after
provision for loan losses |
|
12,154 |
|
|
13,579 |
Other income: |
|
|
|
|
|
Customer service
fees on deposits |
|
228 |
|
|
216 |
Increase in cash
surrender value of life insurance |
|
70 |
|
|
67 |
Miscellaneous |
|
48 |
|
|
49 |
Total other income |
|
346 |
|
|
332 |
Operating
expenses: |
|
|
|
|
|
Salaries and
employee benefits |
|
2,904 |
|
|
3,070 |
Data
processing |
|
296 |
|
|
305 |
Occupancy and
equipment |
|
554 |
|
|
471 |
Deposit
insurance |
|
217 |
|
|
242 |
Foreclosure |
|
77 |
|
|
56 |
Marketing |
|
121 |
|
|
116 |
Other general
and administrative |
|
680 |
|
|
610 |
Total operating
expenses |
|
4,849 |
|
|
4,870 |
Income before income
taxes |
|
7,651 |
|
|
9,041 |
Income tax
provision |
|
3,136 |
|
|
3,717 |
Net income |
$ |
4,515 |
|
$ |
5,324 |
|
|
|
|
|
|
Cash dividends declared
per common share |
$ |
0.28 |
|
$ |
0.30 |
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
Basic |
|
2,129 |
|
|
2,130 |
Diluted |
|
2,140 |
|
|
2,149 |
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
Basic |
$ |
2.12 |
|
$ |
2.50 |
Diluted |
$ |
2.11 |
|
$ |
2.48 |
HINGHAM INSTITUTION FOR SAVINGS |
|
Net Interest Income Analysis |
|
|
|
|
Three Months Ended March 31, |
|
|
2015 |
|
|
2016 |
|
|
AVERAGE BALANCE |
|
INTEREST |
|
YIELD/RATE* |
|
|
AVERAGE BALANCE |
|
INTEREST |
|
YIELD/RATE* |
|
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1) (2) |
$ |
1,250,321 |
|
$ |
14,538 |
|
4.65 |
% |
|
$ |
1,439,994 |
|
$ |
16,430 |
|
4.56 |
% |
Securities (3) (4) |
|
87,063 |
|
|
217 |
|
1.00 |
|
|
|
61,042 |
|
|
272 |
|
1.78 |
|
Short-term investments and
certificates of deposit |
|
204,586 |
|
|
136 |
|
0.27 |
|
|
|
260,669 |
|
|
326 |
|
0.50 |
|
Total
interest-earning assets |
|
1,541,970 |
|
|
14,891 |
|
3.86 |
|
|
|
1,761,705 |
|
|
17,028 |
|
3.87 |
|
Other assets |
|
32,692 |
|
|
|
|
|
|
|
|
33,156 |
|
|
|
|
|
|
Total assets |
$ |
1,574,662 |
|
|
|
|
|
|
|
$ |
1,794,861 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits
(5) |
$ |
1,005,824 |
|
|
1,827 |
|
0.73 |
|
|
$ |
1,120,656 |
|
|
2,290 |
|
0.82 |
|
Borrowed funds |
|
324,979 |
|
|
735 |
|
0.90 |
|
|
|
396,378 |
|
|
904 |
|
0.91 |
|
Total
interest-bearing liabilities |
|
1,330,803 |
|
|
2,562 |
|
0.77 |
|
|
|
1,517,034 |
|
|
3,194 |
|
0.84 |
|
Demand deposits |
|
114,755 |
|
|
|
|
|
|
|
|
131,212 |
|
|
|
|
|
|
Other liabilities |
|
4,750 |
|
|
|
|
|
|
|
|
4,947 |
|
|
|
|
|
|
Total
liabilities |
|
1,450,308 |
|
|
|
|
|
|
|
|
1,653,193 |
|
|
|
|
|
|
Stockholders’ equity |
|
124,354 |
|
|
|
|
|
|
|
|
141,668 |
|
|
|
|
|
|
Total liabilities
and stockholders’ equity |
$ |
1,574,662 |
|
|
|
|
|
|
|
$ |
1,794,861 |
|
|
|
|
|
|
Net interest income |
|
|
|
$ |
12,329 |
|
|
|
|
|
|
|
$ |
13,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
spread |
|
|
|
|
|
|
3.09 |
% |
|
|
|
|
|
|
|
3.03 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
(6) |
|
|
|
|
|
|
3.20 |
% |
|
|
|
|
|
|
|
3.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average interest-earning
assets to average interest-bearing liabilities (7) |
|
|
|
|
|
|
115.87 |
% |
|
|
|
|
|
|
|
116.13 |
% |
* 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 interest-earning
assets.(7) Total interest-earning assets divided by total
interest-bearing liabilities.
CONTACT:
Robert A. Bogart,
Vice President & Treasurer
(781) 783-1744
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