Hingham Savings Announces 14% Increase in Diluted Earnings Per Share and 14.77% Return on Equity
April 12 2017 - 10:02AM
HINGHAM INSTITUTION FOR SAVINGS (NASDAQ:HIFS), Hingham,
Massachusetts announced earnings for the first quarter ended March
31, 2017.
Net income for the quarter ended March 31, 2017
was $6,112,000 or $2.87 per share basic and $2.83 per share
diluted, as compared to $5,324,000 or $2.50 per share basic and
$2.48 per share diluted for the same period last year. For
the first quarter of 2017, the Bank’s annualized return on average
equity was 14.77% and the annualized return on average assets was
1.21%, as compared to 15.03% and 1.19%, respectively, for the same
period in 2016.
Solid growth trends of recent years continued,
as deposits increased to $1.403 billion at March 31, 2017,
representing 11% annualized growth year-to-date and 11% growth from
March 31, 2016. Net loans increased to $1.634 billion,
representing 7% annualized growth year-to-date and 12% growth from
March 31, 2016. Total assets increased to $2.039 billion,
representing 5% annualized growth year-to-date and 10% growth from
March 31, 2016, primarily driven by the Bank’s larger loan
portfolio. Book value per share was $78.29 as of March 31,
2017, representing a 16% increase from the same time last year and
15% annualized growth year to date. This increase in book
value per share excludes capital returned to the ownership through
regular and special dividends; the Bank has declared $1.58 in
regular and special dividends since March 31, 2016, including a
regular dividend of $0.32 declared during the first quarter of
2017.
Key credit and operational metrics remained
strong in the first quarter. At March 31, 2017,
non-performing assets totaled 0.09% of total assets, compared to
0.09% at December 31, 2016 and 0.19% at March 31, 2016.
Non-performing loans as a percentage of the total loan
portfolio totaled 0.08% at March 31, 2017, compared to 0.11% at
December 31, 2016 and 0.22% at March 31, 2016. At March 31,
2017, the Bank owned only one piece of foreclosed property valued
at $563,000. The efficiency ratio improved to 32.45% for the
first quarter of 2017, as compared to 34.38% for the same period
last year. Non-interest expense as a percentage of average
assets fell to 1.02% in the first quarter, as compared to 1.09% for
the same period last year. Both the efficiency ratio and
operating expenses as a percentage of average assets reflect the
Bank’s particular focus on disciplined expense management.
President Robert H. Gaughen Jr. stated, “We are
pleased to report that our first quarter of 2017 diluted earnings
per share represent an 14% increase over the same period in 2016
and a 14.77% 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 over time and through credit cycles.”
Hingham Institution for Savings is a
Massachusetts-chartered savings bank located in Hingham,
Massachusetts. Incorporated in 1834, it is one of America’s
oldest banks. The Bank’s Main Office is located in Hingham
and the Bank also maintains offices on the South Shore, in Boston
(South End and 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, |
|
2016 |
|
2017 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Key Performance
Ratios |
|
|
|
|
|
Return on average
assets (1) |
1.19 |
% |
|
1.21 |
% |
Return on average
equity (1) |
15.03 |
|
|
14.77 |
|
Interest rate spread
(1) (2) |
3.03 |
|
|
3.00 |
|
Net interest margin (1)
(3) |
3.14 |
|
|
3.12 |
|
Non-interest expense to
average assets (1) |
1.09 |
|
|
1.02 |
|
Efficiency ratio
(4) |
34.38 |
|
|
32.45 |
|
Average equity to
average assets |
7.89 |
|
|
8.21 |
|
Average
interest-earning assets to average interest bearing
liabilities |
116.13 |
|
|
116.78 |
|
|
|
|
|
|
|
|
March 31, 2016 |
|
December 31, 2016 |
|
March 31, 2017 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Quality
Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses/total loans |
|
0.70 |
% |
|
0.68 |
% |
|
0.69 |
% |
Allowance for loan
losses/non-performing loans |
|
311.79 |
|
|
614.43 |
|
|
846.59 |
|
|
|
|
|
|
|
|
|
|
|
Non-performing
loans/total loans |
|
0.22 |
|
|
0.11 |
|
|
0.08 |
|
Non-performing
loans/total assets |
|
0.18 |
|
|
0.09 |
|
|
0.07 |
|
Non-performing
assets/total assets |
|
0.19 |
|
|
0.09 |
|
|
0.09 |
|
|
|
|
|
|
|
|
|
|
|
Share
Related |
|
|
|
|
|
|
|
|
|
Book value per
share |
$ |
67.21 |
|
|
$ |
75.50 |
|
$ |
78.29 |
|
Market value per
share |
$ |
119.11 |
|
|
$ |
196.78 |
|
$ |
176.85 |
|
Shares outstanding at
end of period |
|
2,130,750 |
|
|
|
2,132,750 |
|
|
2,132,750 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Annualized.
(2) Interest rate spread represents the difference between the
yield on interest-earning assets and cost of interest-bearing
liabilities.
(3) Net interest margin represents net interest income divided
by average interest-earning assets.
(4) The efficiency ratio represents non-interest expense,
divided by the sum of net interest income and non-interest income,
excluding gain on sale of securities.
HINGHAM INSTITUTION FOR SAVINGS |
Consolidated Statements of Income |
|
|
|
Three Months EndedMarch
31, |
(In thousands, except
per share amounts) |
2016 |
|
2017 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend
income: |
|
|
|
|
|
Loans |
$ |
16,430 |
|
$ |
17,968 |
Debt
securities |
|
28 |
|
|
— |
Equity
securities |
|
244 |
|
|
353 |
Federal
Reserve and other short-term investments |
|
326 |
|
|
609 |
Total
interest and dividend income |
|
17,028 |
|
|
18,930 |
|
|
|
|
|
|
Interest expense: |
|
|
|
|
|
Deposits |
|
2,290 |
|
|
2,518 |
Federal
Home Loan Bank advances |
|
890 |
|
|
960 |
Mortgage
payable |
|
14 |
|
|
13 |
Total
interest expense |
|
3,194 |
|
|
3,491 |
Net
interest income |
|
13,834 |
|
|
15,439 |
Provision for loan
losses |
|
255 |
|
|
255 |
Net
interest income, after provision for loan losses |
|
13,579 |
|
|
15,184 |
Other income: |
|
|
|
|
|
Customer
service fees on deposits |
|
216 |
|
|
219 |
Increase
in cash surrender value of bank-owned life insurance |
|
67 |
|
|
67 |
Miscellaneous |
|
49 |
|
|
45 |
Total
other income |
|
332 |
|
|
331 |
Operating
expenses: |
|
|
|
|
|
Salaries
and employee benefits |
|
3,070 |
|
|
3,146 |
Occupancy
and equipment |
|
471 |
|
|
464 |
Data
processing |
|
305 |
|
|
297 |
Deposit
insurance |
|
242 |
|
|
258 |
Foreclosure |
|
56 |
|
|
43 |
Marketing |
|
116 |
|
|
124 |
Other
general and administrative |
|
610 |
|
|
786 |
Total
operating expenses |
|
4,870 |
|
|
5,118 |
Income before income
taxes |
|
9,041 |
|
|
10,397 |
Income tax
provision |
|
3,717 |
|
|
4,285 |
Net
income |
$ |
5,324 |
|
$ |
6,112 |
|
|
|
|
|
|
Cash dividends declared
per common share |
$ |
0.30 |
|
$ |
0.32 |
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
Basic |
|
2,130 |
|
|
2,133 |
Diluted |
|
2,149 |
|
|
2,162 |
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
Basic |
$ |
2.50 |
|
$ |
2.87 |
Diluted |
$ |
2.48 |
|
$ |
2.83 |
|
|
|
|
|
|
HINGHAM INSTITUTION FOR SAVINGS |
Net Interest Income Analysis |
|
|
|
|
Three Months Ended March 31, |
|
|
2016 |
|
|
2017 |
|
|
AVERAGE BALANCE |
|
INTEREST |
|
YIELD/ RATE (8) |
|
|
AVERAGE BALANCE |
|
INTEREST |
|
YIELD/ RATE (8) |
|
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (1) (2) |
$ |
1,439,994 |
|
$ |
16,430 |
|
4.56 |
% |
|
$ |
1,625,525 |
|
$ |
17,968 |
|
4.42 |
% |
Securities (3) (4) |
|
61,042 |
|
|
272 |
|
1.78 |
|
|
|
47,643 |
|
|
353 |
|
2.96 |
|
Federal Reserve and
other short-term investments |
|
260,669 |
|
|
326 |
|
0.50 |
|
|
|
309,143 |
|
|
609 |
|
0.79 |
|
Total
interest-earning assets |
|
1,761,705 |
|
|
17,028 |
|
3.87 |
|
|
|
1,982,311 |
|
|
18,930 |
|
3.82 |
|
Other assets |
|
33,156 |
|
|
|
|
|
|
|
|
34,405 |
|
|
|
|
|
|
Total
assets |
$ |
1,794,861 |
|
|
|
|
|
|
|
$ |
2,016,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits (5) |
$ |
1,120,656 |
|
|
2,290 |
|
0.82 |
|
|
$ |
1,229,476 |
|
|
2,518 |
|
0.82 |
|
Borrowed funds |
|
396,378 |
|
|
904 |
|
0.91 |
|
|
|
467,988 |
|
|
973 |
|
0.83 |
|
Total
interest-bearing liabilities |
|
1,517,034 |
|
|
3,194 |
|
0.84 |
|
|
|
1,697,464 |
|
|
3,491 |
|
0.82 |
|
Demand deposits |
|
131,212 |
|
|
|
|
|
|
|
|
148,841 |
|
|
|
|
|
|
Other liabilities |
|
4,947 |
|
|
|
|
|
|
|
|
4,849 |
|
|
|
|
|
|
Total
liabilities |
|
1,653,193 |
|
|
|
|
|
|
|
|
1,851,154 |
|
|
|
|
|
|
Stockholders’
equity |
|
141,668 |
|
|
|
|
|
|
|
|
165,562 |
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
$ |
1,794,861 |
|
|
|
|
|
|
|
$ |
2,016,716 |
|
|
|
|
|
|
Net interest
income |
|
|
|
$ |
13,834 |
|
|
|
|
|
|
|
$ |
15,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
spread |
|
|
|
|
|
|
3.03 |
% |
|
|
|
|
|
|
|
3.00 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest margin
(6) |
|
|
|
|
|
|
3.14 |
% |
|
|
|
|
|
|
|
3.12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
interest-earning assets to average interest-bearing
liabilities (7) |
|
|
|
|
|
|
116.13 |
% |
|
|
|
|
|
|
|
116.78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
(8) |
|
Annualized. |
CONTACT: Patrick R. Gaughen, Executive Vice President (781) 783-1761
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