By FROM: Robert H. Gaughen, Jr., President Hingham Institution for Savings Hingham, MA (NASDAQ - HIFS)
DATE: January 22, 2013
CONTACT: William M. Donovan, Jr., Vice President-Administration (781) 749-2200
10% INCREASE IN ANNUAL EARNINGSHINGHAM INSTITUTION FOR SAVINGS (Nasdaq - HIFS), Hingham, Massachusetts announced its earnings for 2012. Net income for the year ended December
31, 2012 was $13,290,000 or $6.25 per share (basic and diluted) as compared to
$12,062,000 or $5.68 per share basic and $5.67 diluted for 2011. Net income for the fourth quarter 2012 was $3,354,000 or $1.58 per share (basic and diluted) as compared to
$3,107,000 or $1.46 per share (basic and diluted) for the fourth quarter 2011. The Bank's return on average equity for the year ending December 31, 2012 was 15.05%, and the return on average assets was 1.15%.
Deposits increased by $82 million, or 10%, net loans increased by 12% and total assets by 7% from December 31, 2011 to December 31, 2012. Total assets were
$1,205,884,000 at December 31, 2012 as compared to $1,127,276,000 at December 31,
2011. Book value per share increased to $43.65 per share at December 31, 2012 from
$38.70 per share at December 31, 2011. At December 31, 2012 non-performing assets totaled 0.28% of total assets compared to 0.92% of total assets at December 31, 2011.
President Robert H. Gaughen, Jr. stated, "We are pleased to report another year of record earnings, representing a 10% increase over those of 2011. Over the past several years, despite the challenging business environment, we have developed a track record for delivering consistently strong performance. Although the current interest rate environment is challenging, our focus on measured organic growth, effective cost control and aggressive management of asset quality have produced real bottom line results. We remain focused on increasing shareholder value through the careful construction of an
outstanding community banking organization."
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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 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 and on Beacon Hill.
The Bank's shares of common stock are listed and traded on The NASDAQ Stock
Market under the symbol HIFS.
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HINGHAM INSTITUTION FOR SAVINGS Consolidated Balance Sheets(Dollars in thousands except per share data) (Unaudited)
ASSETS December 31, 2012 December 31, 2011Preferred stock, $1.00 par value,
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HINGHAM INSTITUTION FOR SAVINGS Consolidated Statements of IncomeThree Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011 (Unaudited) (In thousands, except per share amounts)
Interest and dividend income:
Loans | $ 12,126 | $ 11,943 | $ 47,753 | $ 47,191 |
Debt securities | 111 | 146 | 526 | 749 |
Equity securities | 70 | 52 | 198 | 153 |
Short-term investments and certificates of deposit | 92 | 90 | 354 | 351 |
Total interest and dividend income | 12,399 | 12,231 | 48,831 | 48,444 |
Interest expense:
Deposits 1,467 1,547 5,858 6,751
Federal Home Loan Bank advances 1,282 1,348 5,014 5,799
Mortgage payable 16 17 65 68
Total interest expense 2,765 2,912 10,937 12,618
Net interest income 9,634 9,319 37,894 35,826
Provision for loan losses 150 225 725 1,100
Net interest income, after provision for loan losses | 9,484 | 9,094 | 37,169 | 34,726 |
Other income:
Customer service fees on deposits | 253 | 259 | 1,008 | 987 | |||
Increase in bank-owned life insurance | 102 | 108 | 421 | 450 | |||
Miscellaneous | 73 |
Operating expenses:
Salaries and employee benefits 2,506 2,263 9,643 8,894
Data processing 234 224 884 883
Occupancy and equipment 438 413 1,709 1,528
Deposit insurance 164 159 611 701
Foreclosure 5 429 336 1,038
Marketing 157 171 654 650
Other general and administrative 750 626 2,597 2,397
Total operating expenses 4,254 4,285 16,434 16,091
Income before income taxes 5,658 5,255 22,401 20,335
Income tax provision 2,304 2,148 9,111 8,273
Net income $ 3,354 3,107 $ 13,290 $ 12,062
Weighted average common shares outstanding:
Basic 2,126 2,126 2,126 2,125
Diluted 2,128 2,127 2,127 2,126
Earnings per common share:
Basic $ 1.58 $ 1.46 $ 6.25 $ 5.68
Diluted $ 1.58 $ 1.46 $ 6.25 $ 5.67
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HINGHAM INSTITUTION FOR SAVINGS Net Interest Income AnalysisThree Months Ended December 31,
2012 2011
(Dollars in thousands) (Unaudited)
AVERAGE
BALANCE INTEREST
YIELD/ RATE
AVERAGE
BALANCE INTEREST
YIELD/ RATE
Loans (1) (2) $ 938,446 $ 12,126 5.17 % $ 849,581 $ 11,943 5.62 % Securities (3) (4) 115,630 181 0.63 91,098 198 0.87
Short-term investments and certificates of deposit 119,942 92 0.31 120,079 90 0.30
Total earning assets 1,174,018 12,399 4.22 1,060,758 12,231 4.61
Other assets 36,189 37,218
Total assets $ 1,210,207 $ 1,097,976
Interest-bearing deposits (5) $ 777,259 1,467 0.75 $ 710,878 1,547 0.87
Borrowed funds 258,641 1,298 2.01 237,863 1,365 2.30
Total interest-bearing liabilities 1,035,900 2,765 1.07 948,741 2,912 1.23
Demand deposits 77,972 63,801
Other liabilities 4,298 3,828
Total liabilities 1,118,170 1,016,370
Stockholders' equity 92,037 81,606
Total liabilities and stockholders' equity $ 1,210,207 $ 1,097,976
Net interest income $ 9,634 $ 9,319
Weighted average spread 3.15 % 3.38 %
Net interest margin (6) 3.28 % 3.51 %
Average interest-earning assets to average
interest-bearing liabilities (7) 113.33 % 111.81 %
(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. |
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HINGHAM INSTITUTION FOR SAVINGS Net Interest Income AnalysisTwelve Months Ended December 31,
2012 2011
(Dollars in thousands) (Unaudited)
AVERAGE
BALANCE INTEREST
YIELD/ RATE
AVERAGE
BALANCE INTEREST
YIELD/ RATE
Loans (1) (2) $ 896,372 $ 47,753 5.33 % $ 828,460 $ 47,191 5.70 % Securities (3) (4) 111,430 724 0.65 99,998 902 0.90
Short-term investments and certificates of deposit 114,845 354 0.31 93,867 351 0.37
Total earning assets 1,122,647 48,831 4.35 1,022,325 48,444 4.74
Other assets 36,623 35,502
Total assets $ 1,159,270 $ 1,057,827
Interest-bearing deposits (5) $ 752,516 5,858 0.78 $ 699,897 6,751 0.96
Borrowed funds 243,162 5,079 2.09 217,324 5,867 2.70
Total interest-bearing liabilities 995,678 10,937 1.10 917,221 12,618 1.38
Demand deposits 70,946 58,885
Other liabilities 4,357 3,068
Total liabilities 1,070,981 979,174
Stockholders' equity 88,289 78,653
Total liabilities and stockholders' equity $ 1,159,270 $ 1,057,827
Net interest income $ 37,894 $ 35,826
Weighted average spread 3.25 % 3.36 %
Net interest margin (6) 3.38 % 3.50 %
Average interest-earning assets to average
interest-bearing liabilities (7) 112.75 % 111.46 %
(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. |
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HINGHAM INSTITUTION FOR SAVINGS Selected Financial Ratios Three Months Ended December 31, Twelve Months Ended December 31,(Unaudited)
Key Performance RatiosReturn on average assets (1) 1.11 % 1.13 % 1.15 % 1.14 % Return on average equity (1) 14.58 15.23 15.05 15.34
Interest rate spread (1) (2) 3.15 3.38 3.25 3.36
Net interest margin (1) (3) 3.28 3.51 3.38 3.50
Non-interest expense to average assets (1) 1.41 1.56 1.42 1.52
Efficiency ratio (4) 42.28 43.88 41.54 42.88
Average equity to average assets 7.61 7.43 7.62 7.44
Average interest-bearing assets to average interest
bearing liabilities 113.33 111.81 112.75 111.45
(Unaudited)
Asset Quality Ratios December 31, 2012 December 31, 2011Allowance for loan losses/total loans 0.84 % 0.88 % Allowance for loan losses/non-performing loans 273.66 111.30
Non-performing loans/total loans | 0.31 | 0.79 |
Non-performing loans/total assets | 0.24 | 0.60 |
Non-performing assets/total assets | 0.28 | 0.92 |
Share Related Book value per share | $ 43.65 | $ 38.70 |
Market value per share | $ 62.60 | $ 47.80 |
Shares outstanding at end of period | 2,125,750 | 2,125,750 |
(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.
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