HINGHAM, Mass., Oct. 14, 2015 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ:HIFS), Hingham, Massachusetts announced third quarter earnings for 2015. Net income for the quarter ended September 30, 2015 was $4,874,000 or $2.29 per share basic and $2.27 per share fully diluted as compared to $4,481,000 or $2.10 per share (basic and fully diluted) for the third quarter of 2014. Net income per share (basic) for the third quarter of 2015 increased 9% over the same period in 2014. The Bank’s annualized return on average equity for the third quarter of 2015 was 14.67%, and the annualized return on average assets was 1.18% as compared to 15.12% and 1.20% for the same period in 2014.
Net income for the nine months ended September 30, 2015 was $14,112,000 or $6.63 per share basic and $6.58 per share fully diluted as compared to $17,729,000 or $8.33 per share basic and $8.32 per share fully diluted for the same period last year. Earnings for first nine months of 2014 included a one-time net gain of approximately $5.7 million related to a non-taxable life insurance transaction, the details of which were fully reported in the Bank’s 2014 Annual Report on Form 10-K. Excluding this event, the Bank earned $11,988,000 or $5.63 per share basic and $5.62 per share fully diluted for the first nine months of 2014. Net income per share (basic) for the first nine months of 2015 increased 18% over the same period in 2014 excluding the impact of the life insurance transaction.
The Bank’s annualized return on average equity for the first nine months of 2015 was 14.63% and the annualized return on average assets was 1.17%. Excluding the impact of the life insurance transaction, the Bank’s annualized return on average equity for the first nine months of 2014 was 14.08%, and the annualized return on average assets was 1.11%.
Strong balance sheet growth trends of recent years continued, as deposits were $1.180 billion at September 30, 2015, representing 11% annualized growth year to date and 12% growth from September 30, 2014. Net loans were $1.343 billion at September 30, 2015, representing 11% annualized growth year to date and 11% growth from September 30, 2014. Total assets were $1.691 billion at September 30, 2015, representing 12% annualized growth year to date and 12% growth from September 30, 2014. Book value per share increased to $62.94 per share at September 30, 2015, representing a 14% annualized growth rate year to date and a 12% increase from September 30, 2014. In addition to the increase in book value per share, the Bank has declared $0.86 in dividends per share in 2015 and $2.14 in dividends per share since September 30, 2014.
Key credit and operational metrics remained steady in the third quarter of 2015. At September 30, 2015, non-performing assets totaled 0.17% of total assets, compared with 0.20% at December 31, 2014 and 0.43% at September 30, 2014. Non-performing loans as a percentage of the total loan portfolio totaled 0.21% at September 30, 2015, as compared to 0.18% at December 31, 2014 and 0.46% at September 30, 2014. The efficiency ratio improved to 36.11% for the third quarter of 2015, as compared to 37.04% for the same period last year. Non-interest expense (annualized) as a percentage of average assets fell to 1.15% for the third quarter of 2015, as compared to 1.22% for the same period last year. These reductions reflect the Bank’s continued focus on credit quality and disciplined expense controls.
President Robert H. Gaughen, Jr. stated, “We are pleased to report that our current quarterly earnings represent a 9% increase over the third quarter of 2014 – the product of careful capital allocation, conservative underwriting, disciplined cost control and measured growth. We continue to offer unique value to our customers, with whom we have deep, long-term relationships. Our success is a product of these partnerships.”
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, 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 Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2014 | 2015 | 2014 | 2015 | ||||||||
| (Unaudited) | |||||||||||
| Key Performance Ratios | |||||||||||
| Return on average assets (1) | 1.20 | % | 1.18 | % | 1.64 | % | 1.17 | % | |||
| Return on average equity (1) | 15.12 | 14.67 | 20.82 | 14.63 | |||||||
| Interest rate spread (1) (2) | 3.16 | 3.04 | 3.13 | 3.08 | |||||||
| Net interest margin (1) (3) | 3.26 | 3.16 | 3.24 | 3.19 | |||||||
| Non-interest expense to average assets (1) | 1.22 | 1.15 | 1.42 | 1.19 | |||||||
| Efficiency ratio (4) | 37.04 | 36.19 | 36.96 | 36.94 | |||||||
| Average equity to average assets | 7.91 | 8.01 | 7.89 | 8.00 | |||||||
| Average interest-bearing assets to average interest bearing liabilities | 115.18 | 115.97 | 114.62 | 115.84 | |||||||
| September 30, 2014 | December 31, 2014 | September 30, 2015 | ||||||||||||||
| (Unaudited) | ||||||||||||||||
| Asset Quality Ratios | ||||||||||||||||
| Allowance for loan losses/total loans | 0.74 | % | 0.73 | % | 0.71 | % | ||||||||||
| Allowance for loan losses/non-performing loans | 159.19 | 397.04 | 345.96 | |||||||||||||
| Non-performing loans/total loans | 0.46 | 0.18 | 0.21 | |||||||||||||
| Non-performing loans/total assets | 0.37 | 0.15 | 0.16 | |||||||||||||
| Non-performing assets/total assets | 0.43 | 0.20 | 0.17 | |||||||||||||
| Share Related | ||||||||||||||||
| Book value per share | $ | 56.20 | $ | 57.08 | $ | 62.94 | ||||||||||
| Market value per share | $ | 81.55 | $ | 87.01 | $ | 116.03 | ||||||||||
| Shares outstanding at end of period | 2,128,750 | 2,128,750 | 2,128,750 | |||||||||||||
- Annualized.
- Interest rate spread represents the difference between the yield on earning assets and cost of interest-bearing liabilities.
- Net interest margin represents net interest income divided by average earning assets.
- 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 Balance Sheets | ||||||||||||
| (Dollars in thousands, except per share data) | September 30, 2014 | December 31, 2014 | September 30, 2015 | |||||||||
| (Unaudited) | ||||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 6,012 | $ | 6,917 | $ | 6,646 | ||||||
| Short-term investments | 142,414 | 170,305 | 231,311 | |||||||||
| Cash and cash equivalents | 148,426 | 177,222 | 237,957 | |||||||||
| Certificates of deposit | 14,460 | 12,926 | 7,448 | |||||||||
| Securities available for sale, at fair value | 81,806 | 70,570 | 48,943 | |||||||||
| Federal Home Loan Bank stock, at cost | 17,855 | 17,855 | 18,454 | |||||||||
| Loans, net of allowance for loan losses of $8,953 at September 30, 2014, $9,108 at December 31, 2014 and $9,635 at September 30, 2015 | 1,207,481 | 1,238,656 | 1,342,634 | |||||||||
| Foreclosed assets | 821 | 786 | 118 | |||||||||
| Bank-owned life insurance | 11,345 | 11,416 | 11,628 | |||||||||
| Premises and equipment, net | 15,381 | 15,211 | 15,130 | |||||||||
| Accrued interest receivable | 2,989 | 2,959 | 3,156 | |||||||||
| Deferred income tax asset, net | 2,940 | 2,642 | 2,627 | |||||||||
| Other assets | 2,418 | 1,962 | 2,864 | |||||||||
| Total assets | $ | 1,505,922 | $ | 1,552,205 | $ | 1,690,959 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Deposits | $ | 1,055,701 | $ | 1,089,217 | $ | 1,179,970 | ||||||
| Federal Home Loan Bank advances | 320,635 | 329,602 | 367,499 | |||||||||
| Mortgage payable | 985 | 973 | 935 | |||||||||
| Mortgagors’ escrow accounts | 4,239 | 4,476 | 4,629 | |||||||||
| Accrued interest payable | 346 | 350 | 281 | |||||||||
| Other liabilities | 4,375 | 6,072 | 3,669 | |||||||||
| Total liabilities | 1,386,281 | 1,430,690 | 1,556,983 | |||||||||
| 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 | 2,129 | 2,129 | 2,129 | |||||||||
| Additional paid-in capital | 10,919 | 10,942 | 11,029 | |||||||||
| Undivided profits | 106,432 | 108,243 | 120,524 | |||||||||
| Accumulated other comprehensive income | 161 | 201 | 294 | |||||||||
| Total stockholders’ equity | 119,641 | 121,515 | 133,976 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,505,922 | $ | 1,552,205 | $ | 1,690,959 | ||||||
| HINGHAM INSTITUTION FOR SAVINGS Consolidated Statements of Income | ||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| (In thousands, except per share amounts) | 2014 | 2015 | 2014 | 2015 | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||||||
| Loans | $ | 14,109 | $ | 15,180 | $ | 40,598 | $ | 44,450 | ||||||||||||||||
| Debt securities | 80 | 43 | 263 | 162 | ||||||||||||||||||||
| Equity securities | 116 | 231 | 346 | 545 | ||||||||||||||||||||
| Short-term investments and certificates of deposit | 95 | 154 | 246 | 424 | ||||||||||||||||||||
| Total interest and dividend income | 14,400 | 15,608 | 41,453 | 45,581 | ||||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||
| Deposits | 1,598 | 2,047 | 4,554 | 5,748 | ||||||||||||||||||||
| Federal Home Loan Bank advances | 846 | 728 | 2,802 | 2,162 | ||||||||||||||||||||
| Mortgage payable | 15 | 14 | 45 | 43 | ||||||||||||||||||||
| Total interest expense | 2,459 | 2,789 | 7,401 | 7,953 | ||||||||||||||||||||
| Net interest income | 11,941 | 12,819 | 34,052 | 37,628 | ||||||||||||||||||||
| Provision for loan losses | 150 | 175 | 475 | 525 | ||||||||||||||||||||
| Net interest income, after provision for loan losses | | 11,791 | 12,644 | 33,577 | 37,103 | |||||||||||||||||||
| Other income: | ||||||||||||||||||||||||
| Customer service fees on deposits | 257 | 250 | 756 | 731 | ||||||||||||||||||||
| Increase in bank-owned life insurance | 73 | 71 | 238 | 212 | ||||||||||||||||||||
| Gain on life insurance distribution | — | — | 6,302 | — | ||||||||||||||||||||
| Gain on sale of securities | — | 29 | — | 29 | ||||||||||||||||||||
| Miscellaneous | 69 | 46 | 232 | 142 | ||||||||||||||||||||
| Total other income | 399 | 396 | 7,528 | 1,114 | ||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Salaries and employee benefits | 2,887 | 2,875 | 9,578 | 8,701 | ||||||||||||||||||||
| Occupancy and equipment | 486 | 513 | 1,522 | 1,586 | ||||||||||||||||||||
| Data processing | 308 | 291 | 893 | 891 | ||||||||||||||||||||
| Deposit insurance | 205 | 224 | 592 | 662 | ||||||||||||||||||||
| Foreclosure | (62 | ) | 30 | 234 | 62 | |||||||||||||||||||
| Marketing | 99 | 126 | 354 | 384 | ||||||||||||||||||||
| Other general and administrative | 648 | 713 | 2,195 | 2,015 | ||||||||||||||||||||
| Total operating expenses | 4,571 | 4,772 | 15,368 | 14,301 | ||||||||||||||||||||
| Income before income taxes | 7,619 | 8,268 | 25,737 | 23,916 | ||||||||||||||||||||
| Income tax provision | 3,138 | 3,394 | 8,008 | 9,804 | ||||||||||||||||||||
| Net income | $ | 4,481 | $ | 4,874 | $ | 17,729 | $ | 14,112 | ||||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||||
| Basic | 2,129 | 2,129 | 2,129 | 2,129 | ||||||||||||||||||||
| Diluted | 2,135 | 2,146 | 2,132 | 2,144 | ||||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||||
| Basic | $ | 2.10 | $ | 2.29 | $ | 8.33 | $ | 6.63 | ||||||||||||||||
| Diluted | $ | 2.10 | $ | 2.27 | $ | 8.32 | $ | 6.58 | ||||||||||||||||
| HINGHAM INSTITUTION FOR SAVINGS Net Interest Income Analysis | |||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||
| 2014 | 2015 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE | AVERAGE BALANCE | INTEREST | YIELD/ RATE | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 1,207,348 | $ | 14,109 | 4.67 | % | $ | 1,320,522 | $ | 15,180 | 4.60 | % | |||||
| Securities (3) (4) | 106,538 | 196 | 0.74 | 71,903 | 274 | 1.52 | |||||||||||
| Short-term investments and certificates of deposit | 151,394 | 95 | 0.25 | 232,181 | 154 | 0.27 | |||||||||||
| Total earning assets | 1,465,280 | 14,400 | 3.93 | 1,624,606 | 15,608 | 3.84 | |||||||||||
| Other assets | 33,737 | 33,424 | |||||||||||||||
| Total assets | $ | 1,499,017 | $ | 1,658,030 | |||||||||||||
| Interest-bearing deposits (5) | $ | 940,681 | 1,598 | 0.68 | $ | 1,043,970 | 2,047 | 0.78 | |||||||||
| Borrowed funds | 331,458 | 861 | 1.04 | 356,930 | 742 | 0.83 | |||||||||||
| Total interest-bearing liabilities | 1,272,139 | 2,459 | 0.77 | 1,400,900 | 2,789 | 0.80 | |||||||||||
| Demand deposits | 104,433 | 120,303 | |||||||||||||||
| Other liabilities | 3,894 | 3,952 | |||||||||||||||
| Total liabilities | 1,380,466 | 1,525,155 | |||||||||||||||
| Stockholders’ equity | 118,551 | 132,875 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,499,017 | $ | 1,658,030 | |||||||||||||
| Net interest income | $ | 11,941 | $ | 12,819 | |||||||||||||
| Weighted average spread | 3.16 | % | 3.04 | % | |||||||||||||
| Net interest margin (6) | 3.26 | % | 3.16 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 115.18 | % | 115.97 | % | |||||||||||||
| (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 | |||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||
| 2014 | 2015 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE | AVERAGE BALANCE | INTEREST | YIELD/ RATE | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 1,163,600 | $ | 40,598 | 4.65 | % | $ | 1,282,979 | $ | 44,450 | 4.62 | % | |||||
| Securities (3) (4) | 114,459 | 609 | 0.71 | 80,275 | 707 | 1.17 | |||||||||||
| Short-term investments and certificates of deposit | 125,289 | 246 | 0.26 | 211,054 | 424 | 0.27 | |||||||||||
| Total earning assets | 1,403,348 | 41,453 | 3.94 | 1,574,308 | 45,581 | 3.86 | |||||||||||
| Other assets | 36,586 | 32,972 | |||||||||||||||
| Total assets | $ | 1,439,934 | $ | 1,607,280 | |||||||||||||
| Interest-bearing deposits (5) | $ | 909,248 | 4,554 | 0.67 | $ | 1,021,266 | 5,748 | 0.75 | |||||||||
| Borrowed funds | 315,078 | 2,847 | 1.20 | 337,806 | 2,205 | 0.87 | |||||||||||
| Total interest-bearing liabilities | 1,224,326 | 7,401 | 0.81 | 1,359,072 | 7,953 | 0.78 | |||||||||||
| Demand deposits | 98,656 | 115,296 | |||||||||||||||
| Other liabilities | 3,398 | 4,327 | |||||||||||||||
| Total liabilities | 1,326,380 | 1,478,695 | |||||||||||||||
| Stockholders’ equity | 113,554 | 128,585 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,439,934 | $ | 1,607,280 | |||||||||||||
| Net interest income | $ | 34,052 | $ | 37,628 | |||||||||||||
| Weighted average spread | 3.13 | % | 3.08 | % | |||||||||||||
| Net interest margin (6) | 3.24 | % | 3.19 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 114.62 | % | 115.84 | % | |||||||||||||
| (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. |