HINGHAM, Mass., Oct. 12, 2016 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ:HIFS), Hingham, Massachusetts announced third quarter earnings for 2016. Net income for the quarter ended September 30, 2016 was $5,945,000 or $2.79 per share basic and $2.76 per share diluted as compared to $4,874,000 or $2.29 per share basic and $2.27 per share diluted for the third quarter of 2015. Net income per share (basic) for the third quarter of 2016 increased 22% over the same period in 2015. The Bank’s annualized return on average equity for the third quarter of 2016 was 15.59%, and the annualized return on average assets was 1.23% as compared to 14.67% and 1.18% for the same period in 2015.
Net income for the nine months ended September 30, 2016 was $17,136,000 or $8.04 per share basic and $7.97 per share diluted as compared to $14,112,000 or $6.63 per share basic and $6.58 per share diluted for the same period last year. Net income per share (basic) for the first nine months of 2016 increased 21% over the same period in 2015. The Bank’s annualized return on average equity for the first nine months of 2016 was 15.53% and the annualized return on average assets was 1.21%, as compared to 14.63% and 1.17% for the same period in 2015.
Strong balance sheet growth trends of recent years continued, as deposits were $1.335 billion at September 30, 2016, representing 13% annualized growth year-to-date and 13% growth from September 30, 2015. Net loans were $1.563 billion at September 30, 2016, representing 15% annualized growth year-to-date and 16% growth from September 30, 2015. Total assets were $1.960 billion at September 30, 2016, representing 14% annualized growth year-to-date and 16% growth from September 30, 2015. Book value per share increased to $72.35 per share at September 30, 2016, representing a 15% annualized growth rate year-to-date and a 15% increase from September 30, 2015. In addition to the increase in book value per share, the Bank has declared $1.52 in dividends per share since September 30, 2015.
Key credit and operational metrics remained steady in the third quarter of 2016. At September 30, 2016, non-performing assets totaled 0.16% of total assets as compared with 0.10% at December 31, 2015 and 0.17% at September 30, 2015. Non-performing loans as a percentage of the total loan portfolio totaled 0.20% at September 30, 2016, as compared to 0.13% at December 31, 2015 and 0.21% at September 30, 2015. At September 30, 2016, the Bank did not own any foreclosed property. The efficiency ratio improved to 31.57% for the third quarter of 2016, as compared to 36.19% for the same period last year. Non-interest expense (annualized) as a percentage of average assets fell to 0.99% for the third quarter of 2016, as compared to 1.15% for the same period last year. These metrics reflect the Bank’s disciplined focus on credit and expense management.
President Robert H. Gaughen, Jr. stated, “We are pleased to report another quarter of strong performance. At Hingham, we take our role as stewards of the shareholders’ capital seriously. Our emphasis on careful capital allocation, defensive and conservative underwriting, and disciplined cost control continues to serve our owners well. More important than performance in any one period, however, is a company’s record of compounding shareholder capital over time and through credit cycles. On this measure, our team strives to set a high bar.”
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, MA. The Bank also maintains branch offices in South Hingham and the neighboring towns of Cohasset, Hull, Scituate, Norwell and Weymouth as well as branches in the South End of Boston, 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, | ||||||||||
| 2015 | 2016 | 2015 | 2016 | ||||||||
| (Unaudited) | |||||||||||
| Key Performance Ratios | |||||||||||
| Return on average assets (1) | 1.18 | % | 1.23 | % | 1.17 | % | 1.21 | % | |||
| Return on average equity (1) | 14.67 | 15.59 | 14.63 | 15.53 | |||||||
| Interest rate spread (1) (2) | 3.04 | 3.00 | 3.08 | 2.97 | |||||||
| Net interest margin (1) (3) | 3.16 | 3.12 | 3.19 | 3.09 | |||||||
| Non-interest expense to average assets (1) | 1.15 | 0.99 | 1.19 | 1.02 | |||||||
| Efficiency ratio (4) | 36.19 | 31.57 | 36.94 | 32.94 | |||||||
| Average equity to average assets | 8.01 | 7.88 | 8.00 | 7.78 | |||||||
| Average interest-earning assets to average interest- bearing liabilities | 115.97 | 116.41 | 115.84 | 116.03 | |||||||
| September 30, 2015 | December 31, 2015 | September 30, 2016 | |||||||||||||
| (Unaudited) | |||||||||||||||
| Asset Quality Ratios | |||||||||||||||
| Allowance for loan losses/total loans | 0.71 | % | 0.70 | % | 0.68 | % | |||||||||
| Allowance for loan losses/non-performing loans | 345.96 | 540.37 | 334.89 | ||||||||||||
| Non-performing loans/total loans | 0.21 | 0.13 | 0.20 | ||||||||||||
| Non-performing loans/total assets | 0.16 | 0.10 | 0.16 | ||||||||||||
| Non-performing assets/total assets | 0.17 | 0.10 | 0.16 | ||||||||||||
| Share Related | |||||||||||||||
| Book value per share | $ | 62.94 | $ | 64.83 | $ | 72.35 | |||||||||
| Market value per share | $ | 116.03 | $ | 119.80 | $ | 138.50 | |||||||||
| Shares outstanding at end of period | 2,128,750 | 2,128,750 | 2,130,750 | ||||||||||||
| (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 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 Balance Sheets | |||||||||
| (Dollars in thousands, except per share data) | September 30, 2015 | December 31, 2015 | September 30, 2016 | ||||||
| (Unaudited) | |||||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 6,646 | $ | 6,944 | $ | 7,849 | |||
| Short-term investments | 231,311 | 254,069 | 305,990 | ||||||
| Cash and cash equivalents | 237,957 | 261,013 | 313,839 | ||||||
| Certificates of deposit | 7,448 | 6,206 | 1,142 | ||||||
| Securities available for sale, at fair value | 48,943 | 40,603 | 22,882 | ||||||
| Federal Home Loan Bank stock, at cost | 18,454 | 19,796 | 24,203 | ||||||
| Loans, net of allowance for loan losses of $9,635 at September 30, 2015, $9,905 at December 31, 2015 and $10,713 at September 30, 2016 | 1,342,634 | 1,405,533 | 1,562,934 | ||||||
| Foreclosed assets | 118 | — | — | ||||||
| Bank-owned life insurance | 11,628 | 11,697 | 11,900 | ||||||
| Premises and equipment, net | 15,130 | 15,094 | 14,605 | ||||||
| Accrued interest receivable | 3,156 | 3,270 | 3,394 | ||||||
| Deferred income tax asset, net | 2,627 | 3,281 | 2,957 | ||||||
| Other assets | 2,864 | 2,035 | 2,453 | ||||||
| Total assets | $ | 1,690,959 | $ | 1,768,528 | $ | 1,960,309 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Interest-bearing deposits | $ | 1,057,392 | $ | 1,088,742 | $ | 1,183,905 | ||
| Non-interest-bearing deposits | 122,578 | 128,285 | 151,284 | |||||
| Deposits | 1,179,970 | 1,217,027 | 1,335,189 | |||||
| Federal Home Loan Bank advances | 367,499 | 402,464 | 460,356 | |||||
| Mortgage payable | 935 | 922 | 882 | |||||
| Mortgagors’ escrow accounts | 4,629 | 4,850 | 5,389 | |||||
| Accrued interest payable | 281 | 303 | 360 | |||||
| Other liabilities | 3,669 | 4,947 | 3,979 | |||||
| Total liabilities | 1,556,983 | 1,630,513 | 1,806,155 | |||||
| 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 at September 30, 2015 and December 31, 2015 and 2,130,750 shares issued and outstanding at September 30, 2016 | 2,129 | 2,129 | 2,131 | |||||
| Additional paid-in capital | 11,029 | 11,052 | 11,351 | |||||
| Undivided profits | 120,524 | 124,481 | 139,656 | |||||
| Accumulated other comprehensive income | 294 | 353 | 1,016 | |||||
| Total stockholders’ equity | 133,976 | 138,015 | 154,154 | |||||
| Total liabilities and stockholders’ equity | $ | 1,690,959 | $ | 1,768,528 | $ | 1,960,309 |
| HINGHAM INSTITUTION FOR SAVINGS | ||||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| (In thousands, except per share amounts) | 2015 | 2016 | 2015 | 2016 | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||
| Loans | $ | 15,180 | $ | 17,477 | $ | 44,450 | $ | 50,890 | ||||||||||||
| Debt securities | 43 | 6 | 162 | 52 | ||||||||||||||||
| Equity securities | 231 | 352 | 545 | 881 | ||||||||||||||||
| Short-term investments and certificates of deposit | 154 | 382 | 424 | 1,126 | ||||||||||||||||
| Total interest and dividend income | 15,608 | 18,217 | 45,581 | 52,949 | ||||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 2,047 | 2,435 | 5,748 | 7,125 | ||||||||||||||||
| Federal Home Loan Bank advances | 728 | 933 | 2,162 | 2,782 | ||||||||||||||||
| Mortgage payable | 14 | 13 | 43 | 40 | ||||||||||||||||
| Total interest expense | 2,789 | 3,381 | 7,953 | 9,947 | ||||||||||||||||
| Net interest income | 12,819 | 14,836 | 37,628 | 43,002 | ||||||||||||||||
| Provision for loan losses | 175 | 300 | 525 | 810 | ||||||||||||||||
| Net interest income, after provision for loan losses | 12,644 | 14,536 | 37,103 | 42,192 | ||||||||||||||||
| Other income: | ||||||||||||||||||||
| Customer service fees on deposits | 250 | 239 | 731 | 691 | ||||||||||||||||
| Increase in bank-owned life insurance | 71 | 63 | 212 | 203 | ||||||||||||||||
| Gain on sale of securities | 29 | — | 29 | 344 | ||||||||||||||||
| Miscellaneous | 46 | 45 | 142 | 143 | ||||||||||||||||
| Total other income | 396 | 347 | 1,114 | 1,381 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 2,875 | 2,927 | 8,701 | 8,988 | ||||||||||||||||
| Occupancy and equipment | 513 | 446 | 1,586 | 1,401 | ||||||||||||||||
| Data processing | 291 | 318 | 891 | 926 | ||||||||||||||||
| Deposit insurance | 224 | 265 | 662 | 771 | ||||||||||||||||
| Foreclosure | 30 | 25 | 62 | 107 | ||||||||||||||||
| Marketing | 126 | 104 | 384 | 329 | ||||||||||||||||
| Other general and administrative | 713 | 708 | 2,015 | 1,983 | ||||||||||||||||
| Total operating expenses | 4,772 | 4,793 | 14,301 | 14,505 | ||||||||||||||||
| Income before income taxes | 8,268 | 10,090 | 23,916 | 29,068 | ||||||||||||||||
| Income tax provision | 3,394 | 4,145 | 9,804 | 11,932 | ||||||||||||||||
| Net income | $ | 4,874 | $ | 5,945 | $ | 14,112 | $ | 17,136 | ||||||||||||
| Cash dividends declared per share | $ | 0.30 | $ | 0.32 | $ | 0.86 | $ | 0.92 | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 2,129 | 2,131 | 2,129 | 2,130 | ||||||||||||||||
| Diluted | 2,146 | 2,152 | 2,144 | 2,150 | ||||||||||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | 2.29 | $ | 2.79 | $ | 6.63 | $ | 8.04 | ||||||||||||
| Diluted | $ | 2.27 | $ | 2.76 | $ | 6.58 | $ | 7.97 | ||||||||||||
| HINGHAM INSTITUTION FOR SAVINGS | |||||||||||||||||
| Net Interest Income Analysis | |||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||
| 2015 | 2016 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 1,320,522 | $ | 15,180 | 4.60 | % | $ | 11,552,866 | $ | 17,477 | 4.50 | % | |||||
| Securities (3) (4) | 71,903 | 274 | 1.52 | 49,354 | 358 | 2.90 | |||||||||||
| Short-term investments and certificates of deposit | 232,181 | 154 | 0.27 | 300,435 | 382 | 0.51 | |||||||||||
| Total interest-earning assets | 1,624,606 | 15,608 | 3.84 | 11,902,655 | 18,217 | 3.83 | |||||||||||
| Other assets | 33,424 | 33,109 | |||||||||||||||
| Total assets | $ | 1,658,030 | $ | 1,935,764 | |||||||||||||
| Interest-bearing deposits (5) | $ | 1,043,970 | 2,047 | 0.78 | $ | 1,194,292 | 2,435 | 0.82 | |||||||||
| Borrowed funds | 356,930 | 742 | 0.83 | 440,104 | 946 | 0.86 | |||||||||||
| Total interest-bearing liabilities | 1,400,900 | 2,789 | 0.80 | 1,634,396 | 3,381 | 0.83 | |||||||||||
| Demand deposits | 120,303 | 144,497 | |||||||||||||||
| Other liabilities | 3,952 | 4,334 | |||||||||||||||
| Total liabilities | 1,525,155 | 1,783,227 | |||||||||||||||
| Stockholders’ equity | 132,875 | 152,537 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,658,030 | $ | 1,935,764 | |||||||||||||
| Net interest income | $ | 12,819 | $ | 14,836 | |||||||||||||
| Weighted average spread | 3.04 | % | 3.00 | % | |||||||||||||
| Net interest margin (6) | 3.16 | % | 3.12 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 115.97 | % | 116.41 | % | |||||||||||||
| (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 |
| HINGHAM INSTITUTION FOR SAVINGS | ||||||||||||||||||||
| Net Interest Income Analysis | ||||||||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||
| 2015 | 2016 | |||||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | |||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Loans (1) (2) | $ | 1,282,979 | $ | 44,450 | 4.62 | % | $ | 1,500,203 | $ | 50,890 | 4.52 | % | ||||||||
| Securities (3) (4) | 80,275 | 707 | 1.17 | 57,358 | 933 | 2.17 | ||||||||||||||
| Short-term investments and certificates of deposit | 211,054 | 424 | 0.27 | 298,729 | 1,126 | 0.50 | ||||||||||||||
| Total interest-earning assets | 1,574,308 | 45,581 | 3.86 | 1,856,290 | 52,949 | 3.80 | ||||||||||||||
| Other assets | 32,972 | 33,265 | ||||||||||||||||||
| Total assets | $ | 1,607,280 | $ | 1,889,555 | ||||||||||||||||
| Interest-bearing deposits (5) | $ | 1,021,266 | 5,748 | 0.75 | $ | 1,164,317 | 7,125 | 0.82 | ||||||||||||
| Borrowed funds | 337,806 | 2,205 | 0.87 | 435,548 | 2,822 | 0.86 | ||||||||||||||
| Total interest-bearing liabilities | 1,359,072 | 7,953 | 0.78 | 1,599,865 | 9,947 | 0.83 | ||||||||||||||
| Demand deposits | 115,296 | 137,873 | ||||||||||||||||||
| Other liabilities | 4,327 | 4,741 | ||||||||||||||||||
| Total liabilities | 1,478,695 | 1,742,479 | ||||||||||||||||||
| Stockholders’ equity | 128,585 | 147,076 | ||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,607,280 | $ | 1,889,555 | ||||||||||||||||
| Net interest income | $ | 37,628 | $ | 43,002 | ||||||||||||||||
| Weighted average spread | 3.08 | % | 2.97 | % | ||||||||||||||||
| Net interest margin (6) | 3.19 | % | 3.09 | % | ||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 115.84 | % | 116.03 | % | ||||||||||||||||
| (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 |