HINGHAM INSTITUTION FOR SAVINGS 
By FROM: Robert H. Gaughen, Jr., President Hingham Institution for Savings Hingham, MA (NASDAQ - HIFS)
DATE: January 17, 2014
CONTACT: William M. Donovan, Jr., Vice President-Administration (781) 749-2200
RECORD ANNUAL EARNINGSHINGHAM INSTITUTION FOR SAVINGS (Nasdaq - HIFS), Hingham, Massachusetts announced its earnings for 2013. Net income for the year ended December
31, 2013 was $13,371,000 or $6.28 per share (basic and diluted) as compared to
$13,290,000 or $6.25 per share (basic and diluted) for 2012. Net income for the fourth quarter 2013 was $3,488,000 or $1.64 per share (basic and diluted) as compared to
$3,354,000 or $1.58 per share (basic and diluted) for the fourth quarter 2012. The Bank's return on average equity for the year ended December 31, 2013 was 13.52%, and the return on average assets was 1.07%.
Deposits increased by $71.0 million, or 8%, net loans increased by $129.2 million, or 14%, and total assets increased by 12% from December 31, 2012 to December
31, 2013. Total assets were $1,356,441,000 at December 31, 2013 as compared to
$1,205,884,000 at December 31, 2012. Book value per share increased to $48.49 per share at December 31, 2013 from $43.65 per share at December 31, 2012. At December
31, 2013, non-performing assets totaled 0.46% of total assets compared to 0.28% of total assets at December 31, 2012.
President Robert H. Gaughen, Jr. stated, "We are pleased to report our sixth consecutive year of record earnings. Although the current interest rate environment has continued to put pressure on our net interest margin, the strong growth of our balance sheet, effective cost control and aggressive management of asset quality have again
produced some of the industry's strongest returns. We remain focused on increasing
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shareholder value through the continued development of a truly outstanding community banking organization."
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, Beacon Hill and the island of Nantucket.
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 Selected Financial Ratios Three Months Ended December 31, Twelve Months Ended December 31,(Unaudited)
Key Performance RatiosReturn on average assets (1) 1.06 % 1.11 % 1.07 % 1.15 % Return on average equity (1) 13.62 14.58 13.52 15.05
Interest rate spread (1) (2) 3.03 3.15 3.07 3.25
Net interest margin (1) (3) 3.14 3.28 3.19 3.38
Non-interest expense to average assets (1) 1.37 1.41 1.40 1.42
Efficiency ratio (4) 43.06 42.28 43.26 41.54
Average equity to average assets 7.75 7.61 7.89 7.62
Average interest-bearing assets to average interest
bearing liabilities 113.93 113.33 113.92 112.75
(Unaudited)
Asset Quality Ratios December 31, 2013 December 31, 2012Allowance for loan losses/total loans 0.78 % 0.84 % Allowance for loan losses/non-performing loans 143.37 273.66
Non-performing loans/total loans | 0.55 | 0.31 |
Non-performing loans/total assets | 0.44 | 0.24 |
Non-performing assets/total assets | 0.46 | 0.28 |
Share Related Book value per share | $ 48.49 | $ 43.65 |
Market value per share | $ 78.49 | $ 62.60 |
Shares outstanding at end of period | 2,128,750 | 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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HINGHAM INSTITUTION FOR SAVINGS Consolidated Balance Sheets(Dollars in thousands except per share data) (Unaudited)
ASSETS December 31, 2013 December 31, 2012Preferred stock, $1.00 par value,
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HINGHAM INSTITUTION FOR SAVINGS Consolidated Statements of Net IncomeThree Months Ended Twelve Months Ended
December 31, December 31,
2013 2012 2013 2012 (Unaudited) (In thousands, except per share amounts)
Interest and dividend income:
Loans | $ 12,455 | $ 12,126 | $ 48,455 | $ 47,753 |
Debt securities | 92 | 111 | 407 | 526 |
Equity securities | 65 | 70 | 181 | 198 |
Short-term investments and certificates of deposit | 86 | 92 | 299 | 354 |
Total interest and dividend income | 12,698 | 12,399 | 49,342 | 48,831 |
Interest expense:
Deposits 1,430 1,467 5,660 5,858
Federal Home Loan Bank advances 1,177 1,282 4,779 5,014
Mortgage payable 16 16 63 65
Total interest expense 2,623 2,765 10,502 10,937
Net interest income 10,075 9,634 38,840 37,894
Provision for loan losses 90 150 380 725
Net interest income, after provision for loan losses | 9,985 | 9,484 | 38,460 | 37,169 |
Other income:
Customer service fees on deposits | 261 | 253 | 1,019 | 1,008 | |||
Increase in bank-owned life insurance | 107 | 102 | 430 | 421 | |||
Miscellaneous | 66 | 73 | 229 | 237 | |||
Total other income | 434 | 428 | 1,678 | 1,666 |
Operating expenses:
Salaries and employee benefits | 2,773 | 2,506 | 10,602 | 9,643 | |||
Data processing | 261 | 234 | 1,015 | 884 | |||
Occupancy and equipment | 481 | 438 | 1,868 | 1,709 | |||
Deposit insurance | 172 | 164 | 684 | 611 | |||
Foreclosure | (32) | 5 | 186 | 336 | |||
Marketing | 167 | 157 | 557 | 654 | |||
Other general and administrative | 700 | 750 | 2,615 | 2,597 | |||
Total operating expenses | 4,525 | 4,254 | 17,527 | 16,434 |
Income before income taxes 5,894 5,658 22,611 22,401
Income tax provision | 2,406 | 2,304 | 9,240 | 9,111 |
Net income | $ 3,488 | $ 3,354 | $ 13,371 | $ 13,290 |
Weighted average common shares outstanding:
Basic | 2,129 | 2,126 | 2,128 | 2,126 | |||
Diluted | 2,131 | 2,128 | 2,130 | 2,127 |
Earnings per common share:
Basic | $ 1.64 | $ 1.58 | $ 6.28 | $ 6.25 |
Diluted | $ 1.64 | $ 1.58 | $ 6.28 | $ 6.25 |
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HINGHAM INSTITUTION FOR SAVINGS Net Interest Income AnalysisThree Months Ended December 31,
2013 2012
(Dollars in thousands) (Unaudited)
AVERAGE
BALANCE INTEREST
YIELD/ RATE
AVERAGE
BALANCE INTEREST
YIELD/ RATE
Loans (1) (2) $ 1,053,754 $ 12,455 4.73 % $ 938,446 $ 12,126 5.17 % Securities (3) (4) 115,344 157 0.54 115,630 181 0.63
Short-term investments and certificates of deposit 114,398 86 0.30 119,942 92 0.31
Total earning assets 1,283,496 12,698 3.96 1,174,018 12,399 4.22
Other assets 38,414 36,189
Total assets $ 1,321,910 $ 1,210,207
Interest-bearing deposits (5) $ 833,128 1,430 0.69 $ 777,259 1,467 0.75
Borrowed funds 293,442 1,193 1.63 258,641 1,298 2.01
Total interest-bearing liabilities 1,126,570 2,623 0.93 1,035,900 2,765 1.07
Demand deposits 88,294 77,972
Other liabilities 4,571 4,298
Total liabilities 1,219,435 1,118,170
Stockholders' equity 102,475 92,037
Total liabilities and stockholders' equity $ 1,321,910 $ 1,210,207
Net interest income $ 10,075 $ 9,634
Weighted average spread 3.03 % 3.15 %
Net interest margin (6) 3.14 % 3.28 %
Average interest-earning assets to average
interest-bearing liabilities (7) 113.93 % 113.33 %
(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,
2013 2012
(Dollars in thousands) (Unaudited)
AVERAGE
BALANCE INTEREST
YIELD/ RATE
AVERAGE
BALANCE INTEREST
YIELD/ RATE
Loans (1) (2) $ 1,000,412 $ 48,455 4.84 % $ 896,372 $ 47,753 5.33 % Securities (3) (4) 115,246 588 0.51 111,430 724 0.65
Short-term investments and certificates of deposit 100,527 299 0.30 114,845 354 0.31
Total earning assets 1,216,185 49,342 4.06 1,122,647 48,831 4.35
Other assets 37,096 36,623
Total assets $ 1,253,281 $ 1,159,270
Interest-bearing deposits (5) $ 806,728 5,660 0.70 $ 752,516 5,858 0.78
Borrowed funds 260,817 4,842 1.86 243,162 5,079 2.09
Total interest-bearing liabilities 1,067,545 10,502 0.98 995,678 10,937 1.10
Demand deposits 83,222 70,946
Other liabilities 3,626 4,357
Total liabilities 1,154,393 1,070,981
Stockholders' equity 98,888 88,289
Total liabilities and stockholders' equity $ 1,253,281 $ 1,159,270
Net interest income $ 38,840 $ 37,894
Weighted average spread 3.07 % 3.25 %
Net interest margin (6) 3.19 % 3.38 %
Average interest-earning assets to average
interest-bearing liabilities (7) 113.92 % 112.75 %
(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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