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

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, 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.

CONTACT: Robert A. Bogart, Vice President & Treasurer (781) 749-2200

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.