HINGHAM, Mass., Jan. 16, 2015 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (Nasdaq:HIFS) announced record earnings for 2014. Net income for the year ended December 31, 2014 was $22,264,000 or $10.46 per share basic and $10.44 per share diluted as compared to $13,371,000 or $6.28 per share (basic and diluted) for 2013. Net income for the fourth quarter of 2014 was $4,535,000 or $2.13 per share basic and $2.12 per share diluted; a 30% increase over $3,488,000 or $1.64 per share (basic and diluted) for the fourth quarter of 2013. The Bank's return on average equity for the year ended December 31, 2014 was 19.30%, and the return on average assets was 1.52%.
Net income for 2014 included a one-time net gain of approximately $5.7 million related to non-taxable life insurance death benefit income of $6,302,000 less an accrual of $949,000 for a contractual death benefit liability, and $388,000 in related income tax benefit. Excluding this event, the Bank earned $16,523,000 or $7.76 per share basic and $7.75 per share diluted for 2014, representing a 24% increase in net income over the previous year. Excluding the income statement impact of this event, the Bank's return on average equity was 14.32% and return on average assets was 1.13% in 2014, as compared to 13.52% and 1.07% in 2013.
The Bank also produced record increases in both deposits and loans. Deposits increased by $148.3 million, or 16%. Net loans increased by $159.8 million, or 15%, and total assets increased by 14% from December 31, 2013 to December 31, 2014. Total assets were $1.552 billion at December 31, 2014 as compared to $1.356 billion at December 31, 2013. Book value per share increased by 17.7% to $57.08 per share at December 31, 2014 from $48.49 per share at December 31, 2013. This increase in book value per share excludes capital returned to the ownership through regular and special dividends; the Bank declared $2.10 per share in regular and special dividends in 2014.
Key credit and operational metrics continued to improve in 2014 as compared to 2013. At December 31, 2014, non-performing assets totaled 0.20% of total assets compared to 0.46% of total assets at December 31, 2013. Non-performing loans as a percentage of the total loan portfolio totaled 0.18% at December 31, 2014 as compared to 0.55% at December 31, 2013. The efficiency ratio improved to 37.19% in 2014 as compared to 43.23% in 2013. Non-interest expense as a percentage of average assets fell to 1.37% in 2014 as compared to 1.40% in 2013. Both the efficiency ratio and non-interest expense as a percentage of average assets reached record lows in 2014 and reflect the Bank's particular focus on disciplined expense management.
Robert H. Gaughen Jr., President and Chairman of the Board of Directors, stated "At Hingham, we take our role as stewards of the shareholders' capital seriously. We are pleased to report an outstanding return on that capital in 2014. Our emphasis on conservative underwriting, careful capital allocation, and measured growth continues to serve our shareholders well. More important than performance in any one year, however, is our record of compounding shareholder capital over time. On this measure, our team continues to set a very 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, 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.
| HINGHAM INSTITUTION FOR SAVINGS | ||||
| Selected Financial Ratios | ||||
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (Unaudited) | ||||
| Key Performance Ratios | ||||
| Return on average assets (1) | 1.18% | 1.06% | 1.52% | 1.07% |
| Return on average equity (1) | 15.01 | 13.62 | 19.30 | 13.52 |
| Interest rate spread (1) (2) | 3.12 | 3.02 | 3.13 | 3.08 |
| Net interest margin (1) (3) | 3.23 | 3.14 | 3.23 | 3.19 |
| Non-interest expense to average assets (1) | 1.24 | 1.37 | 1.37 | 1.40 |
| Efficiency ratio (4) | 37.95 | 43.03 | 37.19 | 43.23 |
| Average equity to average assets | 7.83 | 7.75 | 7.87 | 7.89 |
| Average interest-bearing assets to average interest | ||||
| bearing liabilities | 115.74 | 114.01 | 114.92 | 113.95 |
| December 31, | December 31, | |||
| 2014 | 2013 | |||
| (Unaudited) | ||||
| Asset Quality Ratios | ||||
| Allowance for loan losses/total loans | 0.73% | 0.78% | ||
| Allowance for loan losses/non-performing loans | 397.04 | 143.37 | ||
| Non-performing loans/total loans | 0.18 | 0.55 | ||
| Non-performing loans/total assets | 0.15 | 0.44 | ||
| Non-performing assets/total assets | 0.20 | 0.46 | ||
| Share Related | ||||
| Book value per share | $ 57.08 | $ 48.49 | ||
| Market value per share | $ 87.01 | $ 78.49 | ||
| Shares outstanding at end of period | 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. | ||||
| HINGHAM INSTITUTION FOR SAVINGS | ||
| Consolidated Balance Sheets | ||
|
December 31, 2014 |
December 31, 2013 |
|
| (Dollars in thousands except per share data) | ||
| (Unaudited) | ||
| ASSETS | ||
| Cash and due from banks | $ 6,917 | $ 11,922 |
| Short-term investments | 170,305 | 90,925 |
| Cash and cash equivalents | 177,222 | 102,847 |
| Certificates of deposit | 12,926 | 13,011 |
| Securities available for sale, at fair value | 70,570 | 106,369 |
| Federal Home Loan Bank stock, at cost | 17,855 | 15,978 |
| Loans, net of allowance for loan losses of $9,108 at | ||
| December 31, 2014 and $8,509 at December 31, 2013 | 1,238,656 | 1,078,879 |
| Foreclosed assets | 786 | 271 |
| Bank-owned life insurance | 11,416 | 15,375 |
| Premises and equipment, net | 15,211 | 15,854 |
| Accrued interest receivable | 2,959 | 2,792 |
| Deferred income tax asset, net | 2,642 | 2,934 |
| Other assets | 1,962 | 2,131 |
| Total assets | $ 1,552,205 | $ 1,356,441 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Deposits | $ 1,089,217 | $ 940,906 |
| Federal Home Loan Bank advances | 329,602 | 302,732 |
| Mortgage payable | 973 | 1,020 |
| Mortgagors' escrow accounts | 4,476 | 3,709 |
| Accrued interest payable | 350 | 490 |
| Other liabilities | 6,072 | 4,367 |
| Total liabilities | 1,430,690 | 1,253,224 |
| 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 December 31, 2014 and December 31, 2013 | ||
| 2,129 | 2,129 | |
| Additional paid-in capital | 10,942 | 10,659 |
| Undivided profits | 108,243 | 90,449 |
| Accumulated other comprehensive income | 201 | (20) |
| Total stockholders' equity | 121,515 | 103,217 |
| Total liabilities and stockholders' equity | $ 1,552,205 | $ 1,356,441 |
| HINGHAM INSTITUTION FOR SAVINGS | ||||
| Consolidated Statements of Net Income | ||||
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2014 | 2013 | 2014 | 2013 | |
| (Unaudited) | (In thousands, except per share amounts) | |||
| Interest and dividend income: | ||||
| Loans | $ 14,392 | $ 12,455 | $ 54,990 | $ 48,455 |
| Debt securities | 73 | 92 | 336 | 407 |
| Equity securities | 145 | 65 | 491 | 181 |
| Short-term investments and certificates of deposit | 130 | 86 | 376 | 299 |
| Total interest and dividend income | 14,740 | 12,698 | 56,193 | 49,342 |
| Interest expense: | ||||
| Deposits | 1,760 | 1,430 | 6,314 | 5,660 |
| Federal Home Loan Bank advances | 760 | 1,177 | 3,562 | 4,779 |
| Mortgage payable | 15 | 16 | 60 | 63 |
| Total interest expense | 2,535 | 2,623 | 9,936 | 10,502 |
| Net interest income | 12,205 | 10,075 | 46,257 | 38,840 |
| Provision for loan losses | 150 | 90 | 625 | 380 |
| Net interest income, after provision for loan losses | 12,055 | 9,985 | 45,632 | 38,460 |
| Other income: | ||||
| Customer service fees on deposits | 258 | 261 | 1,014 | 1,019 |
| Increase in bank-owned life insurance | 70 | 107 | 308 | 430 |
| Life insurance death benefit | — | — | 6,302 | — |
| Miscellaneous | 69 | 65 | 296 | 214 |
| Total other income | 397 | 433 | 7,920 | 1,663 |
| Operating expenses: | ||||
| Salaries and employee benefits | 2,846 | 2,773 | 12,424 | 10,602 |
| Data processing | 304 | 261 | 1,197 | 1,015 |
| Occupancy and equipment | 496 | 480 | 1,968 | 1,853 |
| Deposit insurance | 211 | 175 | 803 | 684 |
| Foreclosure | 29 | (32) | 263 | 186 |
| Marketing | 203 | 167 | 557 | 557 |
| Other general and administrative | 694 | 700 | 2,934 | 2,615 |
| Total operating expenses | 4,783 | 4,524 | 20,146 | 17,512 |
| Income before income taxes | 7,669 | 5,894 | 33,406 | 22,611 |
| Income tax provision | 3,134 | 2,406 | 11,142 | 9,240 |
| Net income | $ 4,535 | $ 3,488 | $ 22,264 | $ 13,371 |
| Weighted average common shares outstanding: | ||||
| Basic | 2,129 | 2,129 | 2,129 | 2,128 |
| Diluted | 2,136 | 2,131 | 2,133 | 2,130 |
| Earnings per common share: | ||||
| Basic | $ 2.13 | $ 1.64 | $ 10.46 | $ 6.28 |
| Diluted | $ 2.12 | $ 1.64 | $ 10.44 | $ 6.28 |
| HINGHAM INSTITUTION FOR SAVINGS | ||||||
| Net Interest Income Analysis | ||||||
| Three Months Ended December 31, | ||||||
| 2014 | 2013 | |||||
|
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE |
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE |
|
| (Dollars in thousands) | ||||||
| (Unaudited) | ||||||
| Loans (1) (2) | $ 1,228,130 | $ 14,392 | 4.69% | $ 1,053,754 | $ 12,455 | 4.73% |
| Securities (3) (4) | 96,852 | 218 | 0.90 | 116,233 | 157 | 0.54 |
| Short-term investments and certificates of deposit | 185,211 | 130 | 0.28 | 114,398 | 86 | 0.30 |
| Total earning assets | 1,510,193 | 14,740 | 3.90 | 1,284,385 | 12,698 | 3.95 |
| Other assets | 33,565 | 37,525 | ||||
| Total assets | $ 1,543,758 | $ 1,321,910 | ||||
| Interest-bearing deposits (5) | $ 965,990 | 1,760 | 0.73 | $ 833,128 | 1,430 | 0.69 |
| Borrowed funds | 338,841 | 775 | 0.91 | 293,442 | 1,193 | 1.63 |
| Total interest-bearing liabilities | 1,304,831 | 2,535 | 0.78 | 1,126,570 | 2,623 | 0.93 |
| Demand deposits | 111,821 | 88,294 | ||||
| Other liabilities | 6,245 | 4,571 | ||||
| Total liabilities | 1,422,897 | 1,219,435 | ||||
| Stockholders' equity | 120,861 | 102,475 | ||||
| Total liabilities and stockholders' equity | $ 1,543,758 | $ 1,321,910 | ||||
| Net interest income | $ 12,205 | $ 10,075 | ||||
| Weighted average spread | 3.12% | 3.02% | ||||
| Net interest margin (6) | 3.23% | 3.14% | ||||
| Average interest-earning assets to average | ||||||
| interest-bearing liabilities (7) | 115.74% | 114.01% | ||||
| (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 | ||||||
| Twelve Months Ended December 31, | ||||||
| 2014 | 2013 | |||||
|
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE |
AVERAGE BALANCE |
INTEREST |
YIELD/ RATE |
|
| (Dollars in thousands) | ||||||
| (Unaudited) | ||||||
| Loans (1) (2) | $ 1,179,865 | $ 54,990 | 4.66% | $ 1,000,412 | $ 48,455 | 4.84% |
| Securities (3) (4) | 110,021 | 827 | 0.75 | 115,476 | 588 | 0.51 |
| Short-term investments and certificates of deposit | 140,393 | 376 | 0.27 | 100,527 | 299 | 0.30 |
| Total earning assets | 1,430,279 | 56,193 | 3.93 | 1,216,415 | 49,342 | 4.06 |
| Other assets | 35,824 | 36,866 | ||||
| Total assets | $ 1,466,103 | $ 1,253,281 | ||||
| Interest-bearing deposits (5) | $ 923,550 | 6,314 | 0.68 | $ 806,728 | 5,660 | 0.70 |
| Borrowed funds | 321,068 | 3,622 | 1.13 | 260,817 | 4,842 | 1.86 |
| Total interest-bearing liabilities | 1,244,618 | 9,936 | 0.80 | 1,067,545 | 10,502 | 0.98 |
| Demand deposits | 101,974 | 83,222 | ||||
| Other liabilities | 4,130 | 3,626 | ||||
| Total liabilities | 1,350,722 | 1,154,393 | ||||
| Stockholders' equity | 115,381 | 98,888 | ||||
| Total liabilities and stockholders' equity | $ 1,466,103 | $ 1,253,281 | ||||
| Net interest income | $ 46,257 | $ 38,840 | ||||
| Weighted average spread | 3.13% | 3.08% | ||||
| Net interest margin (6) | 3.23% | 3.19% | ||||
| Average interest-earning assets to average | ||||||
| interest-bearing liabilities (7) | 114.92% | 113.95% | ||||
| (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. | ||||||