HINGHAM, Mass., Jan. 17, 2017 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ:HIFS), Hingham, Massachusetts announced earnings for the fourth quarter and the year ended December 31, 2016.
Net income for the year ended December 31, 2016 was $23,423,000 or $10.99 per share basic and $10.89 per share diluted as compared to $19,346,000 or $9.09 per share basic and $9.02 per share diluted for the year ended December 31, 2015. Net income per share (basic and diluted) for 2016 increased 21% over the same period in 2015. The Bank’s return on average equity for the year ended December 31, 2016 was 15.59% and the return on average assets was 1.22%, as compared to 14.81% and 1.18% for the same period in 2015.
Net income for the quarter ended December 31, 2016 was $6,287,000 or $2.95 per share basic and $2.92 per share diluted as compared to $5,234,000 or $2.46 per share basic and $2.44 per share diluted for the fourth quarter of 2015. Net income per share (basic and diluted) for the fourth quarter of 2016 increased 20% over the same period in 2015. The Bank’s annualized return on average equity for the fourth quarter of 2016 was 15.85%, and the annualized return on average assets was 1.27% as compared to 15.30% and 1.21% for the same period in 2015.
The Bank continued to produce strong growth in deposits, loans, and book value per share in 2016. Deposits increased by 12% to $1.366 billion. Net loans increased by 14% to $1.606 billion. Total assets increased by 14% to $2.015 billion. Book value per share increased by 16% to $75.50. This increase in book value per share excludes capital returned to the ownership through regular and special dividends; the Bank declared $1.56 in regular and special dividends in 2016.
Key credit and operational metrics remained strong in 2016. At December 31, 2016, non-performing assets totaled 0.09% of total assets as compared with 0.10% at December 31, 2015. Non-performing loans as a percentage of the total loan portfolio totaled 0.11% at December 31, 2016, as compared to 0.13% at December 31, 2015. At December 31, 2016 and 2015, the Bank did not own any foreclosed property. The efficiency ratio improved to 32.15% in 2016 as compared to 36.32% in 2015. Non-interest expense as a percentage of average assets improved to 1.00% in 2016, as compared to 1.16% in 2015. Both the efficiency ratio and operating expenses as a percentage of average assets reached new record lows in 2016 and reflect the Bank’s particular focus on disciplined expense management.
President Robert H. Gaughen, Jr. stated, “We are pleased to report a strong return on capital in 2016. 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 December 31, | Twelve Months Ended December 31, | ||||||||||
| 2015 | 2016 | 2015 | 2016 | ||||||||
| (Unaudited) | |||||||||||
| Key Performance Ratios | |||||||||||
| Return on average assets (1) | 1.21 | % | 1.27 | % | 1.18 | % | 1.22 | % | |||
| Return on average equity (1) | 15.30 | 15.85 | 14.81 | 15.59 | |||||||
| Interest rate spread (1) (2) | 3.02 | 3.03 | 3.06 | 2.99 | |||||||
| Net interest margin (1) (3) | 3.14 | 3.15 | 3.17 | 3.10 | |||||||
| Non-interest expense to average assets (1) | 1.09 | 0.95 | 1.16 | 1.00 | |||||||
| Efficiency ratio (4) | 34.55 | 29.93 | 36.32 | 32.15 | |||||||
| Average equity to average assets | 7.90 | 7.98 | 7.97 | 7.85 | |||||||
| Average interest-earning assets to average interest-bearing liabilities | 115.90 | 116.65 | 115.85 | 116.19 | |||||||
| December 31, 2015 | December 31, 2016 | |||||||
| (Unaudited) | ||||||||
| Asset Quality Ratios | ||||||||
| Allowance for loan losses/total loans | 0.70 | % | 0.68 | % | ||||
| Allowance for loan losses/non-performing loans | 540.37 | 614.43 | ||||||
| Non-performing loans/total loans | 0.13 | 0.11 | ||||||
| Non-performing loans/total assets | 0.10 | 0.09 | ||||||
| Non-performing assets/total assets | 0.10 | 0.09 | ||||||
| Share Related | ||||||||
| Book value per share | $ | 64.83 | $ | 75.50 | ||||
| Market value per share | $ | 119.80 | $ | 196.78 | ||||
| Shares outstanding at end of period | 2,128,750 | 2,132,750 | ||||||
(1) Annualized for the three months periods.
(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) | December 31, 2015 | December 31, 2016 | |||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | 6,944 | $ | 7,816 | |||||||
| Federal Reserve and other short-term investments | 254,069 | 315,116 | |||||||||
| Cash and cash equivalents | 261,013 | 322,932 | |||||||||
| Certificates of deposit | 6,206 | — | |||||||||
| CRA investment | 4,971 | 6,839 | |||||||||
| Other securities available for sale | 35,632 | 20,329 | |||||||||
| Securities available for sale, at fair value | 40,603 | 27,168 | |||||||||
| Federal Home Loan Bank stock, at cost | 19,796 | 24,472 | |||||||||
| Loans, net of allowance for loan losses of $9,905 at December 31, 2015 and $11,030 at December 31, 2016 | 1,405,533 | 1,605,647 | |||||||||
| Foreclosed assets | — | — | |||||||||
| Bank-owned life insurance | 11,697 | 11,962 | |||||||||
| Premises and equipment, net | 15,094 | 14,462 | |||||||||
| Accrued interest receivable | 3,270 | 3,529 | |||||||||
| Deferred income tax asset, net | 3,281 | 2,489 | |||||||||
| Other assets | 2,035 | 1,938 | |||||||||
| Total assets | $ | 1,768,528 | $ | 2,014,599 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Interest-bearing deposits | $ | 1,088,742 | $ | 1,218,360 | |||||||
| Non-interest-bearing deposits | 128,285 | 147,749 | |||||||||
| Total deposits | 1,217,027 | 1,366,109 | |||||||||
| Federal Home Loan Bank advances | 402,464 | 475,318 | |||||||||
| Mortgage payable | 922 | 868 | |||||||||
| Mortgagors’ escrow accounts | 4,850 | 5,585 | |||||||||
| Accrued interest payable | 303 | 400 | |||||||||
| Other liabilities | 4,947 | 5,295 | |||||||||
| Total liabilities | 1,630,513 | 1,853,575 | |||||||||
| 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 and 2,132,750 shares issued and outstanding at December 31, 2015 and 2016, respectively | 2,129 | 2,133 | |||||||||
| Additional paid-in capital | 11,052 | 11,575 | |||||||||
| Undivided profits | 124,481 | 144,580 | |||||||||
| Accumulated other comprehensive income | 353 | 2,736 | |||||||||
| Total stockholders’ equity | 138,015 | 161,024 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,768,528 | $ | 2,014,599 | |||||||
| HINGHAM INSTITUTION FOR SAVINGS | ||||||||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||
| (In thousands, except per share amounts) | 2015 | 2016 | 2015 | 2016 | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||||
| Loans | $ | 15,810 | $ | 18,027 | $ | 60,260 | $ | 68,917 | ||||||||||||||
| Debt securities | 33 | — | 195 | 52 | ||||||||||||||||||
| Equity securities | 250 | 367 | 795 | 1,248 | ||||||||||||||||||
| Federal Reserve and other short-term investments | 185 | 426 | 609 | 1,552 | ||||||||||||||||||
| Total interest and dividend income | 16,278 | 18,820 | 61,859 | 71,769 | ||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||
| Deposits | 2,197 | 2,474 | 7,945 | 9,599 | ||||||||||||||||||
| Federal Home Loan Bank advances | 746 | 950 | 2,908 | 3,732 | ||||||||||||||||||
| Mortgage payable | 14 | 14 | 57 | 54 | ||||||||||||||||||
| Total interest expense | 2,957 | 3,438 | 10,910 | 13,385 | ||||||||||||||||||
| Net interest income | 13,321 | 15,382 | 50,949 | 58,384 | ||||||||||||||||||
| Provision for loan losses | 100 | 325 | 625 | 1,135 | ||||||||||||||||||
| Net interest income, after provision for loan losses | 13,221 | 15,057 | 50,324 | 57,249 | ||||||||||||||||||
| Other income: | ||||||||||||||||||||||
| Customer service fees on deposits | 247 | 237 | 978 | 928 | ||||||||||||||||||
| Increase in bank-owned life insurance | 69 | 62 | 281 | 265 | ||||||||||||||||||
| Gain on sale of securities | — | — | 29 | 344 | ||||||||||||||||||
| Miscellaneous | 53 | 55 | 195 | 198 | ||||||||||||||||||
| Total other income | 369 | 354 | 1,483 | 1,735 | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||
| Salaries and employee benefits | 2,931 | 3,036 | 11,632 | 12,024 | ||||||||||||||||||
| Occupancy and equipment | 471 | 455 | 2,057 | 1,856 | ||||||||||||||||||
| Data processing | 291 | 304 | 1,182 | 1,230 | ||||||||||||||||||
| Deposit insurance | 240 | 252 | 902 | 1,023 | ||||||||||||||||||
| Foreclosure | 10 | (73 | ) | 72 | 34 | |||||||||||||||||
| Marketing | 105 | 74 | 489 | 403 | ||||||||||||||||||
| Other general and administrative | 682 | 662 | 2,697 | 2,645 | ||||||||||||||||||
| Total operating expenses | 4,730 | 4,710 | 19,031 | 19,215 | ||||||||||||||||||
| Income before income taxes | 8,860 | 10,701 | 32,776 | 39,769 | ||||||||||||||||||
| Income tax provision | 3,626 | 4,414 | 13,430 | 16,346 | ||||||||||||||||||
| Net income | $ | 5,234 | $ | 6,287 | $ | 19,346 | $ | 23,423 | ||||||||||||||
| Cash dividends declared per share | $ | 0.60 | $ | 0.64 | $ | 1.46 | $ | 1.56 | ||||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||
| Basic | 2,129 | 2,131 | 2,129 | 2,131 | ||||||||||||||||||
| Diluted | 2,149 | 2,158 | 2,145 | 2,152 | ||||||||||||||||||
| Earnings per share: | ||||||||||||||||||||||
| Basic | $ | 2.46 | $ | 2.95 | $ | 9.09 | $ | 10.99 | ||||||||||||||
| Diluted | $ | 2.44 | $ | 2.92 | $ | 9.02 | $ | 10.89 | ||||||||||||||
| HINGHAM INSTITUTION FOR SAVINGS | |||||||||||||||||
| Net Interest Income Analysis | |||||||||||||||||
| Three Months Ended December 31, | |||||||||||||||||
| 2015 | 2016 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 1,381,732 | $ | 15,810 | 4.58 | % | $ | 1,598,286 | $ | 18,027 | 4.51 | % | |||||
| Securities (3) (4) | 64,082 | 283 | 1.77 | 45,965 | 367 | 3.19 | |||||||||||
| Federal Reserve and other short-term investments | 253,716 | 185 | 0.29 | 309,043 | 426 | 0.55 | |||||||||||
| Total interest-earning assets | 1,699,530 | 16,278 | 3.83 | 1,953,294 | 18,820 | 3.85 | |||||||||||
| Other assets | 33,138 | 33,715 | |||||||||||||||
| Total assets | $ | 1,732,668 | $ | 1,987,009 | |||||||||||||
| Interest-bearing deposits (5) | $ | 1,087,721 | 2,197 | 0.81 | $ | 1,212,674 | 2,474 | 0.82 | |||||||||
| Borrowed funds | 378,621 | 760 | 0.80 | 461,749 | 964 | 0.84 | |||||||||||
| Total interest-bearing liabilities | 1,466,342 | 2,957 | 0.81 | 1,674,423 | 3,438 | 0.82 | |||||||||||
| Demand deposits | 124,994 | 149,352 | |||||||||||||||
| Other liabilities | 4,499 | 4,579 | |||||||||||||||
| Total liabilities | 1,595,835 | 1,828,354 | |||||||||||||||
| Stockholders’ equity | 136,833 | 158,655 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,732,668 | $ | 1,987,009 | |||||||||||||
| Net interest income | $ | 13,321 | $ | 15,382 | |||||||||||||
| Weighted average spread | 3.02 | % | 3.03 | % | |||||||||||||
| Net interest margin (6) | 3.14 | % | 3.15 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 115.90 | % | 116.65 | % | |||||||||||||
| (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 | ||||||||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||||||
| 2015 | 2016 | |||||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE | AVERAGE BALANCE | INTEREST | YIELD/ RATE | |||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Loans (1) (2) | $ | 1,307,871 | $ | 60,260 | 4.61 | % | $ | 1,524,858 | $ | 68,917 | 4.52 | % | ||||||||
| Securities (3) (4) | 76,193 | 990 | 1.30 | 54,494 | 1,300 | 2.39 | ||||||||||||||
| Federal Reserve and other short-term investments | 221,807 | 609 | 0.27 | 301,322 | 1,552 | 0.52 | ||||||||||||||
| Total interest-earning assets | 1,605,871 | 61,859 | 3.85 | 1,880,674 | 71,769 | 3.82 | ||||||||||||||
| Other assets | 33,014 | 33,378 | ||||||||||||||||||
| Total assets | $ | 1,638,885 | $ | 1,914,052 | ||||||||||||||||
| Interest-bearing deposits (5) | $ | 1,038,016 | 7,945 | 0.77 | $ | 1,176,472 | 9,599 | 0.82 | ||||||||||||
| Borrowed funds | 348,094 | 2,965 | 0.85 | 442,134 | 3,786 | 0.86 | ||||||||||||||
| Total interest-bearing liabilities | 1,386,110 | 10,910 | 0.79 | 1,618,606 | 13,385 | 0.83 | ||||||||||||||
| Demand deposits | 117,741 | 140,758 | ||||||||||||||||||
| Other liabilities | 4,387 | 4,456 | ||||||||||||||||||
| Total liabilities | 1,508,238 | 1,763,820 | ||||||||||||||||||
| Stockholders’ equity | 130,647 | 150,232 | ||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,638,885 | $ | 1,914,052 | ||||||||||||||||
| Net interest income | $ | 50,949 | $ | 58,384 | ||||||||||||||||
| Weighted average spread | 3.06 | % | 2.99 | % | ||||||||||||||||
| Net interest margin (6) | 3.17 | % | 3.10 | % | ||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 115.85 | % | 116.19 | % | ||||||||||||||||
| (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. |