HINGHAM, Mass., April 12, 2017 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ:HIFS), Hingham, Massachusetts announced earnings for the first quarter ended March 31, 2017.
Net income for the quarter ended March 31, 2017 was $6,112,000 or $2.87 per share basic and $2.83 per share diluted, as compared to $5,324,000 or $2.50 per share basic and $2.48 per share diluted for the same period last year. For the first quarter of 2017, the Bank’s annualized return on average equity was 14.77% and the annualized return on average assets was 1.21%, as compared to 15.03% and 1.19%, respectively, for the same period in 2016.
Solid growth trends of recent years continued, as deposits increased to $1.403 billion at March 31, 2017, representing 11% annualized growth year-to-date and 11% growth from March 31, 2016. Net loans increased to $1.634 billion, representing 7% annualized growth year-to-date and 12% growth from March 31, 2016. Total assets increased to $2.039 billion, representing 5% annualized growth year-to-date and 10% growth from March 31, 2016, primarily driven by the Bank’s larger loan portfolio. Book value per share was $78.29 as of March 31, 2017, representing a 16% increase from the same time last year and 15% annualized growth year to date. This increase in book value per share excludes capital returned to the ownership through regular and special dividends; the Bank has declared $1.58 in regular and special dividends since March 31, 2016, including a regular dividend of $0.32 declared during the first quarter of 2017.
Key credit and operational metrics remained strong in the first quarter. At March 31, 2017, non-performing assets totaled 0.09% of total assets, compared to 0.09% at December 31, 2016 and 0.19% at March 31, 2016. Non-performing loans as a percentage of the total loan portfolio totaled 0.08% at March 31, 2017, compared to 0.11% at December 31, 2016 and 0.22% at March 31, 2016. At March 31, 2017, the Bank owned only one piece of foreclosed property valued at $563,000. The efficiency ratio improved to 32.45% for the first quarter of 2017, as compared to 34.38% for the same period last year. Non-interest expense as a percentage of average assets fell to 1.02% in the first quarter, as compared to 1.09% for the same period last year. Both the efficiency ratio and operating expenses as a percentage of average assets reflect the Bank’s particular focus on disciplined expense management.
President Robert H. Gaughen Jr. stated, “We are pleased to report that our first quarter of 2017 diluted earnings per share represent an 14% increase over the same period in 2016 and a 14.77% return on average equity. At Hingham, we take our role as stewards of the owners’ capital seriously. We remain focused on careful capital allocation, conservative underwriting, and disciplined cost control – strategies that have served our owners well over time and through credit cycles.”
Hingham Institution for Savings is a Massachusetts-chartered savings bank located in Hingham, Massachusetts. Incorporated in 1834, it is one of America’s oldest banks. The Bank’s Main Office is located in Hingham and the Bank also maintains offices on the South Shore, in Boston (South End and 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 March 31, | |||||
| 2016 | 2017 | ||||
| (Unaudited) | |||||
| Key Performance Ratios | |||||
| Return on average assets (1) | 1.19 | % | 1.21 | % | |
| Return on average equity (1) | 15.03 | 14.77 | |||
| Interest rate spread (1) (2) | 3.03 | 3.00 | |||
| Net interest margin (1) (3) | 3.14 | 3.12 | |||
| Non-interest expense to average assets (1) | 1.09 | 1.02 | |||
| Efficiency ratio (4) | 34.38 | 32.45 | |||
| Average equity to average assets | 7.89 | 8.21 | |||
| Average interest-earning assets to average interest bearing liabilities | 116.13 | 116.78 | |||
| March 31, 2016 | December 31, 2016 | March 31, 2017 | ||||||||||
| (Unaudited) | ||||||||||||
| Asset Quality Ratios | ||||||||||||
| Allowance for loan losses/total loans | 0.70 | % | 0.68 | % | 0.69 | % | ||||||
| Allowance for loan losses/non-performing loans | 311.79 | 614.43 | 846.59 | |||||||||
| Non-performing loans/total loans | 0.22 | 0.11 | 0.08 | |||||||||
| Non-performing loans/total assets | 0.18 | 0.09 | 0.07 | |||||||||
| Non-performing assets/total assets | 0.19 | 0.09 | 0.09 | |||||||||
| Share Related | ||||||||||||
| Book value per share | $ | 67.21 | $ | 75.50 | $ | 78.29 | ||||||
| Market value per share | $ | 119.11 | $ | 196.78 | $ | 176.85 | ||||||
| Shares outstanding at end of period | 2,130,750 | 2,132,750 | 2,132,750 | |||||||||
(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 interest-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 | ||||||||
| (In thousands, except share amounts) | March 31, 2016 | December 31, 2016 | March 31, 2017 | |||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 7,643 | $ | 7,816 | $ | 6,548 | ||
| Federal Reserve and other short-term investments | 290,414 | 315,116 | 310,130 | |||||
| Cash and cash equivalents | 298,057 | 322,932 | 316,678 | |||||
| Certificates of deposit | 4,469 | — | — | |||||
| CRA investment | 5,041 | 6,839 | 7,341 | |||||
| Other securities available for sale | 32,359 | 20,329 | 21,369 | |||||
| Securities available for sale, at fair value | 37,400 | 27,168 | 28,710 | |||||
| Federal Home Loan Bank stock, at cost | 20,679 | 24,472 | 24,920 | |||||
| Loans, net of allowance for loan losses of $10,158 at March 31, 2016, $11,030 at December 31, 2016 and $11,285 at March 31, 2017 | 1,453,722 | 1,605,647 | 1,634,263 | |||||
| Foreclosed assets | 168 | — | 563 | |||||
| Bank-owned life insurance | 11,764 | 11,962 | 12,029 | |||||
| Premises and equipment, net | 14,921 | 14,462 | 14,314 | |||||
| Accrued interest receivable | 3,435 | 3,529 | 3,576 | |||||
| Deferred income tax asset, net | 3,127 | 2,489 | 2,226 | |||||
| Other assets | 2,188 | 1,938 | 2,217 | |||||
| Total assets | $ | 1,849,930 | $ | 2,014,599 | $ | 2,039,496 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Interest-bearing deposits | $ | 1,135,004 | $ | 1,218,360 | $ | 1,248,381 | ||
| Non-interest-bearing deposits | 133,297 | 147,749 | 154,622 | |||||
| Total deposits | 1,268,301 | 1,366,109 | 1,403,003 | |||||
| Federal Home Loan Bank advances | 425,429 | 475,318 | 455,281 | |||||
| Mortgage payable | 909 | 868 | 855 | |||||
| Mortgagors’ escrow accounts | 4,995 | 5,585 | 5,787 | |||||
| Accrued interest payable | 324 | 400 | 396 | |||||
| Other liabilities | 6,770 | 5,295 | 7,207 | |||||
| Total liabilities | 1,706,728 | 1,853,575 | 1,872,529 | |||||
| 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; 2,130,750 shares issued and outstanding at March 31, 2016 and 2,132,750 shares issued and outstanding at December 31, 2016 and March 31, 2017 | 2,131 | 2,133 | 2,133 | |||||
| Additional paid-in capital | 11,260 | 11,575 | 11,619 | |||||
| Undivided profits | 129,166 | 144,580 | 150,008 | |||||
| Accumulated other comprehensive income | 645 | 2,736 | 3,207 | |||||
| Total stockholders’ equity | 143,202 | 161,024 | 166,967 | |||||
| Total liabilities and stockholders’ equity | $ | 1,849,930 | $ | 2,014,599 | $ | 2,039,496 | ||
| HINGHAM INSTITUTION FOR SAVINGS | |||||
| Consolidated Statements of Income | |||||
| Three Months Ended March 31, | |||||
| (In thousands, except per share amounts) | 2016 | 2017 | |||
| (Unaudited) | |||||
| Interest and dividend income: | |||||
| Loans | $ | 16,430 | $ | 17,968 | |
| Debt securities | 28 | — | |||
| Equity securities | 244 | 353 | |||
| Federal Reserve and other short-term investments | 326 | 609 | |||
| Total interest and dividend income | 17,028 | 18,930 | |||
| Interest expense: | |||||
| Deposits | 2,290 | 2,518 | |||
| Federal Home Loan Bank advances | 890 | 960 | |||
| Mortgage payable | 14 | 13 | |||
| Total interest expense | 3,194 | 3,491 | |||
| Net interest income | 13,834 | 15,439 | |||
| Provision for loan losses | 255 | 255 | |||
| Net interest income, after provision for loan losses | 13,579 | 15,184 | |||
| Other income: | |||||
| Customer service fees on deposits | 216 | 219 | |||
| Increase in cash surrender value of bank-owned life insurance | 67 | 67 | |||
| Miscellaneous | 49 | 45 | |||
| Total other income | 332 | 331 | |||
| Operating expenses: | |||||
| Salaries and employee benefits | 3,070 | 3,146 | |||
| Occupancy and equipment | 471 | 464 | |||
| Data processing | 305 | 297 | |||
| Deposit insurance | 242 | 258 | |||
| Foreclosure | 56 | 43 | |||
| Marketing | 116 | 124 | |||
| Other general and administrative | 610 | 786 | |||
| Total operating expenses | 4,870 | 5,118 | |||
| Income before income taxes | 9,041 | 10,397 | |||
| Income tax provision | 3,717 | 4,285 | |||
| Net income | $ | 5,324 | $ | 6,112 | |
| Cash dividends declared per common share | $ | 0.30 | $ | 0.32 | |
| Weighted average shares outstanding: | |||||
| Basic | 2,130 | 2,133 | |||
| Diluted | 2,149 | 2,162 | |||
| Earnings per share: | |||||
| Basic | $ | 2.50 | $ | 2.87 | |
| Diluted | $ | 2.48 | $ | 2.83 | |
| HINGHAM INSTITUTION FOR SAVINGS | |||||||||||||||||
| Net Interest Income Analysis | |||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| 2016 | 2017 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 1,439,994 | $ | 16,430 | 4.56 | % | $ | 1,625,525 | $ | 17,968 | 4.42 | % | |||||
| Securities (3) (4) | 61,042 | 272 | 1.78 | 47,643 | 353 | 2.96 | |||||||||||
| Federal Reserve and other short-term investments | 260,669 | 326 | 0.50 | 309,143 | 609 | 0.79 | |||||||||||
| Total interest-earning assets | 1,761,705 | 17,028 | 3.87 | 1,982,311 | 18,930 | 3.82 | |||||||||||
| Other assets | 33,156 | 34,405 | |||||||||||||||
| Total assets | $ | 1,794,861 | $ | 2,016,716 | |||||||||||||
| Interest-bearing deposits (5) | $ | 1,120,656 | 2,290 | 0.82 | $ | 1,229,476 | 2,518 | 0.82 | |||||||||
| Borrowed funds | 396,378 | 904 | 0.91 | 467,988 | 973 | 0.83 | |||||||||||
| Total interest-bearing liabilities | 1,517,034 | 3,194 | 0.84 | 1,697,464 | 3,491 | 0.82 | |||||||||||
| Demand deposits | 131,212 | 148,841 | |||||||||||||||
| Other liabilities | 4,947 | 4,849 | |||||||||||||||
| Total liabilities | 1,653,193 | 1,851,154 | |||||||||||||||
| Stockholders’ equity | 141,668 | 165,562 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,794,861 | $ | 2,016,716 | |||||||||||||
| Net interest income | $ | 13,834 | $ | 15,439 | |||||||||||||
| Weighted average spread | 3.03 | % | 3.00 | % | |||||||||||||
| Net interest margin (6) | 3.14 | % | 3.12 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 116.13 | % | 116.78 | % | |||||||||||||
| (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. |