HINGHAM, Mass., July 13, 2017 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ:HIFS), Hingham, Massachusetts announced second quarter earnings for 2017.
Net income for the quarter ended June 30, 2017 was $6,470,000 or $3.03 per share basic and $2.97 per share diluted as compared to $5,867,000 or $2.75 per share basic and $2.73 per share diluted for the same period last year. Net income per share (diluted) for the second quarter of 2017 increased 9% over the same period of 2016. The Bank’s annualized return on average equity for the second quarter of 2017 was 15.08%, and the annualized return on average assets was 1.25% as compared to 15.96% and 1.21% for the same period in 2016. Net income for the 2017 and 2016 periods included after-tax realized gains on investments of approximately $49,000 and $221,000 respectively, which were unrelated to the Bank’s core business operations.
Net income for the six months ended June 30, 2017 was $12,582,000 or $5.90 per share basic and $5.77 per share diluted as compared to $11,191,000 or $5.25 per share basic and $5.21 per share diluted for the same period last year. Net income per share (diluted) for the first six months of 2017 increased 11% over the same period in 2016. The Bank’s annualized return on average equity for the first six months of 2017 was 14.93% and the annualized return on average assets was 1.23%. The Bank’s annualized return on average equity for the first six months of 2016 was 15.51%, and the annualized return on average assets was 1.20%.
Balance sheet growth trends of recent years continued, as deposits were $1.424 billion at June 30, 2017, representing 8% annualized growth year-to-date and 8% growth from June 30, 2016. Net loans were $1.666 billion at June 30, 2017, representing 8% annualized growth year-to-date and 9% growth from June 30, 2016. Total assets were $2.111 billion at June 30, 2017, representing 10% annualized growth year-to-date and 10% growth from June 30, 2016. Book value per share increased to $81.05 per share at June 30, 2017, representing a 15% annualized growth rate year-to-date and a 16% increase from June 30, 2016. In addition to the increase in book value per share, the Bank has declared $1.60 in dividends per share since June 30, 2016.
Key credit and operational metrics remained steady in the second quarter of 2017. At June 30, 2017, non-performing assets totaled 0.18% of total assets, compared with 0.09% at December 31, 2016 and 0.18% at June 30, 2016. Non-performing loans as a percentage of the total loan portfolio totaled 0.22% at June 30, 2017, as compared to 0.11% at December 31, 2016 and 0.22% at June 30, 2016. At June 30, 2017 and 2016, the Bank did not own any foreclosed property. The efficiency ratio improved to 29.97% for the second quarter of 2017, as compared to 32.96% for the same period last year. Non-interest expense (annualized) as a percentage of average assets fell to 0.93% for the second quarter of 2017, as compared to 1.00% for the same period last year. These metrics reflect the Bank’s disciplined focus on credit and expense management.
President Robert H. Gaughen, Jr. stated, “We are pleased to report that our current quarterly diluted earnings per share represent a 9% increase over the second quarter of 2016 and that returns on equity and assets remain satisfactory. 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 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 June 30, | Six Months Ended June 30, | ||||||||||
| 2016 | 2017 | 2016 | 2017 | ||||||||
| (Unaudited) | |||||||||||
| Key Performance Ratios | |||||||||||
| Return on average assets (1) | 1.21 | % | 1.25 | % | 1.20 | % | 1.23 | % | |||
| Return on average equity (1) | 15.96 | 15.08 | 15.51 | 14.93 | |||||||
| Interest rate spread (1) (2) | 2.90 | 2.94 | 2.96 | 2.97 | |||||||
| Net interest margin (1) (3) | 3.01 | 3.08 | 3.07 | 3.10 | |||||||
| Non-interest expense to average assets (1) | 1.00 | 0.93 | 1.04 | 0.97 | |||||||
| Efficiency ratio (4) | 32.96 | 29.97 | 33.66 | 31.20 | |||||||
| Average equity to average assets | 7.59 | 8.27 | 7.73 | 8.24 | |||||||
| Average interest-earning assets to average interest- bearing liabilities | 115.55 | 117.45 | 115.83 | 117.12 | |||||||
| June 30, 2016 | December 31, 2016 | June 30, 2017 | |||||||||||
| (Unaudited) | |||||||||||||
| Asset Quality Ratios | |||||||||||||
| Allowance for loan losses/total loans | 0.68 | % | 0.68 | % | 0.69 | % | |||||||
| Allowance for loan losses/non-performing loans | 302.09 | 614.43 | 310.63 | ||||||||||
| Non-performing loans/total loans | 0.22 | 0.11 | 0.22 | ||||||||||
| Non-performing loans/total assets | 0.18 | 0.09 | 0.18 | ||||||||||
| Non-performing assets/total assets | 0.18 | 0.09 | 0.18 | ||||||||||
| Share Related | |||||||||||||
| Book value per share | $ | 69.69 | $ | 75.50 | $ | 81.05 | |||||||
| Market value per share | $ | 122.92 | $ | 196.78 | $ | 181.93 | |||||||
| 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 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 | ||||||||
| June 30, | December 31, | June 30, | ||||||
| (Dollars in thousands, except per share data) | 2016 | 2016 | 2017 | |||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and due from banks | $ | 10,788 | $ | 7,816 | $ | 8,312 | ||
| Federal Reserve and other short-term investments | 287,009 | 315,116 | 346,999 | |||||
| Cash and cash equivalents | 297,797 | 322,932 | 355,311 | |||||
| Certificates of deposit | 2,630 | — | — | |||||
| CRA investment | 7,092 | 6,839 | 7,383 | |||||
| Other securities available for sale | 25,857 | 20,329 | 21,974 | |||||
| Securities available for sale, at fair value | 32,949 | 27,168 | 29,357 | |||||
| Federal Home Loan Bank stock, at cost | 24,203 | 24,472 | 25,297 | |||||
| Loans, net of allowance for loan losses of $10,413 | ||||||||
| at June 30, 2016, $11,030 at December 31, 2016 | ||||||||
| and $11,571 at June 30, 2017 | 1,525,407 | 1,605,647 | 1,666,172 | |||||
| Foreclosed assets | — | — | — | |||||
| Bank-owned life insurance | 11,838 | 11,962 | 12,091 | |||||
| Premises and equipment, net | 14,774 | 14,462 | 14,169 | |||||
| Accrued interest receivable | 3,498 | 3,529 | 3,645 | |||||
| Deferred income tax asset, net | 3,146 | 2,489 | 2,190 | |||||
| Other assets | 2,423 | 1,938 | 2,784 | |||||
| Total assets | $ | 1,918,665 | $ | 2,014,599 | $ | 2,111,016 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Interest-bearing deposits | $ | 1,183,353 | $ | 1,218,360 | $ | 1,263,923 | ||
| Non-interest-bearing deposits | 136,272 | 147,749 | 159,702 | |||||
| Total Deposits | 1,319,625 | 1,366,109 | 1,423,625 | |||||
| Federal Home Loan Bank advances | 440,392 | 475,318 | 503,242 | |||||
| Mortgage payable | 896 | 868 | 840 | |||||
| Mortgagors’ escrow accounts | 4,970 | 5,585 | 5,735 | |||||
| Accrued interest payable | 388 | 400 | 531 | |||||
| Other liabilities | 3,897 | 5,295 | 4,181 | |||||
| Total liabilities | 1,770,168 | 1,853,575 | 1,938,154 | |||||
| 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 | ||||||||
| June 30, 2016 and 2,132,750 shares issued and | ||||||||
| outstanding at December 31, 2016 and June 30, 2017 | 2,131 | 2,133 | 2,133 | |||||
| Additional paid-in capital | 11,319 | 11,575 | 11,662 | |||||
| Undivided profits | 134,394 | 144,580 | 155,796 | |||||
| Accumulated other comprehensive income | 653 | 2,736 | 3,271 | |||||
| Total stockholders’ equity | 148,497 | 161,024 | 172,862 | |||||
| Total liabilities and stockholders’ equity | $ | 1,918,665 | $ | 2,014,599 | $ | 2,111,016 | ||
| HINGHAM INSTITUTION FOR SAVINGS | |||||||||||||||||||||
| Consolidated Statements of Income | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||
| (In thousands, except per share amounts) | 2016 | 2017 | 2016 | 2017 | |||||||||||||||||
| (Unaudited) | |||||||||||||||||||||
| Interest and dividend income: | |||||||||||||||||||||
| Loans | $ | 16,983 | $ | 18,484 | $ | 33,413 | $ | 36,452 | |||||||||||||
| Debt securities | 18 | — | 46 | — | |||||||||||||||||
| Equity securities | 285 | 367 | 529 | 720 | |||||||||||||||||
| Federal Reserve and other short-term investments | 418 | 827 | 744 | 1,436 | |||||||||||||||||
| Total interest and dividend income | 17,704 | 19,678 | 34,732 | 38,608 | |||||||||||||||||
| Interest expense: | |||||||||||||||||||||
| Deposits | 2,400 | 2,712 | 4,690 | 5,230 | |||||||||||||||||
| Federal Home Loan Bank advances | 959 | 1,277 | 1,849 | 2,237 | |||||||||||||||||
| Mortgage payable | 13 | 13 | 27 | 26 | |||||||||||||||||
| Total interest expense | 3,372 | 4,002 | 6,566 | 7,493 | |||||||||||||||||
| Net interest income | 14,332 | 15,676 | 28,166 | 31,115 | |||||||||||||||||
| Provision for loan losses | 255 | 285 | 510 | 540 | |||||||||||||||||
| Net interest income, after provision for loan losses | 14,077 | 15,391 | 27,656 | 30,575 | |||||||||||||||||
| Other income: | |||||||||||||||||||||
| Customer service fees on deposits | 236 | 227 | 452 | 446 | |||||||||||||||||
| Increase in bank-owned life insurance | 74 | 62 | 141 | 129 | |||||||||||||||||
| Gain on sale of securities | 344 | 77 | 344 | 77 | |||||||||||||||||
| Miscellaneous | 48 | 47 | 97 | 92 | |||||||||||||||||
| Total other income | 702 | 413 | 1,034 | 744 | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||
| Salaries and employee benefits | 2,991 | 3,091 | 6,061 | 6,237 | |||||||||||||||||
| Occupancy and equipment | 484 | 419 | 955 | 883 | |||||||||||||||||
| Data processing | 303 | 311 | 608 | 608 | |||||||||||||||||
| Deposit insurance | 264 | 258 | 506 | 516 | |||||||||||||||||
| Foreclosure | 26 | (40) | 82 | 3 | |||||||||||||||||
| Marketing | 109 | 116 | 225 | 240 | |||||||||||||||||
| Other general and administrative | 665 | 643 | 1,275 | 1,429 | |||||||||||||||||
| Total operating expenses | 4,842 | 4,798 | 9,712 | 9,916 | |||||||||||||||||
| Income before income taxes | 9,937 | 11,006 | 18,978 | 21,403 | |||||||||||||||||
| Income tax provision | 4,070 | 4,536 | 7,787 | 8,821 | |||||||||||||||||
| Net income | $ | 5,867 | $ | 6,470 | $ | 11,191 | $ | 12,582 | |||||||||||||
| Cash dividends declared per share | $ | 0.30 | $ | 0.32 | $ | 0.60 | $ | 0.64 | |||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||
| Basic | 2,131 | 2,133 | 2,130 | 2,133 | |||||||||||||||||
| Diluted | 2,149 | 2,179 | 2,148 | 2,180 | |||||||||||||||||
| Earnings per share: | |||||||||||||||||||||
| Basic | $ | 2.75 | $ | 3.03 | $ | 5.25 | $ | 5.90 | |||||||||||||
| Diluted | $ | 2.73 | $ | 2.97 | $ | 5.21 | $ | 5.77 | |||||||||||||
| HINGHAM INSTITUTION FOR SAVINGS | |||||||||||||||||
| Net Interest Income Analysis | |||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||
| 2016 | 2017 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 1,507,171 | $ | 16,983 | 4.51 | % | $ | 1,666,327 | $ | 18,484 | 4.44 | % | |||||
| Securities (3) (4) | 61,766 | 303 | 1.96 | 49,233 | 367 | 2.98 | |||||||||||
| Federal Reserve and other short-term investments | 335,064 | 418 | 0.50 | 322,239 | 827 | 1.03 | |||||||||||
| Total interest-earning assets | 1,904,001 | 17,704 | 3.72 | 2,037,799 | 19,678 | 3.86 | |||||||||||
| Other assets | 33,532 | 35,894 | |||||||||||||||
| Total assets | $ | 1,937,533 | $ | 2,073,693 | |||||||||||||
| Interest-bearing deposits (5) | $ | 1,177,674 | 2,400 | 0.82 | $ | 1,263,209 | 2,712 | 0.86 | |||||||||
| Borrowed funds | 470,110 | 972 | 0.83 | 471,805 | 1,290 | 1.09 | |||||||||||
| Total interest-bearing liabilities | 1,647,784 | 3,372 | 0.82 | 1,735,014 | 4,002 | 0.92 | |||||||||||
| Demand deposits | 137,837 | 162,339 | |||||||||||||||
| Other liabilities | 4,889 | 4,755 | |||||||||||||||
| Total liabilities | 1,790,510 | 1,902,108 | |||||||||||||||
| Stockholders’ equity | 147,023 | 171,585 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,937,533 | $ | 2,073,693 | |||||||||||||
| Net interest income | $ | 14,332 | $ | 15,676 | |||||||||||||
| Weighted average spread | 2.90 | % | 2.94 | % | |||||||||||||
| Net interest margin (6) | 3.01 | % | 3.08 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 115.55 | % | 117.45 | % | |||||||||||||
| (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 | |||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||
| 2016 | 2017 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 1,473,583 | $ | 33,413 | 4.53 | % | $ | 1,646,040 | $ | 36,452 | 4.43 | % | |||||
| Securities (3) (4) | 61,404 | 575 | 1.87 | 48,442 | 720 | 2.97 | |||||||||||
| Federal Reserve and other short-term investments | 297,866 | 744 | 0.50 | 315,727 | 1,436 | 0.91 | |||||||||||
| Total interest-earning assets | 1,832,853 | 34,732 | 3.79 | 2,010,209 | 38,608 | 3.84 | |||||||||||
| Other assets | 33,344 | 35,153 | |||||||||||||||
| Total assets | $ | 1,866,197 | $ | 2,045,362 | |||||||||||||
| Interest-bearing deposits (5) | $ | 1,149,165 | 4,690 | 0.82 | $ | 1,246,436 | 5,230 | 0.84 | |||||||||
| Borrowed funds | 433,244 | 1,876 | 0.87 | 469,907 | 2,263 | 0.96 | |||||||||||
| Total interest-bearing liabilities | 1,582,409 | 6,566 | 0.83 | 1,716,343 | 7,493 | 0.87 | |||||||||||
| Demand deposits | 134,524 | 155,627 | |||||||||||||||
| Other liabilities | 4,918 | 4,802 | |||||||||||||||
| Total liabilities | 1,721,851 | 1,876,772 | |||||||||||||||
| Stockholders’ equity | 144,346 | 168,590 | |||||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,866,197 | $ | 2,045,362 | |||||||||||||
| Net interest income | $ | 28,166 | $ | 31,115 | |||||||||||||
| Weighted average spread | 2.96 | % | 2.97 | % | |||||||||||||
| Net interest margin (6) | 3.07 | % | 3.10 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 115.83 | % | 117.12 | % | |||||||||||||
| (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 |