HINGHAM INSTITUTION FOR SAVINGS (Nasdaq - HIFS), Hingham, Massachusetts announced its earnings for 2012. Net income for the year ended December 31, 2012 was $13,290,000 or $6.25 per share (basic and diluted) as compared to $12,062,000 or $5.68 per share basic and $5.67 diluted for 2011. Net income for the fourth quarter 2012 was $3,354,000 or $1.58 per share (basic and diluted) as compared to $3,107,000 or $1.46 per share (basic and diluted) for the fourth quarter 2011. The Bank's return on average equity for the year ending December 31, 2012 was 15.05%, and the return on average assets was 1.15%.

Deposits increased by $82 million, or 10%, net loans increased by 12% and total assets by 7% from December 31, 2011 to December 31, 2012. Total assets were $1,205,884,000 at December 31, 2012 as compared to $1,127,276,000 at December 31, 2011. Book value per share increased to $43.65 per share at December 31, 2012 from $38.70 per share at December 31, 2011. At December 31, 2012 non-performing assets totaled 0.28% of total assets compared to 0.92% of total assets at December 31, 2011.

President Robert H. Gaughen, Jr. stated, "We are pleased to report another year of record earnings, representing a 10% increase over those of 2011. Over the past several years, despite the challenging business environment, we have developed a track record for delivering consistently strong performance. Although the current interest rate environment is challenging, our focus on measured organic growth, effective cost control and aggressive management of asset quality have produced real bottom line results. We remain focused on increasing shareholder value through the careful construction of an outstanding community banking organization."

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 in the Commonwealth. 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 and on Beacon Hill.

The Bank's shares of common stock are listed and traded on The NASDAQ Stock Market under the symbol HIFS.

 

HINGHAM INSTITUTION FOR SAVINGS

Consolidated Balance Sheets

 

(Dollars in thousands except per share data)

  

December 31,
2012

  

December 31,
2011

(Unaudited)
ASSETS
 
Cash and due from banks $ 7,961 $ 8,918
Short-term investments 79,373 107,422
Cash and cash equivalents 87,334 116,340
 
Certificates of deposit 13,737 13,405
Securities available for sale, at fair value 102,866 96,689
Federal Home Loan Bank stock, at cost 14,105 13,373

Loans, net of allowance for loan losses of $7,999 at December 31, 2012 and $7,516 at December 31, 2011

949,662

849,776

Foreclosed assets 471 3,629
Bank-owned life insurance 14,945 14,524
Premises and equipment, net 14,180 10,597
Accrued interest receivable 2,667 2,858
Prepaid FDIC assessment 1,364 1,871
Deferred income tax asset, net 2,621 3,425
Other assets 1,932 789
Total assets

$

1,205,884 $ 1,127,276
 

LIABILITIES AND STOCKHOLDERS' EQUITY

 
Deposits $ 869,886 $ 787,573
Federal Home Loan Bank advances 234,355 247,471
Mortgage payable 1,065 1,107
Mortgagors' escrow accounts 3,231 2,517
Accrued interest payable 478 475
Other liabilities 4,070 5,868
Total liabilities 1,113,085 1,045,011
 
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; 2,125,750 shares issued and outstanding

2,126

2,126

Additional paid-in capital 10,519 10,500
Undivided profits 79,930 69,404
Accumulated other comprehensive income 224 235
Total stockholders' equity 92,799 82,265
Total liabilities and stockholders' equity $ 1,205,884 $ 1,127,276
 
 

HINGHAM INSTITUTION FOR SAVINGS

Consolidated Statements of Income

 
    Three Months Ended   Twelve Months Ended
December 31, December 31,
2012   2011 2012   2011
(Unaudited) (In thousands, except per share amounts)
Interest and dividend income:    
Loans $ 12,126 $ 11,943 $ 47,753 $ 47,191
Debt securities 111 146 526 749
Equity securities 70 52 198 153
Short-term investments and certificates of deposit 92 90 354 351
  Total interest and dividend income 12,399 12,231 48,831 48,444
Interest expense:
Deposits 1,467 1,547 5,858 6,751
Federal Home Loan Bank advances 1,282 1,348 5,014 5,799
Mortgage payable 16 17 65 68
Total interest expense 2,765 2,912 10,937 12,618
Net interest income 9,634 9,319 37,894 35,826
Provision for loan losses 150 225 725 1,100
Net interest income, after provision for loan losses 9,484 9,094 37,169 34,726
Other income:
Customer service fees on deposits 253 259 1,008 987
Increase in bank-owned life insurance 102 108 421 450
Miscellaneous 73 79 237 263
Total other income 428 446 1,666 1,700
Operating expenses:
Salaries and employee benefits 2,506 2,263 9,643 8,894
Data processing 234 224 884 883
Occupancy and equipment 438 413 1,709 1,528
Deposit insurance 164 159 611 701
Foreclosure 5 429 336 1,038
Marketing 157 171 654 650
Other general and administrative 750 626 2,597 2,397
Total operating expenses 4,254 4,285 16,434 16,091
Income before income taxes 5,658 5,255 22,401 20,335
Income tax provision 2,304 2,148 9,111 8,273
Net income $ 3,354 3,107 $ 13,290 $ 12,062
 
Weighted average common shares outstanding:
Basic 2,126 2,126 2,126 2,125
Diluted 2,128 2,127 2,127 2,126
 
Earnings per common share:
Basic $ 1.58 $ 1.46 $ 6.25 $ 5.68
Diluted $ 1.58 $ 1.46 $ 6.25 $ 5.67
 
 

HINGHAM INSTITUTION FOR SAVINGS

Net Interest Income Analysis

 
  Three Months Ended December 31,
2012   2011

AVERAGE
BALANCE

  

INTEREST

  

YIELD/
RATE

AVERAGE
BALANCE

  

INTEREST

  

YIELD/
RATE

(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 938,446 $ 12,126 5.17 % $ 849,581 $ 11,943 5.62 %
Securities (3) (4) 115,630 181 0.63 91,098 198 0.87
Short-term investments and certificates of deposit 119,942 92 0.31 120,079 90 0.30
Total earning assets 1,174,018 12,399 4.22 1,060,758 12,231 4.61
Other assets 36,189 37,218
Total assets $ 1,210,207 $ 1,097,976
 
Interest-bearing deposits (5) $ 777,259 1,467 0.75 $ 710,878 1,547 0.87
Borrowed funds 258,641 1,298 2.01 237,863 1,365 2.30
Total interest-bearing liabilities 1,035,900 2,765 1.07 948,741 2,912 1.23
Demand deposits 77,972 63,801
Other liabilities 4,298 3,828
Total liabilities 1,118,170 1,016,370
Stockholders' equity 92,037 81,606
Total liabilities and stockholders' equity $ 1,210,207 $ 1,097,976
Net interest income $ 9,634 $ 9,319
 
Weighted average spread 3.15 % 3.38 %
 
Net interest margin (6) 3.28 % 3.51 %
 

Average interest-earning assets to average interest-bearing liabilities (7)

113.33

%

111.81

%

 

(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,
2012   2011

AVERAGE
BALANCE

  

INTEREST

  

YIELD/
RATE

AVERAGE
BALANCE

  

INTEREST

  

YIELD/
RATE

(Dollars in thousands)
(Unaudited)
 
Loans (1) (2) $ 896,372 $ 47,753 5.33 % $ 828,460 $ 47,191 5.70 %
Securities (3) (4) 111,430 724 0.65 99,998 902 0.90

Short-term investments and certificates of deposit

114,845 354 0.31 93,867 351 0.37
Total earning assets 1,122,647 48,831 4.35 1,022,325 48,444 4.74
Other assets 36,623 35,502
Total assets $ 1,159,270 $ 1,057,827
 
Interest-bearing deposits (5) $ 752,516 5,858 0.78 $ 699,897 6,751 0.96
Borrowed funds 243,162 5,079 2.09 217,324 5,867 2.70
Total interest-bearing liabilities 995,678 10,937 1.10 917,221 12,618 1.38
Demand deposits 70,946 58,885
Other liabilities 4,357 3,068
Total liabilities 1,070,981 979,174
Stockholders' equity 88,289 78,653
Total liabilities and stockholders' equity $ 1,159,270 $ 1,057,827
Net interest income $ 37,894 $ 35,826
 
Weighted average spread 3.25 % 3.36 %
 
Net interest margin (6) 3.38 % 3.50 %
 

Average interest-earning assets to average interest-bearing liabilities (7)

112.75

%

111.46

%

 

(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

Selected Financial Ratios

 
 

Three Months Ended
December 31,

  

Twelve Months Ended
December 31,

2012   2011 2012   2011
(Unaudited)
 
Key Performance Ratios
Return on average assets (1) 1.11 % 1.13 % 1.15 % 1.14 %
Return on average equity (1) 14.58 15.23 15.05 15.34
Interest rate spread (1) (2) 3.15 3.38 3.25 3.36
Net interest margin (1) (3) 3.28 3.51 3.38 3.50
Non-interest expense to average assets (1) 1.41 1.56 1.42 1.52
Efficiency ratio (4) 42.28 43.88 41.54 42.88
Average equity to average assets 7.61 7.43 7.62 7.44

Average interest-bearing assets to average interest bearing liabilities

113.33

111.81

112.75

111.45

 
   

December 31,
2012

December 31,
2011

(Unaudited)
 
Asset Quality Ratios
Allowance for loan losses/total loans 0.84 % 0.88 %
Allowance for loan losses/non-performing loans 273.66 111.30
 
Non-performing loans/total loans 0.31 0.79
Non-performing loans/total assets 0.24 0.60
Non-performing assets/total assets 0.28 0.92
 
Share Related
Book value per share $ 43.65 $ 38.70
Market value per share $ 62.60 $ 47.80
Shares outstanding at end of period 2,125,750 2,125,750
 

(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
Robert H. Gaughen, Jr., 781-749-2200
President
or
William M. Donovan, Jr., 781-749-2200
Vice President-Administration