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Hingham Institution for Savings (HIFS)

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Previous Close244.62
Open247.94
Bid0.00 x 1000
Ask0.00 x 900
Day's Range242.85 - 253.00
52 Week Range125.55 - 259.80
Volume6,875
Avg. Volume4,360
Market Cap530.079M
Beta (5Y Monthly)N/A
PE Ratio (TTM)10.44
EPS (TTM)23.76
Earnings DateApr 12, 2021 - Apr 16, 2021
Forward Dividend & Yield1.88 (0.77%)
Ex-Dividend DateDec 31, 2020
1y Target EstN/A
  • GlobeNewswire

    Hingham Savings Reports 2020 Results

    HINGHAM, Mass., Jan. 19, 2021 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ: HIFS), Hingham, Massachusetts announced earnings for the fourth quarter and the year ended December 31, 2020. Earnings Net income for the year ended December 31, 2020 was $50,771,000 or $23.76 per share basic and $23.25 per share diluted, as compared to $38,927,000 or $18.24 per share basic and $17.83 per share diluted for the same period last year. The Bank’s return on average equity for the year ended December 31, 2020 was 18.96%, and the return on average assets was 1.88%, as compared to 16.82% and 1.55% for the same period in 2019. Net income per share (diluted) for 2020 increased by 30% over the same period in 2019. Core net income for the year ended December 31, 2020, which represents net income excluding the after-tax gains and losses on securities, both realized and unrealized, was $44,600,000 or $20.87 per share basic and $20.43 per share diluted, as compared to $32,996,000 or $15.46 per share basic and $15.12 per share diluted for the same period last year. The Bank’s core return on average equity for the year ended December 31, 2020 was 16.66%, and the core return on average assets was 1.65%, as compared to 14.26% and 1.32% for the same period in 2019. Core net income per share (diluted) for 2020 increased by 35% over the same period in 2019. Net income for the quarter ended December 31, 2020 was $17,042,000 or $7.97 per share basic and $7.78 per share diluted, as compared to $11,364,000 or $5.32 per share basic and $5.20 per share diluted for the same period last year. The Bank’s annualized return on average equity for the fourth quarter of 2020 was 23.83%, and the annualized return on average assets was 2.46%, as compared to 18.64% and 1.81% for the same period in 2019. Net income per share (diluted) for the fourth quarter of 2020 increased by 50% over the same period in 2019. Core net income for the quarter ended December 31, 2020, which represents net income excluding the after-tax gains and losses on securities, both realized and unrealized, was $12,791,000 or $5.99 per share basic and $5.84 per share diluted, as compared to $8,814,000 or $4.13 per share basic and $4.04 per share diluted for the same period last year. The Bank’s annualized core return on average equity for the fourth quarter of 2020 was 17.89%, and the annualized core return on average assets was 1.85%, as compared to 14.46% and 1.40% for the same period in 2019. Core net income per share (diluted) for the fourth quarter of 2020 increased by 45% over the same period in 2019. See page 9 for a Non-GAAP reconciliation between net income and core net income. In calculating core net income, the Bank does not make any adjustments other than those relating to after-tax gains and losses on securities, realized and unrealized. Balance Sheet Total assets increased to $2.857 billion at December 31, 2020, representing 10% growth from December 31, 2019. Net loans totaled $2.495 billion at December 31, 2020, representing 12% growth from December 31, 2019. Growth was concentrated in the Bank’s commercial real estate portfolio. Total deposits, including wholesale deposits, increased to $2.139 billion at December 31, 2020, representing 17% growth from December 31, 2019. Total retail and business deposits increased to $1.592 billion at December 31, 2020, representing 11% growth from December 31, 2019. Non-interest bearing deposits, included in retail and business deposits, increased to $313.5 million at December 31, 2020, representing 32% growth from December 31, 2019. During 2020, the Bank continued to reduce the balance of excess reserves held at the Federal Reserve Bank and managed its wholesale funding mix between wholesale time deposits and Federal Home Loan Bank advances in order to reduce the cost of funds. Book value per share was $137.02 as of December 31, 2020, representing 18.4% growth from December 31, 2019. In addition to the increase in book value per share, the Bank has declared $2.47 in dividends per share since December 31, 2019, including a special dividend of $0.70 per share declared during the fourth quarter of 2020. The Bank increased its regular dividend per share in each of the last four quarters. The trailing five year compound annual growth rate in book value per share, an important measure of long-term value creation, was 16.1%. Operational Performance Metrics The net interest margin for the year ended December 31, 2020 increased 50 basis points to 3.22%, as compared to 2.72% in the prior year. The net interest margin for the quarter ended December 31, 2020 increased 64 basis points to 3.43%, as compared to 2.79% for the same period last year. The Bank has benefited from a sharp decline in the cost of interest-bearing liabilities, including retail and commercial deposits and wholesale funding. The Bank has also benefited from continued growth in non-interest bearing deposit balances. These benefits were partially offset by a decline in the yield on interest-earning assets, driven primarily by the decline in the interest on excess reserves held at the Federal Reserve Bank of Boston and a lower yield on loans during the same periods. Key credit and operational metrics remained strong in the fourth quarter. At December 31, 2020, non-performing assets totaled 0.27% of total assets, as compared to 0.22% at December 31, 2019. Non-performing loans as a percentage of the total loan portfolio totaled 0.16% at December 31, 2020, as compared to 0.25% at December 31, 2019. At December 31, 2020, the Bank did not have any material exposure to loans modified as a result of the COVID-19 pandemic. As indicated in prior quarters, the Bank did not defer the collection of interest due on any commercial loans in response to COVID-19. See “COVID-19 Modifications Table” in Page 9 for a summary of modified loans still outstanding at December 31, 2020. Although the Bank’s litigation activities were slowed by pandemic-related operational challenges in both state and federal courts early in 2020, we continue to pursue delinquencies vigorously. At December 31, 2020, the Bank owned $3.8 million in foreclosed property, consisting exclusively of a residential property on Nantucket that was purchased at auction in January 2020. This balance includes the capitalization of repairs and improvements completed by the Bank following acquisition, net of a valuation allowance of $100,000 recorded in the fourth quarter of 2020 to reflect the property’s fair value. This property had originally secured a non-performing loan which comprised the substantial majority of non-performing assets at December 31, 2019. This property is currently under contract pending closing in the first quarter of 2021. At December 31, 2019, the Bank did not own any foreclosed property. The Bank recorded $260,000 of net charge-offs in 2020, as compared to $1,000 in net recoveries in 2019. This was the product of $712,000 in gross charge-offs, primarily associated with two residential mortgage loans subject to foreclosure, partially offset by $452,000 in recoveries from ongoing litigation and insurance claims related to the same residential loans. The Bank continues to pursue remaining deficiencies via litigation. The efficiency ratio, as defined on page 4 below, fell to 25.41% in 2020, as compared to 30.26% in 2019. Operating expenses as a percentage of average assets were 0.82% in both 2020 and 2019. The Bank remains focused on reducing waste through an ongoing process of continuous improvement. Chairman and Chief Executive Officer Robert H. Gaughen Jr. stated, “Returns on equity and assets were satisfactory in 2020, although performance in any one period should always be viewed cautiously, especially when tailwinds are blowing strongly in our favor. These tailwinds will not blow forever and we must be prepared for environments in which headwinds prevail. In doing so, we remain focused on careful capital allocation, defensive underwriting and disciplined cost control - the building blocks for compounding shareholder capital through all stages of the economic cycle. These remain constant, regardless of the macroeconomic environment in which we operate.” The Bank’s annual financial results are summarized in the earnings release, but shareholders are encouraged to read the Bank’s annual report on Form 10-K, which is generally available several weeks after the earnings release. The Bank expects to file Form 10-K for the year ended December 31, 2020 with the Federal Deposit Insurance Corporation (FDIC) on or about March 3, 2021. Incorporated in 1834, Hingham Institution for Savings is one of America’s oldest banks. The Bank maintains offices in Boston, Nantucket, and Washington, D.C. The Bank’s shares of common stock are listed and traded on The NASDAQ Stock Market under the symbol HIFS. HINGHAM INSTITUTION FOR SAVINGSSelected Financial Ratios Three Months EndedDecember 31, Twelve Months EndedDecember 31, 2019 2020 2019 2020(Unaudited) Key Performance Ratios Return on average assets (1)1.81% 2.46% 1.55% 1.88%Return on average equity (1)18.64 23.83 16.82 18.96 Core return on average assets (1) (5)1.40 1.85 1.32 1.65 Core return on average equity (1) (5)14.46 17.89 14.26 16.66 Interest rate spread (1) (2)2.45 3.31 2.38 3.03 Net interest margin (1) (3)2.79 3.43 2.72 3.22 Operating expenses to average assets (1)0.81 0.80 0.82 0.82 Efficiency ratio (4)29.00 23.57 30.26 25.41 Average equity to average assets9.70 10.34 9.24 9.93 Average interest-earning assets to average interest- bearing liabilities122.02 125.62 120.74 123.64 December 31, 2019 December 31, 2020(Unaudited) Asset Quality Ratios Allowance for loan losses/total loans 0.69% 0.69%Allowance for loan losses/non-performing loans 274.57 438.28 Non-performing loans/total loans 0.25 0.16 Non-performing loans/total assets 0.22 0.14 Non-performing assets/total assets 0.22 0.27 Share Related Book value per share$115.75 $137.02 Market value per share$210.20 $216.00 Shares outstanding at end of period 2,135,750 2,137,900 (1)Annualized for the three months ended December 31, 2019 and 2020.(2) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.(3) Net interest margin represents net interest income divided by average interest-earning assets.(4) The efficiency ratio represents total operating expenses, divided by the sum of net interest income and total other income, excluding gain on equity securities, net.(5) Non-GAAP measurements that represent return on average assets and return on average equity, excluding the after-tax gain on equity securities, net. HINGHAM INSTITUTION FOR SAVINGSConsolidated Balance Sheets (In thousands, except share amounts) December 31, 2019 December 31, 2020(Unaudited) ASSETS Cash and due from banks $9,057 $6,798Federal Reserve and other short-term investments 243,090 227,188Cash and cash equivalents 252,147 233,986 CRA investment 7,910 9,580Debt securities available for sale 11 6Other marketable equity securities 39,265 56,282Securities, at fair value 47,186 65,868Federal Home Loan Bank stock, at cost 24,890 19,345Loans, net of allowance for loan losses of $15,376 at December 31, 2019 and $17,404 at December 31, 2020 2,227,062 2,495,331Foreclosed assets — 3,826Bank-owned life insurance 12,727 12,657Premises and equipment, net 14,548 15,248Accrued interest receivable 4,926 5,267Deferred income tax asset, net 1,213 763Other assets 5,647 4,802Total assets $2,590,346 $2,857,093 LIABILITIES AND STOCKHOLDERS’ EQUITY Interest-bearing deposits $1,583,280 $1,825,700Non-interest-bearing deposits 237,554 313,497Total deposits 1,820,834 2,139,197Federal Home Loan Bank advances 505,200 408,031Mortgage payable 687 —Mortgagors’ escrow accounts 7,815 8,770Accrued interest payable 960 252Other liabilities 7,627 7,900Total liabilities 2,343,123 2,564,150 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; 2,135,750 shares issued and outstanding at December 31, 2019 and 2,137,900 shares issued and outstanding at December 31, 2020 2,136 2,138Additional paid-in capital 12,234 12,460Undivided profits 232,853 278,345Accumulated other comprehensive income — —Total stockholders’ equity 247,223 292,943Total liabilities and stockholders’ equity $2,590,346 $2,857,093 HINGHAM INSTITUTION FOR SAVINGSConsolidated Statements of Income Three Months Ended Twelve Months Ended December 31, December 31,(In thousands, except per share amounts) 2019 2020 2019 2020(Unaudited) Interest and dividend income: Loans $25,330 $26,038 $99,379 $103,797Debt securities 1 — 1 —Equity securities 493 264 1,996 1,666Federal Reserve and other short-term investments 860 55 5,576 899Total interest and dividend income 26,684 26,357 106,952 106,362Interest expense: Deposits 6,014 2,568 26,819 16,186Federal Home Loan Bank and Federal Reserve Bank advances 3,422 513 13,188 4,969Mortgage payable 10 — 43 3Total interest expense 9,446 3,081 40,050 21,158Net interest income 17,238 23,276 66,902 85,204Provision for loan losses 285 175 1,567 2,288Net interest income, after provision for loan losses 16,953 23,101 65,335 82,916Other income: Customer service fees on deposits 205 177 803 678Increase in cash surrender value of bank-owned life insurance 66 51 251 219Gain on equity securities, net 3,271 5,453 7,608 7,916Gain on disposal of fixed assets — — — 218Miscellaneous 41 47 166 161Total other income 3,583 5,728 8,828 9,192Operating expenses: Salaries and employee benefits 3,212 3,278 12,826 13,155Occupancy and equipment 459 422 1,813 1,854Data processing 432 443 1,586 1,909Deposit insurance 4 211 534 860Foreclosure and related 16 207 117 528Marketing 198 145 695 545Other general and administrative 768 846 3,044 3,127Total operating expenses 5,089 5,552 20,615 21,978Income before income taxes 15,447 23,277 53,548 70,130Income tax provision 4,083 6,235 14,621 19,359Net income $11,364 $17,042 $38,927 $50,771 Cash dividends declared per share $1.01 $1.17 $2.18 $2.47 Weighted average shares outstanding: Basic 2,134 2,137 2,134 2,137Diluted 2,183 2,189 2,183 2,183 Earnings per share: Basic $5.32 $7.97 $18.24 $23.76Diluted $5.20 $7.78 $17.83 $23.25 HINGHAM INSTITUTION FOR SAVINGSNet Interest Income Analysis Three Months Ended December 31, 2019 2020 AVERAGE BALANCE INTEREST YIELD/ RATE (8) AVERAGE BALANCE INTEREST YIELD/ RATE (8) (Dollars in thousands) (Unaudited) Loans (1) (2)$2,198,689 $25,330 4.61% $2,440,571 $26,038 4.27%Securities (3) (4) 62,938 494 3.14 62,966 264 1.68 Federal Reserve and other short-term investments 208,197 860 1.65 214,403 55 0.10 Total interest-earning assets 2,469,824 26,684 4.32 2,717,940 26,357 3.88 Other assets 42,766 48,848 Total assets$2,512,590 $2,766,788 Interest-bearing deposits (5)$1,425,114 6,014 1.69 $1,843,689 2,568 0.56 Borrowed funds 599,025 3,432 2.29 319,931 513 0.64 Total interest-bearing liabilities 2,024,139 9,446 1.87 2,163,620 3,081 0.57 Non-interest-bearing deposits 237,039 309,975 Other liabilities 7,594 7,153 Total liabilities 2,268,772 2,480,748 Stockholders’ equity 243,818 286,040 Total liabilities and stockholders’ equity$2,512,590 $2,766,788 Net interest income $17,238 $23,276 Weighted average spread 2.45% 3.31% Net interest margin (6) 2.79% 3.43% Average interest-earning assets to average interest-bearing liabilities (7) 122.02% 125.62% (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.(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 SAVINGSNet Interest Income Analysis Twelve Months Ended December 31, 2019 2020 AVERAGE BALANCE INTEREST YIELD/ RATE AVERAGE BALANCE INTEREST YIELD/ RATE (Dollars in thousands) (Unaudited) Loans (1) (2)$2,150,445 $99,379 4.62% $2,370,869 $103,797 4.38%Securities (3) (4) 58,585 1,997 3.41 65,318 1,666 2.55 Federal Reserve and other short-term investments 255,082 5,576 2.19 212,490 899 0.42 Total interest-earning assets 2,464,112 106,952 4.34 2,648,677 106,362 4.02 Other assets 41,806 46,986 Total assets$2,505,918 $2,695,663 Interest-bearing deposits (5)$1,517,625 26,819 1.77 $1,677,107 16,186 0.97 Borrowed funds 523,235 13,231 2.53 465,161 4,972 1.07 Total interest-bearing liabilities 2,040,860 40,050 1.96 2,142,268 21,158 0.99 Non-interest-bearing deposits 225,999 277,924 Other liabilities 7,619 7,748 Total liabilities 2,274,478 2,427,940 Stockholders’ equity 231,440 267,723 Total liabilities and stockholders’ equity$2,505,918 $2,695,663 Net interest income $66,902 $85,204 Weighted average spread 2.38% 3.03% Net interest margin (6) 2.72% 3.22% Average interest-earning assets to average interest-bearing liabilities (7) 120.74% 123.64% (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.(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. HINGHAM INSTITUTION FOR SAVINGSNon-GAAP Reconciliation The table below presents the reconciliation between net income and core net income, a non-GAAP measurement that represents net income excluding the after-tax gain on equity securities, net. Three Months Ended Twelve Months Ended December 31, December 31,(In thousands, unaudited) 2019 2020 2019 2020 Non-GAAP reconciliation: Net income $11,364 $17,042 $38,927 $50,771 Gain on equity securities, net (3,271) (5,453) (7,608) (7,916)Income tax expense (1) 721 1,202 1,677 1,745 Core net income $8,814 $12,791 $32,996 $44,600 (1)The equity securities are held in a tax-advantaged subsidiary corporation. The income tax effect of the gain on equity securities, net, was calculated using the effective tax rate applicable to the subsidiary. COVID-19 Modifications Table The table below presents the number and outstanding balances of loans that the Bank has modified as a result of COVID-19 compared as a percentage of the total number and outstanding balances of the Bank's loan portfolio as of December 31, 2020, by loan category. This table reflects all modifications in effect as of December 31, 2020 and as loans return to the original contractual terms, they are no longer reflected on this table. Outstanding Modified % Modified # of Loans Balance (2) # of Loans Balance # of Loans Balance(Balances in thousands, unaudited) Residential Real Estate (1)2,392 $656,220 5 $1,394 0.21% 0.21%Commercial Real Estate1,380 1,693,215 7 21,236 0.51 1.25 Construction65 153,020 — — — — Commercial and Consumer529 7,438 — — — — Total Loans 4,366 $2,509,893 12 $22,630 0.27% 0.90% (1)Includes Home Equity lines of credit.(2)Gross loans, before net deferred loan origination costs and the allowance for loan losses. CONTACT: Patrick R. Gaughen, President and Chief Operating Officer (781) 783-1761

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