HINGHAM INSTITUTION FOR SAVINGS FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C. 20492
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 12, 2024 (April 12, 2024)
HINGHAMINSTITUTION FOR SAVINGS
(Exact name of registrant as specified in its charter)
Massachusetts | No.90211-0 | 04-1442480 | ||||||
(State | or Other Jurisdiction of | (FDIC File Number) | (I.R.S. Employer | |||||
Incorporation) | Identification No.) | |||||||
55 Main Street, Hingham, Massachusetts, 02043 | ||||||||
(Address | of principal executive offices) | (Zip Code) | ||||||
(Registrant's | (781) | 749-2200 | ||||||
including area code) | ||||||||
telephone number, | ||||||||
N/A | ||||||||
(Former | name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre -commencement communications pursuant to Rule 13e-4(c) under the
Exchange | Act (17 CFR 240.13e-4(c)) | ||||||||
Item | 2.02. | Results | of Operations and Financial Condition | ||||||
On April | 12, | 2024, | Hingham | Institution | for Savings | announced | its financial | results | for the |
quarter | ended | March | 31, 2024 | . Thefulltextofthepressreleaseissuedinconnectionwiththe | |||||
announcement | is furnished as Exhibit 99.1 to this Current Report on Form 8-K. |
The information in this Form 8-K (including Exhibit 99.1) shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or
otherwise subject to the liabilities of that section, nor shall it be deemed incorporatedby referenceinanyfilingundertheSecuritiesActof1933ortheExchangeAct,exceptasexpressly
set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
99.1 Press Release entitled "Hingham Reports First Quarter 2024 Results" issued by the Bank on April 12, 2024
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EXHIBIT | INDEX | ||
Exhibit No. | Description | ||
99.1 | Press Release entitled "Hingham Reports First Quarter 2024 Results" | ||
issued by the Bank on April 12, 2024. |
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: | April 12, 2024 | Hingham Institution forSavings | |
(Registrant) |
By:
Cristian Melej
Vice President & Chief Financial Officer
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PRESS | RELEASE | |
FROM: | Robert H. Gaughen, Jr., Chairman and Chief Executive Officer | |
Hingham Institution for Savings | ||
Hingham, MA (NASDAQ: HIFS) | ||
DATE: | April 12, 2024 | |
CONTACT: | Patrick R. Gaughen, President and Chief Operating Officer (781) 783-1761 |
HINGHAM REPORTS FIRST QUARTER 2024 RESULTS
HINGHAM INSTITUTION FOR SAVINGS (NASDAQ: HIFS), Hingham, Massachusetts announced results for the quarter ended March 31, 2024.
Earnings
NetincomeforthequarterendedMarch31,2024was$6,868,000or$3.17persharebasicand$3.13 persharediluted,ascomparedto$8,510,000or$3.96persharebasicand$3.87persharedilutedfor thesameperiodlastyear. TheBank'sannualizedreturnonaverageequityforthefirstquarterof 2024was6.63%,andtheannualizedreturnonaverageassetswas0.63%,ascomparedto8.67%and 0.82% for the same periodlastyear. Netincomepershare(diluted)forthefirstquarterof2024 decreased by 19% compared to the same period in 2023.
CorenetincomeforthequarterendedMarch31,2024,whichrepresentsnetincomeexcludingthe
after -taxgainsonequitysecurities,bothrealizedandunrealized,was$2,213,000or$1.02pershare basicand$1.01persharediluted,ascomparedto$5,744,000or$2.67persharebasicand$2.61per
sharedilutedforthesameperiodlastyear. TheBank'sannualizedcorereturnonaverageequityfor
thefirstquarterof2024was2.14%andtheannualizedcorereturnonaverageassetswas0.20%,as
comparedto5.85%and0.56%forthesameperiodlastyear. Corenetincomepershare(diluted)for
the first quarter of 2024 decreased by 61% over the same period in 2023.
See | Page | 9 | for | a Non | -GAAP reconciliation | between | Generally | Accepted | Accounting | Principles | ||||
("GAAP")netincomeandcorenetincome | . Incalculatingcorenetincome,theBankdidnotmake | |||||||||||||
any | adjustments | other | than | those | relating | to after -tax gains | on equity | securities, | realized | and | ||||
unrealized | . | In the | first | quarter | of 2024, | both | net | income | and | core | net | income | were | positively |
impactedbylowerincometaxexpensedrivenbyexcesstaxbenefitassociatedwiththeexerciseof | ||||||||||||||
stock | options and the revision of income tax estimates. |
Page1of 9
Balance Sheet
Total assets increased to $ 4.529 billion at March 31, 2024, representing 4% annualized growth year -to-date and 8% growth from March 31, 2023.
Net | loans | increased | to $ 3.938 billion | at | March | 31, | 2024, | representing | 2% | annualized | growth | ||
year -to-date and | 7% | growth | from | March | 31, | 2023 | . Origination | activity | was | concentratedinthe | |||
BostonandWashingtonD | .C.marketsandremainedfocusedonstabilizedmultifamilycommercial | ||||||||||||
realestateandmultifamilyconstruction | . TheBankcontinuestoevaluatenewopportunitiesinthe | ||||||||||||
San | Francisco | market, | where | interest | in | acquisitions | and | refinancing | activity | from | the | Bank's | |
customers | began to pick up in early 2024. As noted below, asset quality remained strong. |
Retail and business deposits were $1.893 billion at March 31, 2024,representing7%annualized growthyear-to-dateanda5%declinefromMarch31,2023.Non-interest-bearingdeposits,included
inretailandbusinessdeposits,were$347.4millionatMarch31,2024,representing10%annualized growth year-to-date and an 8% decline from March 31, 2023.
Growthinnon-interestbearingandmoneymarketbalancesreflectedtheBank'sfocusondeveloping and deepening deposit relationships with new and existing commercialandnon-profitcustomers.
Investments in new relationship managers in late 2023, combinedwithchangestoourmarketing
approach,begantoshowsomeinitialresults. TheBankalsoaddedanewrelationshipmanagerinits SpecializedDepositGroupinSanFranciscoduringthequarter,aswellasaspecialistthatsupports
the delivery of cash managementservices to our commercial customers . TheBankcontinuesto recruitactivelyfortalentedretailandcommercialbankersinBoston,Washington,andSanFrancisco,
particularly as respected competitors have exited these markets or merged with larger regional banks.
ThestabilityoftheBank'sbalancesheet,aswellasfullandunlimiteddepositinsurancethroughthe
Bank'sparticipationintheMassachusettsDepositorsInsuranceFund,continuestobeappealingto
customers in times of uncertainty.
Wholesale funds, which includes Federal Home Loan Bank borrowings, brokered deposits, and
listingservicedepositswere$2.185billionatMarch31,2024,representing1%annualizedgrowth year -to-dateand22%growthfromMarch31,2023,astheBankcontinuedtomanageitswholesale funding mix to optimize the cost of funds while adding duration where appropriate. Wholesale
deposits,whichincludebrokeredandlistingservicetimedeposits,were$500.4millionatMarch31,
2024, | representing | 10% | annualized | growth | year -to-date and | a 6% | decline | from | March | 31,2023 | . |
Borrowings | from | the | Federal | Home | Loan | Bank | totaled | $ 1.685 billion | at March | 31, | 2024, |
representing | a 2%annualizeddeclinefromDecember31,2023,and33%growthfromMarch31, | ||||||||||
2023 | . | As of March | 31, | 2024, | the Bank | maintained | an additional $677.8millioninimmediately | ||||
available | borrowing | capacity | at the FederalHomeLoanBankofBostonandtheFederalReserve | ||||||||
Bank, | in addition to $373.2 million in cash and cash equivalents. |
Book value per share was $ 190.07 as of March 31, 2024, representing a 3% annualized growth
year -to-date and 4% growth from March31,2023. Inadditiontotheincreaseinbookvalueper
share, the Bank declared $2.52 in dividends per share since March 31, 2023.
OnMarch27,2024,theBankdeclaredaregularcashdividendof$0.63pershare. Thisdividendwill
bepaidonMay15,2024tostockholdersofrecordasofMay6,2024. ThiswastheBank's121st consecutive quarterly dividend.
TheBankhasalsogenerallydeclaredspecialcashdividendsineachofthelasttwenty-nineyears,
Page2of 9
typicallyinthefourthquarter,butdidnotdeclareaspecialdividendin2023. TheBanksetsthelevel ofthespecialdividendbasedontheBank'scapitalrequirementsandtheprospectivereturnonother
capitalallocationoptions,particularlytheincrementalreturnoncapitalfromnewloanoriginations. This may result in special dividends, if any, significantly above or below the regular quarterly
dividend . FutureregularandspecialdividendswillbeconsideredbytheBoardofDirectorsona
quarterly basis.
Operational Performance Metrics
ThenetinterestmarginforthequarterendedMarch31,2024decreased4basispointsto0.85%,as
compared to 0 .89% in the quarter ended December 31, 2023 . It was stable on a monthly basis
throughoutthequarter. Thiswasprimarilytheresultofanincreaseinthecostofinterest-bearing liabilities,drivenprimarilybyanincreaseinthecostoftheBank'swholesalefundingsourcesand higherratesontheBank'sretailandcommercialdeposits,partiallyoffsetbyanincreaseintheyield
on loans from thepriorquarter. Theincreaseintheyieldonloanswasdrivenbybothnewloan
originationsathigherratesandtherepricingofexistingadjustablerateloans. Thepaceofnetinterest
margin compressionslowed substantiallyas compared to prior quarters . Thenetinterestmargin
appearstobestabilizingatthispoint,asshort-termmarketrateshaveremainedstable,thepaceof
increase in the Bank's deposit costs has slowed or reversed in some products, and asset yields continue to climb slowly and sustainably.
ThenetinterestmarginforthequarterendedMarch31,2024decreased61basispointsto0.85%,as comparedto1.46%forthesameperiodlastyear. TheBankexperiencedasubstantialincreaseinthe costofinterest-bearingliabilitieswhencomparedtotheprioryear. Thiswasdrivenprimarilybythe repricingoftheBank'sfundingsources. Duringthisperiod,theincreaseinthecostoffundswas partially offset by ahigheryieldoninterest-earningassets,drivenprimarilybyanincreaseinthe interestonreservesheldattheFederalReserveBankofBoston,ahigherFederalHomeLoanBank of Boston stock dividend and an increase in the yield on loans.
Key credit and operational metrics remained strong in the first quarter . At March 31, 2024,
non -performingassetstotaled0.04%oftotalassets,comparedto0.03%atDecember31,2023and 0.01%atMarch31,2023. Non-performingloansasapercentageofthetotalloanportfoliototaled
0 .04%atMarch31,2024,comparedto0.04%atDecember31,2023and0.01%atMarch31,2023. The Bank did not record any charge-offs in the first three months of 2024 or 2023. All non-performing assets and loans cited above were and are residential, owner-occupant loans.
TheBankdidnothaveanydelinquentornon-performingcommercialrealestateloansasofMarch
31,2024,December31,2023,orMarch31,2023. TheBankdidnotownanyforeclosedpropertyat
March 31, 2024, December 31, 2023 or March 31, 2023.
Theefficiencyratio,asdefinedonpage5below,increasedto77.24%forthefirstquarterof2024,as comparedto45.96%forthesameperiodlastyear. Operatingexpensesasapercentageofaverage
assetsfellto0.67%forthefirstquarterof2024,ascomparedto0.68%forthesameperiodlastyear. Astheefficiencyratiocanbesignificantlyinfluencedbythelevelofnetinterestincome,theBank utilizesthesepairedfigurestogethertoassessitsoperationalefficiencyovertime. Duringperiodsof
significantnetinterestincomevolatility,theefficiencyratioinisolationmayoverorunderstatethe
underlyingoperationalefficiencyoftheBank. TheBankremainsfocusedonreducingwastethrough
an ongoing process of continuous improvement and standard work that supports operational leverage.
ChairmanRobertH.GaughenJr.stated,"Returnsonequityandassetsinthefirstquarterof2024
Page3of 9
weresignificantlylowerthanourlong-termperformance,reflectingthechallengefromtheincreaseinshort-terminterestratesoverthelasttwenty-fourmonthsandahistoricallylonganddeepinversion
oftheyieldcurve. Theseconditionshaveposedasignificant-albeittemporary-challengetoour business model. Our core business has been particularly challenged during this period and our
investment operations have been critical to sustaining growth in book value per share in this environment.
We | are | cautiously | optimistic | that | this | challenge | will | fade | over | this | year . To | the | extent | we | can | ||||||||
capitalize | on the | inverted | yield | curve | and | reduce | liability | sensitivity | slightly | via | our | wholesale | |||||||||||
fundingactivities,wewilldoso | . Thisnormalizationoftheyieldcurvewilleventuallyallowusto | ||||||||||||||||||||||
achieve | more | satisfactory | returns | as we | obtain | higher | rates | on | new | and | adjusting | loans | and | ||||||||||
incremental | funding pressure abates. |
While the current market environmenthas been extraordinarilychallenging, the Bank's business
modelhasbeenbuiltovertimetocompoundshareholdercapitaloveraneconomiccycle. Duringall suchperiods,weremainfocusedoncarefulcapitalallocation,defensiveunderwritinganddisciplined
cost control - the building blocks for compounding shareholder capital through all stages of the
economiccycle. Theseremainconstant,regardlessofthemacroeconomicenvironmentinwhichwe
operate. I believe that over the past twenty-four months we have retained this focus."
TheBank'squarterlyfinancialresultsaresummarizedinthisearningsrelease,butshareholdersare
encouragedtoreadtheBank'squarterlyreportonForm10-Q,whichisgenerallyavailableseveral weeksaftertheearningsrelease. TheBankexpectstofileForm10-QforthequarterendedMarch 31, 2024 with the Federal Deposit Insurance Corporation (FDIC) on or about May 8, 2024.
Incorporatedin1834,HinghamInstitutionforSavingsisoneofAmerica'soldestbanks. TheBank maintains offices in Boston, Nantucket, Washington, D.C., and San Francisco.
TheBank'ssharesofcommonstockarelistedandtradedonTheNASDAQStockMarketunderthe symbol HIFS.
Annual Meeting
The Bank will hold its Annual Meeting of Stockholders(the "Meeting") at 2:00PM EST on
Thursday, April 25, 2024 at the Old Derby Academy, located at 34 Main Street, Hingham,
Massachusetts. Stockholders may also observe the Meeting by streaming video. Immediately followingthebusinessmeeting,theBankwillholdaninformalmeetingtodiscusstheresultsofthe
prioryearandtheoperationsoftheBank,aswellasaquestionandanswerssession. Westrongly
encourageallshareholderstovotebyproxy. Electronicvotingwillnotbeavailable. Registrationfor
themeetingisavailableontheBank'swebsite(clickhere ). Inadditiontoparticipatinginthemeeting itself,wealsoencourageshareholderstosubmitquestionsinwritinginadvanceusingtheformonthe
Bank's website.
Page4of 9
HINGHAM | INSTITUTION FOR SAVINGS | |||||||||||||||||||||
Selected | Financial Ratios | |||||||||||||||||||||
Three | Months Ended | |||||||||||||||||||||
March | 31, | |||||||||||||||||||||
(Unaudited) | 2023 | 2024 | ||||||||||||||||||||
Key | Performance Ratios | 0.63 % | ||||||||||||||||||||
Return | on average assets (1) | 0.82% | ||||||||||||||||||||
Return | on average equity (1) | 8.67 | 6.63 | |||||||||||||||||||
Core | return on average assets (1) (5) | 0.56 | 0.20 | |||||||||||||||||||
Core | return on average equity (1) (5) | 5.85 | 2.14 | |||||||||||||||||||
Interest | rate spread (1) (2) | 0.92 | 0.13 | |||||||||||||||||||
Net interest margin (1) (3) | 1.46 | 0.85 | ||||||||||||||||||||
Operating | expenses to average assets (1) | 0.68 | 0.67 | |||||||||||||||||||
Efficiency | ratio (4) | 45.96 | 77.24 | |||||||||||||||||||
Average | equity to average assets | 9.51 | 9.54 | |||||||||||||||||||
Average | interest-earning assets to average interest | 119 .91 | ||||||||||||||||||||
bearing | liabilities | 121 .68 | ||||||||||||||||||||
March | 31, | December | 31, | March | 31, | |||||||||||||||||
(Unaudited) | 2023 | 2023 | 2024 | |||||||||||||||||||
Asset | Quality Ratios | 0 .67% | ||||||||||||||||||||
Allowance | for credit losses/total loans | 0.69 % | 0.68 % | |||||||||||||||||||
Allowance | for credit losses/non-performing loans | 5,169.01 | 1,804.47 | 1,530 | .95 | |||||||||||||||||
Non -performing loans/total loans | 0.01 | 0 .04 | 0.04 | |||||||||||||||||||
Non -performing loans/total assets | 0.01 | 0 .03 | 0.04 | |||||||||||||||||||
Non -performing assets/total assets | 0.01 | 0 .03 | 0.04 | |||||||||||||||||||
Share | Related | $ | 190.07 | |||||||||||||||||||
Book | value per share | $ | 182.89 | $ | 188 .50 | |||||||||||||||||
Market | value per share | $ | 233.44 | $ | 194 .40 | $ | 174.46 | |||||||||||||||
Shares | outstanding at end of period | 2,147,400 | 2,162,400 | 2,180,250 |
(1) Annualized .
(2) Interestratespreadrepresentsthedifferencebetweentheyieldoninterest-earningassetsandthecostofinterest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.
(4) Theefficiencyratioisanon-GAAPmeasurethatrepresentstotaloperatingexpenses,dividedbythesumofnetinterest income and total other income, excluding gain on equity securities, net.
(5) Non-GAAP measurements that represent return onaverageassetsandreturnonaverageequity,excludingtheafter-tax gain on equity securities, net.
Page5of 9
HINGHAM | INSTITUTION FOR SAVINGS | |||||||||||||||||||||||
Consolidated | Balance Sheets | |||||||||||||||||||||||
March 31, | December | 31, | March 31, | |||||||||||||||||||||
(In thousands, except share amounts) | 2023 | 2023 | 2024 | |||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Cash | and due from banks | $ | 5,727 | $ | 5,654 | $ | 6,200 | |||||||||||||||||
Federal | Reserve and other short-term investments | 346,713 | 356,823 | 367,046 | ||||||||||||||||||||
Cash | and cash equivalents | 352,440 | 362,477 | 373,246 | ||||||||||||||||||||
CRA | investment | 8,361 | 8,853 | 8,759 | ||||||||||||||||||||
Other | marketable equity securities | 59,115 | 70,949 | 78,497 | ||||||||||||||||||||
Securities, | at fair value | 67,476 | 79,802 | 87,256 | ||||||||||||||||||||
Securities | held to maturity, at amortized cost | 3,500 | 3,500 | 5,500 | ||||||||||||||||||||
Federal | Home Loan Bank stock, at cost | 52,316 | 69,574 | 69,484 | ||||||||||||||||||||
Loans, | net of allowance for credit losses of $25,690 | |||||||||||||||||||||||
at March 31, 2023, $26,652 at December 31, 2023 | 3,938,252 | |||||||||||||||||||||||
and $26,760 at March 31, 2024 | 3,672,258 | 3,914,244 | ||||||||||||||||||||||
Bank | -owned life insurance | 13,395 | 13,642 | 13,723 | ||||||||||||||||||||
Premises | and equipment, net | 18,056 | 17,008 | 16,844 | ||||||||||||||||||||
Accrued | interest receivable | 7,161 | 8,554 | 8,783 | ||||||||||||||||||||
Deferred | income tax asset, net | 3,432 | 974 | - | ||||||||||||||||||||
Other | assets | 15,901 | 14,172 | 16,263 | ||||||||||||||||||||
Total | assets | $ | 4,205,935 | $ | 4,483,947 | $ | 4,529,351 | |||||||||||||||||
LIABILITIES | AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||
Interest | -bearing deposits | $ 2,144,387 | $ | 2,010,918 | $ | 2,045,524 | ||||||||||||||||||
Non -interest-bearing deposits | 375,887 | 339,059 | 347,397 | |||||||||||||||||||||
Total | deposits | 2,520,274 | 2,349,977 | 2,392,921 | ||||||||||||||||||||
Federal | Home Loan Bank advances | 1,265,000 | 1,692,675 | 1,684,675 | ||||||||||||||||||||
Mortgagors' | escrow accounts | 13,123 | 13,942 | 13,570 | ||||||||||||||||||||
Accrued | interest payable | 5,713 | 12,261 | 14,040 | ||||||||||||||||||||
Deferred | income tax liability, net | - | | - | 1,765 | |||||||||||||||||||
Other | liabilities | 9,087 | 7,472 | 7,982 | ||||||||||||||||||||
Total | liabilities | 3,813,197 | 4,076,327 | 4,114,953 | ||||||||||||||||||||
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; | 2,147,400 shares issued and outstanding at | |||||||||||||||||||||||
March | 31, 2023, 2,162,400 shares issued and outstanding at | 2,180 | ||||||||||||||||||||||
December | 31, 2023 and 2,180,250 shares issued and | 2,147 | 2,162 | |||||||||||||||||||||
outstanding | at March 31, 2024 | 15,416 | ||||||||||||||||||||||
Additional | paid-in capital | 13,068 | 14,150 | |||||||||||||||||||||
Undivided | profits | 377,523 | 391,308 | 396,802 | ||||||||||||||||||||
Accumulated | other comprehensive income | - | | - | | - | ||||||||||||||||||
Total | stockholders' equity | 392,738 | 407,620 | 414,398 | ||||||||||||||||||||
Total | liabilities and stockholders' equity | $ | 4,205,935 | $ | 4,483,947 | $ | 4,529,351 |
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Hingham Institution for Savings published this content on 12 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2024 20:26:32 UTC.
