Hingham Institution for Savings Reports Increased Net Income for Q4 and Fiscal Year 2024

Hingham Institution for Savings reported increased annual earnings and strong quarterly performance, despite declining assets and loans.

Quiver AI Summary

Hingham Institution for Savings announced its financial results for the fourth quarter and year ending December 31, 2024, reporting a net income of $28.19 million, or $12.95 per share, marking a 7% increase in diluted earnings per share from the previous year. However, core net income, which excludes certain gains, decreased by 15% compared to 2023. For the fourth quarter alone, net income saw a dramatic rise to $11.38 million, significantly up from $6.31 million in the same quarter the previous year, primarily driven by improved operational efficiency and a 79% increase in diluted earnings per share. Total assets slightly declined to $4.46 billion, with net loans also down by 1%. Meanwhile, total deposits increased by 7%, indicating robust growth in retail and business relationships. The bank’s Chairman, Robert H. Gaughen Jr., expressed optimism for future performance despite current economic challenges, emphasizing the bank's commitment to strategic growth and prudent financial management.

Potential Positives

• Net income for the year increased to $28,191,000, which is a notable rise from $26,371,000 in the previous year, signaling financial growth.
• Earnings per share (diluted) for 2024 was $12.85, a 7% increase compared to $12.02 in 2023, demonstrating enhanced profitability on a per-share basis.
• The annualized return on average equity rose significantly to 10.58% in the fourth quarter of 2024, up from 6.21% in the same quarter of 2023, indicating improved financial efficiency.
• The efficiency ratio improved to 52.30% in the fourth quarter of 2024 from 71.58% a year ago, reflecting better operational management and cost control.

Potential Negatives

• Core net income decreased by 15% over 2023, indicating potential challenges in maintaining profitability without relying on equity gains.
• Total assets and net loans each declined by 1% from the previous year, which may not align with the Bank's long-term growth objectives and could raise concerns among investors.
• Chairman indicated that returns on equity and assets in 2024 were significantly lower than long-term expectations, suggesting a need for the Bank to navigate challenging economic conditions going forward.

FAQ

What were Hingham Institution for Savings' earnings for 2024?

In 2024, the bank reported a net income of $28,191,000, or $12.95 per share basic.

How did core net income change from 2023 to 2024?

Core net income for 2024 decreased by 15% compared to 2023, totaling $12,304,000.

What was the bank's return on average equity for 2024?

The return on average equity for the year ended December 31, 2024, was 6.68%.

How much did retail and business deposits grow in 2024?

Retail and business deposits grew by 7% to $1.997 billion as of December 31, 2024.

When will the annual meeting of shareholders be held?

The annual meeting of shareholders is scheduled for April 30, 2025, in Hingham, Massachusetts.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

$HIFS Hedge Fund Activity

We have seen 53 institutional investors add shares of $HIFS stock to their portfolio, and 25 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

• INTERNATIONAL ASSETS INVESTMENT MANAGEMENT, LLC removed 436,158 shares (-99.6%) from their portfolio in Q4 2024, for an estimated $110,845,194
• ROYCE & ASSOCIATES LP removed 29,214 shares (-21.8%) from their portfolio in Q3 2024, for an estimated $7,108,058
• COLONY GROUP, LLC removed 20,433 shares (-92.3%) from their portfolio in Q3 2024, for an estimated $4,971,553
• STATE STREET CORP added 15,000 shares (+40.1%) to their portfolio in Q3 2024, for an estimated $3,649,650
• HOTCHKIS & WILEY CAPITAL MANAGEMENT LLC added 13,350 shares (+inf%) to their portfolio in Q3 2024, for an estimated $3,248,188
• MANGROVE PARTNERS IM, LLC removed 10,205 shares (-100.0%) from their portfolio in Q3 2024, for an estimated $2,482,978
• BLACKROCK, INC. added 7,553 shares (+5.9%) to their portfolio in Q3 2024, for an estimated $1,837,720

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.

Full Release

HINGHAM, Mass., Jan. 17, 2025 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ: HIFS), Hingham, Massachusetts announced earnings for the fourth quarter and the year ended December 31, 2024.

Earnings

Net income for the year ended December 31, 2024 was $28,191,000 or $12.95 per share basic and $12.85 per share diluted, as compared to $26,371,000 or $12.26 per share basic and $12.02 per share diluted for the same period last year. The Bank’s return on average equity for the year ended December 31, 2024 was 6.68%, and the return on average assets was 0.65%, as compared to 6.57% and 0.63% for the same period in 2023. Net income per share (diluted) for 2024 increased by 7% over 2023.

Core net income, which represents net income excluding the after-tax net gain on equity securities, both realized and unrealized, and the after-tax gains on the disposal of fixed assets, was $12,304,000 or $5.65 per share basic and $5.61 per share diluted for the year ended December 31, 2024, as compared to $14,539,000 or $6.76 per share basic and $6.63 per share diluted for the same period last year. The Bank’s core return on average equity for the year ended December 31, 2024 was 2.92%, and the core return on average assets was 0.28%, as compared to 3.62% and 0.35% for the same period in 2023. Core net income per share (diluted) for 2024 decreased by 15% over 2023.

Net income for the quarter ended December 31, 2024 was $11,375,000 or $5.22 per share basic and $5.16 per share diluted, as compared to $6,315,000 or $2.93 per share basic and $2.89 per share diluted for the same period last year. The Bank’s annualized return on average equity for the fourth quarter of 2024 was 10.58%, and the annualized return on average assets was 1.04%, as compared to 6.21% and 0.59% for the same period in 2023. Net income per share (diluted) for the fourth quarter of 2024 increased by 79% over 2023.

Core net income, which represents net income excluding the after-tax net gain on equity securities, both realized and unrealized, was $4,753,000 or $2.18 per share basic and $2.16 per share diluted for the quarter ended December 31, 2024, as compared to $1,854,000 or $0.86 per share basic and $0.85 per share diluted for the same period last year. The Bank’s annualized core return on average equity for the fourth quarter of 2024 was 4.42%, and the annualized core return on average assets was 0.43%, as compared to 1.82% and 0.17% for the same period in 2023. Core net income per share (diluted) for the fourth quarter of 2024 increased by 154% over 2023.

See Page 10 for a reconciliation between Generally Accepted Accounting Principles (“GAAP”) net income and core net income. In calculating core net income, the Bank did not make any adjustments other than those relating to the after-tax net gain on equity securities, both realized and unrealized, and after-tax gains on the disposal of fixed assets, as applicable. The Bank did not sell any fixed assets in 2024. In 2023, the Bank sold a former branch location.

Balance Sheet

Total assets decreased to $4.458 billion at December 31, 2024, a 1% decline from December 31, 2023.

Net loans decreased to $3.874 billion at December 31, 2024, a 1% decline from December 31, 2023. This decline was not consistent with the Bank’s long-term growth objectives and was the result of lower loan originations and, to a lesser extent, normalizing prepayment activity and payoffs in the construction portfolio in the latter half of the year. Origination activity was concentrated in the Boston and Washington D.C. markets. The Bank hired its first local lender in San Francisco at the end of the year. The Bank’s focus across markets remained on stabilized multifamily commercial real estate and multifamily construction.

Retail and business deposits were $1.997 billion at December 31, 2024, representing 7% growth from December 31, 2023. Non-interest-bearing deposits, included in retail and business deposits, increased to $397.5 million at December 31, 2024, representing 17% growth from December 31, 2023.

Growth in non-interest bearing and money market balances in 2024 reflected the Bank’s focus on developing and deepening deposit relationships with new and existing commercial and non-profit customers. The Bank continues to invest in its Specialized Deposit Group, where deposit growth was concentrated in the fourth quarter of 2024. We continue to recruit actively for talented relationship managers in Boston, Washington, and San Francisco, particularly as respected competitors exit these markets or merge with larger regional banks.

The stability of the Bank’s balance sheet, as well as full and unlimited deposit insurance through the Bank’s participation in the Massachusetts Depositors Insurance Fund, continues to be appealing to customers in times of uncertainty.

Wholesale funds, which include Federal Home Loan Bank borrowings, brokered deposits, and Internet listing service deposits, were $1.992 billion at December 31, 2024, a 9% decline from December 31, 2023, as the Bank replaced a portion of these funds with retail and commercial deposits. In 2024, the Bank continued to manage its wholesale funding mix to optimize the cost of funds while taking advantage of the inverted yield curve by adding lower rate longer term liabilities. Wholesale deposits, which include brokered and Internet listing service time deposits, were $494.9 million at December 31, 2024, representing 1% growth from December 31, 2023. Borrowings from the Federal Home Loan Bank totaled $1.497 billion at December 31, 2024, a 12% decline from December 31, 2023. As of December 31, 2024, the Bank maintained an additional $866.6 million in immediately available borrowing capacity at the Federal Home Loan Bank of Boston and the Federal Reserve Bank, in addition to $351.8 million in cash and cash equivalents.

Book value per share was $198.03 as of December 31, 2024, representing 5% growth from December 31, 2023. This growth was not consistent with the Bank’s long-term performance history or expectations. In addition to the increase in book value per share, the Bank has declared $2.52 in regular dividends per share since December 31, 2023. The trailing five year compound annual growth rate in book value per share, an important measure of long-term value creation, was 11.3%.

Operational Performance Metrics

The net interest margin for the quarter ended December 31, 2024 increased 17 basis points to 1.24%, as compared to 1.07% in the quarter ended September 30, 2024. This was the third consecutive quarter of continued expansion and this expansion has started to accelerate modestly. This improvement was the result of a decline in the cost of interest-bearing liabilities, partially offset by a decline in the yield on interest-earning assets. The cost of interest-bearing liabilities fell 21 basis points in the fourth quarter of 2024, as the Bank continued to reduce retail and commercial deposit rates, and to take advantage of the inverted yield curve by adding lower rate FHLB advances and brokered deposits. The yield on interest-earning assets declined by two basis points in the fourth quarter of 2024, driven primarily by a lower yield on cash held at the Federal Reserve Bank, partially offset by a higher yield on loans, as the Bank continued to originate loans at higher rates and reprice existing loans. The net interest margin in the final month of the fourth quarter of 2024 was 1.36% annualized.

Key credit and operational metrics remained strong in the fourth quarter. At both December 31, 2024 and December 31, 2023, non-performing assets totaled 0.03% of total assets. Non-performing loans as a percentage of the total loan portfolio totaled 0.04% at both December 31, 2024 and December 31, 2023. The Bank did not record any charge-offs during the years ended December 31, 2024 and December 31, 2023. All non-performing assets and loans cited above were and are residential, owner-occupant loans.

The Bank had no non-performing commercial real estate loans at December 31, 2024 or December 31, 2023. The Bank did not own any foreclosed property on December 31, 2024 or December 31, 2023.

The efficiency ratio, as defined on page 10, fell to 52.30% for the fourth quarter of 2024, as compared to 62.19% in the prior quarter and 71.58% for the same period last year. Operating expenses as a percentage of average assets were 0.66% for the fourth quarter of 2024, as compared to 0.68% for the prior quarter, and 0.65% for the same period last year. As the efficiency ratio can be significantly influenced by the level of net interest income, the Bank utilizes these paired figures together to assess its operational efficiency over time. During periods of significant net interest income volatility, the efficiency ratio in isolation may over or understate the underlying operational efficiency of the Bank. The Bank remains focused on reducing waste through an ongoing process of continuous improvement and standard work that supports operational leverage, positioning the Bank to operate more efficiently in the future.

These operational metrics reflect the Bank’s disciplined focus on credit quality and expense management.

Chairman Robert H. Gaughen Jr. stated, “Returns on equity and assets in 2024 were significantly lower than our long-term expectations, reflecting the challenge from the increase in interest rates over the last two years and a historically long and deep inversion of the yield curve. We faced a similar challenge in 2006 and 2007, a period during which our returns on equity fell below 10% and growth slowed significantly. We worked through both periods deliberately, making adjustments where appropriate while maintaining the key elements of our business model. We emerged from the first cycle a stronger and more efficient bank. I am confident that as we emerge from this cycle, the same will be true.

As our assets continue to reprice higher and our liabilities, including both deposits and wholesale funding, reprice lower, conditions have started to become more favorable. We have growing momentum in our Specialized Deposit Group, where our service model resonates with customers poorly served elsewhere, and we remain focused on recruiting talented relationship managers looking for a platform where they can provide outstanding service for their customers.

While this market environment has been extraordinarily challenging, the Bank’s business model has been built over thirty years to compound shareholder capital through economic cycles. During all such periods, 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, 2024 with the Federal Deposit Insurance Corporation (FDIC) on or about March 5, 2025.

The Bank expects to hold its Annual Meeting of Shareholders in Hingham, Massachusetts on Wednesday, April 30, 2025 in the afternoon. Additional information will follow in the Bank’s Proxy Statement later in the first quarter of 2025.

Incorporated in 1834, Hingham Institution for Savings is one of America’s oldest banks. The Bank maintains offices in Boston, Nantucket, Washington, D.C., and San Francisco.

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