Hingham Savings Reports 2023 Results
- Net income for the year ended December 31, 2023 was $26,371,000 or $12.26 per share basic and $12.02 per share diluted, a decrease of 29% compared to the same period in 2022.
- Core net income for the year ended December 31, 2023 was $14,539,000 or $6.76 per share basic and $6.63 per share diluted, a decrease of 73% compared to the same period in 2022.
- Total assets increased by 7% to $4.484 billion at December 31, 2023, and net loans increased by 7% to $3.914 billion at the same date.
- Retail and business deposits declined by 2% to $1.861 billion at December 31, 2023.
- The net interest margin for the year ended December 31, 2023 decreased 164 basis points to 1.17%, and the efficiency ratio increased to 57.18% in 2023.
- The Bank's net income for the year and the fourth quarter of 2023 decreased significantly compared to the same periods in 2022.
- Core net income for the year and the fourth quarter of 2023 also decreased significantly compared to the same periods in 2022.
- Retail and business deposits experienced a decline of 2% at December 31, 2023.
- The net interest margin for the year and the fourth quarter of 2023 decreased significantly compared to the same periods in 2022.
- The efficiency ratio increased to 57.18% in 2023, indicating a decrease in operational efficiency.
Insights
The reported earnings by Hingham Institution for Savings indicate a significant year-over-year decline in both net income and core net income for the year and fourth quarter of 2023. This decrease, particularly the 73% drop in core net income per share for the year, is a stark contrast to the previous year's performance and could raise concerns among investors regarding the bank's profitability and future earnings potential. A key factor in this decline appears to be the increasing cost of interest-bearing liabilities, which has outpaced the growth in yield on interest-earning assets. This dynamic has led to a compression in net interest margin, a critical measure of a bank's profitability.
Additionally, the balance sheet growth of 7% in net loans signals a steady expansion in lending activities, particularly in the multifamily commercial real estate sector in the Boston and Washington D.C. markets. However, the decline in retail and business deposits, especially the 12% decrease in non-interest-bearing deposits, implies a challenging environment for deposit growth and could affect the bank's liquidity and cost of capital. The strategic steps taken by the bank, such as hiring new commercial relationship managers and obtaining branch powers for the Washington D.C. office, indicate a proactive approach to address these challenges.
In the context of the broader banking industry, the bank's operational performance metrics, such as the efficiency ratio, have worsened, which may concern stakeholders about the bank's cost management and operational efficiency. However, the bank's strong credit metrics, with non-performing assets and loans remaining low, suggest a disciplined approach to credit risk management, which is a positive sign for long-term stability.
The banking sector has been under pressure due to the inverted yield curve and rising short-term interest rates, which typically squeeze the margins that banks earn on their lending activities. Hingham Institution for Savings' experience is reflective of this broader industry trend. The bank's proactive management of its wholesale funding mix to mitigate the impact of short-term rate increases demonstrates an adaptive response to these macroeconomic headwinds.
Market conditions in the San Francisco Bay Area, as mentioned in the report, have been less active, which may be indicative of a cooling real estate market that could affect regional banks with exposure to this area. This is an important consideration for stakeholders looking at geographic diversification and market-specific risks.
The bank's focus on continuous improvement and operational leverage is a strategy aimed at maintaining competitiveness in the industry. The bank's historical performance and the management's cautious optimism for 2024 suggest a belief in the resilience of their business model. However, investors may weigh this against the current performance downturn to assess the bank's ability to navigate economic cycles and deliver on long-term value creation.
The banking industry is sensitive to changes in interest rates and the Federal Reserve's monetary policy over the past two years has been a key driver of the economic environment Hingham Institution for Savings operates within. The bank's lower returns on equity and assets in 2023 can be attributed to the challenging interest rate environment and the inversion of the yield curve, which typically signals investor skepticism about the near-term economic outlook.
The adoption of the Current Expected Credit Loss (CECL) accounting standard, which requires banks to estimate credit losses over the life of loans, has not had a material impact on the bank's regulatory capital ratios. This suggests a strong capital position and could be reassuring to investors concerned about the bank's ability to absorb potential credit losses.
Looking forward, the normalization of the yield curve anticipated by bank management could alleviate some of the pressure on net interest margins. However, the timing and extent of this normalization remain uncertain and stakeholders should consider the potential lag in recovery of profitability metrics as new and adjusting loans catch up to the interest rate environment.
HINGHAM, Mass., Jan. 19, 2024 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ: HIFS), Hingham, Massachusetts announced earnings for the fourth quarter and the year ended December 31, 2023.
Earnings
Net income for the year ended December 31, 2023 was
Core net income for the year ended December 31, 2023, which represents net income excluding the after-tax gains and losses on securities, both realized and unrealized, and the after-tax gains on the disposal of fixed assets, was
Net income for the quarter ended December 31, 2023 was
Core net income for the quarter ended December 31, 2023, which represents net income excluding the after-tax gains and losses on securities, both realized and unrealized, was
See Page 11 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 after-tax gains and losses on equity securities, realized and unrealized and after-tax gains on the disposal of fixed assets, as applicable.
Balance Sheet
Total assets increased to
Net loans increased to
Retail and business deposits were
Although the environment for deposit growth was a challenging one in a number of respects, it also presented significant opportunities that the Bank did not adequately capitalize on. The Bank’s performance with respect to retail and commercial deposit growth in 2023 was not consistent with the Bank’s historical performance. The Bank has taken a number of steps to address this matter, including hiring several new commercial relationship managers in our Specialized Deposit Group, obtaining branch powers for our Washington D.C. office, and hiring a dedicated relationship manager in San Francisco who will start in 2024.
Wholesale deposits, which include brokered and listing service time deposits, were
Borrowings from the Federal Home Loan Bank totaled
Book value per share was
On January 1, 2023, the Bank adopted ASU 2016-13 - Measurement of Credit Losses on Financial Instruments, and recorded a one-time transition amount of
Operational Performance Metrics
The net interest margin for the year ended December 31, 2023 decreased 164 basis points to
The net interest margin for the quarter ended December 31, 2023 decreased 120 basis points to
In a linked quarter comparison, the net interest margin for the quarter ended December 31, 2023 decreased 16 basis points to
Key credit and operational metrics remained strong in the fourth quarter. At both December 31, 2023 and 2022, non-performing assets totaled
The Bank did not own any foreclosed property on December 31, 2023 and 2022. In the first quarter of 2023, the Bank foreclosed on a small commercial property in Massachusetts and purchased the property at auction. The Bank subsequently sold the property within the quarter and recovered all principal, interest and expenses. The Bank also recognized an additional
The efficiency ratio, as defined on page 11 below, increased to
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 2023 were significantly lower than our long-term performance, reflecting the challenge from the increase in short-term interest rates over the last twenty-four months and a historically long and deep inversion of the yield curve. These conditions have posed a significant - albeit temporary - challenge to our business model. Our core business was particularly challenged in 2023 and our investment operations were critical to sustaining growth in book value per share this year.
We are cautiously optimistic that this challenge will fade over the coming year and may do so materially. To the extent we can capitalize on this via our wholesale funding activities, we will do so and we are seeing materially lower wholesale funding costs already in 2024. This normalization of the yield curve will eventually allow us to achieve more satisfactory returns as we obtain higher rates on new and adjusting loans and incremental funding pressure abates.
While the current market environment has been extraordinarily challenging, the Bank’s business model has been built over time to compound shareholder capital over an economic cycle. 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. I believe that over the past twenty-four months we have retained this focus.”
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, 2023 with the Federal Deposit Insurance Corporation (FDIC) on or about March 6, 2024.
The Bank expects to hold its Annual Meeting of Shareholders in Hingham, Massachusetts on Thursday, April 25, 2024 in the afternoon. Additional information will follow in the Bank’s Proxy Statement later in the first quarter of 2024.
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., and provides commercial mortgage and banking services in the San Francisco Bay Area.
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 December 31, | Twelve Months Ended December 31, | ||||||||||
2022 | 2023 | 2022 | 2023 | ||||||||
(Unaudited) | |||||||||||
Key Performance Ratios | |||||||||||
Return on average assets (1) | 1.18 | % | 0.59 | % | 0.98 | % | 0.63 | % | |||
Return on average equity (1) | 12.40 | 6.21 | 10.01 | 6.57 | |||||||
Core return on average assets (1) (5) | 0.96 | 0.17 | 1.43 | 0.35 | |||||||
Core return on average equity (1) (5) | 10.07 | 1.82 | 14.56 | 3.62 | |||||||
Interest rate spread (1) (2) | 1.67 | 0.17 | 2.60 | 0.53 | |||||||
Net interest margin (1) (3) | 2.09 | 0.89 | 2.81 | 1.17 | |||||||
Operating expenses to average assets (1) | 0.70 | 0.65 | 0.70 | 0.67 | |||||||
Efficiency ratio (4) | 33.54 | 71.58 | 24.81 | 57.18 | |||||||
Average equity to average assets | 9.50 | 9.49 | 9.81 | 9.56 | |||||||
Average interest-earning assets to average interest- bearing liabilities | 123.20 | 120.15 | 124.30 | 120.99 | |||||||
December 31, 2022 | December 31, 2023 | ||||||||||
(Unaudited) | |||||||||||
Asset Quality Ratios | |||||||||||
Allowance for credit losses/total loans | 0.68 | % | 0.68 | % | |||||||
Allowance for credit losses/non-performing loans | 2,139.39 | 1,804.47 | |||||||||
Non-performing loans/total loans | 0.03 | 0.04 | |||||||||
Non-performing loans/total assets | 0.03 | 0.03 | |||||||||
Non-performing assets/total assets | 0.03 | 0.03 | |||||||||
Share Related | |||||||||||
Book value per share | $ | 179.74 | $ | 188.50 | |||||||
Market value per share | $ | 275.96 | $ | 194.40 | |||||||
Shares outstanding at end of period | 2,147,400 | 2,162,400 |
(1) | Annualized for the three months ended December 31, 2022 and 2023. | |
(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 (loss), excluding gain (loss) on equity securities, net and and the after-tax gain on disposal of fixed assets. | |
(5) | Non-GAAP measurements that represent return on average assets and return on average equity, excluding the after-tax gain (loss) on equity securities, net, and the after-tax gain on disposal of fixed assets. |
HINGHAM INSTITUTION FOR SAVINGS Consolidated Balance Sheets | ||||||||
(In thousands, except share amounts) | December 31, 2022 | December 31, 2023 | ||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Cash and due from banks | $ | 7,936 | $ | 5,654 | ||||
Federal Reserve and other short-term investments | 354,097 | 356,823 | ||||||
Cash and cash equivalents | 362,033 | 362,477 | ||||||
CRA investment | 8,229 | 8,853 | ||||||
Other marketable equity securities | 54,967 | 70,949 | ||||||
Securities, at fair value | 63,196 | 79,802 | ||||||
Securities held to maturity, at amortized cost | 3,500 | 3,500 | ||||||
Federal Home Loan Bank stock, at cost | 52,606 | 69,574 | ||||||
Loans, net of allowance for credit losses of 2022 and | 3,657,782 | 3,914,244 | ||||||
Bank-owned life insurance | 13,312 | 13,642 | ||||||
Premises and equipment, net | 17,859 | 17,008 | ||||||
Accrued interest receivable | 7,122 | 8,554 | ||||||
Deferred income tax asset, net | 4,061 | 974 | ||||||
Other assets | 12,328 | 14,172 | ||||||
Total assets | $ | 4,193,799 | $ | 4,483,947 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Interest-bearing deposits | $ | 2,118,045 | $ | 2,010,918 | ||||
Non-interest-bearing deposits | 387,244 | 339,059 | ||||||
Total deposits | 2,505,289 | 2,349,977 | ||||||
Federal Home Loan Bank advances | 1,276,000 | 1,692,675 | ||||||
Mortgagors’ escrow accounts | 12,323 | 13,942 | ||||||
Accrued interest payable | 4,527 | 12,261 | ||||||
Other liabilities | 9,694 | 7,472 | ||||||
Total liabilities | 3,807,833 | 4,076,327 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, | — | — | ||||||
2,500,000 shares authorized, none issued | ||||||||
Common stock, | ||||||||
2,147,400 shares issued and outstanding at December 31, 2022 and 2,162,400 shares issued and outstanding at December 31, 2023 | 2,147 | 2,162 | ||||||
Additional paid-in capital | 13,061 | 14,150 | ||||||
Undivided profits | 370,758 | 391,308 | ||||||
Total stockholders’ equity | 385,966 | 407,620 | ||||||
Total liabilities and stockholders’ equity | $ | 4,193,799 | $ | 4,483,947 |
HINGHAM INSTITUTION FOR SAVINGS Consolidated Statements of Net Income | ||||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
(In thousands, except per share amounts) | 2022 | 2023 | 2022 | 2023 | ||||||||||||||
(Unaudited) | ||||||||||||||||||
Interest and dividend income: | ||||||||||||||||||
Loans | $ | 35,714 | $ | 42,214 | $ | 132,089 | $ | 156,681 | ||||||||||
Debt securities | 33 | 33 | 132 | 131 | ||||||||||||||
Equity securities | 716 | 1,302 | 1,752 | 4,412 | ||||||||||||||
Federal Reserve and other short-term investments | 2,766 | 2,960 | 5,055 | 13,038 | ||||||||||||||
Total interest and dividend income | 39,229 | 46,509 | 139,028 | 174,262 | ||||||||||||||
Interest expense: | ||||||||||||||||||
Deposits | 8,793 | 20,811 | 16,882 | 71,429 | ||||||||||||||
Federal Home Loan Bank and Federal Reserve Bank advances | 9,481 | 16,323 | 16,012 | 54,531 | ||||||||||||||
Total interest expense | 18,274 | 37,134 | 32,894 | 125,960 | ||||||||||||||
Net interest income | 20,955 | 9,375 | 106,134 | 48,302 | ||||||||||||||
Provision for credit losses | 600 | 271 | 4,508 | 1,118 | ||||||||||||||
Net interest income, after provision for credit losses | 20,355 | 9,104 | 101,626 | 47,184 | ||||||||||||||
Other income (loss): | ||||||||||||||||||
Customer service fees on deposits | 146 | 140 | 602 | 550 | ||||||||||||||
Increase in cash surrender value of bank-owned life insurance | 80 | 80 | 332 | 330 | ||||||||||||||
Gain (loss) on equity securities, net | 2,979 | 5,723 | (21,777 | ) | 15,147 | |||||||||||||
Gain on disposal of fixed assets | — | — | — | 44 | ||||||||||||||
Miscellaneous | 57 | 56 | 124 | 232 | ||||||||||||||
Total other income (loss) | 3,262 | 5,999 | (20,719 | ) | 16,303 | |||||||||||||
Operating expenses: | ||||||||||||||||||
Salaries and employee benefits | 4,153 | 3,853 | 15,831 | 16,413 | ||||||||||||||
Occupancy and equipment | 350 | 422 | 1,378 | 1,628 | ||||||||||||||
Data processing | 804 | 732 | 2,757 | 2,874 | ||||||||||||||
Deposit insurance | 515 | 795 | 1,862 | 2,701 | ||||||||||||||
Foreclosure and related | 19 | 19 | 24 | — | ||||||||||||||
Marketing | 279 | 128 | 1,031 | 769 | ||||||||||||||
Other general and administrative | 1,003 | 959 | 3,709 | 3,872 | ||||||||||||||
Total operating expenses | 7,123 | 6,908 | 26,592 | 28,257 | ||||||||||||||
Income before income taxes | 16,494 | 8,195 | 54,315 | 35,230 | ||||||||||||||
Income tax provision | 4,529 | 1,880 | 16,796 | 8,859 | ||||||||||||||
Net income | $ | 11,965 | $ | 6,315 | $ | 37,519 | $ | 26,371 | ||||||||||
Cash dividends declared per share | $ | 1.26 | $ | 0.63 | $ | 3.03 | $ | 2.52 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic | 2,146 | 2,157 | 2,145 | 2,151 | ||||||||||||||
Diluted | 2,198 | 2,188 | 2,202 | 2,193 | ||||||||||||||
Earnings per share: | ||||||||||||||||||
Basic | $ | 5.58 | $ | 2.93 | $ | 17.49 | $ | 12.26 | ||||||||||
Diluted | $ | 5.44 | $ | 2.89 | $ | 17.04 | $ | 12.02 |
HINGHAM INSTITUTION FOR SAVINGS Net Interest Income Analysis | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||
December 31, 2022 | September 30, 2023 | December 31, 2023 | |||||||||||||||||||||||||
Average Balance (9) | Interest | Yield/ Rate (10) | Average Balance (9) | Interest | Yield/ Rate (10) | Average Balance (9) | Interest | Yield/ Rate (10) | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||
Loans (1) (2) | $ | 3,624,745 | $ | 35,714 | 3.94 | % | $ | 3,802,045 | $ | 40,245 | 4.23 | % | $ | 3,896,425 | $ | 42,214 | 4.33 | % | |||||||||
Securities (3) (4) | 103,033 | 749 | 2.91 | 107,432 | 1,195 | 4.45 | 111,913 | 1,335 | 4.77 | ||||||||||||||||||
Short-term investments (5) | 287,286 | 2,766 | 3.85 | 264,160 | 3,598 | 5.45 | 215,323 | 2,960 | 5.50 | ||||||||||||||||||
Total interest-earning assets | 4,015,064 | 39,229 | 3.91 | 4,173,637 | 45,038 | 4.32 | 4,223,661 | 46,509 | 4.40 | ||||||||||||||||||
Other assets | 47,959 | 61,529 | 58,768 | ||||||||||||||||||||||||
Total assets | $ | 4,063,023 | $ | 4,235,166 | $ | 4,282,429 | |||||||||||||||||||||
Liabilities and stockholders’ equity: | ` | ||||||||||||||||||||||||||
Interest-bearing deposits (6) | $ | 2,221,963 | 8,793 | 1.58 | % | $ | 2,200,952 | 20,010 | 3.64 | % | $ | 2,119,506 | 20,811 | 3.93 | % | ||||||||||||
Borrowed funds | 1,036,944 | 9,481 | 3.66 | 1,261,652 | 14,042 | 4.45 | 1,395,744 | 16,323 | 4.68 | ||||||||||||||||||
Total interest-bearing liabilities | 3,258,907 | 18,274 | 2.24 | 3,462,604 | 34,052 | 3.93 | 3,515,250 | 37,134 | 4.23 | ||||||||||||||||||
Non-interest-bearing deposits | 408,951 | 353,543 | 345,743 | ||||||||||||||||||||||||
Other liabilities | 9,282 | 12,958 | 14,843 | ||||||||||||||||||||||||
Total liabilities | 3,677,140 | 3,829,105 | 3,875,836 | ||||||||||||||||||||||||
Stockholders’ equity | 385,883 | 406,061 | 406,593 | ||||||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,063,023 | $ | 4,235,166 | $ | 4,282,429 | |||||||||||||||||||||
Net interest income | $ | 20,955 | $ | 10,986 | $ | 9,375 | |||||||||||||||||||||
Weighted average interest rate spread | 1.67 | % | 0.39 | % | 0.17 | % | |||||||||||||||||||||
Net interest margin (7) | 2.09 | % | 1.05 | % | 0.89 | % |
Average interest earning assets | ||||||||||
to average interest-bearing liabilities (8) | 123.20 | % | 120.53 | % | 120.15 | % |
(1) | Before allowance for credit 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 cash held at the Federal Reserve Bank. | |
(6) | Includes mortgagors' escrow accounts. | |
(7) | Net interest income divided by average total interest-earning assets. | |
(8) | Total interest-earning assets divided by total interest-bearing liabilities. | |
(9) | Average balances are calculated on a daily basis. | |
(10) | Annualized. |
HINGHAM INSTITUTION FOR SAVINGS Net Interest Income Analysis | |||||||||||||||||
Twelve Months Ended December 31, | |||||||||||||||||
2022 | 2023 | ||||||||||||||||
Average Balance (9) | Interest | Yield/ Rate (10) | Average Balance (9) | Interest | Yield/ Rate (10) | ||||||||||||
(Dollars in thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Loans (1) (2) | $ | 3,404,674 | $ | 132,089 | 3.88 | % | $ | 3,777,332 | $ | 156,681 | 4.15 | % | |||||
Securities (3) (4) | 105,612 | 1,884 | 1.78 | 105,586 | 4,543 | 4.30 | |||||||||||
Short-term investments (5) | 263,606 | 5,055 | 1.92 | 254,664 | 13,038 | 5.12 | |||||||||||
Total interest-earning assets | 3,773,892 | 139,028 | 3.68 | 4,137,582 | 174,262 | 4.21 | |||||||||||
Other assets | 47,772 | 57,715 | |||||||||||||||
Total assets | $ | 3,821,664 | $ | 4,195,297 | |||||||||||||
Interest-bearing deposits (6) | $ | 2,118,798 | 16,882 | 0.80 | % | $ | 2,191,468 | 71,429 | 3.26 | % | |||||||
Borrowed funds | 917,252 | 16,012 | 1.75 | 1,228,410 | 54,531 | 4.44 | |||||||||||
Total interest-bearing liabilities | 3,036,050 | 32,894 | 1.08 | 3,419,878 | 125,960 | 3.68 | |||||||||||
Non-interest-bearing deposits | 402,890 | 362,047 | |||||||||||||||
Other liabilities | 7,857 | 12,239 | |||||||||||||||
Total liabilities | 3,446,797 | 3,794,164 | |||||||||||||||
Stockholders’ equity | 374,867 | 401,133 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 3,821,664 | $ | 4,195,297 | |||||||||||||
Net interest income | $ | 106,134 | $ | 48,302 | |||||||||||||
Weighted average interest rate spread | 2.60 | % | 0.53 | % | |||||||||||||
Net interest margin (7) | 2.81 | % | 1.17 | % | |||||||||||||
Average interest-earning assets | |||||||||||||||||
to average interest-bearing liabilities (8) | 124.30 | % | 120.99 | % |
(1) | Before allowance for credit 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 cash held at the Federal Reserve Bank. | |
(6) | Includes mortgagors' escrow accounts. | |
(7) | Net interest income divided by average total interest-earning assets. | |
(8) | Total interest-earning assets divided by total interest-bearing liabilities. | |
(9) | Average balances are calculated on a daily basis. | |
(10) | Annualized. | |
HINGHAM INSTITUTION FOR SAVINGS
Non-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 (loss) on equity securities, net, and after-tax gain on disposal of fixed assets.
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
(In thousands, unaudited) | 2022 | 2023 | 2022 | 2023 | |||||||||||
Non-GAAP reconciliation: | |||||||||||||||
Net income | $ | 11,965 | $ | 6,315 | $ | 37,519 | $ | 26,371 | |||||||
(Gain) loss on equity securities, net | (2,979 | ) | (5,723 | ) | 21,777 | (15,147 | ) | ||||||||
Income tax expense (benefit) (1) | 727 | 1,262 | (4,727 | ) | 3,347 | ||||||||||
Gain on disposal of fixed assets | — | — | — | (44 | ) | ||||||||||
Income tax expense | — | — | — | 12 | |||||||||||
Core net income | $ | 9,713 | $ | 1,854 | $ | 54,569 | $ | 14,539 |
(1) | The equity securities are mostly held in a tax-advantaged subsidiary corporation. The income tax effect of the gain (loss) on equity securities, net, was calculated using the applicable effective tax rates. |
The table below presents the calculation of the efficiency ratio, a non-U.S. GAAP performance measure the management uses to assess operational efficiency which represents total operating expenses, divided by the sum of net interest income and total other income (loss), excluding gain (loss) on equity securities, net, and the after-tax gain on disposal of fixed assets.
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||
(In thousands, unaudited) | 2022 | 2023 | 2022 | 2023 | |||||||||||||||
Non-U.S. GAAP efficiency ratio calculation: | |||||||||||||||||||
Operating expenses | $ | 7,123 | $ | 6,908 | $ | 26,592 | $ | 28,257 | |||||||||||
Net interest income | $ | 20,955 | $ | 9,375 | $ | 106,134 | $ | 48,302 | |||||||||||
Other income (loss) | 3,262 | 5,999 | (20,719 | ) | 16,303 | ||||||||||||||
(Gain) loss on equity securities, net | (2,979 | ) | (5,723 | ) | 21,777 | (15,147 | ) | ||||||||||||
Gain on disposal of fixed assets | — | — | — | (44 | ) | ||||||||||||||
Total revenue | $ | 21,238 | $ | 9,651 | $ | 107,192 | $ | 49,414 | |||||||||||
Efficiency ratio | 33.54 | % | 71.58 | % | 24.81 | % | 57.18 | % |
CONTACT: Patrick R. Gaughen, President and Chief Operating Officer (781) 783-1761
FAQ
What was Hingham Institution for Savings' (HIFS) net income for the year ended December 31, 2023?
How did HIFS's core net income for the year ended December 31, 2023 compare to the same period in 2022?
What was the percentage change in total assets at HIFS from December 31, 2022 to December 31, 2023?
How did the net interest margin for the year ended December 31, 2023 compare to the prior year?