HINGHAM INSTITUTION FOR SAVINGS 2025 Shareholders Meeting Safe Harbor Statement This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about Hingham Institution for Savings and its industry involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding the Bank's future financial condition, results of operations, business plans, liqui ...

Financial Data and Key Metrics Changes - The company reported earnings of $28.2 million for the previous year, which is an improvement compared to 2023 but still considered unsatisfactory relative to historical returns on equity, which have typically been in the low to mid-teens [53][57] - The return on shareholder equity has been lower in the last two years compared to historical averages, although it remains favorable compared to savings banks in Massachusetts [57][58] - The five-year compound annual growth rate (CAGR) in book value per share is 11.3%, which is high for the industry but comparatively low for the company [60] Business Line Data and Key Metrics Changes - The loan book did not grow last year and actually shrank slightly, with strong originations offset by significant payoffs in the construction and term books [66][79] - Checking deposits grew by 23% year-over-year, with an annualized growth rate of 30% in the first quarter of the current year [75][79] Market Data and Key Metrics Changes - The multifamily markets in Boston, Washington, and San Francisco are reported to be healthy, with low vacancy rates and steady rent growth, driven by supply constraints [81][82] - The company remains liability sensitive, with a focus on shorter-term rates falling, which could impact funding conditions [82] Company Strategy and Development Direction - The company aims to invest organically in the balance sheet and growth in loans and deposits, viewing this as the most attractive long-term return strategy [47][50] - The company has no plans for acquisitions, believing that they do not add value for owners or improve service to clients [51] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by interest rate increases and yield curve inversion but emphasized the company's resilience and durability through historical challenges [29][30] - There is uncertainty regarding the impact of potential workforce reductions in the federal government on the economy, particularly in Washington, but current indicators show healthy rental increases and low vacancy rates [100][101] Other Important Information - The company has maintained a policy since 1993 of not making loans to insiders, viewing it as a way to eliminate risks associated with insider lending [106][112] - The company continues to focus on process improvement and eliminating waste as part of its operational strategy [84] Q&A Session All Questions and Answers Question: How does the federal workforce reduction impact the company? - Management discussed the uncertainty surrounding the federal workforce's future and its potential impact on the economy, particularly in multifamily housing demand, but noted that current indicators remain positive [100][101] Question: What are the company's thoughts on insider loans? - The company maintains a strict policy against insider loans, believing it is best to eliminate risks rather than mitigate them, and has confidence in the integrity of management teams at banks in which it invests [106][111]

Earnings Performance - Net income for the quarter ended March 31, 2025, was $7,124,000, or $3.27 per share basic and $3.24 per share diluted, compared to $6,868,000, or $3.17 per share basic and $3.13 per share diluted for the same period last year, reflecting a 3.5% increase in diluted earnings per share [2][3] - Core net income for the same quarter was $6,125,000, or $2.81 per share basic and $2.78 per share diluted, a significant increase of 175.2% compared to $2,213,000, or $1.02 per share basic and $1.01 per share diluted for the same period last year [3][4] Balance Sheet Highlights - Total assets increased to $4.523 billion at March 31, 2025, representing a 5.9% annualized growth year-to-date, but a 0.1% decline from March 31, 2024 [5] - Net loans increased to $3.924 billion at March 31, 2025, showing a 5.2% annualized growth year-to-date, with a 0.4% decline from March 31, 2024 [5] - Retail and commercial deposits rose to $2.066 billion at March 31, 2025, reflecting a 13.8% annualized growth year-to-date and a 9.2% growth from March 31, 2024 [6] Operational Metrics - The net interest margin for the quarter ended March 31, 2025, increased by 65 basis points to 1.50%, compared to 0.85% for the same period last year, driven by a decline in the cost of interest-bearing liabilities and an increase in the yield on interest-earning assets [13][14] - The efficiency ratio improved to 45.82% for the first quarter of 2025, down from 77.24% for the same period last year, indicating enhanced operational efficiency [17][23] Dividend Information - The Bank declared a regular cash dividend of $0.63 per share on March 26, 2025, marking the 125th consecutive quarterly dividend [11][12] - Since March 31, 2024, the Bank has declared a total of $2.52 in dividends per share [10] Credit Quality - Non-performing assets totaled 0.04% of total assets as of March 31, 2025, consistent with the previous year, while non-performing loans as a percentage of the total loan portfolio were 0.05% [15][16] - The Bank did not record any charge-offs in the first three months of 2025 or 2024, indicating strong credit quality [15]

Earnings Summary - 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, an increase from $26,371,000 or $12.26 per share basic and $12.02 per share diluted in 2023, representing a 7% increase in diluted net income per share [2][22] - Core net income for 2024 was $12,304,000 or $5.65 per share basic and $5.61 per share diluted, down from $14,539,000 or $6.76 per share basic and $6.63 per share diluted in 2023, indicating a 15% decrease in core net income per share [3][22] - For the fourth quarter of 2024, net income was $11,375,000 or $5.22 per share basic and $5.16 per share diluted, compared to $6,315,000 or $2.93 per share basic and $2.89 per share diluted in the same quarter of 2023, marking a 79% increase in diluted net income per share [4][22] Balance Sheet Overview - Total assets decreased to $4.458 billion at December 31, 2024, a 1% decline from December 31, 2023 [7] - Net loans also decreased to $3.874 billion at December 31, 2024, a 1% decline from the previous year, attributed to lower loan originations [8] - Retail and business deposits grew to $1.997 billion at December 31, 2024, representing a 7% increase from December 31, 2023, with non-interest-bearing deposits increasing by 17% to $397.5 million [9][10] Operational Performance Metrics - The net interest margin for the fourth quarter of 2024 increased by 17 basis points to 1.24%, driven by a decline in the cost of interest-bearing liabilities [15] - The efficiency ratio improved to 52.30% for the fourth quarter of 2024, down from 71.58% in the same period last year, indicating enhanced operational efficiency [18][22] - Non-performing assets remained stable at 0.03% of total assets, with non-performing loans at 0.04% of the total loan portfolio, unchanged from the previous year [16][17] Management Commentary - The Chairman noted that returns on equity and assets in 2024 were lower than long-term expectations due to challenges from rising interest rates and an inverted yield curve [20] - The Bank is focused on improving its deposit relationships and recruiting talented relationship managers, particularly in competitive markets [21][22] - The management emphasized a commitment to careful capital allocation, defensive underwriting, and disciplined cost control to navigate economic cycles [22]

Core Points - Hingham Institution for Savings has declared a regular quarterly cash dividend of $0.63 per share, to be paid on January 15, 2025, to stockholders of record as of January 6, 2025 [1] - The Bank's returns on equity and assets in 2024 have been significantly lower than long-term performance due to challenges from increased short-term interest rates and a historically long inversion of the yield curve [2] - The Bank's core business has faced challenges, but investment operations have helped sustain growth in book value per share [2] - The Bank emphasizes careful capital allocation, defensive underwriting, and disciplined cost control as essential strategies for compounding shareholder capital through economic cycles [3] - This marks the 124th consecutive quarterly dividend declared by the Bank, which has also typically declared special cash dividends for the past twenty-nine years, although none were declared in 2023 and 2024 [3] - The Bank is focusing on reinvesting incremental capital to support lending at attractive pricing given the current environment and its capital generation capacity [3] - Established in 1834, Hingham Institution for Savings is one of the oldest banks in America, with offices in multiple major cities [4]

Earnings Performance - Net income for Q3 2024 was $5,846,000, or $2.68 per share basic, representing a 77% increase from $3,297,000 or $1.53 per share basic in Q3 2023 [2][3] - Core net income for Q3 2024 was $3,163,000, or $1.45 per share basic, up from $2,895,000 or $1.35 per share basic in Q3 2023, marking a 9% increase [3] - For the nine months ended September 30, 2024, net income was $16,816,000, or $7.73 per share basic, down 16% from $20,056,000 or $9.33 per share basic in the same period last year [4] Balance Sheet Highlights - Total assets as of September 30, 2024, were $4.450 billion, reflecting a 1% annualized decline year-to-date but a 2% growth from the previous year [7] - Net loans stood at $3.863 billion, showing a 2% annualized decline year-to-date and a 1% growth from September 30, 2023 [8] - Retail and business deposits reached $1.977 billion, representing an 8% annualized growth year-to-date and a 3% increase from the previous year [9] Operational Metrics - The net interest margin for Q3 2024 increased to 1.07%, up from 0.96% in Q2 2024, driven by higher yields on earning assets [16] - The efficiency ratio improved to 62.19% in Q3 2024, down from 68.57% in the prior quarter, indicating enhanced operational efficiency [19] - Non-performing assets were 0.04% of total assets as of September 30, 2024, compared to 0.03% at December 31, 2023, and 0.00% at September 30, 2023 [17] Dividend Information - The Bank declared a regular cash dividend of $0.63 per share on September 25, 2024, marking the 123rd consecutive quarterly dividend [14] - Since September 30, 2023, the Bank has declared a total of $2.52 in dividends per share [13] Market Position and Strategy - The Bank continues to focus on developing deposit relationships with new and existing customers, particularly in Boston, Washington, and San Francisco [10] - The Chairman noted that the business model is designed to compound shareholder capital through economic cycles, emphasizing careful capital allocation and disciplined cost control [20][21]

Core Financial Performance - Core net income for Q2 2024 was $2,181,000 or $1.00 per share diluted, a decrease of 46% from $4,046,000 or $1.88 per share diluted in Q2 2023 [2] - For the first six months of 2024, core net income was $4,395,000 or $2.01 per share diluted, down 55% from $9,791,000 or $4.46 per share diluted in the same period last year [3] - Net income for Q2 2024 was $4,102,000 or $1.88 per share diluted, compared to $8,248,000 or $3.76 per share diluted in Q2 2023, reflecting a 50% decrease [41] Asset Growth and Composition - Total assets increased to $4.521 billion as of June 30, 2024, representing 2% annualized growth year-to-date and 5% growth from June 30, 2023 [4] - Net loans were $3.933 billion at June 30, 2024, showing 1% annualized growth year-to-date and 5% growth from June 30, 2023 [52] Deposit and Funding Strategy - Retail and business deposits reached $1.921 billion at June 30, 2024, reflecting 6% annualized growth year-to-date and stable from June 30, 2023 [9] - Wholesale funds totaled $2.146 billion at June 30, 2024, representing a 3% annualized decline year-to-date but a 9% increase from June 30, 2023 [10] Interest Margin and Efficiency - The net interest margin for Q2 2024 increased to 0.96%, up from 0.85% in Q1 2024, marking the first expansion since early 2022 [7] - The efficiency ratio improved to 68.57% for Q2 2024, down from 77.24% in the prior quarter but up from 55.03% in Q2 2023 [12] Dividend and Shareholder Returns - A regular cash dividend of $0.63 per share was declared on June 26, 2024, marking the 122nd consecutive quarterly dividend [6] - Book value per share was $191.34 as of June 30, 2024, representing 3% annualized growth year-to-date and from June 30, 2023 [25] Credit Quality - Non-performing assets totaled 0.04% of total assets as of June 30, 2024, compared to 0.03% at December 31, 2023 [26] - The allowance for credit losses to total loans was 0.68% as of June 30, 2024, consistent with prior periods [28]

Earnings Performance - Core net income for Q2 2024 was $2,181,000 or $1.00 per share diluted, a decrease of 46% from $4,046,000 or $1.85 per share diluted in Q2 2023 [1] - For the first six months of 2024, core net income was $4,395,000 or $2.01 per share diluted, down 55% from $9,791,000 or $4.46 per share diluted in the same period last year [2] - Net income for Q2 2024 was $4,102,000 or $1.88 per share diluted, compared to $8,248,000 or $3.76 per share diluted in Q2 2023, marking a 50% decrease [19] - For the first six months of 2024, net income was $10,970,000 or $5.01 per share diluted, down 34% from $16,759,000 or $7.63 per share diluted in the same period last year [20] Balance Sheet and Asset Quality - Net loans were $3.933 billion as of June 30, 2024, reflecting 1% annualized growth year-to-date and 5% growth from June 30, 2023 [3] - Total assets increased to $4.521 billion at June 30, 2024, representing 2% annualized growth year-to-date and 5% growth from June 30, 2023 [22] - The Bank maintained a strong asset quality with no delinquent or non-performing commercial real estate loans as of June 30, 2024 [9] Deposits and Funding - Retail and business deposits were $1.921 billion at June 30, 2024, showing 6% annualized growth year-to-date and stable from June 30, 2023 [23] - Non-interest-bearing deposits were $343.3 million at June 30, 2024, representing a 2% annualized growth year-to-date but a 6% decline from June 30, 2023 [23] - Wholesale funds totaled $2.146 billion at June 30, 2024, reflecting a 3% annualized decline year-to-date and 9% growth from June 30, 2023 [5] Operational Metrics - The net interest margin for Q2 2024 increased to 0.96%, up from 0.85% in Q1 2024, marking the first expansion since early 2022 [8] - The efficiency ratio decreased to 68.57% for Q2 2024, compared to 77.24% in the prior quarter, but increased from 55.03% for the same period last year [29] - Non-performing assets totaled 0.04% of total assets as of June 30, 2024, compared to 0.03% at December 31, 2023 [28] Dividends - The Bank declared a regular cash dividend of $0.63 per share on June 26, 2024, marking the 122nd consecutive quarterly dividend [26] - The Bank has historically declared special cash dividends but did not do so in 2023, with future dividends to be considered quarterly by the Board of Directors [7]

Pgiam Investment Thesis Hingham Institution for Savings (NASDAQ:HIFS) is in my opinion one of the finest financial establishments in the U.S. The bank has outstanding asset quality thanks to a laser focused approach to risk management and mitigation. The bank has also historically been one of the best performing financial institutions in the U.S. with 5Y average returns handily outperforming industry giants like Bank of America (BAC). While profitability has taken a hit over the last two years, I believ ...

HINGHAM, Mass., April 12, 2024 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ:HIFS), Hingham, Massachusetts announced results for the quarter ended March 31, 2024. Earnings Net income for the quarter ended March 31, 2024 was $6,868,000 or $3.17 per share basic and $3.13 per share diluted, as compared to $8,510,000 or $3.96 per share basic and $3.87 per share diluted for the same period last year. The Bank's annualized return on average equity for the first quarter of 2024 was 6.63%, and the ann ...