HINGHAM, Mass.--(BUSINESS WIRE)-- HINGHAM INSTITUTION FOR SAVINGS (HIFS), Hingham, Massachusetts announced first quarter earnings for 2012. Net income for the quarter ended March 31, 2012 was $3,241,000 or $1.52 per share (basic and diluted) as compared to $2,880,000 or $1.36 per share basic and $1.35 per share diluted for the same period last year. The Banks return on average equity for the first quarter of 2012 was 15.30%, and the return on average assets was 1.15%.

Strong growth trends of recent years continued, as deposits increased by $69.5 million representing a 9% increase from March 31, 2011. Net loans increased by 8% and total assets increased by 11% over those for the first quarter of 2011. Stockholders equity increased to $84.9 million as of March 31, 2012 representing a 13% increase from March 31, 2011 with a related increase in book value per share from $35.31 to $39.94.

At March 31, 2012 non-performing assets totaled 0.89% of total assets, down from 0.92% of total assets at both December 31, 2011 and March 31, 2011. For the quarter ended March 31, 2012, a provision of $225,000 was made to the allowance for loan losses compared to $300,000 for the same period in 2011. Foreclosure related expenses totaled $200,000 for the quarter ended March 31, 2012 compared to $168,000 for the quarter ended March 31, 2011.

President Robert H. Gaughen, Jr. stated, Our quarterly earnings represent a 13% increase over the same period last year. We continue to experience consistent organic growth in our balance sheet. This growth, when combined with our outstanding efficiency, has again produced some of the strongest earnings in our industry.

Hingham Institution for Savings is a Massachusetts-chartered savings bank located in Hingham, Massachusetts. Incorporated in 1834, it is the oldest financial institution headquartered in Hingham and one of the oldest in the Commonwealth. The Banks main office is located on Main Street, Hingham, Massachusetts. The Bank also maintains branch offices in South Hingham and the neighboring towns of Cohasset, Hull, Scituate, Weymouth and Norwell as well as two branches in Boston.

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

HINGHAM INSTITUTION FOR SAVINGS
Consolidated Balance Sheets
			March 31, 2012					December 31, 2011						March 31, 2011
(Dollars in thousands except per share data)
(Unaudited)
ASSETS
Cash and due from banks			$	8,146				$	8,918					$	7,037
Short-term investments				108,345					107,422						65,420
Cash and cash equivalents				116,491					116,340						72,457
Certificates of deposit				13,754					13,405						13,980
Securities available for sale, at fair value				99,772					96,689						94,053
Federal Home Loan Bank stock, at cost				13,159					13,373						13,373
Loans, net of allowance for loan losses of $7,639  at March 31, 2012, $7,516 at December 31, 2011  and $7,205 at March 31, 2011				869,051					849,776						803,653
Foreclosed assets				3,884					3,629						3,044
Bank-owned life insurance				14,621					14,524						14,190
Premises and equipment, net				10,509					10,597						9,106
Accrued interest receivable				2,973					2,858						3,208
Prepaid FDIC assessment				1,755					1,871						2,173
Deferred income tax asset, net				3,462					3,425						2,852
Other assets				1,049					789						923
Total assets			$	1,150,480				$	1,127,276					$	1,033,012
LIABILITIES AND STOCKHOLDERS EQUITY
Deposits			$	807,730				$	787,573				$		738,204
Federal Home Loan Bank advances				246,442					247,471						211,553
Mortgage payable				1,097					1,107						1,137
Mortgagors escrow accounts				2,709					2,517						2,443
Accrued interest payable				472					475						571
Other liabilities				7,121					5,868						4,093
Total liabilities				1,065,571					1,045,011						958,001
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;  2,125,750 shares issued and outstanding as of March 31, 2012  and December 31, 2011 and 2,124,250 shares issued and  outstanding as of March 31, 2011				2,126					2,126						2,124
Additional paid-in capital				10,500					10,500						10,417
Undivided profits				72,114					69,404						62,369
Accumulated other comprehensive income				169					235						101
Total stockholders equity				84,909					82,265						75,011
Total liabilities and stockholders equity			$	1,150,480				$	1,127,276				$		1,033,012

HINGHAM INSTITUTION FOR SAVINGS Consolidated Statements of Income
					Three Months Ended March 31,
(Dollars in thousands, except per share amounts)					2012						2011
(Unaudited)
Interest and dividend income:
Loans					$	11,843					$	11,568
Debt securities						149						239
Equity securities						42						34
Short-term investments and certificates of deposit						89						82
Total interest and dividend income						12,123						11,923
Interest expense:
Deposits						1,506						1,758
Federal Home Loan Bank advances						1,240						1,492
Mortgage payable						16						17
Total interest expense						2,762						3,267
Net interest income						9,361						8,656
Provision for loan losses						225						300
Net interest income, after provision for loan losses						9,136						8,356
Other income:
Customer service fees on deposits						253						235
Increase in Bank-owned life insurance						97						116
Miscellaneous						57						60
Total other income						407						411
Operating expenses:
Salaries and employee benefits						2,335						2,150
Data processing						231						221
Occupancy and equipment						419						355
Deposit insurance						133						319
Foreclosure						200						168
Marketing						134						111
Other general and administrative						625						587
Total operating expenses						4,077						3,911
Income before income taxes						5,466						4,856
Income tax provision						2,225						1,976
Net income					$	3,241					$	2,880
Cash dividends declared per common share					$	0.25					$	0.24
Weighted average shares outstanding:
Basic						2,126						2,124
Diluted						2,127						2,125
Earnings per share:
Basic					$	1.52					$	1.36
Diluted					$	1.52					$	1.35

HINGHAM INSTITUTION FOR SAVINGS Net Interest Income Analysis
			Three Months Ending March 31,
			2012															2011
			AVERAGE BALANCE					INTEREST					YIELD/ RATE					AVERAGE BALANCE					INTEREST					YIELD/ RATE
(Dollars in thousands)
(Unaudited)
Loans (1) (2)			$	864,131				$	11,843				5.48	%				$	806,714				$	11,568				5.74	%
Securities (3) (4)				97,387					191				0.78						107,945					273				1.01
Short-term investments and certificates of deposit				115,706					89				0.31						72,365					82				0.45
Total earning assets				1,077,224					12,123				4.50						987,024					11,923				4.83
Other assets				46,899															34,203
Total assets			$	1,124,123														$	1,021,227
Interest-bearing deposits (5)			$	735,651					1,506				0.82					$	682,247					1,758				1.03
Borrowed funds				236,817					1,256				2.12						206,527					1,509				2.92
Total interest-bearing liabilities				972,468					2,762				1.14						888,774					3,267				1.47
Demand deposits				63,352															54,222
Other liabilities				3,547															3,266
Total liabilities				1,039,367															946,262
Stockholders equity				84,756															74,965
Total liabilities and stockholders equity			$	1,124,123														$	1,021,227
Net interest income								$	9,361														$	8,656
Weighted average spread													3.36	%														3.36	%
Net interest margin (6)													3.48	%														3.51	%
Average interest-earning assets to average  interest-bearing liabilities (7)													110.77	%														111.05	%

(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 available for sale.
(4)			Includes Federal Home Loan Bank stock.
(5)			Includes mortgagors' escrow accounts.
(6)			Net interest income divided by average total earning assets.
(7)			Total earning assets divided by total interest-bearing liabilities.

HINGHAM INSTITUTION FOR SAVINGS Selected Financial Ratios
								Three Months Ended March 31,
								2012						2011
(Unaudited)
Key Performance Ratios
Return on average assets (1)								1.15			%			1.13		%
Return on average equity (1)								15.30						15.37
Interest rate spread (1) (2)								3.36						3.36
Net interest margin (1) (3)								3.48						3.51
Non-interest expense to average assets (1)								1.45						1.53
Efficiency ratio (4)								41.74						43.13
Average equity to average assets								7.54						7.34
Average interest-bearing assets to average interest bearing liabilities								110.77						111.05
			March 31, 2012						December 31, 2011					March 31, 2011
(Unaudited)
Asset Quality Ratios
Allowance for loan losses/total loans				0.87	%				0.88		%				0.89	%
Allowance for loan losses/non-performing loans				120.09					111.30						110.80
Non-performing loans/total loans				0.73					0.79						0.81
Non-performing loans/total assets				0.55					0.60						0.63
Non-performing assets/total assets				0.89					0.92						0.92
Share Related
Book value per share			$	39.94					$	38.70				$ 35.31
Market value per share			$	56.44					$	47.80				$ 51.51
Shares outstanding at end of period				2,125,750						2,125,750				2,124,250

(1)			Annualized
(2)			Interest rate spread represents the difference between the yield on earning assets and cost of interest-bearing liabilities.
(3)			Net interest margin represents net interest income divided by average earning assets.
(4)			The efficiency ratio represents non-interest expense, divided by the sum of net interest income and non-interest income.

Hingham Institution for Savings
Robert H. Gaughen, Jr., 781-749-2200
President
or
William M. Donovan, Jr., 781-749-2200
Vice President-Administration

Source: Hingham Institution for Savings

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