Hingham Savings Institution sees profits fall
Hingham Institution for Savings saw first-quarter earnings fall 27% as the bank reported net income of $11.86 million, or $5.54 per share basic and $5.38 per share diluted, compared with $16.35 million, or $7.65 per share basic and $7.45 per share diluted, in the first quarter of 2021.
The Hingham-based bank said in its first quarter income statement that its annualized return on average equity was 13.1% compared to 21.72% in the first quarter of 2021. The bank had an annualized return on average assets of 1.37% against 2.32%. in the same quarter last year.
Hingham Institution for Savings said its board increased the regular cash dividend to $0.57 per share, up 4% from the previous quarter.
Total deposits, including wholesale deposits, were $2.39 billion at the end of the first quarter, up 5% from March 31, 2021.
Net loans increased to $3.17 billion in the first quarter, up 27% from the same quarter last year. The bank said the growth was concentrated in its commercial real estate portfolio.
Total assets were $3.64 billion in the first quarter, up 28% year-over-year.
After a year in which the Hingham Institution for Savings saw its quarterly net interest margin rise steadily year-over-year, the bank saw a decline in the first quarter. Net interest margin for the first quarter decreased year-over-year by 24 basis points to 3.3%. The bank said the decline was due to a decline in the yield of interest-earning assets, mainly due to lower loan yields. The decrease was partially offset by a lower cost of interest-bearing liabilities. The bank also saw a decline from the fourth quarter, which had a net interest margin of 3.46%.
The bank’s already low efficiency ratio was 21.82% in the first quarter, compared to 22.02% in the first quarter of 2021. Operating expenses as a percentage of average assets were 0.72% in the first quarter, compared to 0.77% in the same quarter last year. . The bank said it remains focused on “reducing waste through an ongoing process of continuous improvement and standard work that supports operational leverage.”
“Returns on equity and assets were adequate in the first quarter of 2022,” Chairman Robert H. Gaughen Jr. said in the statement. “We remain focused on prudent capital allocation, defensive underwriting and disciplined cost control – the building blocks for building shareholder capital through all stages of the economic cycle. These remain constant, regardless of the macroeconomic environment in which we operate.