Hingham Savings Reports Third Quarter 2025 Results

HINGHAM, Mass., Oct. 10, 2025 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ: HIFS), Hingham, Massachusetts announced results for the quarter ended September 30, 2025.

Earnings

Net income for the quarter ended September 30, 2025 was $17,295,000 or $7.93 per share basic and $7.85 per share diluted, as compared to $5,846,000 or $2.68 per share basic and $2.66 per share diluted for the same period last year. The Bank’s annualized return on average equity for the third quarter of 2025 was 15.15%, and the annualized return on average assets was 1.54%, as compared to 5.52% and 0.54% for the same period last year. Net income per share (diluted) for the third quarter of 2025 increased by 195.1% compared to the same period in 2024.

Core net income for the quarter ended September 30, 2025, which represents net income excluding the after-tax net gain on equity securities, both realized and unrealized, was $8,509,000 or $3.90 per share basic and $3.86 per share diluted, as compared to $3,163,000 or $1.45 per share basic and $1.44 per share diluted for the same period last year. The Bank’s annualized core return on average equity for the third quarter of 2025 was 7.45% and the annualized core return on average assets was 0.76%, as compared to 2.99% and 0.29% for the same period last year. Core net income per share (diluted) for the third quarter of 2025 increased by 168.1% compared to the same period in 2024.

Net income for the nine months ended September 30, 2025 was $33,833,000 or $15.51 per share basic and $15.37 per share diluted, as compared to $16,816,000 or $7.73 per share basic and $7.67 per share diluted for the same period last year. The Bank’s annualized return on average equity for the first nine months of 2025 was 10.07%, and the annualized return on average assets was 1.01%, as compared to 5.35% and 0.52% for the same period in 2024. Net income per share (diluted) for the first nine months of 2025 increased by 100.4% over the same period in 2024.

Core net income for the nine months ended September 30, 2025, which represents net income excluding the after-tax net gain on equity securities, both realized and unrealized, was $22,087,000 or $10.13 per share basic and $10.03 per share diluted, as compared to $7,558,000 or $3.47 per share basic and $3.45 per share diluted for the same period last year. The Bank’s annualized core return on average equity for the first nine months of 2025 was 6.57%, and the annualized core return on average assets was 0.66%, as compared to 2.41% and 0.23% for the same period in 2024. Core net income per share (diluted) for the first nine months of 2025 increased by 190.7% over the same period in 2024.

See Page 10 for a reconciliation between Generally Accepted Accounting Principles (“GAAP”) net income and Non-GAAP core net income. Under GAAP, gains and losses on equity securities, net of tax, realized and unrealized, are recognized in the Consolidated Statements of 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. In the first nine months of 2024, both net income and core net income were positively impacted by lower income tax expense driven by excess tax benefit associated with the exercise of stock options and the revision of state income tax estimates.

Balance Sheet

Total assets increased to $4.531 billion at September 30, 2025, representing 2.2% annualized growth year-to-date and a 1.8% increase from September 30, 2024.

Net loans increased to $3.914 billion at September 30, 2025, representing 1.4% annualized growth year-to-date and a 1.3% increase from September 30, 2024. Origination activity was concentrated in the Boston and Washington D.C. markets and remained focused on stabilized multifamily commercial real estate, although it remained below the Bank’s expectations given market conditions.

Retail and commercial deposits were $1.991 billion at September 30, 2025, representing a 0.4% annualized decline year-to-date and a 0.7% increase from September 30, 2024. Non-interest-bearing deposits, included in retail and commercial deposits, were $432.7 million at September 30, 2025, representing 11.8% annualized growth year-to-date and 20.8% growth from September 30, 2024.

Growth in non-interest bearing deposits in the first nine months of 2025 and over the last year continued to reflect 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, actively recruiting 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 appeal to customers in times of uncertainty.

Wholesale funds, which includes Federal Home Loan Bank (“FHLB”) borrowings, brokered deposits, and Internet listing service time deposits, were $2.032 billion at September 30, 2025 representing 2.7% annualized growth year-to-date and 0.8% growth from September 30, 2024, as the Bank used these funds to fund balance sheet growth, and to a lesser extent, replace retail and commercial deposits in 2025. In the first nine months of 2025, the Bank continued to manage its wholesale funding mix to lower its cost of funds while taking advantage of the inverted yield curve at certain durations by adding lower rate longer term liabilities. Wholesale deposits, which include brokered and Internet listing service time deposits, were $505.4 million at September 30, 2025, representing a 2.8% annualized growth year-to-date and 4.4% growth from September 30, 2024. Borrowings from the FHLB totaled $1.526 billion at September 30, 2025, representing 2.6% annualized growth from December 31, 2024, and a 0.3% decline from September 30, 2024. As of September 30, 2025, the Bank maintained an additional $843.3 million in immediately available borrowing capacity at the FHLB of Boston and the Federal Reserve Bank, in addition to $360.0 million in cash and cash equivalents.

Book value per share was $211.67 as of September 30, 2025, representing 9.2% annualized growth year-to-date and 9.4% growth from September 30, 2024. In addition to the increase in book value per share, the Bank declared $2.52 in dividends per share since September 30, 2024.

On September 24, 2025, the Bank declared a regular cash dividend of $0.63 per share. This dividend will be paid on November 12, 2025 to stockholders of record as of November 3, 2025. This will be the Bank’s 127th consecutive quarterly dividend.

The Bank has also generally declared special cash dividends in each of the last thirty years, typically in the fourth quarter, but did not declare a special dividend in 2023 or 2024. The Bank sets the level of the special dividend based on the Bank’s capital requirements and the prospective return on other capital allocation options, particularly the incremental return on capital from new loan originations and share repurchases. This may result in special dividends, if any, significantly above or below the regular quarterly dividend. All capital allocation options, including future regular and special dividends as well as share repurchases, will be considered by the Board of Directors on a quarterly basis.

Operational Performance Metrics

The net interest margin for the quarter ended September 30, 2025 increased 8 basis points to 1.74%, as compared to 1.66% in the quarter ended June 30, 2025. This improvement was the result of a decline in the cost of interest-bearing liabilities, combined with an increase in the yield on interest-earning assets. The cost of interest-bearing liabilities fell 5 basis points in the third quarter of 2025, as the Bank’s retail and commercial deposits continued to reprice at lower rates, and the Bank continued to take advantage of the inverted yield curve by adding lower rate FHLB advances and brokered deposits. The yield on interest-earning assets increased by 4 basis points in the third quarter of 2025, driven primarily 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 third quarter of 2025 was 1.77% annualized.

Key credit and operational metrics remained acceptable in the third quarter of 2025. At September 30, 2025, non-performing assets totaled 0.71% of total assets, compared to 0.03% at December 31, 2024 and 0.04% at September 30, 2024. Non-performing loans as a percentage of the total loan portfolio totaled 0.81% at September 30, 2025, compared to 0.04% at both December 31, 2024 and September 30, 2024. The Bank did not record any charge-offs in the first nine months of 2025 or 2024. In the second quarter of 2025, the Bank placed a commercial real estate loan with an outstanding balance of $30.6 million on nonaccrual, after the borrower failed to make the full payment due at maturity. This loan is secured by an entitled development site for a significant multifamily development in Washington, D.C. and has an associated conditional guarantee from a large national homebuilder and an affordable housing developer. The Bank is working actively to identify a resolution that protects the Bank’s interests. The remaining non-performing assets and loans cited above were and are residential, owner-occupant loans.

As of September 30, 2025, the Bank only had the single above-mentioned non-performing commercial real estate loan, and no other commercial real estate delinquent loans. The Bank did not have any delinquent or non-performing commercial real estate loans as of December 31, 2024 or September 30, 2024. The Bank did not own any foreclosed property at September 30, 2025, December 31, 2024 or September 30, 2024.

The efficiency ratio, as defined on page 5 below, decreased to 38.26% for the third quarter of 2025, as compared to 41.17% in the prior quarter and 62.19% for the same period last year. Operating expenses as a percentage of average assets fell to 0.67% for the third quarter of 2025, as compared to 0.68% for both the prior quarter and 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.

Chairman Robert H. Gaughen Jr. stated, “Returns on equity and assets in the first nine months of 2025 remained somewhat lower than our long-term performance expectations, although they continue to improve consistently over time, driven by sustained expansion in the net interest margin through asset repricing, falling funding costs, and growth in non-interest bearing deposits. Our operational leverage remains critical to generating satisfactory returns and we remain focused on rigorous cost control and continuous operational improvement. Although our equity investment returns are likely to remain volatile in any individual period, they contribute meaningfully to growth in book value per share over time.

We continue to focus on deploying capital organically via growth in the loan portfolio, funded by a mix of retail and commercial deposits and wholesale funds. We believe there are substantial opportunities for such growth in our existing markets and we are not satisfied with our performance over the last year on this measure.

While this period has been extraordinarily challenging, the Bank’s business model has been built to compound shareholder capital over the long-term. We remain focused on careful capital allocation, defensive underwriting and rigorous 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 quarterly financial results are summarized in this earnings release, but shareholders are encouraged to read the Bank’s quarterly report on Form 10-Q, which is generally available several weeks after the earnings release. The Bank expects to file Form 10-Q for the quarter ended September 30, 2025 with the Federal Deposit Insurance Corporation (FDIC) on or about November 5, 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.

HINGHAM INSTITUTION FOR SAVINGS
Selected Financial Ratios Three Months Ended
September 30, Nine Months Ended
September 30, 2024 2025 2024 2025(Unaudited) Key Performance Ratios Return on average assets (1)0.54% 1.54% 0.52% 1.01%Return on average equity (1)5.52 15.15 5.35 10.07 Core return on average assets (1) (5)0.29 0.76 0.23 0.66 Core return on average equity (1) (5)2.99 7.45 2.41 6.57 Interest rate spread (1) (2)0.34 1.04 0.24 0.93 Net interest margin (1) (3)1.07 1.74 0.96 1.63 Operating expenses to average assets (1)0.68 0.67 0.67 0.67 Efficiency ratio (4)62.19 38.26 68.76 41.51 Average equity to average assets9.82 10.14 9.65 10.06 Average interest-earning assets to average interest-bearing liabilities120.59 123.12 120.14 122.78

September 30,
2024 December 31,
2024 September 30,
2025(Unaudited) Asset Quality Ratios Allowance for credit losses/total loans 0.69% 0.69% 0.71%Allowance for credit losses/non-performing loans 1,662.35 1,775.00 87.32 Non-performing loans/total loans 0.04 0.04 0.81 Non-performing loans/total assets 0.04 0.03 0.71 Non-performing assets/total assets 0.04 0.03 0.71 Share Related Book value per share$193.42 $198.03 $ 211.67 Market value per share$243.31 $254.14 $ 263.78 Shares outstanding at end of period 2,180,250 2,180,250 2,181,250

(1) Annualized.

(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 is a non-GAAP measure that represents total operating expenses, divided by the sum of net interest income and total other income, excluding the net gain on equity securities, both realized and unrealized.

(5) Non-GAAP measurements that represent return on average assets and return on average equity, excluding the after-tax net gain on equity securities, both realized and unrealized.

HINGHAM INSTITUTION FOR SAVINGS
Consolidated Balance Sheets (In thousands, except share amounts)September 30,
2024 December 31,
2024 September 30,
2025(Unaudited) ASSETS Cash and due from banks$7,147 $4,183 $6,809Federal Reserve and other short-term investments 360,953 347,647 353,216Cash and cash equivalents 368,100 351,830 360,025 CRA investment 9,040 8,769 9,012Other marketable equity securities 88,604 104,575 125,098Securities, at fair value 97,644 113,344 134,110Securities held to maturity, at amortized cost 6,493 6,493 6,494Federal Home Loan Bank stock, at cost 62,812 61,022 63,117Loans, net of allowance for credit losses of $26,980 at September 30, 2024 and December 31, 2024 and $28,005 at September 30, 2025 3,863,105 3,873,662 3,913,774Bank-owned life insurance 13,899 13,980 14,236Premises and equipment, net 16,565 16,397 16,005Accrued interest receivable 8,395 8,774 8,856Other assets 12,743 12,269 14,608Total assets$4,449,756 $4,457,771 $4,531,225

LIABILITIES AND STOCKHOLDERS’ EQUITY

Interest-bearing deposits$2,103,123 $2,094,626 $2,063,303Non-interest-bearing deposits 358,009 397,469 432,653Total deposits 2,461,132 2,492,095 2,495,956Federal Home Loan Bank advances 1,530,500 1,497,000 1,526,250Mortgagors’ escrow accounts 14,589 16,699 16,817Accrued interest payable 11,025 8,244 14,652Deferred income tax liability, net 1,739 3,787 7,108Other liabilities 9,069 8,191 8,737Total liabilities 4,028,054 4,026,016 4,069,520 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; 2,180,250 shares issued and outstanding at September 30, 2024 and December 31, 2024, and 2,181,250 shares issued and outstanding at September 30, 2025 2,180 2,180 2,181Additional paid-in capital 15,519 15,571 15,821Undivided profits 404,003 414,004 443,715Accumulated other comprehensive loss — — (12)Total stockholders’ equity 421,702 431,755 461,705Total liabilities and stockholders’ equity$4,449,756 $4,457,771 $4,531,225

HINGHAM INSTITUTION FOR SAVINGS
Consolidated Statements of Income Three Months Ended Nine Months Ended September 30, September 30,(In thousands, except per share amounts) 2024 2025 2024 2025(Unaudited) Interest and dividend income: Loans $45,035 $47,672 $132,820 $139,645 Debt securities 93 97 225 289 Equity securities 1,532 1,401 4,533 4,217 Federal Reserve and other short-term investments 2,802 3,739 8,374 9,866 Total interest and dividend income 49,462 52,909 145,952 154,017Interest expense: Deposits 21,371 17,663 64,658 54,125 Federal Home Loan Bank 16,610 15,903 50,361 46,474 Total interest expense 37,981 33,566 115,019 100,599 Net interest income 11,481 19,343 30,933 53,418Provision for credit losses 40 275 328 1,025Net interest income, after provision for credit losses 11,441 19,068 30,605 52,393Other income: Customer service fees on deposits 136 132 411 406 Increase in cash surrender value of bank-owned life insurance 94 93 257 256 Gain on equity securities, net 3,442 11,270 11,876 15,067 Miscellaneous 52 64 156 186 Total other income 3,724 11,559 12,700 15,915Operating expenses: Salaries and employee benefits 4,237 4,501 12,768 13,360 Occupancy and equipment 408 437 1,233 1,293 Data processing 793 849 2,286 2,331 Deposit insurance 743 698 2,372 2,230 Foreclosure and related 15 39 61 63 Marketing 141 109 417 467 Other general and administrative 978 879 2,699 2,784 Total operating expenses 7,315 7,512 21,836 22,528Income before income taxes 7,850 23,115 21,469 45,780Income tax provision 2,004 5,820 4,653 11,947 Net income $5,846 $17,295 $16,816 $33,833 Cash dividends declared per common share $0.63 $0.63 $1.89 $1.89 Weighted average shares outstanding: Basic 2,180 2,181 2,177 2,181 Diluted 2,197 2,204 2,192 2,202 Earnings per share: Basic $2.68 $7.93 $7.73 $15.51 Diluted $2.66 $7.85 $7.67 $15.37

HINGHAM INSTITUTION FOR SAVINGS
Net Interest Income Analysis Three Months Ended September 30, 2024 June 30, 2025 September 30, 2025 Average
Balance
(9) InterestYield/
Rate
(10) Average
Balance
(9) InterestYield/
Rate
(10) Average
Balance
(9) InterestYield/
Rate
(10) (Dollars in thousands) (Unaudited) Assets Loans (1) (2)$3,915,967 $45,035 4.56% $3,952,477 $46,752 4.74%$3,946,966 $47,672 4.79%Securities (3) (4) 122,715 1,625 5.25 135,541 1,462 4.33 139,154 1,498 4.27 Short-term investments (5) 207,446 2,802 5.36 277,146 3,072 4.45 336,213 3,739 4.41 Total interest-earning assets 4,246,128 49,462 4.62 4,365,164 51,286 4.71 4,422,333 52,909 4.75 Other assets 69,148 78,230 82,490 Total assets$4,315,276 $4,443,394 $4,504,823 Liabilities and stockholders’ equity: ` Interest-bearing deposits (6)$2,071,780 21,371 4.09% $2,102,662 17,841 3.40%$2,085,424 17,663 3.36%Borrowed funds 1,449,491 16,610 4.55 1,448,078 15,406 4.27 1,506,359 15,903 4.19 Total interest-bearing liabilities 3,521,271 37,981 4.28 3,550,740 33,247 3.76 3,591,783 33,566 3.71 Non-interest-bearing deposits 355,768 429,537 437,977 Other liabilities 14,577 16,378 18,463 Total liabilities 3,891,616 3,996,655 4,048,223 Stockholders’ equity 423,660 446,739 456,600 Total liabilities and stockholders’ equity$4,315,276 $4,443,394 $4,504,823 Net interest income $11,481 $18,039 $19,343 Weighted average interest rate spread 0.34% 0.95% 1.04% Net interest margin (7) 1.07% 1.66% 1.74%Average interest-earning assets to average interest-bearing
liabilities (8) 120.59% 122.94% 123.12%

(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 based on the actual number of days in the period.

HINGHAM INSTITUTION FOR SAVINGS
Net Interest Income Analysis Nine Months Ended September 30, 2024 2025 Average
Balance
(9) Interest Yield/
Rate
(10) Average
Balance
(9) Interest Yield/
Rate
(10) (Dollars in thousands) (Unaudited) Loans (1) (2)$3,950,610 $132,820 4.48% $3,943,153 $139,645 4.72%Securities (3) (4) 119,477 4,758 5.30 135,154 4,506 4.44 Short-term investments (5) 206,029 8,374 5.41 297,571 9,866 4.42 Total interest-earning assets 4,276,116 145,952 4.55 4,375,878 154,017 4.69 Other assets 66,477 79,989 Total assets$4,342,593 $4,455,867 Interest-bearing deposits (6)$2,106,667 64,658 4.09% $2,109,589 54,125 3.42%Borrowed funds 1,452,606 50,361 4.62 1,454,455 46,474 4.26 Total interest-bearing liabilities 3,559,273 115,019 4.30 3,564,044 100,599 3.76 Non-interest-bearing deposits 349,545 427,219 Other liabilities 14,780 16,449 Total liabilities 3,923,598 4,007,712 Stockholders’ equity 418,995 448,155 Total liabilities and stockholders’ equity$4,342,593 $4,455,867 Net interest income $30,933 $53,418 Weighted average interest rate spread 0.24% 0.93% Net interest margin (7) 0.96% 1.63% Average interest-earning assets
to average interest-bearing
liabilities (8) 120.14% 122.78%

(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 based on the actual number of days in the period.

HINGHAM INSTITUTION FOR SAVINGS
Non-GAAP Reconciliation

The Bank believes the presentation of the following non-GAAP financial measures provide useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Bank. Management uses these measures in its analysis of the Bank’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks.

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 net gain on equity securities, both realized and unrealized.

Three Months Ended Nine Months Ended September 30, September 30,(In thousands, unaudited) 2024 2025 2024 2025 Non-GAAP reconciliation: Net income $5,846 $17,295 $16,816 $33,833 Gain on equity securities, net (3,442) (11,270) (11,876) (15,067)Income tax expense (1) 759 2,484 2,618 3,321 Core net income $3,163 $8,509 $7,558 $22,087

(1) The equity securities are held in a tax-advantaged subsidiary corporation. The income tax effect of the gain on equity securities, net, was calculated using the effective tax rate applicable to the subsidiary.

The table below presents the calculation of the efficiency ratio, a non-U.S. GAAP performance measure that management uses to assess operational efficiency, which represents total operating expenses, divided by the sum of net interest income and total other income, excluding net gain on equity securities, both realized and unrealized.

Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, (In thousands, unaudited) 2024 2025 2025 2024 2025 Non-U.S. GAAP efficiency ratio calculation: Operating expenses $7,315 $7,546 $7,512 $21,836 $22,528 Net interest income $11,481 $18,039 $19,343 $30,933 $53,418 Other income 3,724 2,807 11,559 12,700 15,915 Gain on equity securities, net (3,442) (2,516) (11,270) (11,876) (15,067) Total revenue $11,763 $18,330 $19,632 $31,757 $54,266 Efficiency ratio 62.19 % 41.17 % 38.26 % 68.76 % 41.51 %

CONTACT: Patrick R. Gaughen, President and Chief Operating Officer (781) 783-1761