BOSTON
Beacon Hill
South End
COHASSET
HINGHAM
Hingham Square
South Hingham
Linden Ponds
HULL
NANTUCKET
NORWELL/HANOVER
SCITUATE
WEYMOUTH
HINGHAM
INSTITUTION FOR
SAVINGS
ESTABLISHED 1834
www.hinghamsavings.com
Member FDIC/Member DIF | Equal Housing Lender
HINGHAM
INSTITUTION FOR
SAVINGS
ESTABLISHED 1834
2016 Annual Report
1
F i n a n c i a l H i g h l i g h t s
F r o m t h e P r e s i d e n t
13.3
13.4
22.3
19.3
23.4
1.30 1.34 2.10 1.46 1.56
43.65 48.49 57.08 64.83 75.50
16.5
1.24
1.16
1.10
1.03
1.06
12 13 14 15 16
Net Income*
($ in millions)
12 13 14 15 16
Dividends Declared**
($ per share)
12 13 14 15 16
Book Value
($ per share)
1,205.9 1,356.4 1,552.2 1,768.5 2,014.6
869.9 940.9 1,089.2 1,217.0 1,366.1
949.7 1,078.9 1,238.7 1,405.5 1,605.6
To Our Business Partners:
2016 was another outstanding year for Hingham Institution for Savings.
Since the present management group became associated with the Bank
twenty four years ago, it has been our objective to build a great bank,
characterized by superior long-term financial results, a fortress balance
sheet that provides unquestionable assurance to our depositors, and an
enduring culture of growth and success. In 2016, we continued to expand
on this vision - a vision that attracts the best associates, customers, and
shareholders to our company.
Last year, we produced earnings of $23.4 million dollars for our owners, a
21.1% increase from 2015. Our return on average equity of 15.59% and re-
turn on average assets of 1.22% place us among the most profitable banks
in the country. Net loans increased by 14.2% to $1.606 billion, deposits in-
creased by 12.2% to $1.366 billion, and total assets increased by 13.9% to
$2.015 billion. Book value per share rose 16.5% in 2016 to $75.50 per share. This excludes capital returned
to the shareholders through regular and special dividends - we declared $1.56 in dividends per share in
2016. The trailing five year compound annual growth rate in book value per share, an important mea-
sure of long-term value creation, rose to 14.3%. The efficiency ratio fell to a record low of 32.15%, a reflec-
tion of our disciplined cost control.
Although our financial results in 2016 were strong, the Bank’s long-term success is a reflection of the
fact that banking is a long-term business. Our relationships with customers, their businesses, and their
families span generations. Investments we made a decade ago continue to bear fruit today and invest-
ments we make today will dictate our returns and our competitive position many years from now. As a
publicly-traded, closely-held business, we are corporate in form but a partnership in spirit. Our partner-
ship will always lend and invest with long-term performance in mind.
This means that we must balance improving near-term efficiency with ensuring that we have the peo-
ple, products, and technology necessary to serve our customers and manage risk as we grow. We are
committed to investing in a high-performance team and we continue to attract some of the best bank-
ing and commercial real estate talent in our industry. We significantly expanded our benefits program in
2016 with extended fully paid parental leave for new mothers and fathers and began sponsoring key staff
for advanced degrees. Our culture of performance, innovation, and deliberate development, coupled
with our commitment to independence and our increasing geographic reach, make Hingham a great
place to build a career.
As one of the oldest continuously operating banks in the United States, we enjoy deep relationships with
many of our customers - we are quite literally invested in their success. Many are also long-term share-
holders of the Bank and we know them from our active participation in the civic life of the communities
in which we operate. You are our neighbors and friends, as well as our partners and customers. In our
183rd year, we have every intention of continuing to earn the trust you have placed in us.
Very truly yours,
12 13 14 15 16
12 13 14 15 16
12 13 14 15 16
Assets
($ in millions)
Deposits
($ in millions)
Loans, net
($ in millions)
*Net Income: 2014 includes a one-time net gain of $5.7 million related to a non-taxable life insurance death benefit
(light shading reflects this one-time gain).
**Dividends Declared: Dividends declared table includes the total regular dividends declared (dark shading) and the total dividends declared
2
including any special dividends (light shading).
Robert H. Gaughen Jr.
President and Chairman of the Board
Nino, Marcello and Giancarlo Micozzi
Owners, The Micozzi Companies
The Micozzi Companies are leaders in commercial property management,
with current holdings of more than 2,000 apartments and a half million
square feet of retail properties across New England. Nino Micozzi is one
of the original founders of Dellaria Salons, and established The Micozzi
Companies in 1979. Nino and his sons Marcello and Giancarlo have
worked with Hingham on several real estate investment projects. They
came to Hingham because of our strong reputation among real estate
investors for speed, streamlined processing, and flexible terms.
“Hingham is a bank that stands out and takes great care of
their clients. They are there whenever we need them.”
NINO MICOZZI
4
5
C h r i s P e r r y & T i m V i e t h
Owners, White Hart Development
Tim Vieth and Chris Perry are partners in White Hart Development, a
full-service design/build firm that specializes in luxury construction and
renovation projects on Nantucket. As the leading construction lender on
Nantucket, Hingham has financed several successful White Hart projects.
The Bank also supports the personal banking needs of Tim, Chris, and
their families, a hallmark of the deep, long-term relationships Hingham
enjoys with its customers and a marker of the trust they have placed in us.
“Hingham is a relationship-based bank, with new
technology and efficiency in mind.”
TIM VIETH
6
7
R u b y S t e e l e - M o r r i s
Commercial Real Estate Investor
“I take pride in my relationship with Hingham and the
Gaughens, and I see them as family. Hingham’s focus on
client service is extraordinary.”
RUBY STEELE-MORRIS
A seasoned commercial real estate investor, Ruby Steele-Morris purchased
her first house when she was 21. Ruby’s objective is to provide high
quality affordable housing in Boston and her daughter Brittany helps her
mother manage the family business. Hingham has provided a full range
of banking services and real estate financing for Ruby and her family.
8
9
M a r c e l S a f a r
Founder, Chevron Partners
“Hingham shares our commitment to excellence and
that is at the heart of our strong relationship.”
MARCEL SAFAR
Marcel Safar is the founder of Chevron Partners, a privately-held and
integrated real estate development firm. He was previously the General
Manager of Daniel Rene Boston, a family-owned real estate company.
Marcel and his family have a longstanding banking relationship with
Hingham. Marcel chose Hingham for the financing of the Sears Crescent
building, a historic landmark in the heart of Boston, because of Hingham’s
experienced lenders, certainty of execution, and a commitment to service.
10
11
S t e v e E l b a z & A n d r e w T e r r a t
Principals, Mitchell Gold + Bob Williams, Boston
Steve Elbaz and Andrew Terrat are principals at Mitchell Gold + Bob
Williams, an American home furnishings company respected for its
stylish, high-end furniture as well as its commitment to social justice.
They came to Hingham on the recommendation of Dennis Kanin and
David Goldman of New Boston Ventures, long-time business and personal
clients of the Bank. The Bank moved quickly to provide Steve and Andrew
financing on a complicated transaction, and they were impressed with
their banker’s guidance throughout the process. We now handle Steve’s
personal banking needs at our South End office.
“We knew we had come to the right place when we
came to Hingham. Our banker was fast and transparent
and ensured the entire process went very smoothly.”
STEVE ELBAZ
12
13
T o w n o f P l y m o u t h
Pamela L. Borgatti, Treasurer
“Hingham understands the unique banking needs of
cities and towns. They have gone above and beyond to
make sure we get what we need.”
PAMELA L. BORGATTI, Town Treasurer
Established in 1620 by the Pilgrims, Plymouth is one of America’s oldest
towns. It relies on Hingham, one of America’s oldest banks, to provide a
full suite of cash management and banking services. Like many cities and
towns across Massachusetts, Plymouth has entrusted significant sums
to our safekeeping, monies earmarked for schools, emergency services,
and payroll. Town Treasurer Pamela L. Borgatti and Assistant Treasurer
Patricia Meachen, long-time residents of Plymouth and dedicated civil
servants, appreciate the speed and customer focus of our Specialized
Deposit Group that serves our municipal and institutional clients.
14
15
S e l e c t e d F i n a n c i a l D a t a
B o a r d o f D i r e c t o r s
Balance Sheet Data:
Total assets
Cash & cash equivalents
Securities available for sale
Loans:
Residential loans
Commercial mortgage
Construction
Other
Allowance for loan losses
Deposits
Federal Home Loan Bank advances
Stockholders’ equity
At December 31,
2012
2013
2014
2015
2016
(In Thousands)
$
1,205,884
87,334
102,866
$
1,356,441
102,847
106,369
$
457,217
438,037
60,390
869
7,999
869,886
234,355
92,799
532,845
498,592
53,520
913
8,509
940,906
302,732
103,217
1,552,205
177,222
70,570
576,665
607,851
60,371
996
9,108
1,089,217
329,602
121,515
$
1,768,528
261,013
40,603
$ 2,014,599
322,932
27,168
635,522
681,601
95,433
644
9,905
1,217,027
402,464
138,015
685,674
796,063
131,778
678
11,030
1,366,109
475,318
161,024
At or For the Years Ended December 31,
2012
2013
2014
2015
2016
(Dollars in Thousands, Except Per Share Amounts)
$
$
$
$
$
$
48,831
10,937
37,894
725
1,580
16,348
22,401
9,111
13,290
6.25
6.25
$
$
$
$
49,342
10,502
38,840
380
1,604
17,453
22,611
9,240
13,371
6.28
6.28
1.15 %
15.05
7.62
3.25
3.38
41.41
1.30
43.65
2,125,750
1.07 %
13.52
7.89
3.07
3.19
43.15
1.34
48.49
2,128,750
$
$
$
$
$
$
$
$
56,193
9,936
46,257
625
7,863
20,089
33,406
11,142
22,264
10.46
10.44
$
$
$
$
61,859
10,910
50,949
625
1,483
19,031
32,776
13,430
19,346
9.09
9.02
1.52 %
19.30
7.87
3.13
3.23
37.12
2.10
57.08
2,128,750
1.18 %
14.81
7.97
3.06
3.17
36.32
1.46
64.83
2,128,750
$
$
$
$
$
$
$
$
71,769
13,385
58,384
1,135
1,735
19,215
39,769
16,346
23,423
10.99
10.89
1.22 %
15.59
7.85
2.99
3.10
32.15
1.56
75.50
2,132,750
Income Statement Data:
Total interest and dividend income
Total interest expense
Net interest income
Provision for loan losses
Other income
Operating expenses
Income before income taxes
Income tax provision
Net Income
Earnings per common share:
Basic
Diluted
Financial Ratios:
Return on average assets
Return on average equity
Average equity to average assets
Interest rate spread
Net interest margin
Efficiency ratio
Cash dividends declared per common share
Book value per common share
Shares outstanding, at year end
16
Standing (left to right):
Seated (left to right):
Edward L. Sparda
Scott L. Moser
Michael J. Desmond
Robert A. Lane, Esq.
Brian T. Kenner, Esq.
Kara Gaughen Smith
Robert H. Gaughen, Jr., Esq.
Jacqueline M. Youngworth
Robert K. Sheridan, Esq.
Patrick R. Gaughen
Julio R. Hernando, Esq.
Kevin W. Gaughen, Esq.
Stacey M. Page
Ronald D. Falcione
Geoffrey C. Wilkinson, Sr.
Howard M. Berger, Esq.
17
2 4 Ye a r s o f P e r f o r m a n c e – B o o k Va l u e P e r S h a r e
$75.50
$80
$70
$60
$50
$40
$30
$20
$10
$7.35
(dollars in thousands,
except per share data)
Total Assets
Total Net Loans
Book Value Per Share
Return on Equity
Earnings Per Share
(Basic)
1993*
1994*
1995*
1996*
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
$
$
$
147,889
76,936
7.35
1.34%
0.10
$
$
$
$
153,192
100,398
8.24
17.09%
1.33
$
$
$
$
175,409
119,472
9.17
11.11%
0.98
$
$
$
$
201,586
151,166
9.87
11.06%
1.05
$
$
$
$
222,584
172,839
10.93
13.00%
1.36
$
$
$
$
260,076
204,774
12.05
13.18%
1.53
$
$
$
$
291,183
229,687
12.83
13.07%
1.65
$
$
$
$
337,881
266,568
14.46
15.17%
2.07
$
$
$
$
386,181
282,386
16.38
15.95%
2.49
$
$
$
$
426,430
320,692
18.48
16.58%
2.91
$
$
$
$
483,954
358,778
19.68
13.53%
2.58
$
$
$
$
547,051
415,538
21.29
13.56%
2.80
$
$
$
$
628,251
488,126
23.01
13.20%
2.95
$
$
$
$
691,652
539,104
24.47
9.18%
2.19
$
$
$
$
744,602
593,915
25.85
8.40%
2.12
$
$
$
$
806,193
647,255
28.20
11.08%
2.96
$
$
$
$
925,560
718,242
30.74
12.78%
3.79
$
$
$
$
1,017,845
792,910
34.24
14.67%
4.81
$
$
$
$
1,127,276
849,776
38.70
15.34%
5.68
$
$
$
$
1,205,884
949,662
43.65
15.05%
6.25
$
$
$
$
1,356,441
1,078,879
48.49
13.52%
6.28
$
$
$
$
1,552,205
1,238,656
57.08
19.30%
10.46
$
$
$
$
1,768,528
1,405,533
64.83
14.81%
9.09
$
$
$
$
2,014,599
1,605,647
75.50
15.59%
10.99
$
* per share data for 1993, 1994, 1995 and 1996 adjusted for the 3 for 2 stock split
18
$80
$70
$60
$50
$40
$30
$20
$10
19
S t o c k h o l d e r I n f o r m a t i o n
Stock Data
Hingham Institution for Savings’ common shares are
listed and traded on The NASDAQ Stock Market under the
symbol HIFS.
As of December 31, 2016, there were approximately 260
stockholders of record, holding 232,825 outstanding
shares of common stock. These shares do not include the
number of persons who hold their shares in nominee or
street name through various brokerage firms.
The following table presents the quarterly high and low
bid prices for the Bank’s common stock reported by
NASDAQ.
High
Low
2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2015
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
$ 127.71
137.45
139.90
203.01
$ 103.75
116.84
126.15
135.03
$ 115.80
118.00
120.25
132.00
$ 82.24
98.00
104.25
112.39
The closing sale price of the Bank’s common stock at
December 31, 2016 was $196.78 per share.
Hingham Institution for Savings
55 Main Street
Hingham, MA 02043
(781) 749-2200
President and
Chief Executive Officer
Robert H. Gaughen, Jr.
Investor Inquiries
Patrick R. Gaughen
Executive Vice President
TransferAgent and Registrar
Computershare
P.O. Box 30170
College Station, TX 77842-3170
(800) 288-9541
Online Registered Shareholder Access
www.computershare.com/investor
Independent Registered Public Accounting Firm
Wolf & Company, P.C.
99 High Street
Boston, MA 02110
Special Counsel
WilmerHale
1875 Pennsylvania Ave. NW
Washington, DC 20006
Form 10-K and Proxy Statement
A copy of the Bank’s Annual Report on Form 10-K and
Proxy Statement for the fiscal year ended December
31, 2016, as filed with the Federal Deposit Insurance
Corporation, may be obtained without charge by
any stockholder of the Bank upon written request
addressed
to
the
Investor Relations Department.
Additionally, the Bank’s Annual Report on Form 10-K
and the Proxy Statement are available electronically at
www.hinghamsavings.com.
20
BOSTON
Beacon Hill
South End
COHASSET
HINGHAM
Hingham Square
South Hingham
Linden Ponds
HULL
NANTUCKET
NORWELL/HANOVER
SCITUATE
WEYMOUTH
HINGHAM
INSTITUTION FOR
SAVINGS
ESTABLISHED 1834
www.hinghamsavings.com
Member FDIC/Member DIF | Equal Housing Lender
HINGHAM
INSTITUTION FOR
SAVINGS
ESTABLISHED 1834
2016 Annual Report