F i n a n c i a l H i g h l i g h t s
Fr o m t h e C h a i r m a n a n d t h e P r e s i d e n t
22.3 19.3 23.4 25.8 30.4
2.10 1.46 1.56 1.66 1.92
57.08 64.83 75.50 87.29 99.67
16.5
1.16
1.10
1.42
1.32
1.24
14 15 16 17 18
14 15 16 17 18
14 15 16 17 18
Net Income*
($ in millions)
Dividends Declared**
($ per share)
Book Value
($ per share)
1,552 1,769 2,015 2,285 2,409
1,089 1,217 1,366 1,506 1,573
1,239 1,406 1,606 1,834 2,009
14 15 16 17 18
14 15 16 17 18
14 15 16 17 18
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 chart includes the total regular dividends declared (dark shading) and the total dividends declared
including any special dividends (light shading).
To Our Business Partners:
2018 was another outstanding year for Hingham Institution for Savings.
We earned a record $30.4 million dollars for our owners, an 18%
increase from 2017. Our return on average equity of 14.97%
and return on average assets of 1.32% place us among the most
profitable banks in the country. Net loans increased by 10% to
$2.009 billion, deposits increased by 4% to $1.573 billion, and total
assets increased by 5% to $2.409 billion. Book value per share rose
14% in 2018 from $87.29 to $99.67 per share. This excludes capital
returned to the shareholders through regular and special dividends -
we declared $1.92 in dividends per share in 2018. The trailing five year compound annual growth rate in book value per share, an
important measure of long-term value creation, rose to 15.5%. The efficiency ratio fell to a record low of 29.89%, a reflection of
our disciplined approach to expense control.
As we survey the markets in which we operate, we believe that quality real estate in structurally advantaged urban markets like
Boston and Washington D.C. will perform well through cycles. These cities have extraordinary concentrations of talent, innovation,
and industry - concentrations that are intensifying over time. They are served, however, by fewer small and mid-sized banks. Both
markets have seen meaningful consolidation in the last year, diminishing the choices available to strong commercial, institutional, and
nonprofit customers.
This will create opportunities for Hingham. We have the advantage of scale, with the capacity to handle lending relationships over
$40 million, combined with a commitment to independence and a decision-making process that guarantees speed and surety of
execution. We continue to look for strong commercial lenders and relationship managers in both markets to help us take advantage
of these opportunities. We are planning for a permanent home in Washington, where we will build out a local team, as well as an
expanded presence in Boston and Cambridge, where we believe there are significant opportunities for growth. We continue to make
investments in our digital capabilities - in payments, account opening, analytics, and security - that support our relationship-based
approach. Our model - personalized service, combined with digital excellence and low fees - is the future of our industry.
Since the present management group became associated with the Bank twenty six years ago, it has been our objective to build one of
America’s great banks, 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. We are well on our way.
Very truly yours,
Robert H. Gaughen, Jr.
Chairman of the Board and Chief Executive Officer
Patrick R. Gaughen
President and Chief Operating Officer
2 6 Ye a r s o f P e r f o r m a n c e
B o o k V a l u e P e r S h a r e
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10 $7.35
$99.67
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
(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
2017
2018
$ 147,889 $ 153,192
76,936 $ 100,398
$
8.24
$
17.09%
1.33
0.10 $
7.35 $
1.34%
$
$ 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
$
$ 2,284,599
$ 1,833,987
87.29
$
14.73%
12.08
$
$ 2,408,587
$ 2,009,288
99.67
$
14.97%
14.25
$
* per share data for 1993, 1994, 1995 and 1996 adjusted for the 3 for 2 stock split
B o s t o n C e n t e r f o r t h e A r t s
listed from left to right
Molly McDonald, Vice Chair
John G.F. Ruggieri-Lam, Chairman of the Board
Kristi Keefe, Chief Operating Officer
Gregory Ruffer, President & CEO
Situated in Boston’s South End, the Boston Center for the Arts provides a place for
visual and performing artists to express and celebrate creativity. The campus
occupies a historic city block opposite to Hingham’s South End office and
welcomes over 200,000 visitors a year to theatre performances, art exhibitions
and other community events.
Finding a banking partner that supports the vitality and growth of local
community organizations was critical to BCA President Gregory Ruffer.
Hingham’s deep understanding of nonprofit financial management and
approach to customized service made the relationship a natural fit.
“Hingham shares our passion for community
growth - they are an excellent banking partner.”
GREGORY RUFFER
President & CEO
W o l l a s t o n G o l f C l u b
David Gooding, President
Milton, Massachusetts
Wollaston Golf Club, established in 1895, is known for an outstanding course and
gracious hospitality. When it came to banking, the Club sought a partner that
could deliver client-first service. Wollaston initially came to Hingham to finance
a major construction project, including a new golf building and renovation of
their existing clubhouse. Based on their positive experience, the Club decided
to move their entire banking relationship. With a dedicated relationship
manager, Hingham provides the Club with timely, personalized service.
“Hingham’s support of the local community aligns with
“Hingham made what we expected to be a challenging
the USES’ mission. We value our partnership with the
process appear seamless. We can’t wait to share the
Bank.”
Club’s transformation with our members.”
MACHARIA Z. WEIR LYTLE
DAVID GOODING
President
R o c k C r e e k P r o p e r t y G r o u p
listed from left to right
Gary Schlager, Co-Founder
Andrew Glick, Co-Founder
Washington, DC
“Meaningful relationships are a critical component to
our business - we are fortunate that Hingham shares
this approach.”
ANDREW GLICK
Co-Founder
In 2000, Andy Glick and Gary Schlager co-founded Rock Creek Property Group, a
real estate investment and development company. Rock Creek takes a strategic
approach to investment, focusing on high quality real estate and establishing
purposeful use for each property they pursue.
Hingham has financed two Rock Creek properties in Washington. The 1920s-era historic
Takoma Theater renovation combines modern functional uses with preservation of
historic elements, including the iconic signage. Children’s National Medical Center
plans to house its pediatric facility for behavioural health and medicine, hearing,
speech and autism in the Theater. Rock Creek also acquired and renovated a
building in the historic Shaw neighborhood, re-purposing the building as office space
for Howard University. Rock Creek appreciated Hingham’s streamlined process,
competitive rates and flexibility.
G h i t a A k k a r
President, Highline Development
Boston, Massachusetts
“The lenders at Hingham are responsive no matter
what time of day. Their service has been spectacular.”
GHITA AKKAR
President
Ghita Akkar is the President of Highline Development, a real estate development
firm in Boston. Ghita’s work focuses on modernizing historic Boston brownstones
while preserving their character and charm.
Ghita came to Hingham to finance a construction project in Boston’s South End in
the sought-after “8 Streets” neighborhood, only steps from the Bank’s South End
office. Hingham’s expeditious service, flexible approach, and area knowledge
were important to Ghita - we look forward to supporting her firm as it grows.
M a r i a M i t c h e l l A s s o c i a t i o n
David Gagnon, Executive Director
Nantucket, Massachusetts
The Maria Mitchell Association was founded over 115 years ago to celebrate the life and
accomplishments of Maria Mitchell - a 19th century astronomer, naturalist and educator
born on Nantucket. The Association operates two observatories, a research center, a
natural science museum, an aquarium, the historic birthplace of Maria Mitchell, and
provides year-round science and history programming.
When an opportunity arose to acquire real estate adjacent to its downtown property,
the Association came to Hingham for the financing. In Hingham, the Association found
a stable, local partner committed to the advancement of science and the preservation
of Nantucket as a natural resource and living laboratory for future generations.
“Hingham has a genuine appreciation for the
mission of the Maria Mitchell Association. We
value the community focus of the Bank.”
DAVID GAGNON
Executive Director
T h e D a n e s h G r o u p
listed from left to right
Joshua Danesh, Principal
David Danesh, Principal
Mordecai Danesh, Founder and President
Daniel Danesh, Principal
Brookline, Massachusetts
“Since we started doing business with Hingham over
20 years ago, their commitment to excellence in
client service has remained consistent.”
MORDECAI DANESH
Founder and President
The Danesh Group is a family-owned real estate development and management
firm with projects across greater Boston. Since 1996, Mordecai Danesh has been
working with Hingham on an array of commercial, residential and mixed-use
projects. Most recently, Hingham is financing the Danesh Group’s mixed-use
project on Harvard Street near Coolidge Corner in Brookline.
In the last several years, Mordecai’s three sons - David, Daniel, and Joshua, have
become actively involved in the business. As a multigenerational family-run
Bank, Hingham understands family businesses and provides the flexible, tailored
banking service these firms need to thrive.
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
Loans:
Residential loans
Commercial mortgage
Construction
Other
Allowance for loan losses
Deposits
Federal Home Loan Bank advances
Stockholders’ equity
Income Statement Data:
Total interest and dividend income
Total interest expense
Net interest income
Provision for loan losses
Other income (loss)
Operating expenses
Income before income taxes
Income tax provision
Net income
Core net income **
Earnings per common share:
Basic
Diluted
Financial Ratios:
2014
2015
At December 31, 2018
2016
(In Thousands)
$
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
2017
2018
$
2,284,599
355,229
34,304
721,809
998,567
122,715
701
12,537
1,505,862
579,164
186,158
2,408,587
295,975
38,460
741,841
1,150,535
127,274
542
13,808
1,573,154
606,600
212,576
At or For the Years Ended December 31, 2018
2014 *
2015
2016
2017
2018
(Dollars in Thousands, Except Per Share Amounts)
$
$
$
$
$
56,193
9,936
46,257
625
7,863
20,089
33,406
11,142
22,264
22,267
$
$
$
61,859
10,910
50,949
625
1,483
19,031
32,776
13,430
19,346
19,327
10.46
$
10.44
$
9.09
9.02
$
$
$
$
$
71,769
13,385
58,384
1,135
1,735
19,215
39,769
16,346
23,423
23,202
$
$
$
81,059
17,261
63,798
1,505
1,410
19,576
44,127
18,370
25,757
25,708
$
$
$
94,169
28,384
65,785
1,270
(1,735)
20,051
42,729
12,330
30,399
32,776
10.99
$
10.89
$
12.08
11.81
$
$
14.25
13.90
Return on average assets
Return on average equity
Core return on average assets **
Core 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
1.52 %
19.30
1.52
19.30
7.87
3.13
3.23
37.12
2.10
$
57.08
$
2,128,750
$
$
1.18 %
14.81
1.18
14.80
7.97
3.06
3.17
36.32
1.46
64.83
2,128,750
1.22 %
15.59
1.21
15.44
7.85
2.99
3.10
32.15
1.56
$
75.50
$
2,132,750
1.21 %
14.73
1.21
14.70
8.22
2.91
3.05
30.06
1.66
87.29
2,132,750
$
$
1.32 %
14.97
1.42
16.14
8.80
2.66
2.90
29.89
1.92
99.67
2,132,750
$
$
* Includes a net gain of approximately $5.7 million related to non-taxable life insurance death benefit received in 2014.
*
** Non-GAAP measure which excludes after-tax gain (loss) on equity securities.
Standing (left to right):
Edward L. Sparda
Scott L. Moser
Michael J. Desmond
Robert A. Lane, Esq.
Seated (left to right):
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.
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, 2018, there were approximately 225
stockholders of record, holding 129,727 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
prices for the Bank’s common stock reported by NASDAQ.
2018
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2017
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
High
Low
$ 233.13
229.40
227.50
229.99
$ 195.05
201.89
213.84
194.03
$ 200.90
$ 148.02
185.96
196.71
242.00
166.45
174.47
191.45
The closing sale price of the Bank’s common stock at
December 31, 2018 was $197.74 per share.
Hingham Institution for Savings
55 Main Street
Hingham, MA 02043
(781) 749-2200
Chairman and
Chief Executive Officer
Robert H. Gaughen, Jr.
Investor Inquiries
Patrick R. Gaughen
President and Chief Operating Officer
Transfer Agent and Registrar
Computershare
P.O. Box 505000
Louisville, KY 40233
(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
Goodwin Procter
100 Northern Avenue
Boston, MA 02210
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, 2018, 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.