Hingham Institution for Savings
Annual Report 2021

Plain-text annual report

2021 ANNUAL REPORT F i n a n c i a l H i g h l i g h t s 25.8 30.4 38.9 50.8 67.5 1.66 1.92 2.18 2.47 2.83 87.29 99.67 115.75 137.02 165.52 2.08 1.77 1.58 1.42 1.32 17 18 19 20 21 17 18 19 20 21 17 18 19 20 21 Net Income ($ in millions) Dividends Declared* ($ per share) Book Value ($ per share) 2,285 2,409 2,590 2,857 3,431 1,506 1,573 1,821 2,139 2,393 1,834 2,009 2,227 2,495 2,999 17 18 19 20 21 17 18 19 20 21 17 18 19 20 21 Assets ($ in millions) Deposits ($ in millions) Loans, net ($ in millions) *Dividends Declared: Dividends declared chart includes the total regular dividends declared (dark shading) and the total dividends declared including any special dividends (light shading).  F r 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 To Our Business Partners: 2021 was another outstanding year for Hingham Institution for Savings. We earned a record $67.5 million for our owners, a 33% increase from 2020. Our return on average equity of 20.62% and our return on average assets of 2.25% again placed us among the most profitable banks in the country. Net loans increased by 20% to $2.999 billion, deposits increased by 12% to $2.393 billion, and total assets increased by 20% to $3.431 billion. Non-interest bearing deposits grew by 24%, primarily in our commercial customer base. Book value per share rose 20.8% in 2021 from $137.02 to $165.52 per share. This excludes capital returned to the owners through regular and special dividends - we declared $2.83 in dividends per share in 2021. The trailing five year compound annual growth rate in book value per share, an important measure of long-term value creation, was 17.0%. The efficiency ratio in 2021 was 21.31%, a reflection of our disciplined approach to expense control. This was an extraordinary year for the Bank and it has set the bar for future performance higher. Although these financial results were strong, we can never lose sight of the fact that results in any given year do not fully describe the real accomplishments and progress at Hingham. Our long-term objective is to generate superior returns on equity capital through a disciplined strategy combining a commercial real estate lending business with a relationship-focused deposit business serving families, nonprofits, real estate investors, and institutions. We build these businesses slowly - one employee at a time, one relationship at a time, one loan at a time. There are no shortcuts. Against the backdrop of the pandemic, our commercial real estate business continued to grow steadily last year. Three senior commercial real estate lenders joined us in 2021 and they have become an integral part of our team. We continue to believe the most attractive markets for our business are dense, coastal cities with favorable demographics and concentrations of multifamily real estate. Book Value Per Share $7.35 We completed our fifth full year of operations in Washington, D.C., with a high-quality portfolio approaching $650 million in loans outstanding. We are almost finished building our Washington office in Georgetown by the Canal. This will be a home for our growing local team of four commercial lenders and relationship managers, as well as distributed staff. In 2021, we began laying the basis for what we believe could be a meaningful business in the San Francisco Bay Area. The market has attractive structural economic characteristics, including the presence of a vibrant technology sector, links to Asia, land supply restrictions, and a cluster of research universities that produce the intangible assets that are critical drivers in our economy. Importantly for Hingham, there is also a substantial concentration of small multifamily housing stock. In our first year, we completed diligence on our operational partners, started outreach to prospective customers, and began lending. For talented commercial real estate lenders in Boston, Washington, D.C., and San Francisco, Hingham is an ideal home. We offer a stable platform for long-term growth, a commitment to independence, and a disciplined approach to lending and investing through cycles. If you are customer focused, with strong valuation skills and a track record of origination, please contact Patrick directly. We would like the opportunity to get to know you and explain our model. If this sounds like someone you know, we would appreciate you referring them to us. Our Specialized Deposit Group continued building on its success in 2021. Our deposit strategy - digital excellence, virtually no fees, and personalized service provided by dedicated relationship managers - is compelling. We are committed to scaling this group to handle larger and more complex customers, with the people, technology, and infrastructure to manage significant relationships across multiple deposit-focused verticals and geographies. If you are a talented relationship manager in Boston, Washington, New York or San Francisco that works with these kinds of deposit customers, please call Holly Cirignano, the Head of our Specialized Deposit Group. She wants to talk with you. Assets Net Loans 29 Years of Perf ormance Assets Assets Net Loans Net Loans Book Value Per Share Book Value Per Share Book Value Per Share Earnings Per Share (Basic) Earnings Per Share (Basic) Earnings Per Share (Basic) Return on Equity Return on Equity Return on Equity Efficiency Ratio Efficiency Ratio Efficiency Ratio 1993* 1994* 1993* 1993* 1995* 1994* 1994* 1996* 1995* 1995* 1997 1996* 1996* 1998 1997 1997 1999 1998 1998 2000 1999 1999 2001 2000 2000 2002 2001 2001 2003 2002 2002 2004 2003 2003 2005 2004 2004 2006 2005 2005 2007 2006 2006 2008 2007 2007 2009 2008 2008 2010 2009 2009 2011 2010 2010 2012 2011 2011 2013 2012 2012 2014 2013 2013 2015 2014 2014 2016 2015 2015 2017 2016 2016 2018 2017 2017 2019 2018 2018 2020 2019 2019 2021 2020 2020 2021 2021 $ 147,889 $ 153,192 $ 147,889 $ 147,889 $ 175,409 $ 153,192 $ 153,192 $ 201,586 $ 175,409 $ 175,409 $ 222,584 $ 201,586 $ 201,586 $ 260,076 $ 222,584 $ 222,584 $ 291,183 $ 260,076 $ 260,076 $ 337,881 $ 291,183 $ 291,183 $ 386,181 $ 337,881 $ 337,881 $ 426,430 $ 386,181 $ 386,181 $ 483,954 $ 426,430 $ 426,430 $ 547,051 $ 483,954 $ 483,954 $ 628,251 $ 547,051 $ 547,051 $ 691,652 $ 628,251 $ 628,251 $ 744,602 $ 691,652 $ 691,652 $ 806,193 $ 744,602 $ 744,602 $ 925,560 $ 806,193 $ 806,193 $ 1,017,845 $ 925,560 $ 925,560 $ 1,127,276 $ 1,017,845 $ 1,017,845 $ 1,205,884 $ 1,127,276 $ 1,127,276 $ 1,356,441 $ 1,205,884 $ 1,205,884 $ 1,552,205 $ 1,356,441 $ 1,356,441 $ 1,768,528 $ 1,552,205 $ 1,552,205 $ 2,014,599 $ 1,768,528 $ 1,768,528 $ 2,284,599 $ 2,014,599 $ 2,014,599 $ 2,408,587 $ 2,284,599 $ 2,284,599 $ 2,590,346 $ 2,408,587 $ 2,408,587 $ 2,857,093 $ 2,590,346 $ 2,590,346 $ 3,431,165 $ 2,857,093 $ 2,857,093 $ 3,431,165 $ 3,431,165 $ $ $ 76,936 $ 100,398 $ 76,936 $ 76,936 119,472 $ $ 100,398 $ 100,398 $ 151,166 $ 119,472 $ 119,472 $ 172,839 $ 151,166 $ 151,166 $ 204,774 $ 172,839 $ 172,839 $ 229,687 $ 204,774 $ 204,774 $ 266,568 $ 229,687 $ 229,687 $ 282,386 $ 266,568 $ 266,568 $ 320,692 $ 282,386 $ 282,386 $ 358,778 $ 320,692 $ 320,692 $ 415,538 $ 358,778 $ 358,778 $ 488,126 $ 415,538 $ 415,538 $ 539,104 $ 488,126 $ 488,126 $ 593,915 $ 539,104 $ 539,104 $ 647,255 $ 593,915 $ 593,915 $ 718,242 $ 647,255 $ 647,255 $ 792,910 $ 718,242 $ 718,242 $ 849,776 $ 792,910 $ 792,910 $ 949,662 $ 849,776 $ 849,776 $ 1,078,879 $ 949,662 $ 949,662 $ 1,238,656 $ 1,078,879 $ 1,078,879 $ 1,405,533 $ 1,238,656 $ 1,238,656 $ 1,605,647 $ 1,405,533 $ 1,405,533 $ 1,833,987 $ 1,605,647 $ 1,605,647 $ 2,009,288 $ 1,833,987 $ 1,833,987 $ 2,227,062 $ 2,009,288 $ 2,009,288 $ 2,495,331 $ 2,227,062 $ 2,227,062 $ 2,999,096 $ 2,495,331 $ 2,495,331 $ 2,999,096 $ 2,999,096 7.35 0.10 1.34% 108.32% $ $ $ $ $ $ 8.24 7.35 7.35 1.33 0.10 0.10 $ $ $ $ $ $ 9.17 8.24 8.24 0.98 1.33 1.33 $ $ $ $ $ $ 9.87 9.17 9.17 1.05 0.98 0.98 $ $ $ $ $ 10.93 9.87 9.87 $ 1.36 1.05 1.05 $ $ $ $ 12.05 $ 10.93 10.93 $ 1.53 1.36 1.36 $ $ $ $ 12.83 $ 12.05 12.05 $ 1.65 1.53 1.53 $ $ $ $ 14.46 $ 12.83 12.83 $ 2.07 1.65 1.65 $ $ $ $ 16.38 $ 14.46 14.46 $ 2.49 2.07 2.07 $ $ $ $ 18.48 $ 16.38 16.38 $ 2.91 2.49 2.49 $ $ $ $ 19.68 $ 18.48 18.48 $ 2.58 2.91 2.91 $ $ $ $ 21.29 $ 19.68 19.68 $ 2.80 2.58 2.58 $ $ $ $ 23.01 $ 21.29 21.29 $ 2.95 2.80 2.80 $ $ $ $ 24.47 $ 23.01 23.01 $ 2.19 2.95 2.95 $ $ $ $ 25.85 $ 24.47 24.47 $ 2.12 2.19 2.19 $ $ $ $ $ 28.20 25.85 25.85 $ 2.96 2.12 2.12 $ $ $ $ $ 30.74 28.20 28.20 $ 3.79 2.96 2.96 $ $ $ $ $ 34.24 30.74 30.74 $ 4.81 3.79 3.79 $ $ $ $ $ 38.70 34.24 34.24 $ 5.68 4.81 4.81 $ $ $ $ $ 43.65 38.70 38.70 $ 6.25 5.68 5.68 $ $ $ $ $ 48.49 43.65 43.65 $ 6.28 6.25 6.25 $ $ $ $ $ 57.08 48.49 48.49 $ 10.46 6.28 6.28 $ $ $ $ $ 64.83 57.08 57.08 $ 9.09 10.46 10.46 $ $ $ $ $ 75.50 64.83 64.83 $ 10.99 9.09 9.09 $ $ $ $ $ 87.29 75.50 75.50 $ 12.08 10.99 10.99 $ $ $ $ $ 99.67 87.29 87.29 $ 14.25 12.08 12.08 $ $ $ $ $ 115.75 99.67 99.67 $ 18.24 14.25 14.25 $ $ $ $ $ 137.02 115.75 115.75 $ 23.76 18.24 18.24 $ $ $ $ $ 165.52 137.02 137.02 $ 31.50 23.76 23.76 $ $ 17.09% 1.34% 1.34% 61.46% 108.32% 108.32% 11.11% 17.09% 17.09% 54.25% 61.46% 61.46% 11.06% 11.11% 11.11% 53.36% 54.25% 54.25% 13.00% 11.06% 11.06% 50.10% 53.36% 53.36% 13.18% 13.00% 13.00% 48.72% 50.10% 50.10% 13.07% 13.18% 13.18% 50.25% 48.72% 48.72% 15.17% 13.07% 13.07% 47.78% 50.25% 50.25% 15.95% 15.17% 15.17% 45.31% 47.78% 47.78% 16.58% 15.95% 15.95% 45.42% 45.31% 45.31% 13.53% 16.58% 16.58% 45.55% 45.42% 45.42% 13.56% 13.53% 13.53% 49.48% 45.55% 45.55% 13.20% 13.56% 13.56% 48.50% 49.48% 49.48% 9.18% 13.20% 13.20% 57.58% 48.50% 48.50% 8.40% 9.18% 9.18% 59.69% 57.58% 57.58% 11.08% 8.40% 8.40% 52.72% 59.69% 59.69% 12.78% 11.08% 11.08% 49.20% 52.72% 52.72% 14.67% 12.78% 12.78% 44.91% 49.20% 49.20% 15.34% 14.67% 14.67% 42.88% 44.91% 44.91% 15.05% 15.34% 15.34% 41.54% 42.88% 42.88% 13.52% 15.05% 15.05% 43.26% 41.54% 41.54% 19.30% 13.52% 13.52% 37.19% 43.26% 43.26% 14.81% 19.30% 19.30% 36.32% 37.19% 37.19% 15.59% 14.81% 14.81% 32.15% 36.32% 36.32% 14.73% 15.59% 15.59% 30.06% 32.15% 32.15% 14.97% 14.73% 14.73% 29.89% 30.06% 30.06% 16.82% 14.97% 14.97% 30.26% 29.89% 29.89% 18.96% 16.82% 16.82% 25.48% 30.26% 30.26% 20.62% 18.96% 18.96% 21.31% 25.48% 25.48% $ 165.52 165.52 $ 31.50 31.50 20.62% 20.62% 21.31% 21.31% D o l l a r s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a . * P e r s h a r e d a t a f o r 1 9 9 3 , 1 9 9 4 , 1 9 9 5 a n d 1 9 9 6 a d j u s t e d f o r t h e 3 f o r 2 s t o c k s p l i t . 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Dan Bagley joined our team as the Chief Information Officer in October and we are embarking on a project to significantly enhance our core commercial technology capabilities for clients. We completed the first integration of a third party solution into our core via a standardized set of application programming interfaces (API). This infrastructure was required to work with a wider range of third party partners and potential customers. We are also firmly committed to a geographically distributed business, with remote and hybrid teams across the country. We want the best people on our team; they should have the opportunity to live where they do their best work. Eliminating waste remains a core strategic objective of the Bank. Our continuous improvement process increasingly recognizes the “money value of time.” With a small team, time is one of our few binding constraints. We must find ways to increase the velocity of our operations, maintain our narrow focus, and leverage that time. There is a natural tension between our cultural frugality and speed. We increasingly resolve this tension in favor of speed, with the understanding that operational leverage - not only pure expense control - is what will drive efficiency over time. To this end, we have made substantial progress outsourcing non-differentiated work this year to specialty service providers. In our investment operations, we grew our partial ownership in a range of outstanding businesses. Management teams, working on our behalf, continued to improve these businesses in ways large and small. Our investments are focused on finance - banks, insurers, payment companies, financial infrastructure providers, and ratings agencies. We also have material investments in enterprise software and technology companies that facilitate digital commerce. Our investments - public and private, debt and equity - inform and are informed by our core business operations. When we invest in smaller companies, we look for opportunities to provide both capital and operational expertise. We continue to benefit from studying and engaging with management teams at high performance companies. Book Value Per Share $165.52 Even as we focus on our performance, we recognize that our profitability is ultimately dependent on the health and vitality of the cities in which we operate. We made nearly $100 million in affordable housing and community development loans in 2021, and we made a large long-term investment in the San Francisco Housing Accelerator Fund (SFHAF). Rebecca Foster and her team at SFHAF combine deep real estate market knowledge with smart, innovative approaches that use public, private, and philanthropic capital to expand the supply of affordable housing in San Francisco. If you share our commitment to that mission, please reach out to them to see how you can support it. Since our family became associated with the Bank twenty-nine 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 Assets Assets Net Loans Net Loans Book Value Per Share Book Value Per Share Earnings Per Share (Basic) Earnings Per Share (Basic) Return on Equity Return on Equity Efficiency Ratio Efficiency Ratio 1993* 1993* 1994* 1994* 1995* 1995* 1996* 1996* 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 $ 147,889 $ 147,889 $ 153,192 $ 153,192 $ 175,409 $ 175,409 $ 201,586 $ 201,586 $ 222,584 $ 222,584 $ 260,076 $ 260,076 $ 291,183 $ 291,183 $ 337,881 $ 337,881 $ 386,181 $ 386,181 $ 426,430 $ 426,430 $ 483,954 $ 483,954 $ 547,051 $ 547,051 $ 628,251 $ 628,251 $ 691,652 $ 691,652 $ 744,602 $ 744,602 $ 806,193 $ 806,193 $ 925,560 $ 925,560 $ 1,017,845 $ 1,017,845 $ 1,127,276 $ 1,127,276 $ 1,205,884 $ 1,205,884 $ 1,356,441 $ 1,356,441 $ 1,552,205 $ 1,552,205 $ 1,768,528 $ 1,768,528 $ 2,014,599 $ 2,014,599 $ 2,284,599 $ 2,284,599 $ 2,408,587 $ 2,408,587 $ 2,590,346 $ 2,590,346 $ 2,857,093 $ 2,857,093 $ 3,431,165 $ 3,431,165 76,936 $ 76,936 $ 100,398 $ 100,398 $ 119,472 $ 119,472 $ 151,166 $ 151,166 $ 172,839 $ 172,839 $ 204,774 $ 204,774 $ 229,687 $ 229,687 $ 266,568 $ 266,568 $ 282,386 $ 282,386 $ 320,692 $ 320,692 $ 358,778 $ 358,778 $ 415,538 $ 415,538 $ 488,126 $ 488,126 $ 539,104 $ 539,104 $ 593,915 $ 593,915 $ 647,255 $ 647,255 $ 718,242 $ 718,242 $ 792,910 $ 792,910 $ 849,776 $ 849,776 $ 949,662 $ 949,662 $ 1,078,879 $ 1,078,879 $ 1,238,656 $ 1,238,656 $ 1,405,533 $ 1,405,533 $ 1,605,647 $ 1,605,647 $ 1,833,987 $ 1,833,987 $ 2,009,288 $ 2,009,288 $ 2,227,062 $ 2,227,062 $ 2,495,331 $ 2,495,331 $ 2,999,096 $ 2,999,096 1.34% 1.34% 17.09% 17.09% 11.11% 11.11% 11.06% 11.06% 13.00% 13.00% 13.18% 13.18% 13.07% 13.07% 15.17% 15.17% 15.95% 15.95% 16.58% 16.58% 13.53% 13.53% 13.56% 13.56% 13.20% 13.20% 9.18% 9.18% 8.40% 8.40% 11.08% 11.08% 12.78% 12.78% 14.67% 14.67% 15.34% 15.34% 15.05% 15.05% 13.52% 13.52% 19.30% 19.30% 14.81% 14.81% 15.59% 15.59% 14.73% 14.73% 14.97% 14.97% 16.82% 16.82% 18.96% 18.96% 20.62% 20.62% 108.32% 108.32% 61.46% 61.46% 54.25% 54.25% 53.36% 53.36% 50.10% 50.10% 48.72% 48.72% 50.25% 50.25% 47.78% 47.78% 45.31% 45.31% 45.42% 45.42% 45.55% 45.55% 49.48% 49.48% 48.50% 48.50% 57.58% 57.58% 59.69% 59.69% 52.72% 52.72% 49.20% 49.20% 44.91% 44.91% 42.88% 42.88% 41.54% 41.54% 43.26% 43.26% 37.19% 37.19% 36.32% 36.32% 32.15% 32.15% 30.06% 30.06% 29.89% 29.89% 30.26% 30.26% 25.48% 25.48% 21.31% 21.31% 10.93 $ 10.93 $ 12.05 $ 12.05 $ 12.83 $ 12.83 $ 14.46 $ 14.46 $ 16.38 $ 16.38 $ 18.48 $ 18.48 $ 19.68 $ 19.68 $ 21.29 $ 21.29 $ 23.01 $ 23.01 $ $ 24.47 24.47 $ $ 25.85 25.85 $ $ 28.20 28.20 $ $ 30.74 30.74 $ $ 34.24 34.24 $ $ 38.70 38.70 $ $ 43.65 43.65 $ $ 48.49 48.49 $ $ 57.08 57.08 $ $ 64.83 64.83 $ $ 75.50 75.50 $ $ 87.29 87.29 $ $ 99.67 99.67 $ $ 115.75 115.75 $ $ 137.02 137.02 $ $ 165.52 165.52 $ 1.36 1.36 $ $ 1.53 1.53 $ $ 1.65 1.65 $ $ 2.07 2.07 $ $ 2.49 2.49 $ $ 2.91 2.91 $ $ 2.58 2.58 $ $ 2.80 2.80 $ $ 2.95 2.95 $ $ 2.19 2.19 $ $ 2.12 2.12 $ $ 2.96 2.96 $ $ 3.79 3.79 $ $ 4.81 4.81 $ $ 5.68 5.68 $ $ 6.25 6.25 $ $ 6.28 6.28 $ $ 10.46 10.46 $ $ 9.09 9.09 $ $ 10.99 10.99 $ $ 12.08 12.08 $ $ 14.25 14.25 $ $ 18.24 18.24 $ $ 23.76 23.76 $ $ 31.50 31.50 $ $ $ $ 7.35 $ 0.10 7.35 $ 0.10 $ $ 8.24 $ 1.33 8.24 $ 1.33 $ $ 9.17 $ 0.98 9.17 $ 0.98 $ $ 9.87 $ 1.05 9.87 $ 1.05 $ () () () () () () () () () () () () () () () () () ()()()()()()()()()()()()() () () () () () () () () () () () () () () () () () () () ()()()()()()()()()() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () ()()()()()()()()()()()()() () () () () () () () () () () () () () () () () () () () ()()()()()()()()()() () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () () Autism Speaks New York, NY Pictured: Joe Vanyo, Chief Operating Officer and Lisa Goring, Strategic Initiatives and Innovation Officer Since 2005, Autism Speaks has served people with autism and their families, across the spectrum and throughout their lives. As part of its core program, Autism Speaks connects families to resources and critical support, funds research to further personalized care, and advocates for policies and funding to protect the rights, services, and support of people with autism. Autism Speaks began working with Hingham in 2020 to become eligible for the Paycheck Protection Program during the early days of the COVID-19 pandemic. With Hingham’s expert guidance through the challenging process, Autism Speaks received the critical financial assistance they needed to ensure their continued support of the autism community. “With Hingham’s partnership, we were able to support the autism community during a critical time.” Joe Vanyo Chief Operating Officer Anno.Ai Minnetonka, MN | Reston, VA | San Antonio, TX | Chicago, IL “Real, authentic relationships are the foundation of a successful business. The partnership we’ve built with our team at Hingham has been invaluable to us.” Steven Witt Chief Executive Officer In 2019, Steven Witt co-founded Anno.Ai, a software company that uses artificial intelligence to enhance the precision and effectiveness of machine learning models at scale. Anno.Ai partners with government and commercial customers, enabling them to overcome operational challenges and maintain tactical advantages to accomplish their mission. Steven and his team needed a bank that understood their financial needs, would be available at a moment’s notice to solve problems, and with whom they could build a direct personal relationship. With Hingham as their banking partner, they can focus on optimizing their cutting edge artificial intelligence technology. Pediatric Brain Tumor Foundation Atlanta, GA | Fairview, NC Pictured: Geoff Still - Chief Financial Officer (right), with his sons Eze (left) and David (center). Eze is a brain cancer survivor. The Pediatric Brain Tumor Foundation (PBTF) has been a leader in the brain tumor and childhood cancer communities since its founding in 1991. Its tireless fundraising program provides financial relief to families, offers patient family education and emotional support, and funds research for a cure. Like other nonprofits, PBTF had difficulty obtaining a Paycheck Protection Program loan during the COVID-19 pandemic and sought out Hingham through personal relationships. PBTF has appreciated the personal attention they receive from their dedicated team of relationship managers at Hingham. Hingham’s support has allowed them to refocus on their mission fundraising program and providing support to families in need. “Hingham’s support of the local community aligns with “Hingham made our organization a priority during a time of the USES’ mission. We value our partnership with the uncertainty. It’s refreshing to work with a bank who deeply Bank.” values our mission and the children and families we serve.” MACHARIA Z. WEIR LYTLE Geoff Still Chief Financial Officer Middle East Institute Washington, DC “The loan process with Hingham was efficient and straightforward. It is clear that Hingham appreciates the value of our time.” Tamara Kalandiya Chief Financial and Operating Officer George Camp Kaiser founded the Middle East Institute (MEI) in 1946 with a vision of creating a space where global leaders could collaborate to increase knowledge and awareness and promote a better understanding of the Middle East in the United States. Since its founding, the Middle East Institute has evolved over time to include centers focused on policy analysis, education, and arts and culture. In 2020, MEI completed a major renovation and expansion of its headquarters near Dupont Circle, blending preservation of historic elements with green features and accessibility. Following the completion of the project, it worked with Hingham to structure new mortgage financing to support MEI’s long-term mission. Castle Square Tenants Organization Boston, MA Pictured left to right: Jameelah Julien - Community Engagement Manager, Ann Moy - President, Deborah Backus - Executive Director, Vivian Lee - Senior Advisor The Castle Square Tenants Organization (CSTO) was formed in 1987 to preserve the affordability of the Castle Square Apartments located in the heart of Boston’s South End neighborhood. In 2010, CSTO became majority owner of the 500 unit apartment building which offers direct services and programming in workforce training, health and wellness and STEM for low and moderate income youths, adults and seniors. CSTO sought out Hingham in 2019 when faced with staff turnover at its former bank. Since the transition, the CSTO staff has built a strong relationship with their bankers at Hingham and are appreciative of the comprehensive support they receive. “Hingham’s support of the local community aligns with “Hingham recognizes the positive impact that affordable the USES’ mission. We value our partnership with the housing has on the community. We are pleased to have a Bank.” bank that believes in our cause.” MACHARIA Z. WEIR LYTLE Ann Moy President Aspiration San Francisco, CA Pictured left to right: Josh Black - Assistant Director, Evelyn Arellano - Program Director, Allen Gunn - Executive Director “We needed a trusted financial partner. Hingham offers the stability we need in a bank.” Allen Gunn Executive Director Aspiration Tech (“Aspiration”) is a values-driven nonprofit technology organization, connecting nonprofit organizations, foundations, and activists with technology solutions and data skills that help them better carry out their missions. By helping those working for social justice to find and use the best software available, Aspiration aims to maximize the impact and effectiveness of those who want to change the world. When Aspiration looked for a new banking relationship, stability was a priority. In addition to providing unlimited deposit insurance, Hingham provided a dedicated relationship manager and customized digital banking tools. With Hingham’s support, Aspiration can focus on its mission, not its banking. 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 2017 2018 At December 31, 2019 (In Thousands) 2020 2021 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 $ 2,284,599 355,229 34,304 721,809 998,567 122,715 701 12,537 1,505,862 579,164 186,158 2017 $ 2,408,587 295,975 38,460 $ 2,590,346 252,147 47,186 $ 2,857,093 233,986 65,868 $ 3,431,165 271,161 91,973 741,841 1,150,535 127,274 542 13,808 1,573,154 606,600 212,576 725,524 1,327,126 186,094 782 15,376 1,820,834 505,200 247,223 656,220 1,693,215 153,020 7,438 17,404 2,139,197 408,031 292,943 At or For the Years Ended December 31, 2018 2019 (Dollars in Thousands, Except Per Share Amounts) 2020 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: 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 $ $ $ $ $ $ $ 81,059 17,261 63,798 1,505 1,410 19,576 44,127 18,370 25,757 25,708 12.08 11.81 1.21 % 14.73 1.21 14.70 8.22 2.91 3.05 30.06 1.66 87.29 2,132,750 $ $ $ $ $ $ $ 94,169 28,384 65,785 1,270 (1,735) 20,051 42,729 12,330 30,399 32,776 14.25 13.90 1.32 % 14.97 1.42 16.14 8.80 2.66 2.90 29.89 1.92 99.67 2,132,750 $ $ $ $ $ $ $ 106,952 40,050 66,902 1,567 8,828 20,615 53,548 14,621 38,927 32,996 18.24 17.83 1.55 % 16.82 1.32 14.26 9.24 2.38 2.72 30.26 2.18 115.75 2,135,750 $ $ $ $ $ $ $ 106,362 21,158 85,204 2,288 9,192 21,978 70,130 19,359 50,771 44,443 23.76 23.25 1.88 % 18.96 1.65 16.60 9.93 3.03 3.22 25.48 2.47 137.02 2,137,900 $ $ $ $ $ $ $ * Non-GAAP measurement which represents net income excluding the after-tax gains and losses on securities, both realized and unrealized, and gain on disposal of fixed assets. ** The efficiency ratio represents total operating expenses, divided by the sum of net interest income and total other income, excluding gain on equity securities, net and gain on disposal of fixed assets. For complete financial information please refer to Form 10-K for the year ended December 31, 2021 filed with the Federal Deposit Insurance Corporation. 562,783 2,296,566 155,668 2,495 20,431 2,392,865 665,000 354,612 2021 110,491 8,026 102,465 3,028 15,308 22,076 92,669 25,211 67,458 56,563 31.50 30.65 2.25 % 20.62 1.89 17.29 10.93 3.40 3.48 21.31 2.83 165.52 2,142,400 Standing (left to right): Seated (left to right): Ronald D. Falcione Robert A. Lane, Esq. Michael J. Desmond Scott L. Moser Howard M. Berger, Esq. Jacqueline M. Youngworth Robert H. Gaughen, Jr., Esq. Kara Gaughen Smith Geoffrey C. Wilkinson, Sr. Robert K. Sheridan, Esq. Brian T. Kenner, Esq. Julio R. Hernando, Esq. Stacey M. Page Kevin W. Gaughen, Jr., Esq. Patrick R. Gaughen 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, 2021, there were approximately 186 stockholders of record, holding 74,442 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. High Low 2021 First Quarter Second Quarter Third Quarter Fourth Quarter 2020 First Quarter Second Quarter Third Quarter Fourth Quarter $ 296.97 325.90 347.98 424.50 $ 216.82 181.50 215.00 230.02 $ 214.00 279.56 291.00 339.00 $ 129.89 125.55 154.57 182.65 The closing sale price of the Bank’s common stock at December 31, 2021 was $419.88 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. 255 State Street Boston, MA 02109 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, 2021 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. BOSTON COHASSET HINGHAM HULL NANTUCKET WASHINGTON, DC www.hinghamsavings.com Member FDIC/Member DIF | Equal Housing Lender 

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