Hingham Institution for Savings
Annual Report 2023

Plain-text annual report

2023 ANNUAL REPORT F i n a n c i a l H i g h l i g h t s 38.9 50.8 67.5 37.5 26.4 2.18 2.47 2.83 3.03 2.52 115.75 137.02 165.52 179.74 188.50 2.40 2.08 1.77 1.58 19 20 21 22 23 19 20 21 22 23 19 20 21 22 23 Net Income ($ in millions) Dividends Declared* ($ per share) Book Value ($ per share) 2,590 2,857 3,431 4,194 4,484 1,821 2,139 2,393 2,505 2,350 2,227 2,495 2,999 3,658 3,914 19 20 21 22 23 19 20 21 22 23 19 20 21 22 23 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: Although we strive for them, not every year will be an outstanding one. Over a long time horizon, we expect financial results will be excellent in most years, average in some, and challenging in a few. We noted last year in this letter that 2023 would be a challenging year. It was. We earned $26.4 million for our owners in 2023, a reflection of significant net interest margin compression over the course of the year, owing to our liability sensitive balance sheet and the quick, deep and long yield curve inversion. Our return on average equity of 6.57% and return on average assets of 0.63% were well below our long-term performance and our expectations. Continued strong returns in our investment operations sustained us during a period when core returns were not satisfactory. Net loans increased by 7% to $3.914 billion. Retail and commercial deposits, excluding our wholesale deposits, fell by 2% to $1.861 billion. Book value per share rose 5% in 2023 from $179.74 to $188.50 per share. This excludes capital returned to the owners through regular dividends - we declared $2.52 in dividends per share in 2023. The trailing five year compound annual growth rate in book value per share, an important measure of long-term value creation, was 13.6%. In 2023, the efficiency ratio was 57.18% and operating expenses as a percentage of average assets fell to 0.67%. This structural operating leverage allowed us to navigate the adverse interest rate environment in 2023 and will benefit us when we emerge from the current period of net interest margin compression. As noted last year, our business generates returns for our owners through the efficient transformation of maturity, using deposits and borrowings to fund a loan portfolio composed primarily of real estate loans secured by multifamily properties. During normal economic conditions, the yield curve - a graphical representation of interest rates on debt for a range of maturities - has a positive slope and we benefit from turning short-term deposits and borrowings into somewhat longer term mortgages. From time to time, for reasons beyond the scope of this letter, the yield curve “inverts” and short-term interest rates are higher than long-term interest rates. We are currently in the midst of a significant inversion - the fastest, deepest and the longest inversion since the late 1970s - and arguably the longest inversion on record. Yield curve inversions will occur and although they are difficult for our liability sensitive model, they are also ultimately temporary and they do not cause us to question our approach. Our balance sheet continues to reprice and we have started to see the benefit of anticipated lower funding rates - particularly through some of our wholesale funding vehicles - while we gradually benefit from higher rates on new loans. We continue to see demand from well-capitalized customers with strong balance sheets, looking to make long-term investments in core multifamily properties. The pace of this transition has been slower than we would like and the Bank’s performance with respect to retail and commercial deposit growth in 2023 was not consistent with the Bank’s historical performance. Having noted the above, the current outlook for short and intermediate term rates is promising and we are cautiously optimistic. Although we have employed certain strategies to reduce our risk in the event of additional increases in short-term rates, we see this as a low-probability scenario and we remain overwhelmingly liability sensitive. We emphasized last year that the most dangerous response to short-term challenges is to make changes that have long-term consequences. We will not add incremental risk, either in our lending or investment operations, and we will continue to make the appropriate investments to support our long-term objectives outlined below. We have a disciplined underwriting culture - with zero non-performing commercial loans, zero classified or criticized commercial loans, and zero losses on commercial lending for over ten years at 2023 year end. We have always placed credit risk at the center of our approach. Given the turbulence in the commercial real estate markets, we believe this emphasis continues to be well-placed. Whether extraordinary or disappointing, 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 - brick by brick. There are no shortcuts. Let’s review the bricks from 2023. Our commercial real estate business grew modestly last year, with growth concentrated in our Boston and Washington, D.C. markets. Despite widespread uncertainty regarding the potential of gateway cities, we remain confident that the most attractive markets for our business are dense, coastal cities with favorable demographics and concentrations of multifamily real estate. The demand drivers in these markets, combined with the supply constraints stemming from geography and regulation, support consistent asset performance over time. In 2023, we completed our seventh full year of operations in Washington, D.C., with a high-quality loan portfolio now exceeding $1.2 billion. This was paired with strong growth in our deposit business after the FDIC approved our branch application for our Georgetown office in June. This office has the lowest cost of funds of any office by a significant measure and Washington presents a significant long- term opportunity to deploy capital organically. We intend to expand our retail presence to Washington, supporting our commercial banking office, and we are actively evaluating new potential branch locations. Our equity investments in Washington, D.C. banks continue to complement our core business operations. 31 Years of Perf ormance Assets Assets Loans, Net Loans, Net 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 Bo o k Valu e Pe r Sha re $7.35 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 2022 2022 2023 2023 $ 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 $ 4,193,799 $ 4,193,799 $ 4,483,947 $ 4,483,947 $ $ 76,936 7.35 0.10 $ $ $ $ 100,398 76,936 $ $ 100,398 119,472 $ $ 7.35 8.24 0.10 1.33 $ $ $ $ 8.24 9.17 1.33 0.98 $ $ $ $ 151,166 119,472 $ 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 $ 3,657,782 $ 3,657,782 $ 3,914,244 $ 3,914,244 $ $ 9.17 9.87 0.98 1.05 $ $ $ $ 9.87 10.93 1.05 1.36 $ $ $ 10.93 12.05 $ 1.36 1.53 $ $ $ 12.05 12.83 $ 1.53 1.65 $ $ $ 12.83 14.46 $ 1.65 2.07 $ $ $ 14.46 16.38 $ 2.07 2.49 $ $ $ 16.38 18.48 $ 2.49 2.91 $ $ $ 18.48 19.68 $ 2.91 2.58 $ $ $ 19.68 21.29 $ 2.58 2.80 $ $ $ 21.29 23.01 $ 2.80 2.95 $ $ $ 23.01 24.47 $ 2.95 2.19 $ $ $ 24.47 25.85 $ 2.19 2.12 $ $ $ 25.85 28.20 $ 2.12 2.96 $ $ 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 $ 75.50 87.29 $ 87.29 99.67 $ 99.67 115.75 115.75 $ 137.02 137.02 $ 165.52 165.52 $ 179.74 179.74 $ 188.50 $ 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 $ 10.99 12.08 $ 12.08 14.25 $ 14.25 18.24 $ 18.24 23.76 $ 23.76 31.50 $ 31.50 17.49 $ 17.49 12.26 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 64.83 $ 9.09 $ 75.50 10.99 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 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% 10.01% 10.01% 6.57% $ $ 188.50 12.26 6.57% 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% 24.81% 24.81% 57.18% 57.18% 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 . (()))()()))())(()))()()))())(()))()()))())(()))()()))())() () () () () () () () () () () () ) ) ) ) () () () () ) ) ) ) () () () () () () () () () () () () () () () () ( ( ( ( ( ( ( ( () () () () ( ( ( ( () () () () ) ) ) ) ( ( ( ( )) ) ) (( ( ( (( ( ( ((( ( ()()() () ()()() () ((( ( ()()() () ()()() () ()()() () ((( ( ((( ( ((( ( (()))()()))())(()))()()))())(()))()()))())(()))()()))())() () () () () () () () () () () () ) ) ) ) () () () () ) ) ) ) () () () () () () () () () () () () () () () () ( ( ( ( ( ( ( ( () () () () ( ( ( ( () () () () ) ) ) ) ( ( ( ( )) ) ) (( ( ( (( ( ( ((( ( ()()() () ()()() () ((( ( ()()() () ()()() () ()()() () ((( ( ((( ( ((( ( We remain committed to our expansion in San Francisco, as we believe that the Bay Area is a market with attractive structural economic drivers, including a vibrant technology sector, physical and regulatory limitations on real estate development, links to Asia, and a cluster of research universities that produce the intangible assets that are critical components of our economy. The governance challenges the city faces are temporary, surmountable, and there is a growing political consensus in support of addressing them. provides us with considerable flexibility during periods like this. This year we focused on ensuring that we have well-documented standard work across all of our business and operational processes. Without standards, there can be no improvement. We cannot adequately emphasize the following - eliminating waste at Hingham is not about one-time cost reductions. It is about the continuous and persistent improvement of operational processes that pay small dividends over time. Book Value Per Share 188.50 In 2023, we completed our third year of operations in the city, with a loan portfolio of approximately $120 million. Deposit growth in San Francisco was stronger in 2023 and we recently added a dedicated deposit-focused relationship manager in early 2024. Lending activity was, in contrast, somewhat muted. This was likely driven by significantly lower apartment sales volume throughout the year, uncertainty about the disposition of several large portfolios of overleveraged small multifamily properties, and the disruption caused by the failure of two large Bay Area banks. We remained actively engaged with customers - current and prospective - throughout the year and we believe we will be more active this year. Our Specialized Deposit Group made progress in some respects in 2023, although deposit growth was not consistent with the market opportunities we see. Our deposit strategy - digital excellence, virtually no fees, and personalized service provided by dedicated relationship managers - is compelling. This strategy is executed by relationship managers that work directly with customers and develop new business opportunities, digital banking specialists that provide operational support to our customers, and a marketing program that places this value proposition in front of customers that can benefit from it. We made progress along all three dimensions in 2023. The failure of several large banks last year, combined with the pending sale of a respected competitor in Boston, creates an enduring opportunity for Hingham. It reinforces our belief that there is strong, unmet demand for a nimble, service-oriented bank in Boston, Washington, and San Francisco. Since last year, we have recruited three talented relationship managers in Boston and San Francisco, all with significant experience serving business and nonprofit customers. We have reconfigured our operational team to support larger and more complex business deposit customers, including hiring a new senior specialist for this team. This has been accomplished without any growth in the size of our staff. If you are a talented senior or mid-level banker in Boston, Washington, or San Francisco, particularly with experience in commercial real estate lending or deposit business development, please contact Patrick directly by phone or email. He would like to talk to you and we promise a confidential conversation about opportunities at Hingham. In our investment operations, we grew our partial ownership in a number of outstanding businesses over 2023, and sold several smaller investments, further concentrating our portfolio. Management teams, working on our behalf, continued to improve these businesses in ways large and small. Our investments remain focused on finance - banks, insurers, payment companies, financial infrastructure providers, and ratings agencies. We also have material investments in technology companies that facilitate digital commerce. We continue to benefit from studying and engaging with management teams at high performance companies, both in the banking industry and elsewhere. We recognize that these investment results will be volatile over time, but they are a complement to our core business and some of these businesses are likely to produce strong returns during periods when our core business may not. We recognize that the health of our business is ultimately dependent on the health and vitality of the cities in which we operate. Despite the challenging environment, we remain committed to affordable housing finance - extending over $150 million in affordable multifamily housing loans in 2023 in Boston and Washington, D.C. Several of these projects were financed in conjunction with the Black Economic Development Fund and Amazon’s Housing Equity Fund, combining senior debt from Hingham with low- cost subordinate financing to preserve affordability. Our family became associated with the Bank thirty one years ago, when years of mismanagement and poor lending threatened its very solvency. Since then, 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. Every year, we make progress on that vision. Very truly yours, Eliminating waste remains a core strategic objective of the Bank. We must find ways to increase the velocity of our operations, maintain our narrow focus, and leverage that focus. Our operational efficiency Robert H. Gaughen Jr. Chairman of the Board and Chief Executive Officer Patrick R. Gaughen President and Chief Operating Officer 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 2022 2022 2023 2023 $ 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 $ 4,193,799 $ 4,193,799 $ 4,483,947 $ 4,483,947 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 $ 3,657,782 $ 3,657,782 $ 3,914,244 $ 3,914,244 Book Value Per Share Book Value Per Share $ 7.35 7.35 $ $ 8.24 8.24 $ $ 9.17 9.17 $ $ 9.87 9.87 $ 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 Earnings Per Share (Basic) Earnings Per Share (Basic) $ 0.10 0.10 $ $ 1.33 1.33 $ $ 0.98 0.98 $ $ 1.05 1.05 $ $ 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 $ $ $ $ $ $ $ $ 28.20 $ 28.20 $ 2.96 2.96 $ $ 30.74 $ 30.74 $ 3.79 3.79 $ $ 34.24 $ 34.24 $ 4.81 4.81 $ $ 38.70 $ 38.70 $ 43.65 $ 43.65 $ 5.68 5.68 $ $ 6.25 6.25 $ $ 48.49 $ 48.49 $ 57.08 $ 57.08 $ 6.28 6.28 $ 10.46 $ 10.46 $ $ 64.83 $ 64.83 $ 9.09 9.09 $ $ 75.50 $ 75.50 $ 87.29 $ 87.29 $ 99.67 $ 99.67 $ $ 115.75 115.75 $ $ 137.02 137.02 $ $ 165.52 165.52 $ $ 179.74 179.74 $ $ 188.50 188.50 10.99 $ 10.99 $ 12.08 $ 12.08 $ 14.25 $ 14.25 $ 18.24 $ 18.24 $ 23.76 $ 23.76 $ 31.50 $ 31.50 $ 17.49 $ 17.49 $ 12.26 $ 12.26 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% 10.01% 10.01% 6.57% 6.57% 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% 24.81% 24.81% 57.18% 57.18% Assets Assets Loans, Net Loans, Net Return on Equity Return on Equity Efficiency Ratio Efficiency Ratio $ $ $ (()))()()))())(()))()()))())(()))()()))())(()))()()))())() () () () () () () () () () () () ) ) ) ) () () () () ) ) ) ) () () () () () () () () () () () () () () () () ( ( ( ( ( ( ( ( () () () () ( ( ( ( () () () () ) ) ) ) ( ( ( ( )) ) ) (( ( ( (( ( ( ((( ( ()()() () ()()() () ((( ( ()()() () ()()() () ()()() () ((( ( ((( ( ((( ( (()))()()))())(()))()()))())(()))()()))())(()))()()))())() () () () () () () () () () () () ) ) ) ) () () () () ) ) ) ) () () () () () () () () () () () () () () () () ( ( ( ( ( ( ( ( () () () () ( ( ( ( () () () () ) ) ) ) ( ( ( ( )) ) ) (( ( ( (( ( ( ((( ( ()()() () ()()() () ((( ( ()()() () ()()() () ()()() () ((( ( ((( ( ((( ( Boys & Girls Clubs of Dorchester Dorchester, MA Pictured Left to Right: Michael Gattoni - Chief Financial Officer Bob Scannell - President & CEO Boys & Girls Clubs of Dorchester is a premier non-profit organization with three clubhouses in Dorchester, MA. The Club offers over 4,000 youth a safe and supportive environment to learn, grow, and have fun. With guidance from caring professionals and peers, kids improve their academic performance, self-esteem, and social skills with over 200 available programs. Boys & Girls Clubs of Dorchester was looking to secure its assets by diversifying its banking relationships. During the selection process, it was important to the team to choose a bank with proven stability during times of uncertainty. They chose Hingham Institution for Savings for its strong track record of financial stability and full deposit insurance through the FDIC and DIF. “We feel that Hingham was the perfect choice for our organization and are confident that our funds are safe and secure. Their customer service is second to none.” Michael Gattoni Chief Financial Officer Melrose Solomon Alexandria, VA Pictured Left to Right: Jeff Steinberg - Vice President of Acquisitions Lawrence Solomon - Principal, Jaime Hartman - Investment Committee Ezra Tuchman - Investment Committee, Kathy Bowden - Administration “We look for reliable, high quality service and a consistent process with all of our partners. The team at Hingham executed flawlessly and we hope this is the first of many deals together.” Lawrence Solomon Principal Melrose Solomon is a real estate investment firm with office, retail and industrial properties in the Midwest, Mid-Atlantic, and Southeast. With a disciplined value buying strategy, they have built their real estate portfolio to over 2 million square feet over the last decade. Larry Solomon was first introduced to Hingham Institution for Savings when he was considering acquiring a unique office property in Alexandria, VA. The team was attracted to Hingham’s willingness to underwrite the property thoughtfully in an environment in which financing for office properties has become more difficult. Hingham’s competitive rates, accessible commercial lenders, and new office in Georgetown were additional motivating reasons to work together. Phyllis Bodel Childcare Center At Yale School of Medicine New Haven, CT Pictured left to right: Kyle Miller - Executive Director, June Marcucio - Business Manager The Phyllis Bodel Childcare Center cares for the children of faculty, postdoctoral fellows and students of the Yale School of Medicine in New Haven, CT. With over 15 classrooms of children ranging from six weeks old up to pre-kindergarten, the Center provides a high quality and supportive environment in which each child can develop and grow. The team at the Childcare Center had an account at a national bank with a problematic online banking platform and low deposit rates - something had to change. With Hingham, they found personalized support from a relationship manager, competitive rates, and a reliable online banking experience. “Hingham’s support of the local community aligns with “Working with Hingham is like having a partner in success the USES’ mission. We value our partnership with the - even though we are not near a branch, they might as well Bank.” be next door to us. They make banking refreshingly easy.” MACHARIA Z. WEIR LYTLE Kyle Miller Executive Director GreyBrick Partners San Francisco, CA Pictured: Ryan Taylor - Managing Partner “Hingham was our safety net during a stressful time. With over 185 years of proven stability, we have peace of mind knowing how thoughtfully the bank is operated.” Ryan Taylor Managing Partner GreyBrick Partners is a value-add focused real estate investment firm headquartered in San Francisco, CA. GreyBrick Partners have acquired over 39 assets in the last twelve years and manage over $250 million of investment properties located in California and Washington State. The team at GreyBrick, like so many others, had to act swiftly during recent bank failures. With a strong focus on security, they found Hingham’s stable history, deposit insurance, and conservative lending practices compelling factors to move their banking relationship. Beyond that, they’ve appreciated the opportunity to build a relationship with the Hingham team, ensuring that they’re backed by people that truly care about their business. Public Employees for Environmental Responsibility (PEER) Silver Springs, MD Pictured: Tim Whitehouse - Executive Director PEER supports and protects public employees who seek a higher standard of accountability and environmental protection within their agencies. The team works with every state and operates specifically in areas regarding scientific integrity complaints, climate integrity, conserving public lands, and toxins. Originally interested in Hingham’s competitive savings rates, PEER also found that Hingham took the complexity out of banking, especially when it came to processing donor gifts. Even though most of its banking needs are met with self-serve solutions, the team appreciates being able to get a person on the phone quickly when needed. “Hingham’s support of the local community aligns with “Our team and Hingham’s team are both driven by the USES’ mission. We value our partnership with the upholding high standards - their dedication to customers Bank.” keeps our organization running efficiently.” MACHARIA Z. WEIR LYTLE Tim Whitehouse Director 10 MX Roxbury, MA Pictured left to right: John Sullivan - Principal, Second Street properties Jacob Vance - Principal, Second Street properties Yonathan (Tani) Halperin - Founder and Partner, Trax Development Dartagnan Brown - Founder and Partner, Trax Development “It’s easy to work with Hingham - they work as quickly as we do and when it comes down to terms, they’re simply the best.” John Sullivan Principal 10 MX Owner, LLC is a joint venture between Second Street Properties and Trax Development. Together, they are focused on redeveloping Nubian Square, a fast- changing and transit-oriented neighborhood in Roxbury, MA that has been historically neglected. In coordination with the Boston Planning & Development Agency, they are planning to build two new multifamily buildings on an underutilized site, while preserving a mixed-use building that is an important source of jobs in the neighborhood. The project will ultimately add a mix of over 100 new affordable and market-rate units to Nubian Square. When the team needed financing, they found Hingham’s terms the most competitive. Throughout the loan process and with the subsequent deposit relationship, they have become more familiar with the Bank and value the approach that helps them keep their project moving forward. 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 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, 2023, there were approximately 183 stockholders of record, holding 71,122 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 2023 First Quarter Second Quarter Third Quarter Fourth Quarter 2022 First Quarter Second Quarter Third Quarter Fourth Quarter $ 311.18 235.76 229.99 206.00 $ 432.19 348.59 335.53 297.90 $ 223.00 173.51 181.00 147.00 $ 340.00 270.50 250.00 242.99 The closing sale price of the Bank’s common stock at December 31, 2023 was $194.40 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 43006 Providence, RI 02940 (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, 2023 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/investor-materials. BOSTON COHASSET HINGHAM HULL NANTUCKET WASHINGTON, D.C. SAN FRANCISCO www.hinghamsavings.com Member FDIC/Member DIF | Equal Housing Lender 

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