Mentioned
Hingham Institution for Savings
HIFS
10.76 (3.62%)
307.45
308.49
Devon Toogood
Devon Toogood
Australia
2mo
Edited
$HIFS (Hingham Institution for Savings) - Q2 2026 Book value per share is $230.83, up 13.0% from $204.36 a year ago. Add the $3.22 of dividends declared since and the return on book is about 14.5%. That's the number that matters with this bank. It doesn't chase loan growth. It compounds book. CORE VS HEADLINE Reported EPS was $11.49 diluted. Core EPS was $4.82. The gap is the equity portfolio, $155.5m of long-term holdings in financial and tech names against $507.4m of total equity, where every mark runs through the income statement. Q2 produced a $18.95m pre-tax gain there, roughly $6.68 of the $11.49 headline. Q1 produced a $9.92m loss. That's a $28.9m swing in two quarters on a business earning about $10m a quarter operating. Core net income was $10.7m, up 42% year on year. Core ROE 8.55% and core ROA 0.94%, against 6.67% and 0.67%. GAAP ROE of 20.38% does not mean the bank got three times better. MARGIN IS DOING THE WORK NIM hit 2.14%, up 10bp on the quarter and 48bp on the year. Cost of interest-bearing liabilities fell to 3.36% from 3.76% as deposits and FHLB advances repriced. Non-interest-bearing deposits grew 15.2% to $504m. Net interest income was $23.6m against $18.0m, up 31%, on a loan book that shrank 0.7%. Not a growth quarter, a repricing quarter, and the liability book has plenty left to turn over. THE EFFICIENCY RATIO WENT UP 37.46%, worse than 34.87% in Q1. Opex to average assets 0.79% from 0.69%. Two items explain it: a $928k termination fee to Fiserv as online banking moves to Q2 Technologies, live in H2, and a $201k check fraud loss on a legacy home equity line they settled. Strip both and opex was $7.85m against $7.82m in Q1. Flat. The ratio lands near 32.7%, better than Q1, and opex to assets returns to 0.69%. Management expects the Fiserv fee back through lower running costs. One caveat: foreclosure expenses were $206k against $14k last year, and that persists until the properties sell. CREDIT Non-performing assets rose to 0.78% of assets from 0.69%. Non-performing loans fell to 0.78% of loans from 0.80%. Both are true. Foreclosed assets went from zero to $4.67m because the bank took title to property, so credits moved buckets. The rise is resolution, not deterioration. They cleared three Washington DC affordable-housing credits this quarter, taking title to nine properties under one settlement and exiting a $3.7m construction loan. No loss recognised on any of it. No charge-offs in H1 2026 or H1 2025. The one to watch is a $30.6m loan on an entitled multifamily development site in DC, carrying a conditional guarantee from a national homebuilder and a $2.5m specific reserve. Work the disclosed ratios and non-performing loans total about $30.7m, so this single credit is effectively the entire NPL book. Concentrated, but secured, and coverage improved to 96% from 87%. BUSINESS AS USUAL Total assets $4.56bn, up 0.4%. Wholesale funding down 6.7%. Average equity to assets 11.02% from 10.05%. The $0.63 dividend on 12 August is the 130th consecutive quarterly payment, and they've paid a special in 29 of the last 31 years. Nothing here changes the thesis either way. Flat balance sheet by design, margin recovering as liabilities reprice, credit issues concentrated and resolving without losses, costs controlled once adjusted. The other side of it: Gaughen says core returns remain below their long-term performance and only "approaching acceptable" levels. Shares marked $307.15 at quarter end and trade at $279.37 now, or 1.21x book. A year ago that was 1.22x. Same multiple, on book 13% higher, core earnings up 42% and margin 48bp wider.
Not investment advice. The author may have financial interests in the mentioned instruments.
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HIFS
Hingham Institution for Savings
307.99
10.76 (3.62%)
1 Mentioned
Hingham Institution for Savings
HIFS
Hingham Institution for Savings
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