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Hingham Institution for Savings saw earnings jump in the second quarter and reported just a small percentage of loan modifications related to the coronavirus pandemic.
The Hingham-based bank had net income for the quarter ending June 30 of $16.34 million compared to $8.7 million in the second quarter of 2019. Second quarter earnings per diluted share were $7.50 compared to $3.99 per diluted share for the same period last year, an 88 percent increase.
The bank also saw an increase over its first quarter earnings of $2.18 million, or $1 per diluted share.
The net interest margin increased in the second quarter to 3.15 percent compared to 2.62 percent for the same period last year. One of the drivers of the increase was a decline in the cost of interest-bearing liabilities, including retail and commercial deposits, the bank said in a statement. It added that the benefits were partially offset by a declining yield on interest-earning assets, including excess reserves held at the Federal Reserve Bank of Boston, and a lower yield on loans during the same period
Hingham Institution for Savings’ net loans increased to $2.38 billion, a 10 percent year-over-year growth that was concentrated in its commercial real estate portfolio. The bank also processed 48 Paycheck Protection Program loans totaling $9.3 million for new and existing customers. It does not anticipate originating additional PPP loans or participating in the Federal Reserve’s Main Street Lending Program.
Total assets increased to $2.72 billion, a 4 percent year-over-year increase.
“During this rapidly developing period of economic uncertainty, there may be unusual opportunities – to deploy capital on attractive terms, to develop new relationships with strong customers, to recruit talented staff, and to invest in digital tools to reduce costs and deliver more value for our customers,” Chairman Robert H. Gaughen Jr. said in a statement. “We plan to capitalize on these opportunities. In doing so, we remain focused on careful capital allocation, defensive underwriting and disciplined cost control – the building blocks for compounding shareholder capital through all stages of the economic cycle. These remain constant, regardless of the macroeconomic environment in which we operate.”
Loan modifications were made in response to COVID-19 to 1.13 percent of the bank’s loans through June 30, representing less than 3 percent of its dollar volume. For the commercial real estate portfolio, Hingham Institution for Savings said it had modified a limited number of loans to interest-only and generally required borrowers to pre-fund all interest payments for the period of modification. The bank has not deferred interest payments on any commercial mortgages or modified any construction loans as a result of COVID-19.
The bank said it also granted short-term interest-only modifications to some residential mortgages and deferred interest on four loans. About $13 million of its total residential portfolio of $706.7 received modifications.
