HINGHAM INSTITUTION FOR SAVINGS:

AUTUMN ~ 2012
HINGHAM INSTITUTION
FOR SAVINGS:
SIMPLE BANKING.
HONEST VALUE.
HAPPY CUSTOMERS
Cover Story
Hingham Institution for Savings
Hingham Institution for Savings:
before the bank opened for business, the founders said, in part,
“Parents, by making their children depositors, can teach them the
advantages of saving habits and inculcate lessons of economy which
may be remembered through life.”
Those lessons were reinforced as the years went by as I deposited
money I earned on paper routes and babysitting, eagerly checking my
passbook to see how much interest I had earned. Pretty soon, I had
my first part time job, and I joined the parade of customers streaming
in and out of the bank on Fridays depositing their paychecks.
The day my Dad walked me into the Hingham Institution for
Savings’ main branch in downtown Hingham to open my very first
bank account is still one of those indelible childhood memories.
Of course, he had brought us there before when he was making
his own deposits, but this was a special day. Like many Hingham
children, this was a rite of passage for me – right up there with losing
my first tooth, learning to ride my bike without training wheels, and
going to school.
What my Dad and I didn’t know was, like generations of Hingham
families before and since, we were doing exactly what the founders
had intended when the bank was established in 1834. In an article
in The Hingham Gazette on December 19, 1834, less than a week
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Celebrating its 178th year as a community bank, Hingham Savings
has not only survived the recent banking crisis, but thrived. Robert H.
Gaughen, Jr., President and CEO, recently announced a 4% increase
in the bank’s quarterly dividend, marking the 18th straight year of
dividend increases. This dividend was the 74th consecutive quarterly
dividend, in an era where many banks have slashed or suspended
dividends. Hingham Savings was added to the Russell 3000 Index in
June. The Russell 3000 represents about 98% of the investable U.S.
equity market.
According to Gaughen, HIFS was “the most profitable of all publicly
traded banks in the state last year.” He said the bank had survived
attempts to be acquired in the 1990’s, and changed management in
1993 to ensure that the bank would remain as it has always been,
a community bank. “It’s good for our stockholders, and for our
community.”
A Community Bank in Every Era
While bank officers will not comment on performance, the stock,
trading on the NASDAQ under the symbol HIFS, has done well. Since
January, it has gone up over 19%. A more compelling comparison
- since the global banking crisis began in summer 2007, HIFS has
been up almost 97%. Meanwhile, the NASDAQ was up 20%, and
the Standard and Poor’s 500 index was down 3%. A quick review of
some of the major national banks’ performance in the past five years
shows a few whose stock dropped on a percentage basis as much as
Hingham Savings’ rose. Citigroup was down about 94%, and Bank
of America lost about 85% of its market value.
So, what’s the difference? How has HIFS managed to weather the
storm? Robert Gaughen said they follow a proven formula that
the bank’s founders immortalized as the bank’s motto: “Simple
Banking. Honest Value. Happy Customers.” He added, “We do
it by having strong customer service, controlling our expenses,
and being accessible in terms of having senior people available to
make exceptions to predetermined cookie-cutter situations.” The
top mortgage lender in town, their portfolio is split evenly between
residential and commercial loans, and Gaughen pointed out that “we
always keep the servicing of the loan.”
Hingham Savings has stood out on the national level for many years.
Reporter Dan Rather featured the bank on his show Dan Rather
Reports in a March 2009 episode titled “Meltdown”. HIFS was
the only community bank featured in a story on the global financial
crisis. Robert Gaughen was interviewed at length about the success of
AUTUMN
By Maryellen Dever
the bank during that time. Rather, who compared the bank’s business
model with George Bailey’s Building and Loan in “It’s a Wonderful
Life”, braved a train trip in a snowstorm just to keep the interview
appointment.
Other praise has followed. Nationally, investment bank Keefe,
Bruyette, and Woods has named HIFS to their Bank Honor Roll,
representing a group of 45 exceptional publicly traded banks for
the second year in a row. Financial information firm SNL Financial
named them the top performing thrift institution in the East and third
in the nation for the past year ending March 31. Locally, they have
received #1 rankings in Wicked Local’s town and regional Reader’s
Choice Awards since 2010; been named to the Boston Globe’s Globe
100, and have placed on the Boston Business Journal’s Book of Lists
in 2012.
Most importantly, Gaughen and his team have never strayed from
what they do best. Hingham Savings offers a full line of personal
and business checking and money market accounts, CD’s, IRA’s,
consumer and commercial loans, mortgages, employee benefit plans,
and online banking. “We have a very straight forward product line,
tailored to the needs of our banking customers. Our CD rates are
among the top in the market because we keep it simple and efficient.”
He added that he has never been comfortable with the idea of offering
investment products to customers, saying “I don’t want to deliver
a second-quality service. There are folks that do investments better
than we could.”
~2012
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Hingham Institution for Savings opened its 10th branch last October
on Charles St. in Beacon Hill. This is the second Boston neighborhood
branch for the bank, which opened its first on Tremont St. in the
South End in 2006. Within the first three months, the Beacon Hill
branch exceeded $30 million in deposits, and opened over 250 new
deposit and business accounts. Peggie Warner, Hingham Savings’
Assistant Vice President, Marketing, said “We received a warm
welcome from our Boston neighbors, who have been waiting for
the service, flexibility and simplicity of a local community bank.
On Beacon Hill, our renovation of the historic storefront received
many compliments for its contribution to the unique streetscape of
this neighborhood. Providing a beautiful banking environment for
our customers is a hallmark of Hingham Savings, and underscores
our focus on comfortable, respectful banking relationships with
the merchants and residents we serve.” Indeed, that attention
to neighborhood streetscapes may be seen in all bank buildings.
Their Cohasset branch, built in 1845, is a traditional colonial design
of red brick, gleaming white marble, and a columned entrance typical
of the area.
Gaughen said the bank has had a 10% annual growth rate for the
past 10 years, making it the largest bank headquartered on the
South Shore with the exception of Rockland Trust. “We’ve done
that without any acquisitions, totally through organic growth – with
expanding existing branches and opening new branches.” He also
gives credit to his staff, truly the “face” of the bank in the towns they
serve. The 112 full-time employees have an average time with the
bank of 13 years. “Customers are familiar with them. We are more
productive because of that longevity.”
In 2008, the bank expanded their services to the residents and
businesses of Hanover and Norwell. As if to solidify the point that
HIFS was there for both communities, the 9th branch was opened in
the fully restored and renovated landmark location on Route 53 in
Assinippi known as The Line House. The house was built to exhibit
the brickwork of Elisha Jacobs; and has been used for many things
since, including a market, post office, a selectman’s office, and a
private residence. When the boundaries for Norwell and Hanover
were created, the town line was drawn right through the center of
the building, hence the name. Twice while a private residence this
has caused a political firestorm. Most recently, the last resident of
the home, George Williams, was questioned about whether he could
serve Norwell as selectman when part of his home was in Hanover.
Since residence is determined by “where one lays one’s head”,
Mr. Williams was careful to sleep on the Norwell side of the bed.
HIFS recently completed a major expansion and renovation of its
headquarters on Main Street in downtown Hingham. Like all its
buildings, the renovation was done with an eye to historical details
in keeping with the bank’s history in the surrounding communities.
The three-story, 14,350 square foot addition was seamlessly
integrated into the existing structure. Employees and customers can
find themselves moving from the old section to the new without any
perceivable difference. With the Administration under one roof, there
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is increased opportunity for efficiency.
HIFS has always grown and changed with its customers and the
towns it serves. It was organized by a small group of citizens to benefit
their fellow residents. None had any business experience beyond the
confines of Hingham, and none could be called a “financier”. They
were farmers, merchants, operators of manufacturing plants, even a
sea captain. Many had surnames that live on in Hingham – Lincoln,
Hersey, Thaxter, Barnes, Beal, and Whiton. Early on, Hingham
Institution for Savings shared offices and a close alliance with the
Hingham Mutual Fire Insurance Co. When the bank opened for
business, the first deposit was in the amount of $60. By the end of
the first year, there were 254 accounts, and total deposits of $30,000.
One of the bank’s more famous customers was Daniel Webster, who
negotiated a loan in 1844 for his farm in Marshfield. The longest
continuous customer relationship HIFS enjoys began in 1846 with
Hingham’s New North Meeting House Corporation.
If you lived in Hingham in 1834, you probably worked and banked
there. Hingham was far from the wealthy suburb it is assumed to
be today. Residents were farmers, small merchants, fishermen,
and factory laborers. More than fifty vessels made Hingham their
home port, and enough were engaged in foreign trade to require
a US Custom House in town. Factories made marine hardware,
fish packing plants dotted the harbor, buckets and barrels were
manufactured in home workshops, and ropemaking was a hugely
profitable business.
There have been at least 16 serious financial crises in the United
States alone since the bank opened, many like this most recent one. In
1934, in a booklet celebrating Hingham Institution for Savings’ 100th
Anniversary, Bank management noted “We shall urge thrift with
regularity. We are in league with the sure laws of the universe: which
sometimes seems slower, but are invariably reliable and secure in the
end. It is the outcome and not the thrill of the plunge that counts.”
Fast forward to 2012: Hingham, Hull, Cohasset, Weymouth,
Scituate, Norwell, Hanover, Boston’s South End and Beacon Hill
all are served by the same community bank that served their towns’
founders. Robert Gaughen continues to stress the values of the
bank’s founders when he says “We are committed to being here, to
remaining independent. It’s important to the community that local
banking exists because it serves a real need in the community.”
HINGHAM INSTITUTION FOR SAVINGS
55 Main Steet
Hingham, MA
781.749.2200
www.hinghamsavings.com
AUTUMN
~2012
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