HINGHAM, Mass., Oct. 14, 2022 (GLOBE NEWSWIRE) -- HINGHAM INSTITUTION FOR SAVINGS (NASDAQ: HIFS), announced third quarter results for 2022.
Earnings
Net income for the quarter ended September 30, 2022 was $10,499,000 or $4.89 per share basic and $4.77 per share diluted, as compared to $14,012,000 or $6.54 per share basic and $6.36 per share diluted for the same period last year. The Bank's annualized return on average equity for the third quarter of 2022 was 11.07%, and the annualized return on average assets was 1.05%, as compared to 16.57% and 1.85% for the same period in 2021. Net income per share (diluted) for the third quarter of 2022 decreased by 25% over the same period in 2021.
Core net income for the quarter ended September 30, 2022, which represents net income excluding the after-tax gains and losses on securities, both realized and unrealized, was $14,491,000 or $6.75 per share basic and $6.58 per share diluted, as compared to $14,010,000 or $6.54 per share basic and $6.36 per share diluted for the same period last year. The Bank's annualized core return on average equity for the third quarter of 2022 was 15.28%, and the annualized core return on average assets was 1.45%, as compared to 16.56% and 1.85% for the same period in 2021. Core net income per share (diluted) for the third quarter of 2022 increased by 3% over the same period in 2021.
Net income for the nine months ended September 30, 2022 was $25,554,000 or $11.92 per share basic and $11.60 per share diluted, as compared to $50,784,000 or $23.72 per share basic and $23.09 per share diluted for the same period last year. The Bank's annualized return on average equity for the first nine months of 2022 was 9.18%, and the annualized return on average assets was 0.91%, as compared to 21.16% and 2.33% for the same period in 2021. Net income per share (diluted) for the first nine months of 2022 decreased by 50% over the same period in 2021.
Core net income for the nine months ended September 30, 2022, which represents net income excluding the after-tax gains and losses on securities, both realized and unrealized, and the after-tax gains on the disposal of fixed assets, was $44,856,000 or $20.92 per share basic and $20.36 per share diluted, as compared to $41,530,000 or $19.40 per share basic and $18.88 per share diluted for the same period last year. The Bank's annualized core return on average equity for the first nine months of 2022 was 16.11%, and the annualized core return on average assets was 1.60%, as compared to 17.31% and 1.90% for the same period in 2021. Core net income per share (diluted) for the first nine months of 2022 increased by 8% over the same period in 2021.
See Page 9 for a Non-GAAP reconciliation between net income and core net income. In calculating core net income, the Bank did not make any adjustments other than those relating to after-tax gains and losses on equity securities, realized and unrealized and after-tax gains on the disposal of fixed assets.
Balance Sheet
Total assets increased to $4.062 billion at September 30, 2022, representing 25% annualized growth year-to-date and 28% growth from September 30, 2021.
Net loans increased to $3.563 billion at September 30, 2022, representing 25% annualized growth year-to-date and 27% growth from September 30, 2021. Growth slowed significantly in the third quarter and was concentrated in multifamily assets in the Bank's commercial real estate portfolio.
Total deposits, including wholesale deposits, increased to $2.589 billion at September 30, 2022, representing 11% annualized growth year-to-date and 7% growth from September 30, 2021. Total retail and business deposits increased to $1.893 billion at September 30, 2022, representing 14% annualized growth year-to-date and 12% growth from September 30, 2021. Non-interest-bearing deposits, included in retail and business deposits, increased to $418.8 million at September 30, 2022, representing 10% annualized growth year-to-date and 14% growth from September 30, 2021. During the first nine months of 2022, the Bank continued to focus on growing its base of non-interest bearing commercial deposits, implemented special time deposit offerings, and used wholesale funds to help fund the strong loan growth experienced during the period.
Book value per share was $175.52 as of September 30, 2022, representing 8% annualized growth year-to-date and 10% growth from September 30, 2021. In addition to the increase in book value per share, the Bank has declared $3.07 in dividends per share since September 30, 2021, including a special dividend of $0.75 per share declared during the fourth quarter of 2021. The Bank increased its regular dividend per share in each of the last four quarters.
On September 28, 2022, the Bank's Board of Directors declared a regular cash dividend of $0.61 per share. This represents an increase of 3% over the previous regular quarterly dividend of $0.59 per share. The dividend will be paid on November 9, 2022 to stockholders of record as of November 1, 2022. This will be the Bank's 115th consecutive quarterly dividend and the Bank has consistently increased regular quarterly cash dividends over the last twenty-seven years. The Bank has also declared special cash dividends in each of the last twenty-seven years, typically in the fourth quarter.
The Bank sets the level of the special dividend based on the Bank's capital requirements and the prospective return on other capital allocation options. This may result in special dividends, if any, significantly above or below the regular quarterly dividend. Future regular and special dividends will be considered by the Board of Directors on a quarterly basis.
Operational Performance Metrics
The net interest margin for the quarter ended September 30, 2022 decreased 72 basis points to 2.76%, as compared to 3.48% for the same period last year. The net interest margin for the nine months ended September 30, 2022 decreased 41 basis points to 3.08%, as compared to 3.49% for the same period last year. In the quarter ended September 30, 2022, and to a lesser extent, in the nine months ended September 30, 2022, the Bank experienced an increase in the cost of interest-bearing liabilities, including retail and commercial deposits and wholesale funding, when compared to the same periods in the prior year. This was combined with a decline in the yield on interest-earning assets, driven primarily by a lower yield on loans, partially offset by an increase in the interest on excess reserves held at the Federal Reserve Bank of Boston and Federal Home Loan Bank of Boston stock dividends.
Key credit and operational metrics remained satisfactory in the third quarter. At September 30, 2022, non-performing assets totaled 0.02% of total assets, compared to 0.01% at December 31, 2021 and September 30, 2021. Non-performing loans as a percentage of the total loan portfolio totaled 0.02% at September 30, 2022, compared to 0.01% at December 31, 2021 and September 30, 2021.
The Bank recorded $50,000 of net recoveries for the nine months ended September 30, 2022, as compared to $1,000 of net charge-offs for the same period last year.
The Bank did not own any foreclosed property on September 30, 2022, December 31, 2021 and September 30, 2021.
The efficiency ratio, as defined on page 4 below, increased to 24.98% for the third quarter of 2022, as compared to 21.29% for the same period last year. Operating expenses as a percentage of average assets fell to 0.69% in the third quarter of 2022, as compared to 0.74% for the same period last year. The Bank remains focused on reducing waste through an ongoing process of continuous improvement and standard work that supports operational leverage.
These operational metrics reflect the Bank's disciplined focus on credit quality and expense management.
Chairman Robert H. Gaughen Jr. stated, "Returns on equity and assets were modest in the third quarter of 2022 and should be viewed in the context of the continuing pressure on the net interest margin as the Bank's balance sheet adjusts to significantly higher short-term interest rates. Such adjustments are particularly challenging for our business model. During such periods, 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."
The Bank's quarterly financial results are summarized in the earnings release, but shareholders are encouraged to read the Bank's quarterly reports on Form 10-Q, which are generally available several weeks after the earnings release. The Bank expects to file Form 10-Q for the quarter ended September 30, 2022 with the FDIC on or about November 4, 2022.
Incorporated in 1834, Hingham Institution for Savings is one of America's oldest banks. The Bank maintains offices in Boston, Nantucket, and Washington, D.C., and provides commercial mortgage and banking services in the San Francisco Bay Area.
The Bank's shares of common stock are listed and traded on The NASDAQ Stock Market under the symbol HIFS.
HINGHAM INSTITUTION FOR SAVINGS
Selected Financial Ratios
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2021 | 2022 | 2021 | 2022 | ||||||||
| (Unaudited) | |||||||||||
| Key Performance Ratios | |||||||||||
| Return on average assets (1) | 1.85 | % | 1.05 | % | 2.33 | % | 0.91 | % | |||
| Return on average equity (1) | 16.57 | 11.07 | 21.16 | 9.18 | |||||||
| Core return on average assets (1) (5) | 1.85 | 1.45 | 1.90 | 1.60 | |||||||
| Core return on average equity (1) (5) | 16.56 | 15.28 | 17.31 | 16.11 | |||||||
| Interest rate spread (1) (2) | 3.42 | 2.55 | 3.41 | 2.94 | |||||||
| Net interest margin (1) (3) | 3.48 | 2.76 | 3.49 | 3.08 | |||||||
| Operating expenses to average assets (1) | 0.74 | 0.69 | 0.75 | 0.69 | |||||||
| Efficiency ratio (4) | 21.29 | 24.98 | 21.56 | 22.65 | |||||||
| Average equity to average assets | 11.20 | 9.48 | 11.00 | 9.92 | |||||||
| Average interest-earning assets to average interest- bearing liabilities | 128.29 | 123.53 | 127.30 | 124.71 | |||||||
| September 30, 2021 | December 31, 2021 | September 30, 2022 | |||||||||
| (Unaudited) | |||||||||||
| Asset Quality Ratios | |||||||||||
| Allowance for loan losses/total loans | 0.68 | % | 0.68 | % | 0.68 | % | |||||
| Allowance for loan losses/non-performing loans | 5,297.80 | 4,784.78 | 3,336.25 | ||||||||
| Non-performing loans/total loans | 0.01 | 0.01 | 0.02 | ||||||||
| Non-performing loans/total assets | 0.01 | 0.01 | 0.02 | ||||||||
| Non-performing assets/total assets | 0.01 | 0.01 | 0.02 | ||||||||
| Share Related | |||||||||||
| Book value per share | $ | 159.03 | $ | 165.52 | $ | 175.52 | |||||
| Market value per share | $ | 336.70 | $ | 419.88 | $ | 251.11 | |||||
| Shares outstanding at end of period | 2,142,400 | 2,142,400 | 2,145,400 | ||||||||
| (1 | ) | Annualized. |
| (2 | ) | Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. |
| (3 | ) | Net interest margin represents net interest income divided by average interest-earning assets. |
| (4 | ) | The efficiency ratio represents total operating expenses, divided by the sum of net interest income and total other income (loss), excluding gain (loss) on equity securities, net and gain on disposal of fixed assets. |
| (5 | ) | Non-GAAP measurements that represent return on average assets and return on average equity, excluding the after-tax gain (loss) on equity securities, net, and the after-tax gain on disposal of fixed assets. |
HINGHAM INSTITUTION FOR SAVINGS
Consolidated Balance Sheets
| (In thousands, except share amounts) | September 30, 2021 | December 31, 2021 | September 30, 2022 | ||||||
| (Unaudited) | |||||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 5,711 | $ | 5,428 | $ | 6,682 | |||
| Federal Reserve and other short-term investments | 213,442 | 265,733 | 320,346 | ||||||
| Cash and cash equivalents | 219,153 | 271,161 | 327,028 | ||||||
| CRA investment | 9,395 | 9,306 | 8,212 | ||||||
| Other marketable equity securities | 72,702 | 79,167 | 64,062 | ||||||
| Equity securities, at fair value | 82,097 | 88,473 | 72,274 | ||||||
| Securities available for sale, at fair value | 5 | — | — | ||||||
| Securities held to maturity, at amortized cost | 3,500 | 3,500 | 3,500 | ||||||
| Federal Home Loan Bank stock, at cost | 18,908 | 29,908 | 44,716 | ||||||
| Loans, net of allowance for loan losses of $19,231 at September 30, 2021, $20,431 at December 31, 2021 and $24,388 at September 30, 2022 | 2,800,477 | 2,999,096 | 3,562,745 | ||||||
| Bank-owned life insurance | 12,901 | 12,980 | 13,232 | ||||||
| Premises and equipment, net | 15,476 | 15,825 | 17,213 | ||||||
| Accrued interest receivable | 5,270 | 5,467 | 6,380 | ||||||
| Deferred income tax asset, net | — | — | 4,918 | ||||||
| Other assets | 7,042 | 4,755 | 10,108 | ||||||
| Total assets | $ | 3,164,829 | $ | 3,431,165 | $ | 4,062,114 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY
| Interest-bearing deposits | $ | 2,049,930 | $ | 2,003,717 | $ | 2,169,763 | ||
| Non-interest-bearing deposits | 366,398 | 389,148 | 418,753 | |||||
| Total deposits | 2,416,328 | 2,392,865 | 2,588,516 | |||||
| Federal Home Loan Bank advances | 390,000 | 665,000 | 1,075,000 | |||||
| Mortgagors' escrow accounts | 8,683 | 9,183 | 11,764 | |||||
| Accrued interest payable | 179 | 198 | 2,536 | |||||
| Deferred income tax liability, net | 1,206 | 536 | — | |||||
| Other liabilities | 7,717 | 8,771 | 7,740 | |||||
| Total liabilities | 2,824,113 | 3,076,553 | 3,685,556 | |||||
| Stockholders' equity: | ||||||||
| Preferred stock, $1.00 par value, 2,500,000 shares authorized, none issued | — | — | — | |||||
| Common stock, $1.00 par value, 5,000,000 shares authorized; 2,142,400 shares issued and outstanding at September 30, 2021 and December 31, 2021 and 2,145,400 shares issued and outstanding at September 30, 2022 | 2,142 | 2,142 | 2,145 | |||||
| Additional paid-in capital | 12,722 | 12,728 | 12,914 | |||||
| Undivided profits | 325,852 | 339,742 | 361,499 | |||||
| Total stockholders' equity | 340,716 | 354,612 | 376,558 | |||||
| Total liabilities and stockholders' equity | $ | 3,164,829 | $ | 3,431,165 | $ | 4,062,114 | ||
HINGHAM INSTITUTION FOR SAVINGS
Consolidated Statements of Income
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| (In thousands, except per share amounts) | 2021 | 2022 | 2021 | 2022 | ||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||
| Loans | $ | 27,303 | $ | 34,209 | $ | 80,267 | $ | 96,375 | ||||||||||||
| Debt securities | 33 | 33 | 51 | 99 | ||||||||||||||||
| Equity securities | 171 | 492 | 562 | 1,036 | ||||||||||||||||
| Federal Reserve and other short-term investments | 78 | 1,660 | 184 | 2,289 | ||||||||||||||||
| Total interest and dividend income | 27,585 | 36,394 | 81,064 | 99,799 | ||||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Deposits | 1,551 | 4,483 | 5,350 | 8,089 | ||||||||||||||||
| Federal Home Loan Bank and Federal Reserve Bank advances | 202 | 4,608 | 858 | 6,531 | ||||||||||||||||
| Total interest expense | 1,753 | 9,091 | 6,208 | 14,620 | ||||||||||||||||
| Net interest income | 25,832 | 27,303 | 74,856 | 85,179 | ||||||||||||||||
| Provision for loan losses | 1,000 | 301 | 1,828 | 3,908 | ||||||||||||||||
| Net interest income, after provision for loan losses | 24,832 | 27,002 | 73,028 | 81,271 | ||||||||||||||||
| Other income (loss): | ||||||||||||||||||||
| Customer service fees on deposits | 181 | 141 | 554 | 456 | ||||||||||||||||
| Increase in cash surrender value of bank-owned life insurance | 79 | 82 | 244 | 252 | ||||||||||||||||
| Gain (loss) on equity securities, net | 2 | (5,117 | ) | 9,715 | (24,756 | ) | ||||||||||||||
| Gain on disposal of fixed assets | — | — | 2,337 | — | ||||||||||||||||
| Miscellaneous | 24 | 21 | 60 | 67 | ||||||||||||||||
| Total other income (loss) | 286 | (4,873 | ) | 12,910 | (23,981 | ) | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Salaries and employee benefits | 3,437 | 4,172 | 10,422 | 11,678 | ||||||||||||||||
| Occupancy and equipment | 351 | 339 | 1,082 | 1,028 | ||||||||||||||||
| Data processing | 489 | 691 | 1,432 | 1,953 | ||||||||||||||||
| Deposit insurance | 231 | 546 | 681 | 1,347 | ||||||||||||||||
| Foreclosure and related | 24 | 18 | (51 | ) | 5 | |||||||||||||||
| Marketing | 195 | 246 | 423 | 752 | ||||||||||||||||
| Other general and administrative | 833 | 869 | 2,333 | 2,706 | ||||||||||||||||
| Total operating expenses | 5,560 | 6,881 | 16,322 | 19,469 | ||||||||||||||||
| Income before income taxes | 19,558 | 15,248 | 69,616 | 37,821 | ||||||||||||||||
| Income tax provision | 5,546 | 4,749 | 18,832 | 12,267 | ||||||||||||||||
| Net income | $ | 14,012 | $ | 10,499 | $ | 50,784 | $ | 25,554 | ||||||||||||
| Cash dividends declared per share | $ | 0.53 | $ | 0.61 | $ | 1.53 | $ | 1.77 | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||
| Basic | 2,142 | 2,145 | 2,141 | 2,144 | ||||||||||||||||
| Diluted | 2,202 | 2,201 | 2,199 | 2,203 | ||||||||||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | 6.54 | $ | 4.89 | $ | 23.72 | $ | 11.92 | ||||||||||||
| Diluted | $ | 6.36 | $ | 4.77 | $ | 23.09 | $ | 11.60 | ||||||||||||
HINGHAM INSTITUTION FOR SAVINGS
Net Interest Income Analysis
| Three Months Ended September 30, | |||||||||||||||||
| 2021 | 2022 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 2,693,457 | $ | 27,303 | 4.05 | % | $ | 3,558,317 | $ | 34,209 | 3.85 | % | |||||
| Securities (3) (4) | 69,978 | 204 | 1.17 | 114,946 | 525 | 1.83 | |||||||||||
| Federal Reserve and other short-term investments | 202,685 | 78 | 0.15 | 285,832 | 1,660 | 2.32 | |||||||||||
| Total interest-earning assets | 2,966,120 | 27,585 | 3.72 | 3,959,095 | 36,394 | 3.68 | |||||||||||
| Other assets | 55,606 | 42,768 | |||||||||||||||
| Total assets | $ | 3,021,726 | $ | 4,001,863 | |||||||||||||
| Interest-bearing deposits (5) | $ | 2,032,203 | 1,551 | 0.31 | $ | 2,174,098 | 4,483 | 0.82 | |||||||||
| Borrowed funds | 279,796 | 202 | 0.29 | 1,030,979 | 4,608 | 1.79 | |||||||||||
| Total interest-bearing liabilities | 2,311,999 | 1,753 | 0.30 | 3,205,077 | 9,091 | 1.13 | |||||||||||
| Non-interest-bearing deposits | 364,599 | 410,403 | |||||||||||||||
| Other liabilities | 6,812 | 7,092 | |||||||||||||||
| Total liabilities | 2,683,410 | 3,622,572 | |||||||||||||||
| Stockholders' equity | 338,316 | 379,291 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 3,021,726 | $ | 4,001,863 | |||||||||||||
| Net interest income | $ | 25,832 | $ | 27,303 | |||||||||||||
| Weighted average spread | 3.42 | % | 2.55 | % | |||||||||||||
| Net interest margin (6) | 3.48 | % | 2.76 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 128.29 | % | 123.53 | % | |||||||||||||
| (1 | ) | Before allowance for loan losses. |
| (2 | ) | Includes non-accrual loans. |
| (3 | ) | Excludes the impact of the average net unrealized gain or loss on securities. |
| (4 | ) | Includes Federal Home Loan Bank stock. |
| (5 | ) | Includes mortgagors' escrow accounts. |
| (6 | ) | Net interest income divided by average total interest-earning assets. |
| (7 | ) | Total interest-earning assets divided by total interest-bearing liabilities. |
| (8 | ) | Annualized. |
HINGHAM INSTITUTION FOR SAVINGS
Net Interest Income Analysis
| Nine Months Ended September 30, | |||||||||||||||||
| 2021 | 2022 | ||||||||||||||||
| AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | AVERAGE BALANCE | INTEREST | YIELD/ RATE (8) | ||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Loans (1) (2) | $ | 2,586,723 | $ | 80,267 | 4.14 | % | $ | 3,330,511 | $ | 96,375 | 3.86 | % | |||||
| Securities (3) (4) | 66,478 | 613 | 1.23 | 106,481 | 1,135 | 1.42 | |||||||||||
| Federal Reserve and other short-term investments | 204,395 | 184 | 0.12 | 255,627 | 2,289 | 1.19 | |||||||||||
| Total interest-earning assets | 2,857,596 | 81,064 | 3.78 | 3,692,619 | 99,799 | 3.60 | |||||||||||
| Other assets | 51,469 | 47,707 | |||||||||||||||
| Total assets | $ | 2,909,065 | $ | 3,740,326 | |||||||||||||
| Interest-bearing deposits (5) | $ | 1,962,300 | 5,350 | 0.36 | $ | 2,084,032 | 8,089 | 0.52 | |||||||||
| Borrowed funds | 282,419 | 858 | 0.41 | 876,915 | 6,531 | 0.99 | |||||||||||
| Total interest-bearing liabilities | 2,244,719 | 6,208 | 0.37 | 2,960,947 | 14,620 | 0.66 | |||||||||||
| Non-interest-bearing deposits | 337,507 | 400,848 | |||||||||||||||
| Other liabilities | 6,852 | 7,377 | |||||||||||||||
| Total liabilities | 2,589,078 | 3,369,172 | |||||||||||||||
| Stockholders' equity | 319,987 | 371,154 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,909,065 | $ | 3,740,326 | |||||||||||||
| Net interest income | $ | 74,856 | $ | 85,179 | |||||||||||||
| Weighted average spread | 3.41 | % | 2.94 | % | |||||||||||||
| Net interest margin (6) | 3.49 | % | 3.08 | % | |||||||||||||
| Average interest-earning assets to average interest-bearing liabilities (7) | 127.30 | % | 124.71 | % | |||||||||||||
| (1 | ) | Before allowance for loan losses. |
| (2 | ) | Includes non-accrual loans. |
| (3 | ) | Excludes the impact of the average net unrealized gain or loss on securities. |
| (4 | ) | Includes Federal Home Loan Bank stock. |
| (5 | ) | Includes mortgagors' escrow accounts. |
| (6 | ) | Net interest income divided by average total interest-earning assets. |
| (7 | ) | Total interest-earning assets divided by total interest-bearing liabilities. |
| (8 | ) | Annualized. |
HINGHAM INSTITUTION FOR SAVINGS
Non-GAAP Reconciliation
The table below presents the reconciliation between net income and core net income, a non-GAAP measurement that represents net income excluding the after-tax gain on equity securities, net, and after-tax gain on disposal of fixed assets.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| (In thousands, unaudited) | 2021 | 2022 | 2021 | 2022 | |||||||||||||||||
| Non-GAAP reconciliation: | |||||||||||||||||||||
| Net income | $ | 14,012 | $ | 10,499 | $ | 50,784 | $ | 25,554 | |||||||||||||
| (Gain) loss on equity securities, net | (2 | ) | 5,117 | (9,715 | ) | 24,756 | |||||||||||||||
| Income tax expense (benefit) (1) | — | (1,125 | ) | 2,141 | (5,454 | ) | |||||||||||||||
| Gain on disposal of fixed assets | — | — | (2,337 | ) | — | ||||||||||||||||
| Income tax expense | — | — | 657 | — | |||||||||||||||||
| Core net income | $ | 14,010 | $ | 14,491 | $ | 41,530 | $ | 44,856 | |||||||||||||
(1) The equity securities are held in a tax-advantaged subsidiary corporation. The income tax effect of the gain on equity securities, net, was calculated using the effective tax rate applicable to the subsidiary.
