We Think HIFS Is the B. Riley of Regional Banks. We Believe HIFS Has Undisclosed Foreclosures, Over a Hundred Million in Failing Property Loans, And Is Highly Levered.

We are short Hingham Institution for Savings (HIFS), a bank that has been transformed by the CEO’s son from a conservative Massachusetts bank with a stellar record to a highly levered, highly concentrated, speculative play on some of Washington D.C.’s lowest quality commercial real estate (CRE). After extensive due diligence, we believe management has misled investors about the status of many of its properties and avoided increasing reserves (money set aside for potential defaults aka an allowance) which we think is a terrible idea because we found more than $125 million in loans we consider at high risk. We believe failure to reserve properly for losses could potentially trigger credit downgrades, capital calls, and contagion in a loan book that our analysis shows is highly levered and underwater. HIFS has just ~$480 million in capital, minimal reserves and trades far higher than peers at a 1.38 P/B (KRE at 1.20 P/B). We see downside risk of as much as 58%, if not more, for the stock.

Our analysis also shows HIFS has hundreds of millions in additional loans that are likely underwater. HIFS lent $832.8m in D.C. metro area CRE between 2021-2022 with reported LTVs of 75%, but our analysis indicates HIFS is currently stuck with implied LTVs >120% (on average) for a significant portion of its book. Publicly available data shows the selling price/sqft of large office space in D.C. has declined as much as 40% since 2023. Additionally, CoStar data indicates multifamily units’ values declined over 25% through January 2024 with rent growth falling to zero in 2025.

In January, management foreclosed on two properties to two separate borrowers securing a cumulative $5.2 million in outstanding loans. The total exposure of HIFS to these two borrowers across all their properties is ~$52 million, underscoring the risk of contagion. In management’s Q4 2025 earnings results, published Jan. 16th, management did not identify any of the loans attached to these foreclosures as “non-performing.” How many other “performing” loans are in distress? Let’s take a tour.