Shares of Hingham Institution for Savings (NASDAQ:HIFS) declined 8% on Wednesday after short seller Wolfpack Research disclosed a short position and published a report charging the bank with failing to fully disclose foreclosure activity and a cluster of distressed loans.
Wolfpack said it is shorting HIFS, arguing the institution "is over-leveraged, under-reserved, with a significant portion of its loan book underwater and/or in distress." The research firm reported identifying more than $125 million in loans it classifies as high-risk and distressed, with a concentration in the Washington D.C. market.
Among the specific allegations, Wolfpack said the bank foreclosed on two loans totaling $5.2 million in January but did not report either as "non-performing" in its earnings report for the period ending December 31, 2025. The short seller named several properties it considers problematic, including a $17 million loan tied to a vacant, vandalized project at 1701 Park Road NW in Washington, and a $31 million loan on the property at 50 M St NW that the firm says was 270 days delinquent and failed to sell in March 2025.
Wolfpack also scrutinized the bank's securities portfolio, noting that roughly 40% of HIFS's reported 13-F holdings consist of Alphabet (NASDAQ:GOOG) stock. The short seller asserted that nearly half of the bank's earnings from 2023 through 2025 were the result of mark-to-market gains on its securities holdings rather than core banking revenue.
Based on its review, Wolfpack concluded the bank "lacks the liquidity, capital cushion, or earnings power to easily absorb the losses we believe are inevitable," and projected potential downside of about 60% or more due to capital erosion and multiple compression. The report cited the bank's reported capital base at approximately $480 million and noted HIFS trades at a 1.38 price-to-book ratio versus the KRE regional bank ETF at 1.20 price-to-book.
The allegations and the short position prompted immediate market reaction, with the stock moving lower on the day the report was released. Investors will weigh Wolfpack's claims about loan quality and disclosure practices against the bank's public filings and regulatory disclosures as the situation unfolds.
What to watch next
- Whether Hingham Institution for Savings responds publicly to Wolfpack's specific allegations.
- Any adjustments in the bank's reported non-performing loans or reserves in future filings.
- Market reassessment of HIFS's valuation relative to regional bank peers following the report.