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CST: 22/08/2019 00:15:22   

Washington Trust Reports First Quarter 2019 Earnings

121 Days ago

WESTERLY, R.I., April 22, 2019 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced first quarter 2019 net income of $17.5 million, or $1.00 per diluted share, compared to net income of $17.0 million, or $0.98 per diluted share, reported for the fourth quarter of 2018.

“Washington Trust posted solid first quarter earnings and earnings per share,” stated Edward O. Handy III, Chairman and Chief Executive Officer.  “We had good activity across all business lines resulting from favorable market conditions, recent branch expansion, and continued marketing and business development efforts.”

Selected highlights for the first quarter of 2019 include:

  • Profitability ratios remain strong with returns on average equity and average assets of 15.52% and 1.39%, respectively.
  • Total revenues amounted to $50 million, up by 2% on a linked quarter basis.
  • Wealth management assets under administration were $6.4 billion at March 31, 2019, up by $439 million, or 7%, from the balance at December 31, 2018, reflecting financial market appreciation during the quarter.
  • Total loans were up by $58 million, or 2%, from the end of the prior quarter and up by $351 million, or 10%, from a year ago.

Net Interest Income
Net interest income was $34.6 million for the first quarter of 2019, up by $706 thousand, or 2%, from the fourth quarter of 2018.  The net interest margin was 2.93% for the first quarter, down by 2 basis points from 2.95% reported in the preceding quarter.  Excluding income associated with loan payoffs and prepayment penalties of $49 thousand in the first quarter and $144 thousand in the preceding quarter, the net interest margin was 2.93% for the first quarter, compared to 2.94% reported in the preceding quarter.

Significant linked quarter changes included:

  • Average interest-earning assets increased by $227 million, including increases of $124 million in average investment securities and $97 million in average commercial loans.  The yield on interest-earning assets for the first quarter was 4.24%, up by 11 basis points from the preceding quarter.  Excluding the impact of income associated with loan payoffs and prepayment penalties, the yield on interest-earning assets was 4.24%, up by 13 basis points from the preceding quarter.  The yield benefited from increased market interest rates.
  • Average interest-bearing liabilities increased by $226 million, including increases of $172 million in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances) and $53 million in average in-market deposits.  The cost of interest-bearing liabilities for the first quarter was 1.60%, up by 15 basis points from the preceding quarter.  This increase largely reflected higher rates paid on wholesale funding sources and promotional certificates of deposit.

Noninterest Income
Noninterest income totaled $15.4 million for the first quarter of 2019, up by $204 thousand, or 1%, from the fourth quarter of 2018.  Significant linked quarter changes included:

•         Wealth management revenues were $9.3 million for the first quarter of 2019, up by $240 thousand, or 3%, on a linked quarter basis, reflecting an increase in transaction-based revenues, largely due to tax reporting and preparation fees, which are generally concentrated in the first half of the year.  Asset-based revenues were down modestly by $9 thousand, or 0.1%, on a linked quarter basis.  While the March 31, 2019 end of period balances of wealth management assets under administration increased from the balance at December 31, 2018, the average balance of wealth management assets for the first quarter of 2019 was down slightly by $5 million, or 0.1%, from the fourth quarter of 2018.

  • Mortgage banking revenues were $2.6 million for the first quarter of 2019, up by $668 thousand, or 34%, from the preceding quarter.  First quarter results benefited from an increase in fair value adjustments on mortgage loan commitments and loans held for sale, as well as a relatively higher sales yield on mortgage loans sold in the secondary market.  The increase in the fair value adjustments reflected an increase in the mortgage pipeline and corresponding loan commitment balances as of March 31, 2019.
  • Loan related derivative income was $724 thousand for the first quarter of 2019, down by $650 thousand from the preceding quarter's above-average level of commercial borrower loan related derivative transaction volume.
  • Income from bank-owned life insurance amounted to $649 thousand in the first quarter of 2019, up by $77 thousand, from the preceding quarter.  Included in the first quarter was $91 thousand gain due to the receipt of tax-exempt life insurance proceeds.

Noninterest Expenses
Noninterest expenses totaled $27.0 million for the first quarter of 2019, up by $282 thousand, or 1%, from the fourth quarter of 2018.  The linked quarter comparison of noninterest expenses was impacted by the following:

  • In the fourth quarter of 2018, write-down valuation adjustments on other real estate owned amounting to $833 thousand were recognized and classified in other expenses.  There were no such write-downs in the first quarter of 2019.
  • In the fourth quarter of 2018, a reduction to noninterest expenses of $187 thousand was recognized, resulting from a nontaxable adjustment in the fair value of a contingent consideration liability that was initially recorded upon the completion of a 2015 acquisition.  There was no such reduction in the first quarter of 2019.

Excluding the impact of the aforementioned items, noninterest expenses for the first quarter of 2019 increased by $928 thousand, or 4%, on a linked quarter basis, primarily due to increased salaries and employee benefits expense, which largely reflected a routine increase in payroll taxes associated with the start of the new calendar year.

Income tax expense totaled $4.8 million for the first quarter of 2019, up by $319 thousand from the preceding quarter.  The effective tax rate for the first quarter of 2019 was 21.7%, compared to 21.0% for the preceding quarter.  Based on current federal and applicable state income tax statutes, the Corporation currently expects its 2019 effective tax rate to be approximately 21.5%.

Investment Securities
The securities portfolio totaled $995 million at March 31, 2019, up by $57 million from the balance at December 31, 2018.  The increase reflected first quarter purchases of $73 million in debt securities, with a weighted average yield of 3.69%, as well as an increase in the fair value of available for sale debt securities.  These increases were partially offset by routine principal pay-downs on mortgage-backed securities and a called debt security.  Investment securities represented 19% of total assets at both March 31, 2019 and December 31, 2018.

Loans
Total loans amounted to $3.7 billion at March 31, 2019, up by $58 million, or 2%, from the end of the preceding quarter, reflecting net growth in the commercial real estate portfolio.  The residential real estate loan portfolio decreased by $1 million from the end of the fourth quarter of 2018 and consumer loan portfolio declined by $2 million from the balance at December 31, 2018.  Total loans were up by $351 million, or 10%, from the balance a year ago.

Deposits and Borrowings
Total deposits amounted to $3.5 billion at March 31, 2019, down by $20 million, or 1%, from the end of the preceding quarter.  Excluding the balances of wholesale brokered time deposits, total in-market deposits were down by $27 million, or 1%, reflecting a decline in demand account balances partially offset by growth in promotional certificates of deposit.  Total deposits were up by $248 million, or 8%, from the balance a year ago.

Federal Home Loan Bank advances amounted to $1.1 billion at March 31, 2019, up by $105 million from the balance at December 31, 2018, to fund purchases of investment securities and loan growth.

Asset Quality
Total nonaccrual loans amounted to $12.4 million, or 0.33% of total loans, at March 31, 2019, compared to $11.7 million, or 0.32% of total loans, at December 31, 2018.  Total past due loans amounted to $14.7 million, or 0.39% of total loans, at March 31, 2019, compared to $13.6 million, or 0.37% of total loans, at December 31, 2018.

A loan loss provision totaling $650 thousand was recognized in the first quarter of 2019, compared to a loan loss provision of $800 thousand recognized in the preceding quarter.  These provisions were based on management's assessment of loss exposure, as well as loan loss allocations commensurate with growth and changes in the loan portfolio.  Net charge-offs totaled $78 thousand in the first quarter compared to $237 thousand in the preceding quarter.  The allowance for loan losses amounted to $27.6 million, or 0.74% of total loans, at March 31, 2019, compared to $27.1 million, or 0.74% of total loans, at December 31, 2018.

Capital and Dividends
Total shareholders' equity was $470 million at March 31, 2019, up by $21.7 million from December 31, 2018.  This increase included net income of $17.5 million and an increase of $10.8 million in the accumulated other comprehensive income component of shareholders' equity primarily due to an increase in the fair value of available for sale debt securities, partially offset by $8.2 million in dividend declarations in the first quarter.  The Board of Directors declared a quarterly dividend of 47 cents per share for the quarter ended March 31, 2019.  The dividend was paid on April 12, 2019 to shareholders of record on April 1, 2019.

Capital levels at March 31, 2019 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.59% at March 31, 2019, compared to 12.56% at December 31, 2018.  Book value per share amounted to $27.15 at March 31, 2019, compared to $25.90 at December 31, 2018.

Conference Call
Washington Trust will host a conference call to discuss its first quarter results, business highlights and outlook on Monday, April 22, 2019 at 8:30 a.m. (Eastern Time).  Individuals may dial in to the call at 1-877-407-9208.  An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-844-512-2921 and entering the Replay PIN Number 13689272; the audio replay will be available through May 13, 2019.  Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, http://ir.washtrust.com, and will be available through June 30, 2019.

Background
Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company.  Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies.  Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts.  The Corporation’s common stock trades on NASDAQ under the symbol WASH.  Investor information is available on the Corporation’s web site at http://ir.washtrust.com

Forward-Looking Statements
This press release contains statements that are “forward-looking statements”.  We may also make forward-looking statements in other documents we file with the SEC, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees.  You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters.  You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control.  These risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include the following: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value or outflows of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of our competition; changes in legislation or regulation and accounting principles, policies and guidelines; occurrences of cyberattacks, hacking and identity theft; natural disasters; and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Supplemental Information - Explanation of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures.  Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors.  These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.  Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.


Washington Trust Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)
           
  Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Assets:          
Cash and due from banks $88,242   $89,923   $72,934   $132,068   $85,680  
Short-term investments   3,317     3,552     2,917     2,624     2,322  
Mortgage loans held for sale, at fair value   14,608     20,996     22,571     35,207     19,269  
Securities:          
Available for sale debt securities, at fair value   994,881     927,810     812,647     776,693     787,842  
Held to maturity debt securities, at amortized cost       10,415     10,863     11,412     11,973  
Total securities   994,881     938,225     823,510     788,105     799,815  
Federal Home Loan Bank stock, at cost   48,025     46,068     44,525     46,281     41,127  
Loans:          
Total loans   3,738,469     3,680,360     3,556,203     3,490,230     3,387,406  
Less allowance for loan losses   27,644     27,072     26,509     26,174     25,864  
Net loans   3,710,825     3,653,288     3,529,694     3,464,056     3,361,542  
Premises and equipment, net   29,822     29,005     28,195     28,377     28,316  
Operating lease right-of-use assets   28,249                  
Investment in bank-owned life insurance   80,786     80,463     79,891     79,319     73,782  
Goodwill   63,909     63,909     63,909     63,909     63,909  
Identifiable intangible assets, net   7,923     8,162     8,400     8,645     8,893  
Other assets   84,142     77,175     94,126     88,651     81,671  
Total assets $5,154,729   $5,010,766   $4,770,672   $4,737,242   $4,566,326  
Liabilities:          
Deposits:          
Noninterest-bearing deposits $577,319   $603,216   $611,829   $577,656   $601,478  
Interest-bearing deposits   2,926,941     2,920,832     2,802,519     2,743,955     2,654,956  
Total deposits   3,504,260     3,524,048     3,414,348     3,321,611     3,256,434  
Federal Home Loan Bank advances   1,056,129     950,722     828,392     901,053     808,677  
Junior subordinated debentures   22,681     22,681     22,681     22,681     22,681  
Operating lease liabilities   30,187                  
Other liabilities   71,629     65,131     77,342     70,326     65,453  
Total liabilities   4,684,886     4,562,582     4,342,763     4,315,671     4,153,245  
Shareholders’ Equity:          
Common stock   1,082     1,081     1,081     1,080     1,079  
Paid-in capital   120,743     119,888     119,220     118,883     118,172  
Retained earnings   365,521     355,524     346,685     336,670     326,505  
Accumulated other comprehensive loss   (17,503 )   (28,309 )   (39,077 )   (35,062 )   (32,675 )
Total shareholders’ equity   469,843     448,184     427,909     421,571     413,081  
Total liabilities and shareholders’ equity $5,154,729   $5,010,766   $4,770,672   $4,737,242   $4,566,326  


Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; Dollars and shares in thousands, except per share amounts)
           
For the Three Months Ended Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Interest income:          
Interest and fees on loans $41,744   $40,299   $38,493   $36,788   $34,352  
Interest on mortgage loans held for sale   180     289     384     313     226  
Taxable interest on debt securities   7,226     5,957     5,383     5,358     5,118  
Nontaxable interest on debt securities   9     9     9     20     23  
Dividends on Federal Home Loan Bank stock   695     669     634     550     516  
Other interest income   340     294     261     257     205  
Total interest and dividend income   50,194     47,517     45,164     43,286     40,440  
Interest expense:          
Deposits   8,696     7,953     6,546     5,254     4,422  
Federal Home Loan Bank advances   6,661     5,446     4,937     4,707     3,983  
Junior subordinated debentures   253     240     232     214     183  
Total interest expense   15,610     13,639     11,715     10,175     8,588  
Net interest income   34,584     33,878     33,449     33,111     31,852  
Provision for loan losses   650     800     350     400      
Net interest income after provision for loan losses   33,934     33,078     33,099     32,711     31,852  
Noninterest income:          
Wealth management revenues   9,252     9,012     9,454     9,602     10,273  
Mortgage banking revenues   2,646     1,978     2,624     2,941     2,838  
Card interchange fees   997     977     983     961     847  
Service charges on deposit accounts   875     977     885     903     863  
Loan related derivative income   724     1,374     278     668     141  
Income from bank-owned life insurance   649     572     572     537     515  
Other income   224     273     419     381     266  
Total noninterest income   15,367     15,163     15,215     15,993     15,743  
Noninterest expense:          
Salaries and employee benefits   17,619     16,918     17,283     17,304     17,772  
Outsourced services   2,606     2,510     1,951     2,350     1,873  
Net occupancy   1,998     1,946     2,013     1,930     2,002  
Equipment   1,011     983     1,080     1,069     1,180  
Legal, audit and professional fees   534     587     559     555     726  
FDIC deposit insurance costs   429     376     410     422     404  
Advertising and promotion   239     460     440     329     177  
Amortization of intangibles   239     239     245     247     248  
Change in fair value of contingent consideration       (187 )            
Other expenses   2,289     2,850     2,081     2,082     2,748  
Total noninterest expense   26,964     26,682     26,062     26,288     27,130  
Income before income taxes   22,337     21,559     22,252     22,416     20,465  
Income tax expense   4,842     4,523     4,741     4,742     4,254  
Net income $17,495   $17,036   $17,511   $17,674   $16,211  
           
Net income available to common shareholders $17,461   $17,004   $17,475   $17,636   $16,173  
           
Weighted average common shares outstanding:          
  Basic   17,304     17,297     17,283     17,272     17,234  
  Diluted   17,401     17,385     17,382     17,387     17,345  
Earnings per common share:          
  Basic $1.01   $0.98   $1.01   $1.02   $0.94  
  Diluted $1.00   $0.98   $1.01   $1.01   $0.93  
           
Cash dividends declared per share $0.47   $0.47   $0.43   $0.43   $0.43  


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars and shares in thousands, except per share amounts)
   
  Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Share and Equity Related Data:          
Book value per share $27.15   $25.90   $24.75   $24.40   $23.93  
Tangible book value per share - Non-GAAP (1) $23.00   $21.74   $20.57   $20.20   $19.71  
Market value per share $48.15   $47.53   $55.30   $58.10   $53.75  
Shares issued and outstanding at end of period   17,305     17,302     17,290     17,278     17,262  
                               
Capital Ratios (2):                              
Tier 1 risk-based capital   11.84 %   11.81 %   12.00 %   11.84 %   11.78 %
Total risk-based capital   12.59 %   12.56 %   12.77 %   12.61 %   12.56 %
Tier 1 leverage ratio   8.69 %   8.89 %   8.91 %   8.87 %   8.84 %
Common equity tier 1   11.25 %   11.20 %   11.37 %   11.20 %   11.13 %
                               
Balance Sheet Ratios:                              
Equity to assets   9.11 %   8.94 %   8.97 %   8.90 %   9.05 %
Tangible equity to tangible assets - Non-GAAP (1)   7.83 %   7.62 %   7.57 %   7.48 %   7.57 %
Loans to deposits (3)   106.3 %   104.3 %   104.0 %   105.3 %   103.8 %


For the Three Months Ended Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Performance Ratios (4):          
Net interest margin (5) 2.93 % 2.95 % 2.99 % 3.05 % 3.03 %
Return on average assets (net income divided by average assets) 1.39 % 1.40 % 1.47 % 1.53 % 1.45 %
Return on average tangible assets - Non-GAAP (1) 1.41 % 1.42 % 1.49 % 1.56 % 1.48 %
Return on average equity (net income available for common shareholders divided by average equity) 15.52 % 15.61 % 16.26 % 16.99 % 15.96 %
Return on average tangible equity - Non-GAAP (1) 18.43 % 18.75 % 19.59 % 20.58 % 19.40 %
Efficiency ratio (6) 54.0 % 54.4 % 53.6 % 53.5 % 57.0 %
  1. See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.
  2. Estimated for March 31, 2019 and actuals for prior periods.
  3. Period-end balances of net loans and mortgage loans held for sale as a percentage of total deposits.
  4. Annualized based on the actual number of days in the period.
  5. Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets.
  6. Total noninterest expense as percentage of total revenues (net interest income and noninterest income).


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands)
   
For the Three Months Ended Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Wealth Management Results          
Wealth Management Revenues:          
Asset-based revenues $8,921   $8,930   $9,322   $9,136   $9,955  
Transaction-based revenues   331     82     132     466     318  
Total wealth management revenues $9,252   $9,012   $9,454   $9,602   $10,273  
           
Assets Under Administration (AUA):          
Balance at beginning of period $5,910,814   $6,462,340   $6,220,155   $6,343,720   $6,714,637  
Net investment appreciation (depreciation) & income   520,057     (534,847 )   232,245     133,450     (32,024 )
Net client asset flows   (80,743 )   (16,679 )   9,940     (257,015 )   (338,893 )
Balance at end of period $6,350,128   $5,910,814   $6,462,340   $6,220,155   $6,343,720  
           
Percentage of AUA that are managed assets   91 %   90 %   91 %   92 %   92 %
           
Mortgage Banking Results          
Mortgage Banking Revenues:          
Gains & commissions on loan sales, net (1) $2,474   $1,798   $2,485   $2,786   $2,679  
Loan servicing fee income, net (2)   172     180     139     155     159  
Total mortgage banking revenues $2,646   $1,978   $2,624   $2,941   $2,838  
           
Residential Mortgage Loan Originations:          
Originations for retention in portfolio $51,697   $58,515   $80,751   $128,479   $67,840  
Originations for sale to secondary market (3)   85,826     96,792     119,832     122,693     87,720  
Total mortgage loan originations $137,523   $155,307   $200,583   $251,172   $155,560  
           
Residential Mortgage Loans Sold:          
Sold with servicing rights retained $9,490   $16,577   $24,422   $24,367   $33,575  
Sold with servicing rights released (3)   82,589     81,985     107,694     81,054     63,265  
Total mortgage loans sold $92,079   $98,562   $132,116   $105,421   $96,840  
  1. Includes gains on loan sales, commissions on loans originated for others, servicing right gains, fair value adjustments on mortgage loans held for sale, and fair value adjustments and gains on forward loan commitments.
  2. Represents loan servicing fee income, net of servicing right amortization and valuation adjustments.
  3. Includes loans originated in a broker capacity.


Washington Trust Bancorp, Inc. and Subsidiaries
END OF PERIOD LOAN AND DEPOSIT COMPOSITION
(Unaudited; Dollars in thousands)
   
  Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Loans:          
Commercial real estate (1) $1,463,682   $1,392,408   $1,240,350   $1,218,643   $1,217,278  
Commercial & industrial   610,608     620,704     656,882     632,029     603,830  
Total commercial   2,074,290     2,013,112     1,897,232     1,850,672     1,821,108  
           
Residential real estate (2)   1,359,072     1,360,387     1,349,340     1,327,418     1,249,890  
           
Home equity   279,938     280,626     282,331     283,744     285,723  
Other   25,169     26,235     27,300     28,396     30,685  
Total consumer   305,107     306,861     309,631     312,140     316,408  
Total loans $3,738,469   $3,680,360   $3,556,203   $3,490,230   $3,387,406  
  1. Commercial real estate loans consist of commercial mortgages and construction and development loans.  Commercial mortgages are loans secured by income producing property.
  2. Residential real estate loans consist of mortgage and homeowner construction loans secured by one- to four-family residential properties.


  March 31, 2019   December 31, 2018
  Balance % of Total   Balance % of Total
Commercial Real Estate Loans by Property Location:          
Rhode Island $386,990   26 %   $377,249   27 %
Connecticut   582,934   40       570,116   41  
Massachusetts   402,276   28       356,615   26  
Subtotal   1,372,200   94       1,303,980   94  
All other states   91,482   6       88,428   6  
Total commercial real estate loans $1,463,682   100 %   $1,392,408   100 %
                   
Residential Real Estate Loans by Property Location:                  
Rhode Island $349,232   26 %   $352,141   26 %
Connecticut   142,472   10       141,775   10  
Massachusetts   850,940   63       849,435   63  
Subtotal   1,342,644   99       1,343,351   99  
All other states   16,428   1       17,036   1  
Total residential real estate loans $1,359,072   100 %   $1,360,387   100 %


  Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Deposits:          
Noninterest-bearing demand deposits $577,319   $603,216   $611,829   $577,656   $601,478  
Interest-bearing demand deposits   162,598     178,733     151,322     136,640     83,249  
NOW accounts   471,682     466,568     468,578     481,905     470,112  
Money market accounts   644,949     646,878     650,976     604,954     693,748  
Savings accounts   371,248     373,545     372,425     375,983     376,608  
Time deposits (in-market)   792,470     778,105     715,635     698,286     625,965  
In-market deposits   3,020,266     3,047,045     2,970,765     2,875,424     2,851,160  
Wholesale brokered time deposits   483,994     477,003     443,583     446,187     405,274  
Total deposits $3,504,260   $3,524,048   $3,414,348   $3,321,611   $3,256,434  


Washington Trust Bancorp, Inc. and Subsidiaries
CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
   
  Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Asset Quality Ratios:          
Nonperforming assets to total assets   0.28 %   0.28 %   0.29 %   0.32 %   0.30 %
Nonaccrual loans to total loans   0.33 %   0.32 %   0.30 %   0.34 %   0.31 %
Total past due loans to total loans   0.39 %   0.37 %   0.38 %   0.48 %   0.57 %
Allowance for loan losses to nonaccrual loans   223.57 %   231.25 %   245.25 %   222.85 %   245.83 %
Allowance for loan losses to total loans   0.74 %   0.74 %   0.75 %   0.75 %   0.76 %
           
Nonperforming Assets:          
Commercial real estate $926   $925     $—     $—     $—  
Commercial & industrial           122     397     397  
Total commercial   926     925     122     397     397  
Residential real estate   10,032     9,346     9,063     10,206     9,340  
Home equity   1,407     1,436     1,624     1,133     771  
Other consumer               9     13  
Total consumer   1,407     1,436     1,624     1,142     784  
Total nonaccrual loans   12,365     11,707     10,809     11,745     10,521  
Other real estate owned   2,142     2,142     2,974     3,206     3,206  
Total nonperforming assets $14,507   $13,849   $13,783   $14,951   $13,727  
           
Past Due Loans (30 days or more past due):          
Commercial real estate $926   $1,080   $931     $—     $—  
Commercial & industrial   1         142     2,851     3,295  
Total commercial   927     1,080     1,073     2,851     3,295  
Residential real estate   10,849     10,520     9,398     11,243     11,806  
Home equity   2,911     1,989     2,939     2,585     4,235  
Other consumer   13     33     109     16     22  
Total consumer   2,924     2,022     3,048     2,601     4,257  
Total past due loans $14,700   $13,622   $13,519   $16,695   $19,358  
           
Accruing loans 90 days or more past due   $—     $—     $—     $—     $—  
Nonaccrual loans included in past due loans $8,563   $8,613   $6,425   $8,575   $7,066  


Washington Trust Bancorp, Inc. and Subsidiaries
CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
           
For the Three Months Ended Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Nonaccrual Loan Activity:          
Balance at beginning of period $11,707   $10,809   $11,745   $10,521   $15,211  
Additions to nonaccrual status   1,924     2,918     2,179     2,457     1,210  
Loans returned to accruing status   (855 )   (1,500 )   (361 )   (475 )   (344 )
Loans charged-off   (103 )   (298 )   (96 )   (103 )   (690 )
Loans transferred to other real estate owned                   (3,074 )
Payments, payoffs and other changes   (308 )   (222 )   (2,658 )   (655 )   (1,792 )
Balance at end of period $12,365   $11,707   $10,809   $11,745   $10,521  
           
Allowance for Loan Losses:          
Balance at beginning of period $27,072   $26,509   $26,174   $25,864   $26,488  
Provision charged to earnings   650     800     350     400      
Charge-offs   (103 )   (298 )   (96 )   (103 )   (690 )
Recoveries   25     61     81     13     66  
Balance at end of period $27,644   $27,072   $26,509   $26,174   $25,864  
           
Net Loan Charge-Offs (Recoveries):          
Commercial real estate   $—     $—     $—     $—   $602  
Commercial & industrial   6     (13 )   (70 )   (3 )   (23 )
Total commercial   6     (13 )   (70 )   (3 )   579  
Residential real estate       156     68     5      
Home equity   48     65     (2 )   73     28  
Other consumer   24     29     19     15     17  
Total consumer   72     94     17     88     45  
Total $78   $237   $15   $90   $624  
           
Net charge-offs to average loans (annualized)   0.01 %   0.03 %   %   0.01 %   0.07 %

The following table presents average balance and interest rate information.  Tax-exempt income is converted to a fully taxable equivalent basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit.  Unrealized gains (losses) on available for sale securities and fair value adjustments on mortgage loans held for sale are excluded from the average balance and yield calculations.  Nonaccrual loans, as well as interest recognized on these loans, are included in amounts presented for loans.


Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)
(Unaudited; Dollars in thousands)
For the Three Months Ended March 31, 2019   December 31, 2018   Quarter Change
  Average Balance Interest Yield/
Rate
  Average Balance Interest Yield/
Rate
  Average Balance Interest Yield/
Rate
 
Assets:                      
Cash, federal funds sold and short-term investments $56,359   $340   2.45 %   $51,584   $294   2.26 %   $4,775   $46   0.19 %
Mortgage loans held for sale   16,587     180   4.40       24,178     289   4.74       (7,591 )   (109 ) (0.34 )
Taxable debt securities   1,000,911     7,226   2.93       877,186     5,957   2.69       123,725     1,269   0.24  
Nontaxable debt securities   935     10   4.34       935     12   5.09           (2 ) (0.75 )
Total securities   1,001,846     7,236   2.93       878,121     5,969   2.70       123,725     1,267   0.23  
FHLB stock   46,988     695   6.00       44,662     669   5.94       2,326     26   0.06  
Commercial real estate   1,425,225     16,879   4.80       1,309,957     15,500   4.69       115,268     1,379   0.11  
Commercial & industrial   618,364     7,544   4.95       636,156     7,732   4.82       (17,792 )   (188 ) 0.13  
Total commercial   2,043,589     24,423   4.85       1,946,113     23,232   4.74       97,476     1,191   0.11  
Residential real estate   1,357,835     13,765   4.11       1,348,993     13,516   3.98       8,842     249   0.13  
Home equity   278,581     3,564   5.19       280,085     3,553   5.03       (1,504 )   11   0.16  
Other   25,629     316   5.00       26,679     329   4.89       (1,050 )   (13 ) 0.11  
Total consumer   304,210     3,880   5.17       306,764     3,882   5.02       (2,554 )   (2 ) 0.15  
Total loans   3,705,634     42,068   4.60       3,601,870     40,630   4.48       103,764     1,438   0.12  
Total interest-earning assets   4,827,414     50,519   4.24       4,600,415     47,851   4.13       226,999     2,668   0.11  
Noninterest-earning assets   268,689           239,743           28,946      
Total assets $5,096,103         $4,840,158         $255,945      
Liabilities and Shareholders' Equity:                      
Interest-bearing demand deposits $165,911   $686   1.68 %   $148,840   $636   1.70 %   $17,071   $50   (0.02 )%
NOW accounts   454,868     84   0.07       455,052     207   0.18       (184 )   (123 ) (0.11 )
Money market accounts   646,250     1,609   1.01       649,535     1,449   0.89       (3,285 )   160   0.12  
Savings accounts   369,219     61   0.07       369,787     60   0.06       (568 )   1   0.01  
Time deposits (in-market)   789,378     3,727   1.91       749,025     3,318   1.76       40,353     409   0.15  
Total interest-bearing in-market deposits   2,425,626     6,167   1.03       2,372,239     5,670   0.95       53,387     497   0.08  
Wholesale brokered time deposits   473,799     2,529   2.16       450,336     2,283   2.01       23,463     246   0.15  
Total interest-bearing deposits   2,899,425     8,696   1.22       2,822,575     7,953   1.12       76,850     743   0.10  
FHLB advances   1,027,285     6,661   2.63       878,250     5,446   2.46       149,035     1,215   0.17  
Junior subordinated debentures   22,681     253   4.52       22,681     240   4.20           13   0.32  
Total interest-bearing liabilities   3,949,391     15,610   1.60       3,723,506     13,639   1.45       225,885     1,971   0.15  
Noninterest-bearing demand deposits   607,033           615,392           (8,359 )    
Other liabilities   83,438           69,217           14,221      
Shareholders' equity   456,241           432,043           24,198      
Total liabilities and shareholders' equity $5,096,103         $4,840,158         $255,945      
Net interest income (FTE)   $34,909         $34,212         $697    
Interest rate spread     2.64 %       2.68 %       (0.04 )%
Net interest margin     2.93 %       2.95 %       (0.02 )%

Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:

For the Three Months Ended Mar 31, 2019 Dec 31, 2018 Quarter Change
Commercial loans $324   $331   ($7 )
Nontaxable debt securities   1     3     (2 )
Total $325   $334   ($9 )



Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures
(Unaudited; Dollars in thousands, except per share amounts)
   
  Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Tangible Book Value per Share:          
Total shareholders' equity, as reported $469,843   $448,184   $427,909   $421,571   $413,081  
Less:          
Goodwill   63,909     63,909     63,909     63,909     63,909  
Identifiable intangible assets, net   7,923     8,162     8,400     8,645     8,893  
Total tangible shareholders' equity $398,011   $376,113   $355,600   $349,017   $340,279  
           
Shares outstanding, as reported   17,305     17,302     17,290     17,278     17,262  
           
Book value per share - GAAP $27.15   $25.90   $24.75   $24.40   $23.93  
Tangible book value per share - Non-GAAP $23.00   $21.74   $20.57   $20.20   $19.71  
           
Tangible Equity to Tangible Assets:          
Total tangible shareholders' equity $398,011   $376,113   $355,600   $349,017   $340,279  
           
Total assets, as reported $5,154,729   $5,010,766   $4,770,672   $4,737,242   $4,566,326  
Less:          
Goodwill   63,909     63,909     63,909     63,909     63,909  
Identifiable intangible assets, net   7,923     8,162     8,400     8,645     8,893  
Total tangible assets $5,082,897   $4,938,695   $4,698,363   $4,664,688   $4,493,524  
           
Equity to assets - GAAP   9.11 %   8.94 %   8.97 %   8.90 %   9.05 %
Tangible equity to tangible assets - Non-GAAP   7.83 %   7.62 %   7.57 %   7.48 %   7.57 %



For the Three Months Ended Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Return on Average Tangible Assets:          
Net income, as reported $17,495   $17,036   $17,511   $17,674   $16,211  
                               
Total average assets, as reported $5,096,103   $4,840,158   $4,724,898   $4,628,816   $4,529,708  
Less average balances of:                              
Goodwill   63,909     63,909     63,909     63,909     63,909  
Identifiable intangible assets, net   8,040     8,278     8,519     8,766     9,014  
Total average tangible assets $5,024,154   $4,767,971   $4,652,470   $4,556,141   $4,456,785  
                               
Return on average assets - GAAP   1.39 %   1.40 %   1.47 %   1.53 %   1.45 %
Return on average tangible assets - Non-GAAP   1.41 %   1.42 %   1.49 %   1.56 %   1.48 %
                               
Return on Average Tangible Equity:                              
Net income available to common shareholders, as reported $17,461   $17,004   $17,475   $17,636   $16,173  
                               
Total average equity, as reported $456,241   $432,043   $426,306   $416,433   $410,955  
Less average balances of:                              
Goodwill   63,909     63,909     63,909     63,909     63,909  
Identifiable intangible assets, net   8,040     8,278     8,519     8,766     9,014  
Total average tangible equity $384,292   $359,856   $353,878   $343,758   $338,032  
                               
Return on average equity - GAAP   15.52 %   15.61 %   16.26 %   16.99 %   15.96 %
Return on average tangible equity - Non-GAAP   18.43 %   18.75 %   19.59 %   20.58 %   19.40 %


Contact:  Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone:  (401) 348-1309
E-mail:  ebeckel@washtrust.com 

 

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