(MENAFN- GlobeNewsWire - Nasdaq) itemprop="articleBody">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 %
See the section labeled 'SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures' at the end of this document. Estimated for March 31, 2019 and actuals for prior periods. Period-end balances of net loans and mortgage loans held for sale as a percentage of total deposits. Annualized based on the actual number of days in the period. Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets. 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
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. Represents loan servicing fee income, net of servicing right amortization and valuation adjustments. 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
Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property. 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 %
Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone: (401) 348-1309
E-mail:
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