Slide 1

Press Release

Washington Trust Reports Second Quarter 2019 Earnings

Company Release - 7/22/2019 4:05 PM ET

WESTERLY, R.I., July 22, 2019 /PRNewswire/ -- Washington Trust Bancorp, Inc. (Nasdaq: WASH), parent company of The Washington Trust Company, today announced second quarter 2019 net income of $17.3 million, or $0.99 per diluted share, compared to net income of $17.5 million, or $1.00 per diluted share, reported for the first quarter of 2019.

(PRNewsfoto/Washington Trust Bancorp, Inc.)

"Washington Trust's second quarter earnings reflect our success at generating revenues from our diversified business model," stated Edward O. Handy III, Chairman and Chief Executive Officer.  "We continue to see positive results from our key business lines, despite a competitive and challenging economic environment."

Selected highlights for the second quarter of 2019 include:

  • Returns on average equity and average assets were 14.58% and 1.34%, respectively.
  • Mortgage banking revenues were $3.6 million, up by $994 thousand, or 38%, from the preceding quarter.
  • Total loans amounted to $3.7 billion, down by $8.1 million from the preceding quarter. Total loans were up by $240 million, or 7%, from the balance at June 30, 2018.
  • Total deposits amounted to $3.5 billion, up by $362 thousand from the preceding quarter. Total deposits were up by $183 million, or 6%, from the balance at June 30, 2018.
  • In June, Washington Trust declared a quarterly dividend of 51 cents per share, representing a 4 cent per share, or 9%, increase over the preceding quarter.

Net Interest Income
Net interest income was $33.9 million for the second quarter of 2019, down by $726 thousand, or 2%, from the first quarter of 2019.  The net interest margin was 2.81% for the second quarter, down by 12 basis points from 2.93% reported in the preceding quarter.  Income associated with loan payoffs and prepayment penalties, which is included in net interest income, was modest at $37 thousand in the second quarter and $49 thousand in the preceding quarter.

Significant linked quarter changes included:

  • Average interest-earning assets increased by $56 million, including an increase of $32 million in average commercial loans. The yield on interest-earning assets for the second quarter was 4.18%, down by 6 basis points from the preceding quarter. The yield was impacted by lower market interest rates.
  • Average interest-bearing liabilities increased by $45 million, including an increase of $57 million in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances), partially offset by a $12 million decline in average in-market deposits. The cost of interest-bearing liabilities for the second quarter was 1.68%, up by 8 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 $16.8 million for the second quarter of 2019, up by $1.4 million, or 9%, from the first quarter of 2019.  Significant linked quarter changes included:

  • Wealth management revenues were $9.5 million for the second quarter of 2019, up by $297 thousand, or 3%, on a linked quarter basis, consisting of increases of $220 thousand in asset-based revenues and $77 thousand in transaction-based revenues. Wealth management assets under administration stood at $6.5 billion at June 30, 2019, up by $128.8 million, or 2%, from the balance at March 31, 2019. The average balance of wealth management assets under administration for the second quarter of 2019 increased by 3% from the average balance in the preceding quarter. Both the increase in asset-based revenues and wealth management assets under administration were attributable to financial market appreciation.

    In late June, two client-facing senior counselors in our Weston Financial Group subsidiary left the firm.  As a result, Washington Trust could experience an increased level of client asset outflows in upcoming months.

  • Mortgage banking revenues totaled $3.6 million for the second quarter of 2019, up by $994 thousand, or 38%, from the preceding quarter. Mortgage loans sold in the secondary market amounted to $137.4 million for the second quarter of 2019, an increase of $45.3 million, or 49%, compared to the preceding quarter.

Noninterest Expenses
Noninterest expenses totaled $28.2 million for the second quarter of 2019, up by $1.2 million, or 4%, from the first quarter of 2019.  The linked quarter change reflected increases of $817 thousand in salaries and employee benefits expense and $286 thousand in advertising and promotion costs.  The increase in salaries and employee benefits expense from the preceding quarter reflected increased commissions expense due to an increase in mortgage banking activities.  The linked quarter increase in advertising and promotion costs was largely due to the timing of promotional activities.

Income tax expense totaled $4.7 million for the second quarter of 2019, down by $180 thousand from the preceding quarter.  The effective tax rate for the second quarter of 2019 was 21.3%, compared to 21.7% 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 21.6%.

Investment Securities
The securities portfolio totaled $969 million at June 30, 2019, down by $26 million from the balance at March 31, 2019.  The decrease was primarily due to routine principal pay-downs on mortgage-backed securities, partially offset by an increase in the fair value of available for sale debt securities.  Investment securities represented 19% of total assets at both June 30, 2019 and March 31, 2019.

Loans
Total loans amounted to $3.7 billion at June 30, 2019, down by $8 million from the end of the preceding quarter.  The commercial real estate portfolio increased by $19 million, while the commercial and industrial portfolio declined by $27 million, from the end of the prior quarter.  Commercial loan originations and advances totaled $107 million in the second quarter of 2019, offset by payoffs and paydowns totaling $113 million during the period.  The residential real estate loan portfolio decreased by $7 million from the end of the first quarter of 2019 and consumer loan portfolio increased by $6 million from the balance at March 31, 2019.

Deposits and Borrowings
Total deposits amounted to $3.5 billion at June 30, 2019, unchanged from the end of the preceding quarter.  Excluding the balances of wholesale brokered time deposits, total in-market deposits were up by $1 million.  Federal Home Loan Bank advances amounted to $1.1 billion at June 30, 2019, up by $5 million from the balance at March 31, 2019.

Asset Quality
Total nonaccrual loans amounted to $12.9 million, or 0.34% of total loans, at June 30, 2019, compared to $12.4 million, or 0.33% of total loans, at March 31, 2019.  Total past due loans amounted to $17.9 million, or 0.48% of total loans, at June 30, 2019, compared to $14.7 million, or 0.39% of total loans, at March 31, 2019.  The increase in past due loans was largely due to one commercial real estate loan with a carrying value of $2.7 million that went delinquent in the second quarter of 2019.  This loan returned to current status in early July 2019.

A loan loss provision totaling $525 thousand was recognized in the second quarter of 2019, compared to a loan loss provision of $650 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 changes in the loan portfolio.  Net charge-offs totaled $771 thousand in the second quarter and were largely attributable to one residential real estate relationship.  Net charge-offs were $78 thousand in the preceding quarter.  The allowance for loan losses amounted to $27.4 million, or 0.73% of total loans, at June 30, 2019, compared to $27.6 million, or 0.74% of total loans, at March 31, 2019.

Capital and Dividends
Total shareholders' equity was $484 million at June 30, 2019, up by $14.4 million from March 31, 2019.  This increase included net income of $17.3 million and an increase of $5.6 million in the accumulated other comprehensive income component of shareholders' equity reflecting an increase in the fair value of available for sale debt securities, partially offset by $8.9 million in dividend declarations in the second quarter.  The Board of Directors declared a quarterly dividend of 51 cents per share for the quarter ended June 30, 2019, an increase of 4 cents per share, or 9%, over the preceding quarter.  The dividend was paid on July 12, 2019 to shareholders of record on July 1, 2019.

Capital levels at June 30, 2019 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.80% at June 30, 2019, compared to 12.59% at March 31, 2019.  Book value per share amounted to $27.93 at June 30, 2019, compared to $27.15 at March 31, 2019.

Conference Call
Washington Trust will host a conference call to discuss its second quarter results, business highlights and outlook on Tuesday, July 23, 2019 at 8:30 a.m. (Eastern Time).  Individuals may dial in to the call at 1-888-317-6016.  An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-877-344-7529 and entering the Replay PIN Number 10132712; the audio replay will be available through August 5, 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 September 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)








Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018

Assets:






Cash and due from banks

$115,904


$88,242


$89,923


$72,934


$132,068


Short-term investments

3,910


3,317


3,552


2,917


2,624


Mortgage loans held for sale, at fair value

39,996


14,608


20,996


22,571


35,207


Securities:






Available for sale debt securities, at fair value

969,168


994,881


927,810


812,647


776,693


Held to maturity debt securities, at amortized cost



10,415


10,863


11,412


Total securities

969,168


994,881


938,225


823,510


788,105


Federal Home Loan Bank stock, at cost

49,759


48,025


46,068


44,525


46,281


Loans:






Total loans

3,730,339


3,738,469


3,680,360


3,556,203


3,490,230


Less allowance for loan losses

27,398


27,644


27,072


26,509


26,174


Net loans

3,702,941


3,710,825


3,653,288


3,529,694


3,464,056


Premises and equipment, net

29,302


29,822


29,005


28,195


28,377


Operating lease right-of-use assets

28,174


28,249





Investment in bank-owned life insurance

81,351


80,786


80,463


79,891


79,319


Goodwill

63,909


63,909


63,909


63,909


63,909


Identifiable intangible assets, net

7,684


7,923


8,162


8,400


8,645


Other assets

97,574


84,142


77,175


94,126


88,651


Total assets

$5,189,672


$5,154,729


$5,010,766


$4,770,672


$4,737,242


Liabilities:






Deposits:






Noninterest-bearing deposits

$587,326


$577,319


$603,216


$611,829


$577,656


Interest-bearing deposits

2,917,296


2,926,941


2,920,832


2,802,519


2,743,955


Total deposits

3,504,622


3,504,260


3,524,048


3,414,348


3,321,611


Federal Home Loan Bank advances

1,060,960


1,056,129


950,722


828,392


901,053


Junior subordinated debentures

22,681


22,681


22,681


22,681


22,681


Operating lease liabilities

30,210


30,187





Other liabilities

86,994


71,629


65,131


77,342


70,326


Total liabilities

4,705,467


4,684,886


4,562,582


4,342,763


4,315,671


Shareholders' Equity:






Common stock

1,083


1,082


1,081


1,081


1,080


Paid-in capital

121,115


120,743


119,888


119,220


118,883


Retained earnings

373,873


365,521


355,524


346,685


336,670


Accumulated other comprehensive loss

(11,866)


(17,503)


(28,309)


(39,077)


(35,062)


Total shareholders' equity

484,205


469,843


448,184


427,909


421,571


Total liabilities and shareholders' equity

$5,189,672


$5,154,729


$5,010,766


$4,770,672


$4,737,242


 


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


For the Six Months
Ended


Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018


Jun 30,
2019

Jun 30,
2018

Interest income:









Interest and fees on loans

$42,138


$41,744


$40,299


$38,493


$36,788



$83,882


$71,140


Interest on mortgage loans held for sale

288


180


289


384


313



468


539


Taxable interest on debt securities

7,006


7,226


5,957


5,383


5,358



14,232


10,476


Nontaxable interest on debt securities

8


9


9


9


20



17


43


Dividends on Federal Home Loan Bank stock

720


695


669


634


550



1,415


1,066


Other interest income

399


340


294


261


257



739


462


Total interest and dividend income

50,559


50,194


47,517


45,164


43,286



100,753


83,726


Interest expense:









Deposits

9,469


8,696


7,953


6,546


5,254



18,165


9,676


Federal Home Loan Bank advances

6,980


6,661


5,446


4,937


4,707



13,641


8,690


Junior subordinated debentures

252


253


240


232


214



505


397


Total interest expense

16,701


15,610


13,639


11,715


10,175



32,311


18,763


Net interest income

33,858


34,584


33,878


33,449


33,111



68,442


64,963


Provision for loan losses

525


650


800


350


400



1,175


400


Net interest income after provision for loan losses

33,333


33,934


33,078


33,099


32,711



67,267


64,563


Noninterest income:









Wealth management revenues

9,549


9,252


9,012


9,454


9,602



18,801


19,875


Mortgage banking revenues

3,640


2,646


1,978


2,624


2,941



6,286


5,779


Card interchange fees

1,018


997


977


983


961



2,015


1,808


Service charges on deposit accounts

929


875


977


885


903



1,804


1,766


Loan related derivative income

746


724


1,374


278


668



1,470


809


Income from bank-owned life insurance

566


649


572


572


537



1,215


1,052


Net realized losses on securities

(80)







(80)



Other income

385


224


273


419


381



609


647


Total noninterest income

16,753


15,367


15,163


15,215


15,993



32,120


31,736


Noninterest expense:









Salaries and employee benefits

18,436


17,619


16,918


17,283


17,304



36,055


35,076


Outsourced services

2,518


2,606


2,510


1,951


2,350



5,124


4,223


Net occupancy

1,904


1,998


1,946


2,013


1,930



3,902


3,932


Equipment

1,028


1,011


983


1,080


1,069



2,039


2,249


Legal, audit and professional fees

664


534


587


559


555



1,198


1,281


FDIC deposit insurance costs

540


429


376


410


422



969


826


Advertising and promotion

525


239


460


440


329



764


506


Amortization of intangibles

239


239


239


245


247



478


495


Change in fair value of contingent consideration



(187)







Other expenses

2,297


2,289


2,850


2,081


2,082



4,586


4,830


Total noninterest expense

28,151


26,964


26,682


26,062


26,288



55,115


53,418


Income before income taxes

21,935


22,337


21,559


22,252


22,416



44,272


42,881


Income tax expense

4,662


4,842


4,523


4,741


4,742



9,504


8,996


Net income

$17,273


$17,495


$17,036


$17,511


$17,674



$34,768


$33,885











Net income available to common shareholders

$17,238


$17,461


$17,004


$17,475


$17,636



$34,699


$33,809











Weighted average common shares outstanding:









  Basic

17,330


17,304


17,297


17,283


17,272



17,317


17,253


  Diluted

17,405


17,401


17,385


17,382


17,387



17,403


17,384


Earnings per common share:









  Basic

$0.99


$1.01


$0.98


$1.01


$1.02



$2.00


$1.96


  Diluted

$0.99


$1.00


$0.98


$1.01


$1.01



$1.99


$1.94











Cash dividends declared per share

$0.51


$0.47


$0.47


$0.43


$0.43



$0.98


$0.86


 

Washington Trust Bancorp, Inc. and Subsidiaries

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited; Dollars and shares in thousands, except per share amounts)





Jun 30,
2019

Mar 31,
2019

Dec 31,
2018


Sep 30,
2018

Jun 30,
2018

Share and Equity Related Data:







Book value per share

$27.93


$27.15


$25.90



$24.75


$24.40


Tangible book value per share - Non-GAAP (1)

$23.80


$23.00


$21.74



$20.57


$20.20


Market value per share

$52.18


$48.15


$47.53



$55.30


$58.10


Shares issued and outstanding at end of period

17,336


17,305


17,302



17,290


17,278









Capital Ratios (2):







Tier 1 risk-based capital

12.06

%

11.84

%

11.81

%


12.00

%

11.84

%

Total risk-based capital

12.80

%

12.59

%

12.56

%


12.77

%

12.61

%

Tier 1 leverage ratio

8.76

%

8.69

%

8.89

%


8.91

%

8.87

%

Common equity tier 1

11.46

%

11.25

%

11.20

%


11.37

%

11.20

%








Balance Sheet Ratios:







Equity to assets

9.33

%

9.11

%

8.94

%


8.97

%

8.90

%

Tangible equity to tangible assets - Non-GAAP (1)

8.06

%

7.83

%

7.62

%


7.57

%

7.48

%

Loans to deposits (3)

106.8

%

106.3

%

104.3

%


104.0

%

105.3

%
















For the Six Months
Ended


For the Three Months Ended



Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018


Jun 30,
2019

Jun 30,
2018

Performance Ratios (4):









Net interest margin (5)

2.81

%

2.93

%

2.95

%

2.99

%

3.05

%


2.87

%

3.04

%

Return on average assets (net income divided by
  average assets)

1.34

%

1.39

%

1.40

%

1.47

%

1.53

%


1.37

%

1.49

%

Return on average tangible assets - Non-GAAP (1)

1.36

%

1.41

%

1.42

%

1.49

%

1.56

%


1.39

%

1.52

%

Return on average equity (net income available for
  common shareholders divided by average equity)

14.58

%

15.52

%

15.61

%

16.26

%

16.99

%


15.04

%

16.48

%

Return on average tangible equity - Non-GAAP (1)

17.17

%

18.43

%

18.75

%

19.59

%

20.58

%


17.78

%

20.00

%

Efficiency ratio (6)

55.6

%

54.0

%

54.4

%

53.6

%

53.5

%


54.8

%

55.2

%













(1)

See the section labeled "SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures" at the end of this document.

(2)

Estimated for June 30, 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


For the Six Months
Ended


Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018


Jun 30,
2019

Jun 30,
2018

Wealth Management Results









Wealth Management Revenues:









Asset-based revenues

$9,141


$8,921


$8,930


$9,322


$9,136



$18,062


$19,091


Transaction-based revenues

408


331


82


132


466



739


784


Total wealth management revenues

$9,549


$9,252


$9,012


$9,454


$9,602



$18,801


$19,875











Assets Under Administration (AUA):









Balance at beginning of period

$6,350,128


$5,910,814


$6,462,340


$6,220,155


$6,343,720



$5,910,814


$6,714,637


Net investment appreciation (depreciation) &
  income

222,489


520,057


(534,847)


232,245


133,450



742,546


101,426


Net client asset flows

(93,727)


(80,743)


(16,679)


9,940


(257,015)



(174,470)


(595,908)


Balance at end of period

$6,478,890


$6,350,128


$5,910,814


$6,462,340


$6,220,155



$6,478,890


$6,220,155











Percentage of AUA that are managed assets

91%


91%


90%


91%


92%



91%


92%











Mortgage Banking Results









Mortgage Banking Revenues:









Gains & commissions on loan sales, net (1)

$3,523


$2,474


$1,798


$2,485


$2,786



$5,997


$5,465


Loan servicing fee income, net (2)

117


172


180


139


155



289


314


Total mortgage banking revenues

$3,640


$2,646


$1,978


$2,624


$2,941



$6,286


$5,779











Residential Mortgage Loan Originations:









Originations for retention in portfolio

$69,736


$51,697


$58,515


$80,751


$128,479



$121,433


$196,319


Originations for sale to secondary market (3)

162,123


85,826


96,792


119,832


122,693



247,949


210,413


Total mortgage loan originations

$231,859


$137,523


$155,307


$200,583


$251,172



$369,382


$406,732











Residential Mortgage Loans Sold:









Sold with servicing rights retained

$18,292


$9,490


$16,577


$24,422


$24,367



$27,782


$57,942


Sold with servicing rights released (3)

119,122


82,589


81,985


107,694


81,054



201,711


144,319


Total mortgage loans sold

$137,414


$92,079


$98,562


$132,116


$105,421



$229,493


$202,261




(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 brokered loans.

 


Washington Trust Bancorp, Inc. and Subsidiaries

END OF PERIOD LOAN AND DEPOSIT COMPOSITION

(Unaudited; Dollars in thousands)




Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018

Loans:






Commercial real estate (1)

$1,482,836


$1,463,682


$1,392,408


$1,240,350


$1,218,643


Commercial & industrial

583,873


610,608


620,704


656,882


632,029


Total commercial

2,066,709


2,074,290


2,013,112


1,897,232


1,850,672








Residential real estate (2)

1,352,113


1,359,072


1,360,387


1,349,340


1,327,418








Home equity

288,078


279,938


280,626


282,331


283,744


Other

23,439


25,169


26,235


27,300


28,396


Total consumer

311,517


305,107


306,861


309,631


312,140


Total loans

$3,730,339


$3,738,469


$3,680,360


$3,556,203


$3,490,230



(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.




June 30, 2019


December 31, 2018



Balance

% of Total


Balance

% of Total

Commercial Real Estate Loans by Property Location:







Rhode Island



$384,603


26

%

$377,249


27

%

Connecticut



603,036


41


570,116


41


Massachusetts



407,350


27


356,615


26


Subtotal



1,394,989


94


1,303,980


94


All other states



87,847


6


88,428


6


Total commercial real estate loans



$1,482,836


100

%

$1,392,408


100

%








Residential Real Estate Loans by Property Location:







Rhode Island



$347,406


26

%

$352,141


26

%

Connecticut



144,664


11


141,775


10


Massachusetts



844,024


62


849,435


63


Subtotal



1,336,094


99


1,343,351


99


All other states



16,019


1


17,036


1


Total residential real estate loans



$1,352,113


100

%

$1,360,387


100

%



Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018

Deposits:






Noninterest-bearing demand deposits

$587,326


$577,319


$603,216


$611,829


$577,656


Interest-bearing demand deposits

128,355


162,598


178,733


151,322


136,640


NOW accounts

484,615


471,682


466,568


468,578


481,905


Money market accounts

654,719


644,949


646,878


650,976


604,954


Savings accounts

365,069


371,248


373,545


372,425


375,983


Time deposits (in-market)

801,501


792,470


778,105


715,635


698,286


In-market deposits

3,021,585


3,020,266


3,047,045


2,970,765


2,875,424


Wholesale brokered time deposits

483,037


483,994


477,003


443,583


446,187


Total deposits

$3,504,622


$3,504,260


$3,524,048


$3,414,348


$3,321,611


 

Washington Trust Bancorp, Inc. and Subsidiaries

CREDIT & ASSET QUALITY DATA

(Unaudited; Dollars in thousands)




Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018

Asset Quality Ratios:






Nonperforming assets to total assets

0.29

%

0.28

%

0.28

%

0.29

%

0.32

%

Nonaccrual loans to total loans

0.34

%

0.33

%

0.32

%

0.30

%

0.34

%

Total past due loans to total loans

0.48

%

0.39

%

0.37

%

0.38

%

0.48

%

Allowance for loan losses to nonaccrual loans

212.93

%

223.57

%

231.25

%

245.25

%

222.85

%

Allowance for loan losses to total loans

0.73

%

0.74

%

0.74

%

0.75

%

0.75

%







Nonperforming Assets:






Commercial real estate

$926


$926


$925


$—


$—


Commercial & industrial




122


397


Total commercial

926


926


925


122


397


Residential real estate

10,610


10,032


9,346


9,063


10,206


Home equity

1,243


1,407


1,436


1,624


1,133


Other consumer

88





9


Total consumer

1,331


1,407


1,436


1,624


1,142


Total nonaccrual loans

12,867


12,365


11,707


10,809


11,745


Other real estate owned

2,142


2,142


2,142


2,974


3,206


Total nonperforming assets

$15,009


$14,507


$13,849


$13,783


$14,951








Past Due Loans (30 days or more past due):






Commercial real estate

$3,670


$926


$1,080


$931


$—


Commercial & industrial

1


1



142


2,851


Total commercial

3,671


927


1,080


1,073


2,851


Residential real estate

11,237


10,849


10,520


9,398


11,243


Home equity

2,904


2,911


1,989


2,939


2,585


Other consumer

102


13


33


109


16


Total consumer

3,006


2,924


2,022


3,048


2,601


Total past due loans

$17,914


$14,700


$13,622


$13,519


$16,695








Accruing loans 90 days or more past due

$—


$—


$—


$—


$—


Nonaccrual loans included in past due loans

$8,581


$8,563


$8,613


$6,425


$8,575


 

Washington Trust Bancorp, Inc. and Subsidiaries

CREDIT & ASSET QUALITY DATA

(Unaudited; Dollars in thousands)


For the Three Months Ended


For the Six Months
Ended


Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018


Jun 30,
2019

Jun 30,
2018

Nonaccrual Loan Activity:









Balance at beginning of period

$12,365


$11,707


$10,809


$11,745


$10,521



$11,707


$15,211


Additions to nonaccrual status

1,620


1,924


2,918


2,179


2,457



3,544


3,667


Loans returned to accruing status

(118)


(855)


(1,500)


(361)


(475)



(973)


(819)


Loans charged-off

(819)


(103)


(298)


(96)


(103)



(922)


(793)


Loans transferred to other real estate owned








(3,074)


Payments, payoffs and other changes

(181)


(308)


(222)


(2,658)


(655)



(489)


(2,447)


Balance at end of period

$12,867


$12,365


$11,707


$10,809


$11,745



$12,867


$11,745











Allowance for Loan Losses:









Balance at beginning of period

$27,644


$27,072


$26,509


$26,174


$25,864



$27,072


$26,488


Provision charged to earnings

525


650


800


350


400



1,175


400


Charge-offs

(819)


(103)


(298)


(96)


(103)



(922)


(793)


Recoveries

48


25


61


81


13



73


79


Balance at end of period

$27,398


$27,644


$27,072


$26,509


$26,174



$27,398


$26,174











Net Loan Charge-Offs (Recoveries):









Commercial real estate

$—


$—


$—


$—


$—



$—


$602


Commercial & industrial

(16)


6


(13)


(70)


(3)



(10)


(26)


Total commercial

(16)


6


(13)


(70)


(3)



(10)


576


Residential real estate

486



156


68


5



486


5


Home equity

289


48


65


(2)


73



337


101


Other consumer

12


24


29


19


15



36


32


Total consumer

301


72


94


17


88



373


133


Total

$771


$78


$237


$15


$90



$849


$714











Net charge-offs to average loans (annualized)

0.08

%

0.01

%

0.03

%

%

0.01

%


0.05

%

0.04

%


 

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

June 30, 2019


March 31, 2019


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

$72,976


$399


2.19

%


$56,359


$340


2.45

%


$16,617


$59


(0.26)

%

Mortgage loans held for sale

28,532


288


4.05



16,587


180


4.40



11,945


108


(0.35)


Taxable debt securities

996,590


7,006


2.82



1,000,911


7,226


2.93



(4,321)


(220)


(0.11)


Nontaxable debt securities

805


11


5.48



935


10


4.34



(130)


1


1.14


Total securities

997,395


7,017


2.82



1,001,846


7,236


2.93



(4,451)


(219)


(0.11)


FHLB stock

49,574


720


5.83



46,988


695


6.00



2,586


25


(0.17)


Commercial real estate

1,468,382


17,509


4.78



1,425,225


16,879


4.80



43,157


630


(0.02)


Commercial & industrial

606,835


7,482


4.95



618,364


7,544


4.95



(11,529)


(62)



Total commercial

2,075,217


24,991


4.83



2,043,589


24,423


4.85



31,628


568


(0.02)


Residential real estate

1,350,865


13,606


4.04



1,357,835


13,765


4.11



(6,970)


(159)


(0.07)


Home equity

284,195


3,579


5.05



278,581


3,564


5.19



5,614


15


(0.14)


Other

24,189


292


4.84



25,629


316


5.00



(1,440)


(24)


(0.16)


Total consumer

308,384


3,871


5.03



304,210


3,880


5.17



4,174


(9)


(0.14)


Total loans

3,734,466


42,468


4.56



3,705,634


42,068


4.60



28,832


400


(0.04)


Total interest-earning assets

4,882,943


50,892


4.18



4,827,414


50,519


4.24



55,529


373


(0.06)


Noninterest-earning assets

288,619





268,689





19,930




Total assets

$5,171,562





$5,096,103





$75,459




Liabilities and Shareholders' Equity:












Interest-bearing demand deposits

$129,334


$624


1.94

%


$165,911


$686


1.68

%


($36,577)


($62)


0.26

%

NOW accounts

462,217


75


0.07



454,868


84


0.07



7,349


(9)



Money market accounts

659,021


1,831


1.11



646,250


1,609


1.01



12,771


222


0.10


Savings accounts

366,449


71


0.08



369,219


61


0.07



(2,770)


10


0.01


Time deposits (in-market)

796,606


3,992


2.01



789,378


3,727


1.91



7,228


265


0.10


Total interest-bearing in-market deposits

2,413,627


6,593


1.10



2,425,626


6,167


1.03



(11,999)


426


0.07


Wholesale brokered time deposits

507,376


2,876


2.27



473,799


2,529


2.16



33,577


347


0.11


Total interest-bearing deposits

2,921,003


9,469


1.30



2,899,425


8,696


1.22



21,578


773


0.08


FHLB advances

1,050,660


6,980


2.66



1,027,285


6,661


2.63



23,375


319


0.03


Junior subordinated debentures

22,681


252


4.46



22,681


253


4.52




(1)


(0.06)


Total interest-bearing liabilities

3,994,344


16,701


1.68



3,949,391


15,610


1.60



44,953


1,091


0.08


Noninterest-bearing demand deposits

608,099





607,033





1,066




Other liabilities

94,766





83,438





11,328




Shareholders' equity

474,353





456,241





18,112




Total liabilities and shareholders' equity

$5,171,562





$5,096,103





$75,459




Net interest income (FTE)


$34,191





$34,909





($718)



Interest rate spread



2.50

%




2.64

%




(0.14)

%

Net interest margin



2.81

%




2.93

%




(0.12)

%


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


For the Three Months Ended

Jun 30,
2019

Mar 31,
2019

Quarter
Change

Commercial loans

$330


$324


$6


Nontaxable debt securities

3


1


2


Total

$333


$325


$8


 


 











Washington Trust Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)

(Unaudited; Dollars in thousands)

For the Six Months Ended

June 30, 2019

June 30, 2018

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

$64,713


$739


2.30

%

$54,649


$462


1.70

%

$10,064


$277


0.60

%

Mortgage loans for sale

22,588


468


4.18


27,329


539


3.98


(4,741)


(71)


0.20


Taxable debt securities

998,738


14,232


2.87


813,193


10,476


2.60


185,545


3,756


0.27


Nontaxable debt securities

870


21


4.87


2,154


55


5.15


(1,284)


(34)


(0.28)


Total securities

999,608


14,253


2.88


815,347


10,531


2.60


184,261


3,722


0.28


FHLB stock

48,288


1,415


5.91


42,116


1,066


5.10


6,172


349


0.81


Commercial real estate

1,446,923


34,388


4.79


1,222,136


25,809


4.26


224,787


8,579


0.53


Commercial & industrial

612,568


15,026


4.95


615,698


14,392


4.71


(3,130)


634


0.24


Total commercial

2,059,491


49,414


4.84


1,837,834


40,201


4.41


221,657


9,213


0.43


Residential real estate

1,354,330


27,371


4.08


1,251,904


24,355


3.92


102,426


3,016


0.16


Home equity

281,404


7,142


5.12


285,684


6,439


4.55


(4,280)


703


0.57


Other

24,905


609


4.93


30,188


729


4.87


(5,283)


(120)


0.06


Total consumer

306,309


7,751


5.10


315,872


7,168


4.58


(9,563)


583


0.52


Total loans

3,720,130


84,536


4.58


3,405,610


71,724


4.25


314,520


12,812


0.33


Total interest-earning assets

4,855,327


101,411


4.21


4,345,051


84,322


3.91


510,276


17,089


0.30


Noninterest-earning assets

278,714




234,485




44,229




Total assets

$5,134,041




$4,579,536




$554,505




Liabilities and Shareholders' Equity:










Interest-bearing demand deposits

$147,522


$1,311


1.79

%

$83,368


$129


0.31

%

$64,154


$1,182


1.48

%

NOW accounts

458,563


159


0.07


455,036


111


0.05


3,527


48


0.02


Money market accounts

652,671


3,440


1.06


691,245


1,840


0.54


(38,574)


1,600


0.52


Savings accounts

367,826


131


0.07


371,873


114


0.06


(4,047)


17


0.01


Time deposits (in-market)

793,012


7,719


1.96


640,548


4,085


1.29


152,464


3,634


0.67


Total interest-bearing in-market deposits

2,419,594


12,760


1.06


2,242,070


6,279


0.56


177,524


6,481


0.50


Wholesale brokered time deposits

490,680


5,405


2.22


419,738


3,397


1.63


70,942


2,008


0.59


Total interest-bearing deposits

2,910,274


18,165


1.26


2,661,808


9,676


0.73


248,466


8,489


0.53


FHLB advances

1,039,037


13,641


2.65


843,033


8,690


2.08


196,004


4,951


0.57


Junior subordinated debentures

22,681


505


4.49


22,681


397


3.53



108


0.96


Total interest-bearing liabilities

3,971,992


32,311


1.64


3,527,522


18,763


1.07


444,470


13,548


0.57


Noninterest-bearing demand deposits

607,569




579,379




28,190




Other liabilities

89,133




58,926




30,207




Shareholders' equity

465,347




413,709




51,638




Total liabilities and shareholders' equity

$5,134,041




$4,579,536




$554,505




Net interest income (FTE)


$69,100




$65,559




$3,541



Interest rate spread



2.57

%



2.84

%



(0.27)

%

Net interest margin



2.87

%



3.04

%



(0.17)

%


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





For the Six Months Ended

Jun 30,
2019

Jun 30,
2018

Change

Commercial loans

$654


$584


$70


Nontaxable debt securities

4


12


(8)


Total

$658


$596


$62


 


 

Washington Trust Bancorp, Inc. and Subsidiaries


SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures


(Unaudited; Dollars in thousands, except per share amounts)






Jun 30,
2019

Mar 31,
2019

Dec 31,
2018


Sep 30,
2018

Jun 30,
2018

Tangible Book Value per Share:







Total shareholders' equity, as reported

$484,205


$469,843


$448,184



$427,909


$421,571


Less:







Goodwill

63,909


63,909


63,909



63,909


63,909


Identifiable intangible assets, net

7,684


7,923


8,162



8,400


8,645


Total tangible shareholders' equity

$412,612


$398,011


$376,113



$355,600


$349,017









Shares outstanding, as reported

17,336


17,305


17,302



17,290


17,278









Book value per share - GAAP

$27.93


$27.15


$25.90



$24.75


$24.40


Tangible book value per share - Non-GAAP

$23.80


$23.00


$21.74



$20.57


$20.20









Tangible Equity to Tangible Assets:







Total tangible shareholders' equity

$412,612


$398,011


$376,113



$355,600


$349,017









Total assets, as reported

$5,189,672


$5,154,729


$5,010,766



$4,770,672


$4,737,242


Less:







Goodwill

63,909


63,909


63,909



63,909


63,909


Identifiable intangible assets, net

7,684


7,923


8,162



8,400


8,645


Total tangible assets

$5,118,079


$5,082,897


$4,938,695



$4,698,363


$4,664,688









Equity to assets - GAAP

9.33

%

9.11

%

8.94

%


8.97

%

8.90

%

Tangible equity to tangible assets - Non-GAAP

8.06

%

7.83

%

7.62

%


7.57

%

7.48

%




For the Three Months Ended


For the Six Months Ended


Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

Jun 30,
2018


Jun 30,
2019

Jun 30,
2018

Return on Average Tangible Assets:









Net income, as reported

$17,273


$17,495


$17,036


$17,511


$17,674



$34,768


$33,885











Total average assets, as reported

$5,171,562


$5,096,103


$4,840,158


$4,724,898


$4,628,816



$5,134,041


$4,579,536


Less average balances of:









Goodwill

63,909


63,909


63,909


63,909


63,909



63,909


63,909


Identifiable intangible assets, net

7,800


8,040


8,278


8,519


8,766



7,919


8,889


Total average tangible assets

$5,099,853


$5,024,154


$4,767,971


$4,652,470


$4,556,141



$5,062,213


$4,506,738











Return on average assets - GAAP

1.34

%

1.39

%

1.40

%

1.47

%

1.53

%


1.37

%

1.49

%

Return on average tangible assets - Non-
  GAAP

1.36

%

1.41

%

1.42

%

1.49

%

1.56

%


1.39

%

1.52

%










Return on Average Tangible Equity:









Net income available to common
  shareholders, as reported

$17,238


$17,461


$17,004


$17,475


$17,636



$34,699


$33,809











Total average equity, as reported

$474,353


$456,241


$432,043


$426,306


$416,433



$465,347


$413,709


Less average balances of:









Goodwill

63,909


63,909


63,909


63,909


63,909



63,909


63,909


Identifiable intangible assets, net

7,800


8,040


8,278


8,519


8,766



7,919


8,889


Total average tangible equity

$402,644


$384,292


$359,856


$353,878


$343,758



$393,519


$340,911











Return on average equity - GAAP

14.58

%

15.52

%

15.61

%

16.26

%

16.99

%


15.04

%

16.48

%

Return on average tangible equity - Non-
  GAAP

17.17

%

18.43

%

18.75

%

19.59

%

20.58

%


17.78

%

20.00

%


 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/washington-trust-reports-second-quarter-2019-earnings-300888868.html

SOURCE Washington Trust Bancorp, Inc.