• Washington Trust Bancorp, Inc.
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  • Washington Trust's Assets Top $2 Billion; First Quarter Earnings Increase 4%
    Company Release - 04/15/2004 11:53

    WESTERLY, R.I.--(BUSINESS WIRE)--April 15, 2004--Washington Trust Bancorp, Inc. (Nasdaq National Market; symbol: WASH), parent company of The Washington Trust Company, today reported first quarter 2004 net income of $5.0 million, or 37 cents per diluted share, up 4 percent from $4.7 million, or 36 cents per diluted share, for the first quarter of 2003. The returns on average assets and average equity for the three months ended March 31, 2004 were 1.00% and 13.90%, respectively, compared to 1.07% and 14.56%, respectively, for the three months ended March 31, 2003.

    "Washington Trust had a very strong first quarter and surpassed $2 billion in assets for the first time in the Corporation's 204-year history," stated John C. Warren, Washington Trust Chairman and CEO. He continued, "We had good growth in both commercial and consumer loans. In addition, our trust and asset management revenues were up by 21% over the same quarter last year."

    Net interest income for the first quarter of 2004 amounted to $13.1 million, up 10 percent from $11.9 million for the same quarter a year ago. The increase in net interest income was due to a 12% increase in average interest-earning assets. The net interest margin for the first quarter of 2004 was 2.87%, unchanged from the fourth quarter of 2003, but lower than the 2.97% level reported for the first quarter of 2003. The year-to-year decrease in the net interest margin reflects a decline in yields on loans and securities offset somewhat by lower funding costs of interest-bearing deposits and Federal Home Loan Bank ("FHLB") advances.

    Noninterest income (excluding net realized gains on securities) amounted to $5.9 million for the quarter ended March 31, 2004, up from $5.8 million for the same quarter a year ago. Increases were recognized in trust and investment management income, service charges on deposits, merchant processing fees and other income. Revenue from trust and investment management income, the largest component of noninterest income, totaled $3.1 million for the quarter ended March 31, 2004, up 21 percent from the comparable quarter in 2003. Trust assets under administration amounted to $1.782 billion at March 31, 2004, compared to $1.742 billion at December 31, 2003. Meanwhile, gains on loan sales declined from $1.2 million in the first quarter of 2003 to $349 thousand in the first quarter of 2004, primarily due to a drop off in mortgage origination activity.

    For the first quarter of 2004, noninterest expenses totaled $11.7 million, up 6 percent from the first quarter of 2003. The increase in noninterest expenses occurred primarily in the category of salaries and benefits, the largest component of total noninterest expense.

    Total assets amounted to $2.054 billion at March 31, 2004, up by $80.4 million, or 4 percent, from the December 31, 2003 balance of $1.974 billion.

    In the first quarter of 2004, total loans increased $43.4 million to $1.0 billion, with the largest increase in consumer loans. Consumer loans increased $19.7 million, or 12 percent, from the balance at December 31, 2003 primarily due to growth in home equity lines and loans. Commercial loans increased $13.0 million, or 3 percent, to $421.4 million at March 31, 2004. Residential real estate loans amounted to $400.6 million, up $10.7 million from the balance at December 31, 2003. The Corporation purchased a total of $13.2 million of adjustable rate residential mortgages from other financial institutions in the first quarter of 2004.

    Total securities were $884.6 million at March 31, 2004, up $45.2 million from the balance at December 31, 2003. The increase was mainly due to purchases of mortgage-backed securities.

    Total deposits at March 31, 2004 amounted to $1.245 billion, up $38.6 million, or 3 percent, from the December 31, 2003 balance of $1.206 billion. Savings deposits, including money market deposits, amounted to $522.5 million at March 31, 2004, up $28.6 million from the December 31, 2003 balance. Time deposits amounted to $542.8 million at March 31, 2004, up $24.7 million from the December 31, 2003 balance, primarily due to increases in consumer accounts as well as brokered certificates of deposit. Total consumer certificates of deposit amounted to $402.1 million at March 31, 2004, up $16.9 million from the balance at December 31, 2003. Brokered certificates of deposit increased $8.0 million during the first quarter of 2004 and totaled $126.2 million at March 31, 2004. Demand deposits decreased $14.7 million in the first three months of 2004 and totaled $179.5 million at March 31, 2004, however, demand deposits at December 31, 2003 included a temporary placement of approximately $18.6 million in funds on deposit that were withdrawn in January 2004. In the first quarter of 2004, FHLB advances increased $37.1 million to $644.2 million at March 31, 2004.

    Asset quality, as measured by the level of nonperforming assets, continues to be strong in 2004. Nonaccrual loans as a percentage of total loans at March 31, 2004 were .29%, unchanged from December 31, 2003. Similarly, nonperforming assets (nonaccrual loans and property acquired through foreclosure) as a percent of total assets at March 31, 2004 and December 31, 2003 amounted to .14%. The Corporation benefited from favorable loan loss experience in the first quarter of 2004 as indicated by a $140 thousand excess of loan loss recoveries over charge-offs. In the first quarter of 2003, charge-offs, net of recoveries, amounted to $92 thousand.

    Total shareholders' equity amounted to $144.6 million at March 31, 2004, up from $138.1 million at December 31, 2003. Book value per share as of March 31, 2004 and December 31, 2003 amounted to $10.95 and $10.46, respectively.

    Washington Trust Bancorp, Inc. Chairman and Chief Executive Officer, John C. Warren, and David V. Devault, Executive Vice President, Treasurer, and Chief Financial Officer will host a conference call on Thursday, April 15, at 4:15 p.m. (Eastern Daylight Time) to discuss the Corporation's first quarter results. Access to the call is available in a listen-only mode on Washington Trust's web site, http://investorrelations.washtrust.com. A replay of the call will be posted in this same section of the web site shortly after the conclusion of the call.

    Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank founded in 1800. The Bank offers a full range of financial services, including trust and investment management, through its offices in Rhode Island and southeastern Connecticut. Washington Trust Bancorp, Inc.'s common stock trades on The Nasdaq Stock Market(R) under the symbol WASH. Investor information is available on the Corporation's web site: www.washtrust.com.

    This report contains certain statements that may be considered "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Corporation's actual results, performance or achievements could differ materially from those projected in the forward-looking statements as a result, among other factors, of changes in general national or regional economic conditions, changes in interest rates, reductions in the market value of trust and investment assets under management, reductions in loan demand, reductions in deposit levels necessitating increased borrowing to fund loans and investments, changes in loan default and charge-off rates, changes in the size and nature of the Corporation's competition, changes in legislation or regulation and accounting principles, policies and guidelines and changes in the assumptions used in making such forward-looking statements.

    Washington Trust Bancorp, Inc. and Subsidiary
                               FINANCIAL SUMMARY
    
    
                                                 THREE MONTHS ENDED
    (Dollars and shares in thousands,      MAR. 31,   MAR. 31,   DEC. 31,
     except per share amounts)               2004       2003       2003
    
    OPERATING RESULTS
    Net interest income                     $13,083    $11,929    $12,861
    Provision for loan losses                   120        100        100
    Net realized gains on securities              -        230          -
    Other noninterest income                  5,940      5,803      5,900
    Noninterest expenses                     11,680     10,978     11,616
    Income tax expense                        2,268      2,134      2,186
    Net income                                4,955      4,750      4,859
    
    PER SHARE
    Basic earnings                            $0.38      $0.36      $0.37
    Diluted earnings                          $0.37      $0.36      $0.36
    Dividends declared                        $0.17      $0.15      $0.16
    
    SHARES OUTSTANDING
    Weighted Average:   Basic              13,202.6   13,059.3   13,172.3
                        Diluted            13,513.3   13,230.2   13,538.9
    
    AVERAGE BALANCE SHEET
    Federal funds sold and other
     short-term investments                 $11,155    $14,946    $10,804
    Taxable debt securities                 809,505    764,975    789,173
    Nontaxable debt securities               14,235     17,462     14,783
    Corporate stocks and Federal Home
     Loan Bank stock                         54,518     48,025     53,743
    
    Loans:              Commercial          412,642    389,545    405,710
                        Residential         390,834    292,276    380,913
                        Consumer            170,589    133,050    155,382
    
                        Total loans         974,065    814,871    942,005
    
    Earning assets                        1,863,478  1,660,279  1,810,508
    Total assets                          1,988,142  1,778,338  1,933,259
    
    Deposits:           Demand              170,289    155,944    180,858
                        Savings             497,033    459,777    490,866
                        Time                527,531    481,766    501,852
    
                        Total deposits    1,194,853  1,097,487  1,173,576
    
    Federal Home Loan Bank advances         633,195    532,698    606,806
    Shareholders' equity                    142,582    130,506    136,964
    
    KEY RATIOS
    Return on average assets                  1.00%      1.07%      1.01%
    Return on average equity                 13.90%     14.56%     14.19%
    Interest rate spread
     (taxable equivalent basis)               2.62%      2.68%      2.61%
    Net interest margin
     (taxable equivalent basis)               2.87%      2.97%      2.87%
    
    ALLOWANCE FOR LOAN LOSSES
    Balance at beginning of period          $15,914    $15,487    $15,813
    Provision charged to earnings               120        100        100
    Net (charge-offs) recoveries                140        (92)         1
    
    Balance at end of period                $16,174    $15,495    $15,914
    
    
                 Washington Trust Bancorp, Inc. and Subsidiary
                               FINANCIAL SUMMARY
    
    
    (Dollars and shares in thousands,    MAR. 31,    MAR. 31,    DEC. 31,
     except per share amounts)             2004        2003        2003
    
    PERIOD END BALANCE SHEET
    Assets                             $2,054,232  $1,815,627  $1,973,807
    Total securities                      884,592     842,307     839,421
    
    Loans:              Commercial        421,440     391,158     408,477
                        Residential       400,564     285,689     389,855
                        Consumer          182,344     134,285     162,649
    
                        Total loans     1,004,348     811,132     960,981
    
    Deposits:           Demand            179,468     169,636     194,144
                        Savings           522,477     467,027     493,878
                        Time              542,814     484,183     518,119
    
                        Total deposits  1,244,759   1,120,846   1,206,141
    
    Federal Home Loan Bank advances       644,203     544,387     607,104
    Shareholders' equity                  144,571     131,010     138,055
    
    
    CAPITAL RATIOS
    Tier 1 risk-based capital               9.84%      10.00%      10.00%
    Total risk-based capital               11.42%      11.41%      11.57%
    Tier 1 leverage ratio                   5.66%       5.59%       5.65%
    
    
    SHARE INFORMATION
    Shares outstanding at end of period  13,206.9    13,071.0    13,194.6
    Book value per share                   $10.95      $10.02      $10.46
    Tangible book value per share           $9.10       $8.10       $8.60
    Market value per share                 $26.40      $20.21      $26.20
    
    
    CREDIT QUALITY
    Nonaccrual loans                       $2,920      $4,034      $2,743
    Other real estate owned, net               11           4          11
    Nonperforming assets to total assets    0.14%       0.22%       0.14%
    Nonaccrual loans to total loans         0.29%       0.50%       0.29%
    Allowance for loan losses
     to nonaccrual loans                  553.90%     384.11%     580.17%
    Allowance for loan losses
     to total loans                         1.61%       1.91%       1.66%
    
    
    ASSETS UNDER MANAGEMENT
    Market value                       $1,782,153  $1,478,748  $1,741,948
    
    
                 Washington Trust Bancorp, Inc. and Subsidiary
                          CONSOLIDATED BALANCE SHEETS
    
    (Dollars in thousands)
                                                 (Unaudited)
                                                   March 31,  December 31,
                                                     2004         2003
    Assets:
    
    Cash and due from banks                         $35,303      $40,710
    Federal funds sold and other
     short-term investments                          17,630       20,400
    Mortgage loans held for sale                      2,405        2,486
    Securities:
     Available for sale, at fair value;
      amortized cost $722,247 in 2004
      and $663,529 in 2003                          737,985      673,845
     Held to maturity, at cost; fair value
      $150,834 in 2004 and $169,401 in 2003         146,607      165,576
    
     Total securities                               884,592      839,421
    
    Federal Home Loan Bank stock, at cost            32,789       31,464
    
    Loans                                         1,004,348      960,981
    Less allowance for loan losses                   16,174       15,914
    
     Net loans                                      988,174      945,067
    
    Premises and equipment, net                      25,014       24,941
    Accrued interest receivable                       8,282        7,911
    Goodwill                                         22,591       22,591
    Identifiable intangible assets                    1,792        1,953
    Other assets                                     35,660       36,863
    
     Total assets                                $2,054,232   $1,973,807
    
    Liabilities:
    
    Deposits:
     Demand                                        $179,468     $194,144
     Savings                                        522,477      493,878
     Time                                           542,814      518,119
    
     Total deposits                               1,244,759    1,206,141
    
    Dividends payable                                 2,247        2,113
    Federal Home Loan Bank advances                 644,203      607,104
    Other borrowings                                  1,625        2,311
    Accrued expenses and other liabilities           16,827       18,083
    
     Total liabilities                            1,909,661    1,835,752
    
    Shareholders' Equity:
    
    Common stock of $.0625 par value; authorized
     30 million shares; issued 13,219,949 shares
     in 2004 and 13,204,024 shares in 2003              826          825
    Paid-in capital                                  30,090       29,868
    Retained earnings                               104,200      101,492
    Unamortized employee restricted stock               (16)         (22)
    Accumulated other comprehensive income            9,773        6,101
    Treasury stock, at cost; 13,052 shares
     in 2004 and 9,463 in 2003                         (302)        (209)
    
     Total shareholders' equity                     144,571      138,055
    
     Total liabilities and
      shareholders' equity                       $2,054,232   $1,973,807
    
    
                 Washington Trust Bancorp, Inc. and Subsidiary
                       CONSOLIDATED STATEMENTS OF INCOME
    
    
    (Dollars and shares in thousands, except per share amounts)
                                                            (Unaudited)
    Three months ended March 31,                           2004     2003
    
    Interest income:
     Interest and fees on loans                          $13,641  $12,646
     Interest on securities                                8,255    8,555
     Dividends on corporate stock and
      Federal Home Loan Bank stock                           474      487
     Interest on federal funds sold and other
      short-term investments                                  20       37
    
     Total interest income                                22,390   21,725
    
    Interest expense:
     Savings deposits                                        729      950
     Time deposits                                         4,018    3,934
     Federal Home Loan Bank advances                       4,545    4,893
     Other                                                    15       19
    
     Total interest expense                                9,307    9,796
    
    Net interest income                                   13,083   11,929
    Provision for loan losses                                120      100
    
    Net interest income after provision
     for loan losses                                      12,963   11,829
    
    Noninterest income:
     Trust and investment management                       3,055    2,533
     Service charges on deposit accounts                   1,170    1,100
     Net gains on loan sales                                 349    1,238
     Merchant processing fees                                597      457
     Income from bank-owned life insurance                   299      284
     Net realized gains on securities                          -      230
     Other income                                            470      191
    
     Total noninterest income                              5,940    6,033
    
    Noninterest expense:
     Salaries and employee benefits                        6,977    6,534
     Net occupancy                                           816      762
     Equipment                                               770      837
     Merchant processing costs                               466      362
     Legal, audit and professional fees                      258      305
     Advertising and promotion                               466      270
     Outsourced services                                     376      371
     Amortization of intangibles                             161      180
     Other                                                 1,390    1,357
    
     Total noninterest expense                            11,680   10,978
    
    Income before income taxes                             7,223    6,884
    Income tax expense                                     2,268    2,134
    
     Net income                                           $4,955   $4,750
    
    Weighted average shares outstanding - basic         13,202.6 13,059.3
    Weighted average shares outstanding - diluted       13,513.3 13,230.2
    Per share information:
     Basic earnings per share                               $.38     $.36
     Diluted earnings per share                             $.37     $.36
     Cash dividends declared per share                      $.17     $.15
    
    
        CONTACT: Washington Trust Bancorp, Inc.
                 Elizabeth B. Eckel, 401-348-1309
                 ebeckel@washtrust.com
    
        SOURCE: Washington Trust Bancorp, Inc.