• Washington Trust Bancorp, Inc.
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  • Washington Trust Quarterly Earnings Up 9%
    Company Release - 04/25/2005 09:42

    WESTERLY, R.I.--(BUSINESS WIRE)--April 25, 2005--Washington Trust Bancorp, Inc. (Nasdaq National Market; symbol: WASH), parent company of The Washington Trust Company, today announced first quarter ended March 31, 2005 net income of $5.4 million, an increase of 9 percent from the $5.0 million reported for the first quarter of 2004. On a diluted earnings per share basis, the Corporation earned 40 cents for the first quarter of 2005, up 8 percent from the 37 cents earned for the same quarter in 2004. The returns on average equity and average assets for the three months ended March 31, 2005 were 14.20% and 0.94%, respectively, compared to 13.90% and 1.00%, respectively, for the same period in 2004.

    John C. Warren, Washington Trust Chairman and Chief Executive Officer, noted that "During the first quarter of 2005, we increased the cash dividend for the thirteenth consecutive year; announced an agreement to purchase Weston Financial Group, a Wellesley, Mass. registered investment advisor with assets under management in excess of $1.2 billion; and posted a 9 percent increase in earnings. Growth continues to be a key ingredient to the Corporation's success."

    On March 23, 2005, Washington Trust announced the signing of a definitive agreement to acquire Weston Financial Group. It is currently anticipated that the acquisition, which is subject to state and federal regulatory approval and other customary conditions to closing, will most likely be completed in the third quarter of 2005.

    Net interest income, the primary source of Washington Trust's operating income, amounted to $14.6 million for the first quarter of 2005, up 12 percent from the $13.1 million reported for the same period a year ago. This increase in net interest income was primarily due to a 17 percent increase in interest-earning assets. The net interest margin for the three months ended March 31, 2005 was 2.76%, up 7 basis points from the fourth quarter of 2004, but lower than the 2.87% level reported for the first quarter of 2004. The improvement in the net interest margin during the first quarter of 2005 primarily resulted from higher yields on commercial and consumer loans. The decrease in the net interest margin from the first quarter of 2004 was largely attributable to increased funding costs for deposits and borrowed funds, which were partially offset by higher yields on investment securities and loans.

    Noninterest income is an important source of revenue for Washington Trust. For the first quarter of 2005, noninterest income totaled $6.1 million, compared to $5.9 million reported for the same quarter a year ago. Primary sources of noninterest income are trust and investment management fees, service charges on deposit accounts, merchant credit card processing fees and net gains on sales of loans.

    Revenue from trust and investment management services represented 53% of noninterest income in the first quarter of 2005. This revenue amounted to $3.2 million for the three months ended March 31, 2005, up 5 percent from the same period in 2004. Trust and investment management fee revenue is largely dependent on the value of assets under administration and is closely tied to the performance of the financial markets. Trust assets under administration amounted to $1.797 billion at March 31, 2005, compared to $1.871 billion at December 31, 2004.

    For the first quarter of 2005, service charges on deposit accounts totaled $1.0 million, down 14 percent from the same period in 2004, due, in part, to the introduction of free checking.

    For the quarter ended March 31, 2005, noninterest expenses amounted to $12.4 million, up 7 percent from the same period a year ago. Salaries and employee benefit expense, the largest component of noninterest expenses, totaled $7.5 million for the three months ended March 31, 2005, up 7 percent from the first quarter of 2004. Included in this amount was a 3 percent increase in salary costs as well as a 14 percent increase in benefit costs including pension and stock-based compensation.

    At March 31, 2005, total assets amounted to $2.342 billion, up $34.3 million from December 31, 2004. In the first quarter of 2005, total loans increased $44.5 million to $1.294 billion, while deposits rose $71.2 million to $1.529 billion at March 31, 2005.

    Residential real estate loans grew $35.1 million, or 7 percent, during the first quarter of 2005, including an increase of $20.0 million in purchased residential mortgages. Consumer loans increased $6.6 million in the first three months of 2005, primarily due to growth in home equity lines and loans. Commercial loans, including commercial real estate and construction loans, amounted to $510.5 million at March 31, 2005, up $2.8 million from $507.7 million reported at December 31, 2004.

    Demand deposits totaled $190.9 million at March 31, 2005, compared to $189.6 million at December 31, 2004. Savings deposits, including money market deposits, amounted to $619.0 million at March 31, 2005, down from the December 31, 2004 balance of $623.4 million. Time deposits (including brokered certificates of deposit) amounted to $719.2 million, up $74.3 million, or 12 percent, during the first quarter of 2005. Brokered certificates of deposit amounted to $207.7 million, up $38.1 million, or 22 percent, during the three months ended March 31, 2005. The Corporation utilizes brokered certificates of deposit as part of its overall funding program along with other sources. During the first quarter of 2005, the Corporation reduced its Federal Home Loan Bank advance borrowing position by $32.9 million.

    Nonperforming assets (nonaccrual loans and property acquired through foreclosure) declined during the quarter and were below prior year and prior quarter levels. Nonperforming assets totaled $2.4 million, or .10% of total assets, at March 31, 2005. The allowance for loan losses was $17.1 million, or 1.32% of total loans, at March 31, 2005, compared to $16.8 million, or 1.34%, at December 31, 2004. The Corporation's loan loss provision amounted to $300 thousand for the quarter ended March 31, 2005, up from $250 thousand for the fourth quarter of 2004 and $120 thousand for the first quarter of 2004. The increase was in response to growth in the loan portfolio.

    Total shareholders' equity amounted to $149.2 million at March 31, 2005, compared to $151.9 million at December 31, 2004. Book value per share as of March 31, 2005 and December 31, 2004 amounted to $11.23 and $11.44, respectively.

    Washington Trust 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 Monday, April 25, at 4:30 p.m. (Eastern 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 location on 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)               2005       2004       2004
                                          ---------- ---------- ----------
    
    Operating Results
    -------------------------------------
    Net interest income                     $14,621    $13,083    $14,384
    Provision for loan losses                   300        120        250
    Net realized gains on securities              -          -        387
    Other noninterest income                  6,079      5,940      6,587
    Noninterest expenses                     12,444     11,680     13,094
    Income tax expense                        2,546      2,268      2,516
    Net income                                5,410      4,955      5,498
    
    Per Share
    -------------------------------------
    Basic earnings                            $0.41      $0.38      $0.41
    Diluted earnings                          $0.40      $0.37      $0.40
    Dividends declared                        $0.18      $0.17      $0.17
    
    Weighted Average Shares Outstanding
    -------------------------------------
           Basic                           13,282.7   13,202.6   13,259.7
           Diluted                         13,617.3   13,513.3   13,605.1
    
    Average Balance Sheet
    -------------------------------------
    Federal funds sold and other short-
     term investments                       $10,670    $11,155    $11,022
    Taxable debt securities                 830,738    809,505    845,307
    Nontaxable debt securities               19,132     14,235     18,937
    Corporate stocks and Federal Home
     Loan Bank stock                         52,852     54,518     52,397
    Loans:
           Commercial and other             512,260    412,642    498,236
           Residential real estate          530,845    390,834    513,133
           Consumer                         230,728    170,589    222,321
    
           Total loans                    1,273,833    974,065  1,233,690
    
    Earning assets                        2,187,225  1,863,478  2,161,353
    Total assets                          2,313,405  1,988,142  2,291,735
    
    Deposits:
           Demand deposits                  182,281    170,289    203,162
           NOW accounts                     171,108    149,060    172,811
           Money market accounts            196,577     94,430    208,203
           Savings accounts                 248,957    253,543    255,647
           Time deposits                    688,878    527,531    628,030
    
           Total deposits                 1,487,801  1,194,853  1,467,853
    
    Federal Home Loan Bank advances         655,564    633,195    653,746
    Shareholders' equity                    152,420    142,582    151,291
    
    Key Ratios
    -------------------------------------
    Return on average assets                   0.94%      1.00%      0.96%
    Return on average equity                  14.20%     13.90%     14.54%
    Interest rate spread (taxable
     equivalent basis)                         2.49%      2.62%      2.42%
    Net interest margin (taxable
     equivalent basis)                         2.76%      2.87%      2.69%
    
    Allowance for Loan Losses
    -------------------------------------
    Balance at beginning of period          $16,771    $15,914    $16,627
    Provision charged to earnings               300        120        250
    Net (charge-offs) recoveries                (13)       140       (106)
                                          ---------- ---------- ----------
    
    Balance at end of period                $17,058    $16,174    $16,771
                                          ---------- ---------- ----------
    
    
                Washington Trust Bancorp, Inc. and Subsidiary
                              FINANCIAL SUMMARY
    
    
    (Dollars and shares in thousands,    Mar. 31,    Dec. 31,    Mar. 31,
     except per share amounts)            2005        2004        2004
                                       ----------- ----------- -----------
    Period-End Balance Sheet
    ----------------------------------
    Assets                             $2,342,138  $2,307,820  $2,054,232
    Total securities                      866,873     890,058     884,592
    Loans:
           Commercial and other:
             Mortgages                    260,058     266,670     227,367
             Construction and
              development                  31,060      29,263      14,463
             Other                        219,346     211,778     179,610
           Total commercial and other     510,464     507,711     421,440
    
           Residential real estate:
             Mortgages                    529,177     494,720     388,843
             Homeowner construction        19,663      18,975      11,721
           Total residential real
            estate                        548,840     513,695     400,564
    
           Consumer:
             Home equity lines            157,752     155,001     126,701
             Other                         77,134      73,269      55,643
           Total consumer                 234,886     228,270     182,344
    
           Total loans                  1,294,190   1,249,676   1,004,348
    
    Deposits:
           Demand deposits                190,883     189,588     179,468
           NOW accounts                   180,240     174,727     159,738
           Money market accounts          189,870     196,775     109,349
           Savings accounts               248,852     251,920     253,390
           Time deposits                  719,202     644,875     542,814
    
           Total deposits               1,529,047   1,457,885   1,244,759
    
    Brokered deposits included in time
     deposits                             207,652     169,587     126,243
    Federal Home Loan Bank advances       639,874     672,748     644,203
    Shareholders' equity                  149,225     151,852     144,571
    
    Capital Ratios
    ----------------------------------
    Tier 1 risk-based capital                9.21%       9.15%       9.84%
    Total risk-based capital                10.75%      10.72%      11.42%
    Tier 1 leverage ratio                    5.44%       5.35%       5.66%
    
    Share Information
    ----------------------------------
    Shares outstanding at end of
     period                              13,291.1    13,269.4    13,206.9
    Book value per share                   $11.23      $11.44      $10.95
    Tangible book value per share           $9.44       $9.64       $9.10
    Market value per share                 $27.48      $29.31      $26.40
    
    Credit Quality
    ----------------------------------
    Nonaccrual loans                       $2,376      $4,731      $2,920
    Other real estate owned, net                4           4          11
    Nonperforming assets to total
     assets                                  0.10%       0.21%       0.14%
    Nonaccrual loans to total loans          0.18%       0.38%       0.29%
    Allowance for loan losses to
     nonaccrual loans                      717.93%     354.49%     553.90%
    Allowance for loan losses to total
     loans                                   1.32%       1.34%       1.61%
    
    Assets Under Administration
    ----------------------------------
    Market value                       $1,797,394  $1,870,510  $1,782,153
    
    
    
                Washington Trust Bancorp, Inc. and Subsidiary
                         CONSOLIDATED BALANCE SHEETS
                                               (Unaudited)
    (Dollars in thousands)                      March 31,    December 31,
                                                   2005           2004
                                               ------------ --------------
    Assets:
    Cash and due from banks                        $40,578        $34,801
    Federal funds sold and other short-term
     investments                                    19,950         17,280
    Mortgage loans held for sale                     2,038          1,095
    Securities:
     Available for sale, at fair value;
      amortized cost $694,309 in 2005 and
      $724,209 in 2004                             696,705        735,666
     Held to maturity, at cost; fair value
      $169,459 in 2005 and $156,270 in 2004        170,168        154,392
                                               ------------ --------------
    
     Total securities                              866,873        890,058
    
    Federal Home Loan Bank stock, at cost           34,966         34,373
    
    Loans:
      Commercial and other                         510,464        507,711
      Residential real estate                      548,840        513,695
      Consumer                                     234,886        228,270
                                               ------------ --------------
    
      Total loans                                1,294,190      1,249,676
     Less allowance for loan losses                 17,058         16,771
                                               ------------ --------------
    
     Net loans                                   1,277,132      1,232,905
    
    Premises and equipment, net                     23,801         24,248
    Accrued interest receivable                      9,805          9,367
    Investment in bank-owned life insurance         29,522         29,249
    Goodwill                                        22,591         22,591
    Identifiable intangible assets                   1,162          1,309
    Other assets                                    13,720         10,544
                                               ------------ --------------
    
     Total assets                               $2,342,138     $2,307,820
                                               ------------ --------------
    
    Liabilities:
    Deposits:
     Demand deposits                              $190,883       $189,588
     NOW accounts                                  180,240        174,727
     Money market accounts                         189,870        196,775
     Savings accounts                              248,852        251,920
     Time deposits                                 719,202        644,875
                                               ------------ --------------
    
     Total deposits                              1,529,047      1,457,885
    
    Dividends payable                                2,394          2,257
    Federal Home Loan Bank advances                639,874        672,748
    Other borrowings                                 2,535          3,417
    Accrued expenses and other liabilities          19,063         19,661
                                               ------------ --------------
    
     Total liabilities                           2,192,913      2,155,968
                                               ------------ --------------
    
    Shareholders' Equity:
    Common stock of $.0625 par value;
     authorized 30 million shares;
     issued 13,299,455 shares in 2005 and
     13,278,685 in 2004                                831            830
    Paid-in capital                                 31,857         31,718
    Retained earnings                              116,330        113,314
    Unearned stock-based compensation                 (667)          (737)
    Accumulated other comprehensive income           1,064          6,937
    Treasury stock, at cost; 8,321 shares in
     2005 and 9,309 in 2004                           (190)          (210)
                                               ------------ --------------
    
     Total shareholders' equity                    149,225        151,852
                                               ------------ --------------
    
     Total liabilities and shareholders' equity $2,342,138     $2,307,820
                                               ------------ --------------
    
    
                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,                          2005      2004
                                                       --------- ---------
    
    Interest income:
      Interest and fees on loans                        $17,825   $13,641
      Interest on securities                              8,619     8,255
      Dividends on corporate stock and Federal Home
       Loan Bank stock                                      619       474
      Interest on federal funds sold and other short-
       term investments                                      55        20
                                                       --------- ---------
    
      Total interest income                              27,118    22,390
                                                       --------- ---------
    
    Interest expense:
      Deposits                                            6,932     4,747
      Federal Home Loan Bank advances                     5,549     4,545
      Other                                                  16        15
                                                       --------- ---------
    
      Total interest expense                             12,497     9,307
                                                       --------- ---------
    
    Net interest income                                  14,621    13,083
    Provision for loan losses                               300       120
                                                       --------- ---------
    
    Net interest income after provision for loan losses  14,321    12,963
                                                       --------- ---------
    
    Noninterest income:
      Trust and investment management fees                3,212     3,055
      Service charges on deposit accounts                 1,011     1,170
      Merchant processing fees                              778       597
      Net gains on loan sales                               487       349
      Income from bank-owned life insurance                 272       299
      Other income                                          319       470
                                                       --------- ---------
    
      Total noninterest income                            6,079     5,940
                                                       --------- ---------
    
    Noninterest expense:
      Salaries and employee benefits                      7,459     6,977
      Net occupancy                                         853       816
      Equipment                                             882       770
      Merchant processing costs                             636       466
      Advertising and promotion                             303       466
      Outsourced services                                   413       376
      Legal, audit and professional fees                    392       258
      Amortization of intangibles                           147       161
      Other                                               1,359     1,390
                                                       --------- ---------
    
      Total noninterest expense                          12,444    11,680
                                                       --------- ---------
    
    Income before income taxes                            7,956     7,223
    Income tax expense                                    2,546     2,268
                                                       --------- ---------
    
      Net income                                         $5,410    $4,955
                                                       --------- ---------
    
    Weighted average shares outstanding - basic        13,282.7  13,202.6
    Weighted average shares outstanding - diluted      13,617.3  13,513.3
    Per share information:
      Basic earnings per share                            $0.41     $0.38
      Diluted earnings per share                          $0.40     $0.37
      Cash dividends declared per share                   $0.18     $0.17
    
    
    
        CONTACT: Washington Trust Bancorp, Inc.
                 Elizabeth B. Eckel, 401-348-1309
                 Senior Vice President, Marketing
                 ebeckel@washtrust.com
    
        SOURCE: Washington Trust Bancorp, Inc.