• Washington Trust Bancorp, Inc.
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  • Washington Trust Reports Strong Fourth Quarter and Record 2013 Earnings
    Company Release - 01/28/2014 16:05

    Solid Growth in Loans, Deposits and Wealth Management Business

    WESTERLY, R.I.--(BUSINESS WIRE)-- Washington Trust Bancorp, Inc. (NASDAQ Global Select; symbol: WASH), parent company of The Washington Trust Company, today announced net income of $9.8 million, or 58 cents per diluted share, for the fourth quarter of 2013. These results compared to third quarter of 2013 net income of $10.0 million, or 59 cents per diluted share, and fourth quarter of 2012 net income of $9.0 million, or 55 cents per diluted share.

    For the year ended December 31, 2013, net income totaled $36.2 million, or $2.16 per diluted share, up from the $35.1 million, or $2.13 per diluted share, reported for 2012. The returns on average equity and average assets for 2013 were 11.65% and 1.17%, respectively, compared to 11.97% and 1.16%, respectively, for 2012.

    "Washington Trust's strong fourth quarter performance led to record full-year 2013 earnings," stated Joseph J. MarcAurele, Washington Trust Chairman and CEO. "We continued to build relationships with individuals and businesses throughout the region, which contributed to solid loan and deposit growth."

    Selected highlights for the fourth quarter included:

    • Loan growth was strong in the fourth quarter, totaling $109.1 million, or 5%. Total loans amounted to $2.46 billion at December 31, 2013, up by 7% from a year ago.
    • Deposit growth continued in the fourth quarter with an increase of $50.5 million, or 2%, from the end of the third quarter. Total deposits reached $2.51 billion at December 31, 2013, up by 8% from a year ago.
    • Wealth management assets under administration grew by $186.4 million, or 4%, to $4.78 billion. Wealth management revenues rose by $1.2 million, or 15%, on a linked quarter basis.
    • Asset quality indicators continued to improve. Nonperforming assets were down by 4% and delinquencies were down 9% from September 30, 2013.
    • In December, the quarterly dividend was increased to 27 cents per share, representing the third quarterly dividend increase during 2013.

    Net Interest Income

    Net interest income totaled $23.5 million for the fourth quarter of 2013, up modestly from $23.4 million for the third quarter of 2013. The net interest margin for the fourth quarter of 2013 was 3.24%, compared to 3.29% for the third quarter of 2013. The yield on interest-earning assets declined by 10 basis points from the previous quarter largely due to lower yields on commercial loans. Meanwhile, the cost of funds improved by 4 basis points.

    Noninterest Income

    Noninterest income totaled $15.1 million for the fourth quarter of 2013, compared to $17.4 million for the third quarter of 2013. Included in noninterest income in the fourth quarter was an other-than-temporary impairment ("OTTI") charge of $717 thousand on a trust preferred collateralized debt obligation investment holding. The security has been sold in January 2014 with a realized loss equal to the impairment charge.

    Excluding the OTTI charge, noninterest income declined by $1.6 million, or 9%, compared to the third quarter of 2013. Other significant linked quarter changes included the following:

    • Wealth management revenues totaled $8.8 million for the fourth quarter, up from the $7.6 million recognized in the previous quarter. This included:
      • An increase of $375 thousand, or 5%, in asset-based revenues, which totaled $7.7 million for the fourth quarter.
      • An increase of $805 thousand in transaction-based revenues, which totaled $1.1 million for the fourth quarter. This increase was largely due to an above-average level of insurance commission income. Transaction-based revenues were approximately $700 thousand higher than the average amount recognized for each of the previous three quarters.
    • Net gains on loan sales and commissions on loans originated for others declined by $2.3 million compared to the third quarter. Included in the previous quarter were gains of $977 thousand resulting from the sale of residential mortgage portfolio loans. Excluding the third quarter 2013 portfolio loan sale, these revenues declined by $1.4 million, reflecting continued declines in refinancing activity due to higher mortgage interest rates. Residential mortgage loans sold to the secondary market amounted to $65.9 million in the fourth quarter, compared to $114.4 million in the previous quarter.
    • Net gains on interest rate swap contracts increased by $672 thousand largely due to an above-average level of customer-related interest rate swap transactions in the fourth quarter of 2013. Net gains on interest rate swap contracts for the fourth quarter of 2013 were approximately $650 thousand higher than the average amount of net gains recognized for each of the first three quarters of 2013.
    • Merchant processing fee revenue was down by $1.1 million, or 32%, reflecting a seasonal decline in the volume of transactions processed for customers. See discussion below regarding the corresponding decrease in merchant processing expenses.

    Noninterest Expenses

    Noninterest expenses totaled $24.0 million for the fourth quarter of 2013, compared to $25.5 million for the previous quarter. Debt prepayment penalties of $1.1 million were incurred in the third quarter of 2013; there were none incurred in the fourth quarter. In addition, a charitable contribution expense (classified in other expenses) of $400 thousand was incurred in the fourth quarter of 2013; there was none incurred in the previous quarter.

    Excluding these items, noninterest expenses for the fourth quarter of 2013 decreased by $755 thousand from the previous quarter. Significant changes, on this basis, included the following:

    • Salaries and employee benefits expenses were down by $212 thousand, or 1%, primarily as a result of a modification to the Corporation's defined benefit pension plans adopted in the third quarter.
    • Merchant processing expenses were down by $926 thousand, or 32%, on a linked quarter basis. This decline is consistent with the decline in merchant processing fee income described above.

    Income tax expense amounted to $4.4 million for the fourth quarter of 2013, compared to $4.0 million for the previous quarter. The effective tax rate for the fourth quarter was 31.0%, compared to 31.5% for the third quarter. Based on current federal and applicable state income tax statutes, the Corporation currently expects the 2014 effective tax rate to be approximately 31.7%.

    Asset Quality

    Total nonaccrual loans amounted to $18.3 million, or 0.74% of total loans, at December 31, 2013, compared to $19.5 million, or 0.83%, at September 30, 2013. Total past due loans amounted to $21.9 million, or 0.89% of total loans, at December 31, 2013, compared to $24.0 million, or 1.02%, at September 30, 2013.

    The loan loss provision charged to earnings in the fourth quarter of 2013 totaled $400 thousand compared to $700 thousand in the third quarter. Net charge-offs amounted to $522 thousand in the fourth quarter of 2013, compared to $576 thousand in the third quarter of 2013.

    The allowance for loan losses was $27.9 million, or 1.13% of total loans, at December 31, 2013, compared to $28.0 million, or 1.19% of total loans, at September 30, 2013. The decline in the ratio of the allowance for loan losses to total loans reflects charge-offs, a decrease in specific reserves on impaired loans and overall improvement in asset and credit quality indicators.

    Loans

    Total loans of $2.46 billion at December 31, 2013 increased by $109.1 million, or 5%, from the balance at September 30, 2013 and by $168.9 million, or 7%, from a year ago. Significant changes included:

    • Commercial loan portfolio growth of $65.4 million, or 5.0%, in the fourth quarter and $110.9 million, or 9.0%, from a year ago, reflecting growth in both commercial real estate and commercial and industrial loan portfolios.
    • Residential real estate loan portfolio growth of $41.0 million, or 6%, in the fourth quarter and $55.0 million, or 8%, in the last twelve months.

    Deposits

    Total deposits of $2.51 billion at December 31, 2013 grew by $50.5 million, or 2%, from September 30, 2013, and by $192.7 million, or 8%, from a year ago. Significant changes included:

    • Demand deposit and NOW account growth of $29.2 million, or 4%, in the fourth quarter and $79.5 million, or 12%, from a year ago.
    • Money market and savings account growth of $47.6 million, or 5%, in the fourth quarter and $192.7 million, or 25%, in the last twelve months.
    • Time deposit balance decreases of $26.3 million, or 3%, in the fourth quarter and $79.5 million, or 9%, from a year ago.

    Capital Management

    Capital levels continued to exceed the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 13.29% at December 31, 2013, compared to 13.44% at September 30, 2013 and 13.26% at December 31, 2012.

    Total shareholder's equity was $329.6 million at December 31, 2013, up by $6.1 million from September 30, 2013.

    Dividends Declared

    The Board of Directors declared a quarterly dividend of 27 cents per share for the quarter ended December 31, 2013. The dividend was paid on January 14, 2014 to shareholders of record on January 2, 2014.

    Conference Call

    Washington Trust will host a conference call to discuss fourth quarter results, business highlights and outlook on Wednesday, January 29, 2014 at 8:30 am (Eastern Time). Individuals may dial in to the call at 1-888-317-6016. An audio replay of the call will be available by dialing 1-877-344-7529 and entering Conference Number 10038876; the audio replay will be available until 9:00 a.m. on February 13, 2014. A webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, www.washtrust.com, shortly after the conclusion of the call and will be available through March 31, 2014.

    Background

    Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a state-chartered bank headquartered in Westerly, Rhode Island. Founded in 1800, Washington Trust is the oldest community bank in the nation and is the largest independent bank headquartered in Rhode Island. Washington Trust offers a full range of financial services, including commercial banking, small business 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 The NASDAQ Global Select® Stock Market under the symbol WASH. Investor information is available on the Corporation’s web site: www.washtrust.com.

    Forward-Looking Statements

    This press release contains statements that are “forward-looking statements”. We may also make written or oral 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 the control of Washington Trust. These risks, uncertainties and other factors may cause the actual results, performance or achievements of Washington Trust 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: continued weakness in general national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets, volatility and disruption in national and international financial markets, additional government intervention in the U.S. financial system, 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 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 Washington Trust'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. In addition, the factors described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission and as updated by our Quarterly Reports on Form 10-Q, 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 press release, and Washington Trust assumes 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
    CONSOLIDATED BALANCE SHEETS (unaudited)
    (Dollars in thousands, except par value)      

    Dec 31,
    2013

         

    Dec 31,
    2012

    Assets:            
    Cash and due from banks $81,939$73,474
    Short-term investments 3,378 19,176
    Mortgage loans held for sale, at fair value 11,636 50,056
    Securities:
    Available for sale, at fair value 392,903 375,498
    Held to maturity, at amortized cost (fair value $29,865 in 2013 and $41,420 in 2012)       29,905         40,381  
    Total securities 422,808 415,879
    Federal Home Loan Bank stock, at cost 37,730 40,418
    Loans:
    Commercial 1,363,335 1,252,419
    Residential real estate 772,674 717,681
    Consumer       326,875         323,903  
    Total loans 2,462,884 2,294,003
    Less allowance for loan losses       27,886         30,873  
    Net loans 2,434,998 2,263,130
    Premises and equipment, net 25,402 27,232
    Investment in bank-owned life insurance 56,673 54,823
    Goodwill 58,114 58,114
    Identifiable intangible assets, net 5,493 6,173
    Other assets       50,696         63,409  
    Total assets       $3,188,867         $3,071,884  
    Liabilities:
    Deposits:
    Demand deposits $440,785$379,889
    NOW accounts 309,771 291,174
    Money market accounts 666,646 496,402
    Savings accounts 297,357 274,934
    Time deposits       790,762         870,232  
    Total deposits 2,505,321 2,312,631
    Federal Home Loan Bank advances 288,082 361,172
    Junior subordinated debentures 22,681 32,991
    Other borrowings 178 1,212
    Other liabilities       42,959         68,226  
    Total liabilities       2,859,221         2,776,232  
    Shareholders’ Equity:

    Common stock of $.0625 par value; authorized 30,000,000 shares; issued and outstanding 16,613,561 shares in 2013 and 16,379,771 shares in 2012

    1,038 1,024
    Paid-in capital 97,566 91,453
    Retained earnings 232,595 213,674
    Accumulated other comprehensive loss       (1,553 )       (10,499 )
    Total shareholders’ equity       329,646         295,652  
    Total liabilities and shareholders’ equity       $3,188,867         $3,071,884  
     
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    CONSOLIDATED STATEMENTS OF INCOME (unaudited)
    (Dollars and shares in thousands, except per share amounts)     Three Months       Twelve Months  

    Periods ended December 31,

        2013     2012     2013     2012
    Interest income:            
    Interest and fees on loans       $25,649$26,109$102,481$102,656
    Interest on securities: Taxable 3,005 3,241 11,008 15,359
    Nontaxable 618 664 2,553 2,699
    Dividends on corporate stock and Federal Home Loan Bank stock 35 49 148 256
    Other interest income     59       27       158       91  
    Total interest and dividend income     29,366       30,090       116,348       121,061  
    Interest expense:
    Deposits 3,066 3,380 12,420 13,590
    Federal Home Loan Bank advances 2,534 3,148 10,643 14,957
    Junior subordinated debentures 241 394 1,484 1,570
    Other interest expense     4       4       16       248  
    Total interest expense     5,845       6,926       24,563       30,365  
    Net interest income 23,521 23,164 91,785 90,696
    Provision for loan losses     400       600       2,400       2,700  
    Net interest income after provision for loan losses     23,121       22,564       89,385       87,996  
    Noninterest income:
    Wealth management revenues 8,810 7,790 31,825 29,641
    Service charges on deposit accounts 820 837 3,256 3,193
    Merchant processing fees 2,271 2,232 10,220 10,159
    Card interchange fees 775 636 2,788 2,480
    Income from bank-owned life insurance 458 479 1,850 2,448
    Net gains on loan sales and commissions on loans originated for others 1,551 4,476 13,085 14,092
    Net realized gains on securities 924 1,223
    Net gains on interest rate swap contracts 726 168 951 255
    Equity in earnings (losses) of unconsolidated subsidiaries (42 ) 82 (107 ) 196
    Other income     468       275       1,701       1,748  
    Noninterest income, excluding other-than-temporary impairment losses 15,837 17,899 65,569 65,435
    Total other-than-temporary impairment losses on securities 319 57 (294 ) (28 )
    Portion of loss recognized in other comprehensive income (before tax)     (1,036 )     (69 )     (3,195 )     (193 )
    Net impairment losses recognized in earnings     (717 )     (12 )     (3,489 )     (221 )
    Total noninterest income     15,120       17,887       62,080       65,214  
    Noninterest expense:
    Salaries and employee benefits 14,428 15,661 60,052 59,786
    Net occupancy 1,487 1,518 5,769 6,039
    Equipment 1,189 1,222 4,847 4,640
    Merchant processing costs 1,936 1,903 8,682 8,593
    Outsourced services 1,072 900 3,662 3,560
    Legal, audit and professional fees 639 641 2,330 2,240
    FDIC deposit insurance costs 431 419 1,761 1,730
    Advertising and promotion 321 435 1,464 1,730
    Amortization of intangibles 164 173 680 728
    Foreclosed property costs 36 158 258 762
    Debt prepayment penalties 1,774 1,125 3,908
    Other expenses     2,345       2,617       8,155       8,622  
    Total noninterest expense     24,048       27,421       98,785       102,338  
    Income before income taxes 14,193 13,030 52,680 50,872
    Income tax expense     4,404       4,007       16,527       15,798  
    Net income     $9,789       $9,023       $36,153       $35,074  
     
    Weighted average common shares outstanding - basic 16,602 16,376 16,506 16,358
    Weighted average common shares outstanding - diluted 16,770 16,425 16,664 16,401
    Per share information: Basic earnings per common share $0.59$0.55$2.18$2.13
    Diluted earnings per common share $0.58$0.55$2.16$2.13
    Cash dividends declared per share $0.27$0.24$1.03$0.94
     
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
          At or for the Quarters Ended  
    (Dollars and shares in thousands, except per share amounts)       Dec 31,
    2013
        Sep 30,
    2013
        Jun 30,
    2013
        Mar 31,
    2013
        Dec 31,
    2012
    Financial Data:                
    Total assets $3,188,867$3,131,958$3,061,307$3,051,848$3,071,884
    Total loans 2,462,884 2,353,766 2,384,980 2,325,045 2,294,003
    Total securities 422,808 419,349 350,517 387,102 415,879
    Total deposits 2,505,321 2,454,831 2,304,609 2,319,641 2,312,631
    Total shareholders' equity 329,646 323,585 303,370 301,291 295,652
    Net interest income 23,521 23,388 22,409 22,467 23,164
    Provision for loan losses 400 700 700 600 600
    Noninterest income, excluding OTTI losses 15,837 17,400 16,394 15,938 17,899
    Net OTTI losses recognized in earnings (717 ) (2,772 ) (12 )
    Noninterest expenses 24,048 25,548 25,005 24,184 27,421
    Income tax expense 4,404 4,580 4,115 3,428 4,007
    Net income 9,789 9,960 8,983 7,421 9,023
     
    Share Data:
    Basic earnings per common share $0.59$0.60$0.54$0.45$0.55
    Diluted earnings per common share $0.58$0.59$0.54$0.45$0.55
    Dividends declared per share $0.27$0.26$0.25$0.25$0.24
    Book value per share $19.84$19.51$18.40$18.34$18.05
    Tangible book value per share - Non-GAAP (1) $16.01$15.66$14.52$14.44$14.13
    Market value per share $37.22$31.43$28.52$27.38$26.31
    Shares outstanding at end of period 16,614 16,589 16,487 16,425 16,380
    Weighted average common shares outstanding - basic 16,602 16,563 16,454 16,401 16,376
    Weighted average common shares outstanding - diluted 16,770 16,696 16,581 16,449 16,425
     
    Key Ratios:
    Return on average assets 1.24 % 1.29 % 1.18 % 0.98 % 1.19 %
    Return on average tangible assets - Non-GAAP (1) 1.26 % 1.31 % 1.21 % 1.01 % 1.21 %
    Return on average equity 11.98 % 12.82 % 11.84 % 9.91 % 12.01 %
    Return on average tangible equity - Non-GAAP (1) 14.80 % 16.13 % 15.01 % 12.62 % 15.29 %
     
    Capital Ratios:
    Tier 1 risk-based capital 12.12% (i) 12.23 % 11.85 % 12.25 % 12.01 %
    Total risk-based capital 13.29% (i) 13.44 % 13.06 % 13.50 % 13.26 %
    Tier 1 leverage ratio 9.41% (i) 9.41 % 9.32 % 9.53 % 9.30 %
    Equity to assets 10.34 % 10.33 % 9.91 % 9.87 % 9.62 %
    Tangible equity to tangible assets - Non-GAAP (1) 8.51 % 8.47 % 7.99 % 7.94 % 7.69 %
    (i) - estimated
     
    Wealth Management Assets under Administration:
    Balance at beginning of period $4,595,594$4,433,574$4,420,076$4,199,640$4,242,520

    Net investment appreciation (depreciation) & income

    248,727 190,931 (20,956 ) 213,979 (5,887 )
    Net client cash flows       (62,363 )     (28,911 )     34,454       6,457       (36,993 )
    Balance at end of period       $4,781,958       $4,595,594       $4,433,574       $4,420,076       $4,199,640  

    (1) See the section labeled “Supplemental Information - Non-GAAP Financial Measures” at the end of this document.

     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
         

    Years Ended

     
    (Dollars and shares in thousands, except per share amounts)       Dec 31,
    2013
        Dec 31,
    2012
    Financial Data:    
    Net interest income $91,785$90,696
    Provision for loan losses 2,400 2,700
    Noninterest income, excluding OTTI losses 65,569 65,435
    Net OTTI losses recognized in earnings (3,489 ) (221 )
    Noninterest expenses 98,785 102,338
    Income tax expense 16,527 15,798
    Net income 36,153 35,074
     
    Share Data:
    Basic earnings per common share $2.18$2.13
    Diluted earnings per common share $2.16$2.13
    Dividends declared per share $1.03$0.94
     
    Weighted average common shares outstanding - basic 16,506 16,358
    Weighted average common shares outstanding - diluted 16,664 16,401
     
    Key Ratios:
    Return on average assets 1.17 % 1.16 %
    Return on average tangible assets - Non-GAAP (1) 1.20 % 1.18 %
    Return on average equity 11.65 % 11.97 %
    Return on average tangible equity - Non-GAAP (1) 14.68 % 15.35 %
     
    Asset Quality Data:
    Allowance for Loan Losses:
    Balance at beginning of period $30,873$29,802
    Provision charged to earnings 2,400 2,700
    Charge-offs (6,022 ) (2,335 )
    Recoveries       635       706  
    Balance at end of period       $27,886       $30,873  
     
    Net Loan Charge-Offs (Recoveries):
    Commercial mortgages $4,833$43
    Other commercial 205 1,076
    Residential real estate mortgages 125 257
    Consumer       224       253  
    Total       $5,387       $1,629  
     
    Net charge-offs to average loans (annualized) 0.27 % 0.07 %
     
    Wealth Management Assets Under Administration:
    Balance at beginning of period $4,199,640$3,900,061
    Net investment appreciation & income 632,681 315,799
    Net client cash flows       (50,363 )     (16,220 )
    Balance at end of period       $4,781,958       $4,199,640  

    (1) See the section labeled “Supplemental Information - Non-GAAP Financial Measures” at the end of this document.

     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
          For the Quarters Ended  
            Dec 31,
    2013
        Sep 30,
    2013
        Jun 30,
    2013
        Mar 31,
    2013
        Dec 31,
    2012
    Average Yield / Rate (taxable equivalent basis):                
    Assets:
    Commercial loans 4.52 % 4.67 % 4.58 % 4.70   % 4.90 %
    Residential real estate loans, including mortgage loans held for sale 4.09 % 4.06 % 4.14 % 4.26 % 4.23 %
    Consumer loans 3.77 % 3.78 % 3.81 % 3.84 % 3.86 %
    Total loans 4.28 % 4.35 % 4.34 % 4.44 % 4.53 %
    Cash, federal funds sold and other short-term investments 0.22 % 0.21 % 0.22 % 0.21 % 0.26 %
    FHLBB stock 0.37 % 0.38 % 0.42 % 0.39 % 0.48 %
    Taxable debt securities 3.40 % 3.44 % 3.52 % 3.56 % 3.49 %
    Nontaxable debt securities 5.88 % 5.87 % 5.94 % 5.98 % 5.89 %
    Corporate stocks % % % % %
    Total securities 3.78 % 3.88 % 3.97 % 3.98 % 3.86 %
    Total interest-earning assets 4.02 % 4.12 % 4.17 % 4.24 % 4.31 %
    Liabilities:
    Interest-bearing demand deposits % % % % %
    NOW accounts 0.06 % 0.06 % 0.06 % 0.06 % 0.07 %
    Money market accounts 0.34 % 0.31 % 0.29 % 0.29 % 0.28 %
    Savings accounts 0.06 % 0.06 % 0.07 % 0.07 % 0.09 %
    Time deposits 1.19 % 1.23 % 1.25 % 1.28 % 1.32 %
    FHLBB advances 3.49 % 3.25 % 3.29 % 3.21 % 3.27 %
    Junior subordinated debentures 4.22 % 4.22 % 7.82 % 4.79 % 4.75 %
    Other 2.52 % 4.50 % 5.87 % 1.77 % 5.51 %
    Total interest-bearing liabilities 0.98 % 1.01 % 1.11 % 1.11 % 1.19 %
     
    Interest rate spread (taxable equivalent basis) 3.04 % 3.11 % 3.06 % 3.13 % 3.12 %
    Net interest margin (taxable equivalent basis) 3.24 % 3.29 % 3.26 % 3.32 % 3.33 %
       
     
    At December 31, 2013
    Amortized     Unrealized   Unrealized   Fair
    (Dollars in thousands)       Cost (1)     Gains     Losses     Value
    Securities Available for Sale:
    Obligations of U.S. government-sponsored enterprises $54,474$720 ($79 ) $55,115

    Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises

    230,387 8,369 (401 ) 238,355
    States and political subdivisions 60,659 2,200 62,859
    Trust preferred securities:
    Individual name issuers 30,715 (6,031 ) 24,684
    Collateralized debt obligations 547 547
    Corporate bonds       11,128       231       (16 )     11,343
    Total securities available for sale       387,910       11,520       (6,527 )     392,903
    Held to Maturity:

    Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises

          29,905       14       (54 )     29,865
    Total securities held to maturity       29,905       14       (54 )     29,865
    Total securities       $417,815       $11,534       ($6,581 )     $422,768

    (1) Net of other-than-temporary impairment losses recognized in earnings.

     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
        Period End Balances At
    (Dollars in thousands)     Dec 31,
    2013
        Sep 30,
    2013
        Jun 30,
    2013
        Mar 31,
    2013
        Dec 31,
    2012
    Loans:                
    Commercial:     Mortgages $796,249$727,375$758,437$729,968   $710,813
    Construction & development 36,289 51,951 39,449 34,179 27,842
          Other     530,797       518,566       512,228       513,000         513,764
    Total commercial 1,363,335 1,297,892 1,310,114 1,277,147 1,252,419
    Residential real estate: Mortgages 749,163 711,427 728,158 702,418 692,798
          Homeowner construction     23,511       20,265       20,713       21,943         24,883
    Total residential real estate 772,674 731,692 748,871 724,361 717,681
    Consumer: Home equity lines 231,362 227,063 228,367 226,640 226,861
    Home equity loans 40,212 41,158 41,312 40,134 39,329
          Other     55,301       55,961       56,316       56,763         57,713
          Total consumer     326,875       324,182       325,995       323,537         323,903
          Total loans     $2,462,884       $2,353,766       $2,384,980       $2,325,045         $2,294,003
     
     
        At December 31, 2013
    (Dollars in thousands)     Balance     % of Total
    Commercial Real Estate Loans by Property Location:    
    Rhode Island, Connecticut, Massachusetts$791,682 95.1 %
    New York, New Jersey 32,126 3.9 %
    New Hampshire     8,730       1.0 %
    Total commercial real estate loans (1)     $832,538       100.0 %
     

    (1) Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property.

     
        At December 31, 2013
    (Dollars in thousands)     Balance     % of Total
    Residential Mortgages by Property Location:    
    Rhode Island, Connecticut, Massachusetts$751,932 97.3 %
    New Hampshire 7,900 1.0 %
    New York, Virginia, New Jersey, Maryland, Pennsylvania, District of Columbia 6,972 0.9 %
    Ohio 2,509 0.3 %
    Washington, Oregon 1,356 0.2 %
    Georgia 1,083 0.1 %
    New Mexico 468 0.1 %
    Other     454       0.1 %
    Total residential mortgages     $772,674       100.0 %
     
     
          Period End Balances At
    (Dollars in thousands)       Dec 31,
    2013
        Sep 30,
    2013
        Jun 30,
    2013
        Mar 31,
    2013
        Dec 31,
    2012
    Deposits:                
    Demand deposits $440,785$420,075$358,797$375,156$379,889
    NOW accounts 309,771 301,250 301,096 294,136 291,174
    Money market accounts 666,646 623,631 540,012 503,414 496,402
    Savings accounts 297,357 292,765 293,405 284,983 274,934
    Time deposits       790,762       817,110       811,299       861,952       870,232
    Total deposits       $2,505,321       $2,454,831       $2,304,609       $2,319,641       $2,312,631
     

    Out-of-market brokered certificates of deposits included in time deposits

    $98,009$106,231$96,177$103,045$102,636

    In-market deposits, excluding out-of-market brokered certificates of deposit

    $2,407,312$2,348,600$2,208,432$2,216,596$2,209,995
     
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
          Period End Balances At  
    (Dollars in thousands)       Dec 31,
    2013
        Sep 30,
    2013
        Jun 30,
    2013
        Mar 31,
    2013
        Dec 31,
    2012
    Asset Quality Data:                
    Nonperforming Assets:
    Commercial mortgages $7,492$8,956$9,976$14,953$10,681
    Commercial construction and development
    Other commercial 1,291 1,248 1,400 3,122 4,412
    Residential real estate mortgages 8,315 8,095 7,526 6,699 6,158
    Consumer       1,204       1,204       1,124       901       1,292  
    Total nonaccrual loans $18,302$19,503$20,026$25,675$22,543
    Nonaccrual investment securities 547 425 397 404 843
    Property acquired through foreclosure or repossession       932       594       1,230       2,625       2,047  
    Total nonperforming assets       $19,781       $20,522       $21,653       $28,704       $25,433  
     
    Total past due loans to total loans 0.89 % 1.02 % 1.09 % 1.13 % 1.22 %
    Nonperforming assets to total assets 0.62 % 0.66 % 0.71 % 0.94 % 0.83 %
    Nonaccrual loans to total loans 0.74 % 0.83 % 0.84 % 1.10 % 0.98 %
    Allowance for loan losses to nonaccrual loans 152.37 % 143.61 % 139.24 % 121.28 % 136.95 %
    Allowance for loan losses to total loans 1.13 % 1.19 % 1.17 % 1.34 % 1.35 %
     
    Troubled Debt Restructured Loans:
    Accruing troubled debt restructured loans:
    Commercial mortgages $22,800$23,892$19,018$9,600$9,569
    Other commercial 1,265 1,576 2,602 6,554 6,577
    Residential real estate mortgages 1,442 870 876 1,599 1,123
    Consumer       236       239       242       244       154  
    Accruing troubled debt restructured loans       25,743       26,577       22,738       17,997       17,423  
    Nonaccrual troubled debt restructured loans:
    Commercial mortgages
    Other commercial 542 547 590 721 2,063
    Residential real estate mortgages 144 155 688
    Consumer       38       40       42       42       44  
    Nonaccrual troubled debt restructured loans       580       587       776       918       2,795  
    Total troubled debt restructured loans       $26,323       $27,164       $23,514       $18,915       $20,218  
     
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SELECTED FINANCIAL HIGHLIGHTS (unaudited)
          Period End Balances At
    (Dollars in thousands)       Dec 31,
    2013
        Sep 30,
    2013
        Jun 30,
    2013
        Mar 31,
    2013
        Dec 31,
    2012
    Past Due Loans:                
    Loans 30-59 Days Past Due:
    Commercial mortgages $— $— $— $— $373
    Other commercial loans 276 2,648 505 689 260
    Residential real estate mortgages 4,040 2,624 4,051 3,891 4,840
    Consumer loans       1,322       1,013       1,588       1,534       1,134
    Loans 30-59 days past due       $5,638       $6,285       $6,144       $6,114       $6,607
     
    Loans 60-89 Days Past Due:
    Commercial mortgages $— $730$536$193$408
    Other commercial loans 302 8 34 341 296
    Residential real estate mortgages 1,285 1,960 1,697 1,451 1,951
    Consumer loans       166       328       689       461       385
    Loans 60-89 days past due       $1,753       $3,026       $2,956       $2,446       $3,040
     
    Loans 90 Days or more Past Due:
    Commercial mortgages $7,492$8,226$8,895$9,852$10,300
    Other commercial loans 731 929 3,428 2,961 3,647
    Residential real estate mortgages 5,633 4,843 4,266 4,327 3,658
    Consumer loans       656       693       415       484       844
    Loans 90 days or more past due       $14,512       $14,691       $17,004       $17,624       $18,449
     
    Total Past Due Loans:
    Commercial mortgages $7,492$8,956$9,431$10,045$11,081
    Other commercial loans 1,309 3,585 3,967 3,991 4,203
    Residential real estate mortgages 10,958 9,427 10,014 9,669 10,449
    Consumer loans       2,144       2,034       2,692       2,479       2,363
    Total past due loans       $21,903       $24,002       $26,104       $26,184       $28,096
     
    Accruing loans 90 days or more past due $— $— $2,431 $— $—
    Nonaccrual loans included in past due loans $15,591$17,275$17,208$19,000$20,979
     
     
          For the Quarters Ended  
    (Dollars in thousands)       Dec 31,
    2013
        Sep 30,
    2013
        Jun 30,
    2013
        Mar 31,
    2013
        Dec 31,
    2012
    Allowance for Loan Losses:                
    Balance at beginning of period $28,008$27,884$31,139$30,873$30,752
    Provision charged to earnings 400 700 700 600 600
    Charge-offs (703 ) (770 ) (4,175 ) (374 ) (534 )
    Recoveries       181       194       220       40       55  
    Balance at end of period       $27,886       $28,008       $27,884       $31,139       $30,873  
     
    Net Loan Charge-Offs (Recoveries):
    Commercial mortgages $309$602$3,814$108$212
    Other commercial 73 (2 ) 63 71 225
    Residential real estate mortgages 80 36 9 39
    Consumer       60       (24 )     42       146       3  
    Total       $522       $576       $3,955       $334       $479  
     

    The following tables present 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. For dividends on corporate stocks, the 70% federal dividends received deduction is also used in the calculation of tax equivalency. Unrealized gains (losses) on available for sale securities are excluded from the average balance and yield calculations. Nonaccrual and renegotiated loans, as well as interest earned on these loans (to the extent recognized in the Consolidated Statements of Income) are included in amounts presented for loans.

     
    Washington Trust Bancorp, Inc. and Subsidiaries
    CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
          Three Months Ended  
            December 31, 2013     September 30, 2013     December 31, 2012

    Average
    Balance

        Interest    

    Yield/
    Rate

       

    Average
    Balance

        Interest    

    Yield/
    Rate

       

    Average
    Balance

        Interest    

    Yield/
    Rate

    (Dollars in thousands)                                  
    Assets:    
    Commercial loans $1,310,584$14,944 4.52 % $1,297,705$15,274 4.67 % $1,227,120$15,121 4.90 %

    Residential real estate loans, including mortgage loans held for sale

    771,272 7,947 4.09 % 780,323 7,991 4.06 % 757,764 8,049 4.23 %
    Consumer loans       323,778       3,078       3.77 %     323,398       3,083       3.78 %     322,476       3,131       3.86 %
    Total loans 2,405,634 25,969 4.28 % 2,401,426 26,348 4.35 % 2,307,360 26,301 4.53 %

    Cash, federal funds sold and short-term investments

    104,718 59 0.22 % 87,048 47 0.21 % 42,056 27 0.26 %
    FHLBB stock 37,730 35 0.37 % 37,730 36 0.38 % 40,418 49 0.48 %
     
    Taxable debt securities 350,821 3,005 3.40 % 297,532 2,582 3.44 % 369,736 3,241 3.49 %
    Nontaxable debt securities 63,524 941 5.88 % 64,836 960 5.87 % 68,198 1,010 5.89 %
    Corporate stocks                   %                 %                 %
    Total securities       414,345       3,946       3.78 %     362,368       3,542       3.88 %     437,934       4,251       3.86 %
    Total interest-earning assets 2,962,427 30,009 4.02 % 2,888,572 29,973 4.12 % 2,827,768 30,628 4.31 %
    Noninterest-earning assets       200,615                   209,656                   216,996              
    Total assets       $3,163,042                   $3,098,228                   $3,044,764              
    Liabilities and Shareholders' Equity:
    Interest-bearing demand deposits $10,877 $— % $6,688 $— % $— $— %
    NOW accounts 300,113 48 0.06 % 293,634 45 0.06 % 276,572 49 0.07 %
    Money market accounts 653,731 560 0.34 % 591,860 456 0.31 % 473,747 338 0.28 %
    Savings accounts 293,434 47 0.06 % 295,821 47 0.06 % 271,716 60 0.09 %
    Time deposits 802,979 2,411 1.19 % 811,850 2,516 1.23 % 886,355 2,933 1.32 %
    FHLBB advances 288,212 2,534 3.49 % 328,705 2,693 3.25 % 382,465 3,148 3.27 %
    Junior subordinated debentures 22,681 241 4.22 % 22,681 241 4.22 % 32,991 394 4.75 %
    Other       629       4       2.52 %     353       4       4.50 %     289       4       5.51 %
    Total interest-bearing liabilities 2,372,656 5,845 0.98 % 2,351,592 6,002 1.01 % 2,324,135 6,926 1.19 %
    Demand deposits 425,316 384,665 362,060
    Other liabilities 38,204 51,186 58,139
    Shareholders' equity       326,866                   310,785                   300,430              
    Total liabilities and shareholders' equity       $3,163,042                   $3,098,228                   $3,044,764              
    Net interest income (FTE)             $24,164                   $23,971                   $23,702        
    Interest rate spread 3.04 % 3.11 % 3.12 %
    Net interest margin                   3.24 %                 3.29 %                 3.33 %
     

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

     
    (Dollars in thousands)             Three Months Ended
                 

    Dec 31,
    2013

       

    Sep 30,
    2013

       

    Dec 31,
    2012

    Commercial loans $320     $252     $192
    Nontaxable debt securities 323 331 346
    Corporate stocks                        
    Total             $643       $583       $538
     
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)

    Years ended December 31,

          2013     2012
         

    Average
    Balance

        Interest    

    Yield/
    Rate

       

    Average
    Balance

        Interest    

    Yield/
    Rate

    (Dollars in thousands)                        
    Assets:  
    Commercial loans $1,286,029$59,387 4.62 % $1,177,268$58,823 5.00 %

    Residential real estate loans, including mortgage loans held for sale

    767,450 31,752 4.14 % 733,178 31,974 4.36 %
    Consumer loans       323,847       12,304       3.80 %     320,828       12,428       3.87 %
    Total loans 2,377,326 103,443 4.35 % 2,231,274 103,225 4.63 %
    Cash, federal funds sold and short-term investments 72,726 158 0.22 % 41,359 91 0.22 %
    FHLBB stock 38,238 148 0.39 % 40,713 207 0.51 %
     
    Taxable debt securities 316,440 11,008 3.48 % 431,024 15,359 3.56 %
    Nontaxable debt securities 65,708 3,889 5.92 % 69,838 4,115 5.89 %
    Corporate stocks                   %     910       68       7.47 %
    Total securities       382,148       14,897       3.90 %     501,772       19,542       3.89 %
    Total interest-earning assets 2,870,438 118,646 4.13 % 2,815,118 123,065 4.37 %
    Noninterest-earning assets       208,463                   221,031              
    Total assets       $3,078,901                   $3,036,149              
    Liabilities and Shareholders' Equity:
    Interest-bearing demand deposits $4,461 $— % $— $— %
    NOW accounts 291,705 183 0.06 % 259,595 175 0.07 %
    Money market accounts 569,534 1,749 0.31 % 430,262 1,078 0.25 %
    Savings accounts 288,892 186 0.06 % 261,795 276 0.11 %
    Time deposits 831,729 10,302 1.24 % 893,474 12,061 1.35 %
    FHLBB advances 322,118 10,643 3.30 % 466,424 14,957 3.21 %
    Junior subordinated debentures 27,398 1,484 5.42 % 32,991 1,570 4.76 %
    Other       581       16       2.75 %     5,093       248       4.87 %
    Total interest-bearing liabilities 2,336,418 24,563 1.05 % 2,349,634 30,365 1.29 %
    Demand deposits 384,323 338,046
    Other liabilities 47,961 55,382
    Shareholders' equity       310,199                   293,087              
    Total liabilities and shareholders' equity       $3,078,901                   $3,036,149              
    Net interest income (FTE)             $94,083                   $92,700        
    Interest rate spread 3.08 % 3.08 %
    Net interest margin                   3.28 %                 3.29 %
     

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

     
    (Dollars in thousands)                

    Years ended December 31,

                2013     2012
    Commercial loans $962$569
    Nontaxable debt securities 1,336 1,416
    Corporate stocks                   19
    Total             $2,298       $2,004
     
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SUPPLEMENTAL INFORMATION - Non-GAAP Financial Measures (unaudited)
          At or for the Quarters Ended  
    (Dollars in thousands, except per share amounts)      

    Dec 31,
    2013

        Sep 30,
    2013
        Jun 30,
    2013
        Mar 31,
    2013
        Dec 31,
    2012
    Calculation of Tangible Book Value per Share:                
    Total shareholders' equity at end of period $329,646$323,585$303,370$301,291$295,652
    Less:
    Goodwill 58,114 58,114 58,114 58,114 58,114
    Identifiable intangible assets, net       5,493       5,657       5,827       6,000       6,173  
    Total tangible shareholders' equity at end of period       $266,039       $259,814       $239,429       $237,177       $231,365  
     
    Shares outstanding at end of period       16,614       16,589       16,487       16,425       16,380  
     
    Book value per share - GAAP       $19.84       $19.51       $18.40       $18.34       $18.05  
    Tangible book value per share - Non-GAAP       $16.01       $15.66       $14.52       $14.44       $14.12  
     
    Calculation of Tangible Equity to Tangible Assets:
    Total tangible shareholders' equity at end of period       $266,039       $259,814       $239,429       $237,177       $231,365  
     
    Total assets at end of period $3,188,867$3,131,958$3,061,307$3,051,848$3,071,884
    Less:
    Goodwill 58,114 58,114 58,114 58,114 58,114
    Identifiable intangible assets, net       5,493       5,657       5,827       6,000       6,173  
    Total tangible assets at end of period       $3,125,260       $3,068,187       $2,997,366       $2,987,734       $3,007,597  
     
    Equity to assets - GAAP       10.34 %     10.33 %     9.91 %     9.87 %     9.62 %
    Tangible equity to tangible assets - Non-GAAP       8.51 %     8.47 %     7.99 %     7.94 %     7.69 %
     
    Calculation of Return on Average Tangible Assets:
    Net income       $9,789       $9,960       $8,983       $7,421       $9,023  
     
    Total average assets $3,163,042$3,098,228$3,034,956$3,017,583$3,044,764
    Less:
    Average goodwill 58,114 58,114 58,114 58,114 58,114
    Average identifiable intangible assets, net       5,573       5,739       5,912       6,085       6,257  
    Total average tangible assets       $3,099,355       $3,034,375       $2,970,930       $2,953,384       $2,980,393  
     
    Return on average assets - GAAP       1.24 %     1.29 %     1.18 %     0.98 %     1.19 %
    Return on average tangible assets - Non-GAAP       1.26 %     1.31 %     1.21 %     1.01 %     1.21 %
     
    Calculation of Return on Average Tangible Equity:
    Net income       $9,789       $9,960       $8,983       $7,421       $9,023  
     
    Total average shareholders' equity $326,866$310,785$303,402$299,436$300,430
    Less:
    Average goodwill 58,114 58,114 58,114 58,114 58,114
    Average identifiable intangible assets, net       5,573       5,739       5,912       6,085       6,257  
    Total average tangible shareholders' equity       $263,179       $246,932       $239,376       $235,237       $236,059  
     
    Return on average shareholders' equity - GAAP       11.98 %     12.82 %     11.84 %     9.91 %     12.01 %
    Return on average tangible shareholders' equity - Non-GAAP       14.80 %     16.13 %     15.01 %     12.62 %     15.29 %
     
     
    Washington Trust Bancorp, Inc. and Subsidiaries
    SUPPLEMENTAL INFORMATION - Non-GAAP Financial Measures (unaudited)
         

    Years Ended

    (Dollars in thousands)      

    Dec 31,
    2013

        Dec 31,
    2012
    Calculation of return on average tangible assets:    
    Net income       $36,153       $35,074  
     
    Total average assets $3,078,901$3,036,149
    Less:
    Average goodwill 58,114 58,114
    Average identifiable intangible assets, net       5,826       6,528  
    Total average tangible assets       $3,014,961       $2,971,507  
     
    Return on average assets - GAAP       1.17 %     1.16 %
    Return on average tangible assets - Non-GAAP       1.20 %     1.18 %
     
     
    Calculation of return on average tangible equity:
    Net income       $36,153       $35,074  
     
    Total average shareholders' equity $310,199$293,087
    Less:
    Average goodwill 58,114 58,114
    Average identifiable intangible assets, net       5,826       6,528  
    Total average tangible shareholders' equity       $246,259       $228,445  
     
    Return on average shareholders' equity - GAAP       11.65 %     11.97 %
    Return on average tangible shareholders' equity - Non-GAAP       14.68 %     15.35 %
     

    Washington Trust Bancorp, Inc.
    Elizabeth B. Eckel, 401-348-1309
    Senior Vice President, Marketing
    ebeckel@washtrust.com

    Source: Washington Trust Bancorp, Inc.