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Washington Trust Reports Fourth Quarter and Full-Year 2019 Earnings

WASH

WESTERLY, R.I., Jan. 27, 2020 /PRNewswire/ -- Washington Trust Bancorp, Inc. (Nasdaq: WASH), parent company of The Washington Trust Company, today announced fourth quarter 2019 net income of $15.5 million, or $0.89 per diluted share, compared to net income of $18.8 million, or $1.08 per diluted share, reported for the third quarter of 2019.  Net income for the year ended December 31, 2019 totaled $69.1 million, or $3.96 per diluted share, compared to $68.4 million, or $3.93 per diluted share, reported for the prior year.

(PRNewsfoto/Washington Trust Bancorp, Inc.)

"Washington Trust reported record full-year 2019 earnings," stated Edward O. Handy III, Washington Trust Chairman and Chief Executive Officer.  "Our results reflect the strength and stability of our core business model, which enabled us to generate growth and revenues from key business lines.  As we enter our 220th year of service, Washington Trust remains committed to providing enhanced value to those who have contributed to our success over time:  our employees, our customers, our communities and our shareholders."

Selected highlights for the fourth quarter and full-year 2019 include:

  • Returns on average equity and average assets for the fourth quarter 2019 were 12.24% and 1.18%, respectively. Full-year returns on average equity and average assets were 14.34% and 1.34%, respectively.

  • Total loans amounted to $3.9 billion at December 31, 2019, up by $115 million, or 3%, from the end of the preceding quarter. Total loans were up by $213 million, or 6%, from December 31, 2018.

  • In-market deposits (total deposits less out-of-market wholesale brokered time deposits) amounted to $3.2 billion at December 31, 2019, up by $59 million, or 2%, from the end of the preceding quarter. Total in-market deposits were up by $167 million, or 5%, from December 31, 2018.

  • In December, Washington Trust declared a quarterly dividend of 51 cents per share. Full-year 2019 dividends declared amounted to $2.00 per share, an increase of 24 cents per share, or 14%, over last year.

Net Interest Income

Net interest income was $32.0 million for the fourth quarter of 2019, down by $984 thousand, or 3%, from the third quarter of 2019.  The net interest margin was 2.61% for the fourth quarter, down by 11 basis points from 2.72% for the preceding quarter.  The declines in net interest income and the net interest margin reflect the impact of the Federal Reserve rate cuts in the second half of 2019.

Significant linked quarter changes included:

  • Average interest-earning assets increased by $42 million, primarily due to a $72 million increase in the average balance of loans, partially offset by a $46 million decline in the average balance of the securities portfolio. The yield on interest-earning assets for the fourth quarter was 3.86%, down by 21 basis points from the preceding quarter, reflecting the impact of lower market interest rates.

  • Average interest-bearing liabilities increased by $33 million, with an increase of $90 million in average in-market deposits, partially offset by a decrease of $57 million in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances). The cost of interest-bearing liabilities for the fourth quarter was 1.53%, down by 13 basis points from the preceding quarter, reflecting lower market interest rates.

Noninterest Income

Noninterest income totaled $16.6 million for the fourth quarter of 2019, down by $1.7 million, or 9%, from the third quarter of 2019.  Significant linked quarter changes included:

  • Wealth management revenues amounted to $8.9 million for the fourth quarter of 2019, down by $259 thousand, or 3%, on a linked quarter basis, due to a decline in asset-based revenues.

Wealth management assets under administration benefited from financial market appreciation in the fourth quarter of 2019 and totaled $6.2 billion at December 31, 2019, up by $109 million, or 2%, from September 30, 2019. The average balance of assets under administration for the fourth quarter decreased by approximately $209 million, or 3%, from the average balance for the preceding quarter.

Assets under administration have been negatively impacted by approximately $650 million in lost client accounts associated with the departure of two senior counselors at the end of the second quarter of 2019. The impact of these lost accounts was a reduction of revenues of approximately $290 thousand during the third quarter and $775 thousand in the fourth quarter.

  • Mortgage banking revenues totaled $3.7 million for the fourth quarter of 2019, down by $1.2 million, or 24%, from the third quarter of 2019. This reflected a linked quarter decline in the mortgage pipeline and corresponding fair value of mortgage loan commitments and loans held for sale as of December 31, 2019. Mortgage loans sold to the secondary market totaled $176 million in the fourth quarter, compared to $185 million in the preceding quarter.

  • Loan related derivative income was $1.1 million for the fourth quarter of 2019, down by $291 thousand, or 21%, reflecting lower volume of commercial borrower interest rate swap transactions.

Noninterest Expenses

Noninterest expenses totaled $28.8 million for the fourth quarter of 2019, up by $1.9 million, or 7%, from the third quarter of 2019.  The linked quarter comparison of noninterest expenses was impacted by the following:

  • In the fourth quarter of 2019, a write-down valuation adjustment of $1.0 million on other real estate owned ("OREO") was recognized and included in other noninterest expenses. There were no such adjustments in the third quarter of 2019.

  • FDIC assessment credits of $235 thousand were recognized in the fourth quarter of 2019, compared to credits of $895 thousand in the third quarter of 2019. No additional FDIC assessment credits remain available, as the credits were fully utilized in the fourth quarter of 2019.

Excluding the impact of the aforementioned items, noninterest expenses for the fourth quarter of 2019 increased by $192 thousand, or 1%, on a linked quarter basis, reflecting modest increases across various noninterest expense categories.

Income tax expense totaled $4.3 million for the fourth quarter of 2019, down by $915 thousand from the preceding quarter.  The effective tax rate for the fourth quarter of 2019 was 21.8%, unchanged from the preceding quarter.

Investment Securities

The securities portfolio totaled $899 million at December 31, 2019, up by $12 million, or 1%, from September 30, 2019, reflecting purchases of U.S. government agency and U.S. government-sponsored debt securities, including mortgage-backed securities, that were largely offset by routine pay-downs on mortgage-backed securities and calls of debt securities.  Fourth quarter 2019 purchases were concentrated in December and totaled $123 million, with a weighted average yield of 2.79%.

Securities represented 17% of total assets at both December 31, 2019 and September 30, 2019.

Loans

Total loans amounted to $3.9 billion at December 31, 2019, up by $115 million, or 3%, from the end of the preceding quarter.  Linked quarter changes included:

  • Residential real estate loans increased by $71 million, or 5%, from September 30, 2019 and included purchases of $53 million of residential mortgage loans with a weighted average rate of 3.36%. The purchased loans were individually evaluated to our underwriting standards and are predominantly secured by properties in Massachusetts.

  • Commercial loans grew by $49 million, or 2%, with net increases of $30 million in the commercial real estate portfolio and $19 million in the commercial and industrial portfolio. In the fourth quarter, commercial loan originations and construction advances totaled approximately $111 million and were partially offset by payoffs and paydowns.

  • The consumer loan portfolio decreased by $5 million from the balance at September 30, 2019.

From the end of 2018, total loans increased by $213 million, or 6%, with growth of $120 million, or 6%, in commercial loans, $89 million, or 7%, in residential real estate loans and $4 million, or 1%, in consumer loans.

Deposits and Borrowings

Total deposits amounted to $3.5 billion at December 31, 2019, down by $87 million, or 2%, from the end of the preceding quarter and $25 million, or 1%, from the end of 2018.  Included in total deposits are out-of-market wholesale brokered time deposits, which decreased by $146 million from September 30, 2019 and by $192 million from the end of 2018.

Excluding wholesale brokered time deposits, in-market deposits at December 31, 2019 were up by $59 million, or 2%, from the end of the preceding quarter and by $167 million, or 5%, from the end of 2018, reflecting growth in money market and NOW account balances.

Federal Home Loan Bank advances amounted to $1.1 billion at December 31, 2019, up by $185 million from September 30, 2019 and $191 million from the end of 2018.

Asset Quality

Nonperforming assets amounted to $18.5 million at December 31, 2019, down by $527 thousand from the end of the preceding quarter.  This decline included a $3.0 million decrease in OREO and a $2.5 million increase in nonaccrual loans.  The decrease in OREO reflected the sale of a foreclosed commercial property, with a carrying value of $2.0 million at September 30, 2019, at no gain or loss and a $1.0 valuation write-down adjustment on the remaining foreclosed commercial property in OREO at the end of 2019.

Total nonaccrual loans amounted to $17.4 million, or 0.45% of total loans, at December 31, 2019, compared to $14.9 million, or 0.39% of total loans, at September 30, 2019, reflecting a net increase in nonaccrual residential real estate loans.  Total past due loans amounted to $15.7 million, or 0.40% of total loans, at December 31, 2019, compared to $14.4 million, or 0.38% of total loans, at September 30, 2019.

Based on management's assessment of loss exposure, as well as loan loss allocations commensurate with growth and changes in the loan portfolio and credit quality, management concluded that no loan loss provision was necessary in the fourth quarter of 2019.  A loan loss provision of $400 thousand was recognized in the preceding quarter.  In the fourth quarter of 2019, net recoveries of $17 thousand were recognized, compared to net charge-offs of $801 thousand in the preceding quarter.

The allowance for loan losses amounted to $27.0 million, or 0.69% of total loans, at December 31, 2019, compared to $27.0 million, or 0.71% of total loans, at September 30, 2019.

Capital and Dividends

Total shareholders' equity was $503.5 million at December 31, 2019, up by $5.7 million from September 30, 2019.  This increase included net income of $15.5 million, which was partially offset by $8.9 million in dividend declarations and a charge of $2.8 million to the accumulated other comprehensive income component of shareholders' equity associated with the annual remeasurement of pension plan liabilities.  This charge was largely due to a decline in the discount rate used to measure the present value of pension plan liabilities as a result of a reduction in market interest rates in 2019.

Capital levels at December 31, 2019 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.94% at December 31, 2019, unchanged from September 30, 2019.  Book value per share amounted to $29.00 at December 31, 2019, compared to $28.71 at September 30, 2019.

The Board of Directors declared a quarterly dividend of 51 cents per share for the quarter ended December 31, 2019.  The dividend was paid on January 10, 2020 to shareholders of record on January 2, 2020.

Conference Call

Washington Trust will host a conference call to discuss its fourth quarter results, business highlights and outlook on Tuesday, January 28, 2020 at 8:30 a.m. (Eastern Time).  Individuals may dial in to the call at 1-888-317-6016.  An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-877-344-7529 and entering the Replay PIN Number 10138161; the audio replay will be available through February 11, 2020.  Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, http://ir.washtrust.com, and will be available through March 31, 2020.

Background
Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company.  Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies.  Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts.  The Corporation's common stock trades on NASDAQ under the symbol WASH.  Investor information is available on the Corporation's web site at http://ir.washtrust.com.

Forward-Looking Statements
This press release contains statements that are "forward-looking statements".  We may also make forward-looking statements in other documents we file with the SEC, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees.  You can identify forward-looking statements by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "outlook," "will," "should," and other expressions that predict or indicate future events and trends and which do not relate to historical matters.  You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control.  These risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include the following: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value or outflows of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of our competition; changes in legislation or regulation and accounting principles, policies and guidelines; operational risks including, but not limited to, cybersecurity breaches, fraud and natural disasters; and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Supplemental Information - Explanation of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures.  Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors.  These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.  Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.


 

Washington Trust Bancorp, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; Dollars in thousands)








Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Assets:






Cash and due from banks

$132,193


$141,768


$115,904


$88,242


$89,923


Short-term investments

6,262


4,336


3,910


3,317


3,552


Mortgage loans held for sale, at fair value

27,833


44,657


39,996


14,608


20,996


Securities:






Available for sale debt securities, at fair value

899,490


887,020


969,168


994,881


927,810


Held to maturity debt securities, at amortized cost





10,415


Total securities

899,490


887,020


969,168


994,881


938,225


Federal Home Loan Bank stock, at cost

50,853


45,030


49,759


48,025


46,068


Loans:






Total loans

3,892,999


3,778,106


3,730,339


3,738,469


3,680,360


Less allowance for loan losses

27,014


26,997


27,398


27,644


27,072


Net loans

3,865,985


3,751,109


3,702,941


3,710,825


3,653,288


Premises and equipment, net

28,700


29,293


29,302


29,822


29,005


Operating lease right-of-use assets

26,792


27,500


28,174


28,249



Investment in bank-owned life insurance

82,490


81,920


81,351


80,786


80,463


Goodwill

63,909


63,909


63,909


63,909


63,909


Identifiable intangible assets, net

7,218


7,448


7,684


7,923


8,162


Other assets

100,934


114,888


97,574


84,142


77,175


Total assets

$5,292,659


$5,198,878


$5,189,672


$5,154,729


$5,010,766


Liabilities:






Deposits:






Noninterest-bearing deposits

$609,924


$619,839


$587,326


$577,319


$603,216


Interest-bearing deposits

2,888,958


2,966,314


2,917,296


2,926,941


2,920,832


Total deposits

3,498,882


3,586,153


3,504,622


3,504,260


3,524,048


Federal Home Loan Bank advances

1,141,464


956,786


1,060,960


1,056,129


950,722


Junior subordinated debentures

22,681


22,681


22,681


22,681


22,681


Operating lease liabilities

28,861


29,541


30,210


30,187



Other liabilities

97,279


105,892


86,994


71,629


65,131


Total liabilities

4,789,167


4,701,053


4,705,467


4,684,886


4,562,582


Shareholders' Equity:






Common stock

1,085


1,084


1,083


1,082


1,081


Paid-in capital

123,281


121,900


121,115


120,743


119,888


Retained earnings

390,363


383,765


373,873


365,521


355,524


Accumulated other comprehensive loss

(11,237)


(8,924)


(11,866)


(17,503)


(28,309)


Total shareholders' equity

503,492


497,825


484,205


469,843


448,184


Total liabilities and shareholders' equity

$5,292,659


$5,198,878


$5,189,672


$5,154,729


$5,010,766


 

 


Washington Trust Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

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






For the Three Months Ended


For the Twelve Months
Ended


Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018


Dec 31,
2019

Dec 31,
2018

Interest income:









Interest and fees on loans

$40,079


$41,558


$42,138


$41,744


$40,299



$165,519


$149,932


Interest on mortgage loans held for sale

359


410


288


180


289



1,237


1,212


Taxable interest on debt securities

5,817


6,318


7,006


7,226


5,957



26,367


21,816


Nontaxable interest on debt securities


1


8


9


9



18


61


Dividends on Federal Home Loan Bank stock

693


747


720


695


669



2,855


2,369


Other interest income

435


493


399


340


294



1,667


1,017


Total interest and dividend income

47,383


49,527


50,559


50,194


47,517



197,663


176,407


Interest expense:









Deposits

9,144


9,792


9,469


8,696


7,953



37,101


24,175


Federal Home Loan Bank advances

6,015


6,512


6,980


6,661


5,446



26,168


19,073


Junior subordinated debentures

230


245


252


253


240



980


869


Total interest expense

15,389


16,549


16,701


15,610


13,639



64,249


44,117


Net interest income

31,994


32,978


33,858


34,584


33,878



133,414


132,290


Provision for loan losses


400


525


650


800



1,575


1,550


Net interest income after provision for loan losses

31,994


32,578


33,333


33,934


33,078



131,839


130,740


Noninterest income:









Wealth management revenues

8,894


9,153


9,549


9,252


9,012



36,848


38,341


Mortgage banking revenues

3,669


4,840


3,640


2,646


1,978



14,795


10,381


Card interchange fees

1,100


1,099


1,018


997


977



4,214


3,768


Service charges on deposit accounts

941


939


929


875


977



3,684


3,628


Loan related derivative income

1,116


1,407


746


724


1,374



3,993


2,461


Income from bank-owned life insurance

570


569


566


649


572



2,354


2,196


Net realized losses on securities

27



(80)





(53)



Other income

301


335


385


224


273



1,245


1,339


Total noninterest income

16,618


18,342


16,753


15,367


15,163



67,080


62,114


Noninterest expense:









Salaries and employee benefits

18,374


18,332


18,436


17,619


16,918



72,761


69,277


Outsourced services

2,752


2,722


2,518


2,606


2,510



10,598


8,684


Net occupancy

1,986


1,933


1,904


1,998


1,946



7,821


7,891


Equipment

996


1,046


1,028


1,011


983



4,081


4,312


Legal, audit and professional fees

692


645


664


534


587



2,535


2,427


FDIC deposit insurance costs

109


(460)


540


429


376



618


1,612


Advertising and promotion

402


368


525


239


460



1,534


1,406


Amortization of intangibles

229


236


239


239


239



943


979


Change in fair value of contingent consideration





(187)




(187)


Other expenses

3,215


2,048


2,297


2,289


2,850



9,849


9,761


Total noninterest expense

28,755


26,870


28,151


26,964


26,682



110,740


106,162


Income before income taxes

19,857


24,050


21,935


22,337


21,559



88,179


86,692


Income tax expense

4,321


5,236


4,662


4,842


4,523



19,061


18,260


Net income

$15,536


$18,814


$17,273


$17,495


$17,036



$69,118


$68,432











Net income available to common shareholders

$15,502


$18,778


$17,238


$17,461


$17,004



$68,979


$68,288











Weighted average common shares outstanding:









  Basic

17,351


17,338


17,330


17,304


17,297



17,331


17,272


  Diluted

17,436


17,414


17,405


17,401


17,385



17,414


17,391


Earnings per common share:









  Basic

$0.89


$1.08


$0.99


$1.01


$0.98



$3.98


$3.95


  Diluted

$0.89


$1.08


$0.99


$1.00


$0.98



$3.96


$3.93











Cash dividends declared per share

$0.51


$0.51


$0.51


$0.47


$0.47



$2.00


$1.76


 

 

Washington Trust Bancorp, Inc. and Subsidiaries

SELECTED FINANCIAL HIGHLIGHTS

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




Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Share and Equity Related Data:






Book value per share

$29.00


$28.71


$27.93


$27.15


$25.90


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

$24.90


$24.60


$23.80


$23.00


$21.74


Market value per share

$53.79


$48.31


$52.18


$48.15


$47.53


Shares issued and outstanding at end of period

17,363


17,338


17,336


17,305


17,302








Capital Ratios (2):






Tier 1 risk-based capital

12.23

%

12.21

%

12.06

%

11.84

%

11.81

%

Total risk-based capital

12.94

%

12.94

%

12.80

%

12.59

%

12.56

%

Tier 1 leverage ratio

9.04

%

8.97

%

8.76

%

8.69

%

8.89

%

Common equity tier 1

11.65

%

11.62

%

11.46

%

11.25

%

11.20

%







Balance Sheet Ratios:






Equity to assets

9.51

%

9.58

%

9.33

%

9.11

%

8.94

%

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

8.28

%

8.32

%

8.06

%

7.83

%

7.62

%

Loans to deposits (3)

111.3

%

105.8

%

106.8

%

106.3

%

104.3

%

 




For the Twelve Months
Ended


For the Three Months Ended



Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018


Dec 31,
2019

Dec 31,
2018

Performance Ratios (4):









Net interest margin (5)

2.61

%

2.72

%

2.81

%

2.93

%

2.95

%


2.77

%

3.01

%

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

1.18

%

1.44

%

1.34

%

1.39

%

1.40

%


1.34

%

1.46

%

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

1.20

%

1.46

%

1.36

%

1.41

%

1.42

%


1.36

%

1.48

%

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

12.24

%

15.20

%

14.58

%

15.52

%

15.61

%


14.34

%

16.20

%

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

14.26

%

17.79

%

17.17

%

18.43

%

18.75

%


16.85

%

19.57

%

Efficiency ratio (6)

59.2

%

52.4

%

55.6

%

54.0

%

54.4

%


55.2

%

54.6

%



(1)

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

(2)

Estimated for December 31, 2019 and actuals for prior periods.

(3)

Period-end balances of net loans and mortgage loans held for sale as a percentage of total deposits.

(4)

Annualized based on the actual number of days in the period.

(5)

Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets.

(6)

Total noninterest expense as percentage of total revenues (net interest income and noninterest income).

 


 

Washington Trust Bancorp, Inc. and Subsidiaries

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited; Dollars in thousands)







For the Three Months Ended


For the Twelve Months
Ended


Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018


Dec 31,
2019

Dec 31,
2018

Wealth Management Results









Wealth Management Revenues:









Asset-based revenues

$8,731


$9,013


$9,141


$8,921


$8,930



$35,806


$37,343


Transaction-based revenues

163


140


408


331


82



1,042


998


Total wealth management revenues

$8,894


$9,153


$9,549


$9,252


$9,012



$36,848


$38,341











Assets Under Administration (AUA):









Balance at beginning of period

$6,126,327


$6,478,890


$6,350,128


$5,910,814


$6,462,340



$5,910,814


$6,714,637


Net investment appreciation (depreciation) & income

310,766


66,514


222,489


520,057


(534,847)



1,119,826


(201,176)


Net client asset flows

(243,175)


(419,077)


(93,727)


(80,743)


(16,679)



(836,722)


(602,647)


Other (1)

41,883







41,883



Balance at end of period

$6,235,801


$6,126,327


$6,478,890


$6,350,128


$5,910,814



$6,235,801


$5,910,814











Percentage of AUA that are managed assets

90%


90%


91%


91%


90%



90%


90%











Mortgage Banking Results









Mortgage Banking Revenues:









Gains & commissions on loan sales, net (2)

$3,583


$4,752


$3,523


$2,474


$1,798



$14,332


$9,748


Loan servicing fee income, net (3)

86


88


117


172


180



463


633


Total mortgage banking revenues

$3,669


$4,840


$3,640


$2,646


$1,978



$14,795


$10,381











Residential Mortgage Loan Originations:









Originations for retention in portfolio

$120,882


$105,075


$69,736


$51,697


$58,515



$347,390


$335,585


Originations for sale to secondary market (4)

160,175


189,979


162,123


85,826


96,792



598,103


427,037


Total mortgage loan originations

$281,057


$295,054


$231,859


$137,523


$155,307



$945,493


$762,622











Residential Mortgage Loans Sold:









Sold with servicing rights retained

$42,612


$25,766


$18,292


$9,490


$16,577



$96,160


$98,941


Sold with servicing rights released (4)

134,091


159,210


119,122


82,589


81,985



495,012


333,998


Total mortgage loans sold

$176,703


$184,976


$137,414


$92,079


$98,562



$591,172


$432,939




(1)

Represents the classification of certain non-fee generating assets as AUA due to a reporting change in the fourth quarter of 2019.

(2)

Includes gains on loan sales, commission income on loans originated for others, servicing right gains, fair value adjustments on mortgage loans held for sale, and fair value adjustments and gains on forward loan commitments.

(3)

Represents loan servicing fee income, net of servicing right amortization and valuation adjustments.

(4)

Includes brokered loans (loans originated for others).

 


 

Washington Trust Bancorp, Inc. and Subsidiaries

END OF PERIOD LOAN AND DEPOSIT COMPOSITION

(Unaudited; Dollars in thousands)




Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Loans:






Commercial real estate (1)

$1,547,572


$1,517,320


$1,482,836


$1,463,682


$1,392,408


Commercial & industrial

585,289


566,426


583,873


610,608


620,704


Total commercial

2,132,861


2,083,746


2,066,709


2,074,290


2,013,112








Residential real estate (2)

1,449,090


1,378,518


1,352,113


1,359,072


1,360,387








Home equity

290,874


294,250


288,078


279,938


280,626


Other

20,174


21,592


23,439


25,169


26,235


Total consumer

311,048


315,842


311,517


305,107


306,861


Total loans

$3,892,999


$3,778,106


$3,730,339


$3,738,469


$3,680,360


(1)

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

(2)

Residential real estate loans consist of mortgage and homeowner construction loans secured by one- to four-family residential properties.

 


December 31, 2019


December 31, 2018


Balance

% of Total


Balance

% of Total

Commercial Real Estate Loans by Property Location:






Rhode Island

$394,929


25

%


$377,249


27

%

Connecticut

616,484


40



570,116


41


Massachusetts

458,029


30



356,615


26


Subtotal

1,469,442


95



1,303,980


94


All other states

78,130


5



88,428


6


Total commercial real estate loans

$1,547,572


100

%


$1,392,408


100

%







Residential Real Estate Loans by Property Location:






Rhode Island

$356,392


25

%


$352,141


26

%

Connecticut

140,574


10



141,775


10


Massachusetts

932,726


64



849,435


63


Subtotal

1,429,692


99



1,343,351


99


All other states

19,398


1



17,036


1


Total residential real estate loans

$1,449,090


100

%


$1,360,387


100

%

 


Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Deposits:






Noninterest-bearing demand deposits

$609,924


$619,839


$587,326


$577,319


$603,216


Interest-bearing demand deposits

159,938


152,200


128,355


162,598


178,733


NOW accounts

520,295


478,462


484,615


471,682


466,568


Money market accounts

765,899


749,122


654,719


644,949


646,878


Savings accounts

373,503


362,868


365,069


371,248


373,545


Time deposits (in-market)

784,481


792,941


801,501


792,470


778,105


In-market deposits

3,214,040


3,155,432


3,021,585


3,020,266


3,047,045


Wholesale brokered time deposits

284,842


430,721


483,037


483,994


477,003


Total deposits

$3,498,882


$3,586,153


$3,504,622


$3,504,260


$3,524,048


 


 

Washington Trust Bancorp, Inc. and Subsidiaries

CREDIT & ASSET QUALITY DATA

(Unaudited; Dollars in thousands)




Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Asset Quality Ratios:






Nonperforming assets to total assets

0.35

%

0.37

%

0.29

%

0.28

%

0.28

%

Nonaccrual loans to total loans

0.45

%

0.39

%

0.34

%

0.33

%

0.32

%

Total past due loans to total loans

0.40

%

0.38

%

0.48

%

0.39

%

0.37

%

Allowance for loan losses to nonaccrual loans

155.18

%

181.16

%

212.93

%

223.57

%

231.25

%

Allowance for loan losses to total loans

0.69

%

0.71

%

0.73

%

0.74

%

0.74

%







Nonperforming Assets:






Commercial real estate

$603


$684


$926


$926


$925


Commercial & industrial

657






Total commercial

1,260


684


926


926


925


Residential real estate

14,297


12,531


10,610


10,032


9,346


Home equity

1,763


1,599


1,243


1,407


1,436


Other consumer

88


88


88




Total consumer

1,851


1,687


1,331


1,407


1,436


Total nonaccrual loans

17,408


14,902


12,867


12,365


11,707


Other real estate owned

1,109


4,142


2,142


2,142


2,142


Total nonperforming assets

$18,517


$19,044


$15,009


$14,507


$13,849








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






Commercial real estate

$1,433


$684


$3,670


$926


$1,080


Commercial & industrial

1


1


1


1



Total commercial

1,434


685


3,671


927


1,080


Residential real estate

11,429


11,599


11,237


10,849


10,520


Home equity

2,696


1,973


2,904


2,911


1,989


Other consumer

130


99


102


13


33


Total consumer

2,826


2,072


3,006


2,924


2,022


Total past due loans

$15,689


$14,356


$17,914


$14,700


$13,622








Accruing loans 90 days or more past due

$—


$—


$—


$—


$—


Nonaccrual loans included in past due loans

$11,477


$9,797


$8,581


$8,563


$8,613


 

 

Washington Trust Bancorp, Inc. and Subsidiaries

CREDIT & ASSET QUALITY DATA

(Unaudited; Dollars in thousands)






For the Three Months Ended


For the Twelve Months
Ended


Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018


Dec 31,
2019

Dec 31,
2018

Nonaccrual Loan Activity:









Balance at beginning of period

$14,902


$12,867


$12,365


$11,707


$10,809



$11,707


$15,211


Additions to nonaccrual status

2,766


5,672


1,620


1,924


2,918



11,982


8,764


Loans returned to accruing status


(597)


(118)


(855)


(1,500)



(1,570)


(2,680)


Loans charged-off

(132)


(966)


(819)


(103)


(298)



(2,020)


(1,187)


Loans transferred to other real estate owned


(2,000)






(2,000)


(3,074)


Payments, payoffs and other changes

(128)


(74)


(181)


(308)


(222)



(691)


(5,327)


Balance at end of period

$17,408


$14,902


$12,867


$12,365


$11,707



$17,408


$11,707











Allowance for Loan Losses:









Balance at beginning of period

$26,997


$27,398


$27,644


$27,072


$26,509



$27,072


$26,488


Provision charged to earnings


400


525


650


800



1,575


1,550


Charge-offs

(132)


(966)


(819)


(103)


(298)



(2,020)


(1,187)


Recoveries

149


165


48


25


61



387


221


Balance at end of period

$27,014


$26,997


$27,398


$27,644


$27,072



$27,014


$27,072











Net Loan Charge-Offs (Recoveries):









Commercial real estate

($44)


$947


$—


$—


$—



$903


$602


Commercial & industrial

(15)


(122)


(16)


6


(13)



(147)


(109)


Total commercial

(59)


825


(16)


6


(13)



756


493


Residential real estate



486



156



486


229


Home equity

17


(36)


289


48


65



318


164


Other consumer

25


12


12


24


29



73


80


Total consumer

42


(24)


301


72


94



391


244


Total

($17)


$801


$771


$78


$237



$1,633


$966











Net charge-offs to average loans (annualized)

%

0.08

%

0.08

%

0.01

%

0.03

%


0.04

%

0.03

%


The following table presents average balance and interest rate information.  Tax-exempt income is converted to a fully taxable equivalent basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit.  Unrealized gains (losses) on available for sale securities and fair value adjustments on mortgage loans held for sale are excluded from the average balance and yield calculations.  Nonaccrual loans, as well as interest recognized on these loans, are included in amounts presented for loans.

Washington Trust Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)

(Unaudited; Dollars in thousands)







For the Three Months Ended

December 31, 2019


September 30, 2019


Quarter Change


Average
Balance

Interest

Yield/

Rate


Average
Balance

Interest

Yield/

Rate


Average
Balance

Interest

Yield/
Rate


Assets:












Cash, federal funds sold and short-term investments

$115,458


$435


1.49

%


$96,231


$493


2.03

%


$19,227


($58)


(0.54)

%

Mortgage loans held for sale

38,494


359


3.70



39,771


410


4.09



(1,277)


(51)


(0.39)


Taxable debt securities

874,770


5,817


2.64



920,910


6,318


2.72



(46,140)


(501)


(0.08)


Nontaxable debt securities





75


3


15.87



(75)


(3)


(15.87)


Total securities

874,770


5,817


2.64



920,985


6,321


2.72



(46,215)


(504)


(0.08)


FHLB stock

46,501


693


5.91



47,982


747


6.18



(1,481)


(54)


(0.27)


Commercial real estate

1,538,627


16,491


4.25



1,490,878


17,314


4.61



47,749


(823)


(0.36)


Commercial & industrial

576,590


6,572


4.52



584,601


6,946


4.71



(8,011)


(374)


(0.19)


Total commercial

2,115,217


23,063


4.33



2,075,479


24,260


4.64



39,738


(1,197)


(0.31)


Residential real estate

1,399,144


13,833


3.92



1,367,017


13,728


3.98



32,127


105


(0.06)


Home equity

293,029


3,254


4.41



291,058


3,615


4.93



1,971


(361)


(0.52)


Other

20,589


250


4.82



22,270


278


4.95



(1,681)


(28)


(0.13)


Total consumer

313,618


3,504


4.43



313,328


3,893


4.93



290


(389)


(0.50)


Total loans

3,827,979


40,400


4.19



3,755,824


41,881


4.42



72,155


(1,481)


(0.23)


Total interest-earning assets

4,903,202


47,704


3.86



4,860,793


49,852


4.07



42,409


(2,148)


(0.21)


Noninterest-earning assets

323,833





320,223





3,610




Total assets

$5,227,035





$5,181,016





$46,019




Liabilities and Shareholders' Equity:












Interest-bearing demand deposits

$146,408


$578


1.57

%


$137,980


$649


1.87

%


$8,428


($71)


(0.30)

%

NOW accounts

489,374


82


0.07



471,302


69


0.06



18,072


13


0.01


Money market accounts

769,860


2,179


1.12



699,138


2,094


1.19



70,722


85


(0.07)


Savings accounts

365,977


68


0.07



362,142


72


0.08



3,835


(4)


(0.01)


Time deposits (in-market)

789,864


4,157


2.09



800,571


4,181


2.07



(10,707)


(24)


0.02


Total interest-bearing in-market deposits

2,561,483


7,064


1.09



2,471,133


7,065


1.13



90,350


(1)


(0.04)


Wholesale brokered time deposits

392,001


2,080


2.11



475,026


2,727


2.28



(83,025)


(647)


(0.17)


Total interest-bearing deposits

2,953,484


9,144


1.23



2,946,159


9,792


1.32



7,325


(648)


(0.09)


FHLB advances

1,006,246


6,015


2.37



980,091


6,512


2.64



26,155


(497)


(0.27)


Junior subordinated debentures

22,681


230


4.02



22,681


245


4.29




(15)


(0.27)


Total interest-bearing liabilities

3,982,411


15,389


1.53



3,948,931


16,549


1.66



33,480


(1,160)


(0.13)


Noninterest-bearing demand deposits

618,406





626,408





(8,002)




Other liabilities

123,604





115,480





8,124




Shareholders' equity

502,614





490,197





12,417




Total liabilities and shareholders' equity

$5,227,035





$5,181,016





$46,019




Net interest income (FTE)


$32,315





$33,303





($988)



Interest rate spread



2.33

%




2.41

%




(0.08)

%

Net interest margin



2.61

%




2.72

%




(0.11)

%

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

For the Three Months Ended

Dec 31,
2019

Sep 30,
2019

Quarter
Change

Commercial loans

$321


$323


($2)


Nontaxable debt securities


2


(2)


Total

$321


$325


($4)


 


 











Washington Trust Bancorp, Inc. and Subsidiaries

CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)

(Unaudited; Dollars in thousands)

For the Twelve Months Ended

December 31, 2019

December 31, 2018

Change


Average
Balance

Interest

Yield/

Rate

Average
Balance

Interest

Yield/

 Rate

Average
Balance

Interest

Yield/
 Rate


Assets:










Cash, federal funds sold and short-term investments

$85,447


$1,667


1.95

%

$53,264


$1,017


1.91

%

$32,183


$650


0.04

%

Mortgage loans for sale

30,928


1,237


4.00


28,360


1,212


4.27


2,568


25


(0.27)


Taxable debt securities

947,875


26,367


2.78


832,374


21,816


2.62


115,501


4,551


0.16


Nontaxable debt securities

450


23


5.11


1,540


78


5.06


(1,090)


(55)


0.05


Total securities

948,325


26,390


2.78


833,914


21,894


2.63


114,411


4,496


0.15


FHLB stock

47,761


2,855


5.98


43,530


2,369


5.44


4,231


486


0.54


Commercial real estate

1,481,116


68,193


4.60


1,247,068


55,239


4.43


234,048


12,954


0.17


Commercial & industrial

596,451


28,545


4.79


627,485


29,845


4.76


(31,034)


(1,300)


0.03


Total commercial

2,077,567


96,738


4.66


1,874,553


85,084


4.54


203,014


11,654


0.12


Residential real estate

1,368,824


54,932


4.01


1,296,389


51,233


3.95


72,435


3,699


0.06


Home equity

286,767


14,011


4.89


283,868


13,461


4.74


2,899


550


0.15


Other

23,153


1,137


4.91


28,661


1,402


4.89


(5,508)


(265)


0.02


Total consumer

309,920


15,148


4.89


312,529


14,863


4.76


(2,609)


285


0.13


Total loans

3,756,311


166,818


4.44


3,483,471


151,180


4.34


272,840


15,638


0.10


Total interest-earning assets

4,868,772


198,967


4.09


4,442,539


177,672


4.00


426,233


21,295


0.09


Noninterest-earning assets

300,549




239,327




61,222




Total assets

$5,169,321




$4,681,866




$487,455




Liabilities and Shareholders' Equity:










Interest-bearing demand deposits

$144,836


$2,537


1.75

%

$112,792


$1,231


1.09

%

$32,044


$1,306


0.66

%

NOW accounts

469,540


310


0.07


455,823


422


0.09


13,717


(112)


(0.02)


Money market accounts

693,921


7,713


1.11


665,690


4,393


0.66


28,231


3,320


0.45


Savings accounts

365,927


272


0.07


372,269


233


0.06


(6,342)


39


0.01


Time deposits (in-market)

794,124


16,056


2.02


684,571


10,208


1.49


109,553


5,848


0.53


Total interest-bearing in-market deposits

2,468,348


26,888


1.09


2,291,145


16,487


0.72


177,203


10,401


0.37


Wholesale brokered time deposits

461,862


10,213


2.21


432,205


7,688


1.78


29,657


2,525


0.43


Total interest-bearing deposits

2,930,210


37,101


1.27


2,723,350


24,175


0.89


206,860


12,926


0.38


FHLB advances

1,015,914


26,168


2.58


854,398


19,073


2.23


161,516


7,095


0.35


Junior subordinated debentures

22,681


980


4.32


22,681


869


3.83



111


0.49


Total interest-bearing liabilities

3,968,805


64,249


1.62


3,600,429


44,117


1.23


368,376


20,132


0.39


Noninterest-bearing demand deposits

615,049




596,829




18,220




Other liabilities

104,463




63,102




41,361




Shareholders' equity

481,004




421,506




59,498




Total liabilities and shareholders' equity

$5,169,321




$4,681,866




$487,455




Net interest income (FTE)


$134,718




$133,555




$1,163



Interest rate spread



2.47

%



2.77

%



(0.30)

%

Net interest margin



2.77

%



3.01

%



(0.24)

%

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





For the Twelve Months Ended

Dec 31,
2019

Dec 31,
2018

Change

Commercial loans

$1,299


$1,248


$51


Nontaxable debt securities

5


17


(12)


Total

$1,304


$1,265


$39


 


 

Washington Trust Bancorp, Inc. and Subsidiaries

SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures

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




Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Tangible Book Value per Share:






Total shareholders' equity, as reported

$503,492


$497,825


$484,205


$469,843


$448,184


Less:






Goodwill

63,909


63,909


63,909


63,909


63,909


Identifiable intangible assets, net

7,218


7,448


7,684


7,923


8,162


Total tangible shareholders' equity

$432,365


$426,468


$412,612


$398,011


$376,113








Shares outstanding, as reported

17,363


17,338


17,336


17,305


17,302








Book value per share - GAAP

$29.00


$28.71


$27.93


$27.15


$25.90


Tangible book value per share - Non-GAAP

$24.90


$24.60


$23.80


$23.00


$21.74








Tangible Equity to Tangible Assets:






Total tangible shareholders' equity

$432,365


$426,468


$412,612


$398,011


$376,113








Total assets, as reported

$5,292,659


$5,198,878


$5,189,672


$5,154,729


$5,010,766


Less:






Goodwill

63,909


63,909


63,909


63,909


63,909


Identifiable intangible assets, net

7,218


7,448


7,684


7,923


8,162


Total tangible assets

$5,221,532


$5,127,521


$5,118,079


$5,082,897


$4,938,695








Equity to assets - GAAP

9.51

%

9.58

%

9.33

%

9.11

%

8.94

%

Tangible equity to tangible assets - Non-GAAP

8.28

%

8.32

%

8.06

%

7.83

%

7.62

%

 


For the Three Months Ended


For the Twelve Months Ended


Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018


Dec 31,
2019

Dec 31,
2018

Return on Average Tangible Assets:









Net income, as reported

$15,536


$18,814


$17,273


$17,495


$17,036



$69,118


$68,432











Total average assets, as reported

$5,227,035


$5,181,016


$5,171,562


$5,096,103


$4,840,158



$5,169,321


$4,681,866


Less average balances of:









Goodwill

63,909


63,909


63,909


63,909


63,909



63,909


63,909


Identifiable intangible assets, net

7,330


7,562


7,800


8,040


8,278



7,681


8,642


Total average tangible assets

$5,155,796


$5,109,545


$5,099,853


$5,024,154


$4,767,971



$5,097,731


$4,609,315











Return on average assets - GAAP

1.18

%

1.44

%

1.34

%

1.39

%

1.40

%


1.34

%

1.46

%

Return on average tangible assets - Non-GAAP

1.20

%

1.46

%

1.36

%

1.41

%

1.42

%


1.36

%

1.48

%










Return on Average Tangible Equity:









Net income available to common shareholders, as reported

$15,502


$18,778


$17,238


$17,461


$17,004



$68,979


$68,288











Total average equity, as reported

$502,614


$490,197


$474,353


$456,241


$432,043



$481,004


$421,506


Less average balances of:









Goodwill

63,909


63,909


63,909


63,909


63,909



63,909


63,909


Identifiable intangible assets, net

7,330


7,562


7,800


8,040


8,278



7,681


8,642


Total average tangible equity

$431,375


$418,726


$402,644


$384,292


$359,856



$409,414


$348,955











Return on average equity - GAAP

12.24

%

15.20

%

14.58

%

15.52

%

15.61

%


14.34

%

16.20

%

Return on average tangible equity - Non-GAAP

14.26

%

17.79

%

17.17

%

18.43

%

18.75

%


16.85

%

19.57

%

 

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/washington-trust-reports-fourth-quarter-and-full-year-2019-earnings-300993594.html

SOURCE Washington Trust Bancorp, Inc.



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