WashTrust eager to build on record-breaking ’14

‘We’re not trying to force our customers into a phone bank.’
JOSEPH J. MARCAURELE
Washington Trust  chairman and CEO
‘We’re not trying to force our customers into a phone bank.’ JOSEPH J. MARCAURELE Washington Trust chairman and CEO

Coming off a record-breaking 2014, the parent of Westerly-based The Washington Trust Co. is looking to build on its success by growing lending outside Rhode Island and expanding its physical presence in Greater Providence.
Washington Trust Bancorp Inc. on Jan. 28 reported record profit and earnings per share for both the year and fourth quarter. Reported net income of $40.8 million in 2014 marked a 12.9 percent increase over the previous year. Earnings per share totaled $2.41 per diluted share, compared to $2.16 for 2013.
The bank reported $3.58 billion in total assets for 2014, an increase of 12 percent from 2013.
Net income in the fourth quarter came to $11.2 million, an increase of 14.3 percent, as earnings per diluted share grew to 66 cents from 58 cents a year earlier. The bank paid a 32 cent dividend in the fourth quarter, an increase from 27 cents in the 2013 fourth quarter.
Joseph J. MarcAurele, Washington Trust chairman and CEO, attributed the record year to the bank’s ability to be consistent with its business delivery and strong lending activity.
“We’ve been able to take advantage of our reputation,” MarcAurele said. “We experienced very good growth on the loan side and I think it’s important to note that Ned Handy came here about a year ago and it’s fairly easy for me to say that he’s added a lot to our capability.”
Edward O. “Ned” Handy III joined Washington Trust a little more than a year ago as its president and chief operating officer, leaving his former position as Citizens Bank president for Rhode Island and Connecticut. Handy, who called his employment with Washington Trust the “best working year of [his] life,” is responsible for managing mortgage, retail and commercial business for the bank.
In 2014, total loans rose 16 percent to about $2.86 billion. Handy has spent a lot of his focus on markets outside of Rhode Island, especially in Connecticut and Massachusetts, where there’s been growth in residential and commercial lending.
About 93 percent of all commercial real estate loans were issued in Rhode Island, Connecticut and Massachusetts. Nearly 6 percent were issued in New York, New Jersey or Pennsylvania and about 1 percent – $8.5 million – were issued in New Hampshire. But while lending continues to grow outside of Rhode Island, the company is focusing on expanding its brick-and-mortar business in the Ocean State, specifically in the Greater Providence area.
“This is where our brand is,” Marc-Aurele said pointedly, when asked what’s to be gained in the Rhode Island market. “We have a statewide brand that’s really respected. We have about 9 percent of the market, but we don’t have statewide convenience.”
In 2014, Washington Trust opened a new branch in Johnston and has already announced plans to open another in the Rumford section of East Providence this quarter. MarcAurele also revealed third-quarter plans to open another branch in East Providence. In 2016, Washington Trust plans to open two more in North Providence and Coventry, pending regulatory approval.
Although optimistic about growth in the Providence area, MarcAurele is realistic about the challenges the bank will face.
“There are a lot of competitors out there … and it’s our job to compete against them in their backyard,” Marc-Aurele said.
The Providence area is largely dominated in terms of physical presence by larger banks, including Citizens Financial Group Inc., Bank of America, Boston-based Santander Bank and Bank Rhode Island, a subsidiary of Brookline Bancorp Inc., to name a few, not to mention a handful of longstanding credit unions.
MarcAurele noted that – for now – there is still a strong demand for person-to-person banking, despite the ever-increasing amount of online and mobile banking.
“Branch transactions have gone down,” MarcAurele said. “But as we look at what customers actually want, they want a physical presence. It doesn’t have to be elaborate, it can be modest in size and modestly staffed. … The challenge is that there has to be a balance and we really have to do both.”
The bank is also continuing to bolster its wealth-management business. The bank saw an uptick in assets under wealth management, reporting a 6.5 percent increase to $5.07 billion for the year, compared to 2013.
“The difference between us and the really big players is that we’re not trying to force our customers into a phone bank,” MarcAurele said. “They get to talk to people on a regular basis.” •

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