Washington Trust Bancorp Inc. reported record lending of $2.26 billion in the third quarter due mostly to favorable interest rates and increased commercial lending, bank Chairman, President and CEO Joseph J. MarcAurele said last week.
The parent company of Westerly-based The Washington Trust Co. also reported record deposits for a quarter that generated an $8.9 million profit, a 15 percent improvement over the third quarter in 2011. Diluted earnings per share for the third quarter 2012 were 54 cents, up 8 cents, or 17 percent from the same period last year.
The $2.26 billion in loans for the quarter was a 7.5 percent increase from the $2.09 billion reported for the 2011 third quarter, and a 2 percent increase when compared to the $2.21 billion reported for this year’s second quarter. The increase was attributed to a rise in commercial lending and, to a lesser degree, mortgage lending.
For the third quarter, total commercial loans equaled $1.22 billion, a $149 million, or 12 percent, increase from the same period last year. When compared to the second quarter, commercial loans increased $27.3 million, or 2.2 percent.
MarcAurele also credited favorable interest rates. “We are in a longer-term interest-rate environment than many people would have thought was possible. We think the rates will stay low throughout 2013, which should spur refinancing activity in residential mortgages,” he told Providence Business News. Should rates increase, the bank’s balance sheet is strong enough to weather a slowdown in loan activity and it would also benefit from the higher rates.
For the past year through Sept. 30, the net gain on loan sales and commissions on loans generated for others tripled, from $1.08 million to $3.5 million, respectively.
“We have expanded our residential mortgage business substantially over the last few years,” explained MarcAurele. “We have entered new markets in the Boston area and in Connecticut.”
While the bank has indeed explored new markets, MarcAurele still refers to its strong Rhode Island roots.
“We are a Rhode Island bank with a very strong presence in the southern part of the state,” he said. “We have a strong statewide brand but not statewide convenience yet.”
The bank also reported record deposits for the quarter of $2.23 billion, an increase of $170 million, or 6 percent from Sept. 30, 2011, and an increase of $104.2 million, or 5 percent from June 30, 2012. Demand deposits and money-market accounts saw most of the gains.