WashTrust sets profit record in 2Q

WASHINGTON TRUST BANCORP on Monday announced record earnings in its second quarter, built on a growing loan portfolio.
WASHINGTON TRUST BANCORP on Monday announced record earnings in its second quarter, built on a growing loan portfolio.

WESTERLY – Washington Trust Bancorp Inc. set a quarterly profit record of $11.5 million in the recently concluded second quarter, according to the company’s Monday after-market earnings release. The net income represented an increase of 17.4 percent over the same 2014 period for the parent company of The Washington Trust Co.
Chairman and CEO Joseph J. MarcAurele said “Washington Trust once again posted solid quarterly results, reflecting the strength of our diversified business model and our expanded regional presence.”
Rhode Island’s oldest community bank also set a quarterly record for earnings per share, posting 68 cents per diluted share, compared with EPS of 58 cents a year earlier. The extra earnings supported a year-over-year increase of 5 cents to the cash dividend, which totaled 34 cents per share for the period ended June 30.
Total interest and noninterest income increased 10.3 percent to $46.8 million, as the company saw continued growth in its loan portfolio and in its wealth management operations. Total assets saw a 9.9 percent rise to $3.6 billion.
Commercial loans grew 15.9 percent in the quarter to $1.6 billion, as residential real estate loans increased 14.2 percent to $1 billion and consumer loans grew 1.6 percent to $343.8 million. As a result, total loans grew 13.5 percent to $2.9 billion. Total deposits increased 5.9 percent year over year to $2.7 billion.
After not recording a loan-loss provision in the first quarter of the year, Washington Trust look a $100,000 charge in the period, although that was less than the $450,000 taken in the 2014 second quarter. The bank noted in the earnings release that the charge was the result of a growing loan portfolio. At the same time, it said that the increase of total past-due loans from $19.1 million to $24 million (or from 0.66 percent of the total loan portfolio to 0.82 percent of full loan portfolio) was “largely attributable to a well-secured commercial relationship.”
In June, the bank had announced plans to acquire Halsey Associates, a New Haven, Conn., investment adviser with annual revenue of approximately $4 million. The deal is expected to conclude in the third quarter, and although an exact price was not named, Washington Trust expects to pay about 6.5 times Halsey’s 2014 earnings before interest, taxes, depreciation and amortization, with the new division adding to 2015 net income in a modest amount. Assets under management for the bank’s existing division grew 4 percent over the 12-month period to $5.2 billion, with revenue from its activities increasing 4.5 percent to $8.9 million.
The net interest margin for Washington Trust fell from 3.35 percent to 3.15 percent over the 12-month period even as key ratios improved year over year. Return on average assets in the second quarter was 1.27 percent, compared with 1.22 percent a year earlier, while the return on average equity increased to 12.88 percent from 11.52 percent.

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