WESTERLY – Washington Trust Bancorp Inc., parent of The Washington Trust Co, today posted a fourth-quarter profit of $5.79 million, a decline of $416,000 or 6.7 percent from the year-ago period’s $6.2 million, in part because of an increase in the bank’s loan-loss provision.
For the year, the Westerly-based bank finished with a profit of $23.8 million, $1.2 million less than the previous year’s earnings of $25.03 million, a 4.9-percent decrease, on revenue of $181.94 million.
Earnings per diluted share were 43 cents in the quarter just ended, down two cents from a year ago. For the year, earnings per diluted share were $1.75, a decrease of seven cents from $1.82 in 2006.
“Despite unfavorable economic and market conditions, Washington Trust’s fourth quarter and year-end 2007 earnings were strong, particularly in comparison with our peers in the region,” Chairman and CEO John C. Warren said in a statement that accompanied the after-market report.
Providence-based Bank Rhode Island is due to announce its fourth quarter and year-end earnings on Thursday, along with regional players Sovereign Bank and Webster Bank. Financial giant Bank of America said earlier today its fourth-quarter profit had dropped by 95 percent in the wake of write-offs because of the subprime turmoil and a slowing economy.
Independent Bank Corp., the parent of Rockland Trust Co., last week reported a profit of $28.38 million for the year ended Dec. 31, a decline of 13.6 percent from the $32.85 million it posted for 2006. Independent, based in Rockland, Mass., recently acquired Somerset-based Slade’s Ferry Bancorp.
Washington Trust’s financial statements show the bank’s loan-loss set-aside for the fourth quarter was $1 million, a sizable increase over the $300,000 provision in the fourth quarter of 2006. For the year, the loan-loss provision was $1.9 million, up from $1.2 million in 2006.
“We believe that the increase in our loan-loss provision is a prudent response to the conditions we are seeing,” Warren said. “We continue to be pleased with the strong growth in our commercial loan portfolio, but have general concerns with the overall economic environment.”
The increase in the fourth quarter provision was “based on management’s assessment of various factors affecting the loan portfolio including, among others, growth in the portfolio, ongoing evaluation of credit quality, with particular emphasis on the commercial portfolio and general economic conditions,” the bank said.
Washington Trust noted that commercial loans grew by 16 percent to $92.9 million in 2007 – and increased $30.2 million in the fourth quarter alone.
Revenue from its wealth-management services increased 4 percent from the third quarter and 11 percent from the fourth quarter of 2006.
The net interest margin for the fourth quarter was 2.65 percent, down 16 basis points from the third quarter and down 9 basis points from the fourth quarter of 2006, the bank said. For the year, the margin was 2.75 percent, compared with 2.8 percent in 2006.
Washington Trust Bancorp Inc. (Nasdaq: WASH) is the parent of The Washington Trust Co., a Rhode Island-chartered bank founded in 1800 that has offices in Rhode Island, Massachusetts and southeastern Connecticut. Additional information is available at www.washtrust.com.
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