Edward O. “Ned” Handy III is chairman and CEO of Washington Trust Bancorp Inc., parent of The Washington Trust Co. The Westerly based bank last month reported record-breaking first-quarter profit totaled $16.2 million, or 93 cents per diluted share, compared with $11.8 million, or 68 cents per diluted share, a year earlier.
Handy recently assumed the top role at the second-largest Rhode Island-based bank, with $4.6 billion in assets, and he talked with Providence Business News about the quarter, the state’s economy and what Washington Trust is planning for the future.
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PBN: How would you describe your performance for the first quarter?
HANDY: Despite what’s becoming a tough deposit-gathering market and with deposit pricing having some upward pressure, we had our core bank generate some pretty good returns. Deposit gathering is our No. 1 focus and that went OK in the quarter in terms of mix. We didn’t see a lot of gross growth, but the mix and accounts has had a good couple quarters and that’s favorable to the margin. Loan payoffs continue to be a bit of a challenge for all the right reasons. We’re doing high-end loans and those borrowers are finding very attractive purchase offers and taking advantage of them with cap rates where they are.
PBN: Do you expect those loan payoffs to continue?
HANDY: We expect that to slow as interest rates rise and cap rates rise, and property valuations come back into a normal swing. We expect loan growth to come back into the single-digit growth level by year’s end.
PBN: How are you feeling about the Rhode Island market?
HANDY: If you look at the cranes in the sky in downtown Providence, you’ll see there’s a fair amount of activity, so the state has done a good job attracting new development, some through incentives and some through the cost of living and the quality of life Rhode Island has become better known for. Businesses are making decisions to take advantage of that and Providence is catching on as an alternative location for some of the younger people who are working in Boston but who are choosing to take advantage of the lower cost of living.
PBN: Any plans to grow through acquisition?
HANDY: There’s nothing imminent, but we always keep our eyes open. Growth is an important part of our strategy and we like the fact that we’re a solid, organic-growth company. But supplementing that with M&A when the price is right in a way that will allow us to continue to grow makes sense.
PBN: Any new branches on the way?
HANDY: The new Coventry branch is ramping up as we’d expect. We have also identified another site that we think we’ll deliver on in the fourth quarter or first quarter of next year in North Providence. Other than that, we don’t have anything on the drawing board, but we don’t have any reason to think we won’t continue to do about one branch per year.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
