Washington Trust 1Q income beats estimates

WESTERLY – Washington Trust Bancorp Inc., parent of The Washington Trust Co., said on Monday that its first-quarter profit increased by nearly a third to $6.8 million, up from $5.17 million in the year-earlier period.

Earnings per diluted share jumped to 42 cents from 32 cents in the first quarter 2010. The performance for the first three months of 2011 beat by 2 cents a consensus estimate from the two analysts who follow Washington Trust, according to Yahoo! Finance.

The bank posted $41.59 million in interest and non-interest revenue for the first quarter, slightly higher than the $41.33 million it recorded in the period in 2010.

Some of the revenue increase was attributed to improved wealth-management income, which was $7.08 million for the first three months of 2011, $774,000 greater than a year earlier.

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Also on the rise was merchant processing fees, which climbed $338,000 to $1.94 million in the first quarter of 2011 compared with a year earlier.

The bank continued to benefit from lower interest rates on deposits. While total deposits increased $87 million to $2.05 billion between the first quarter of 2010 and first quarter of 2011, interest expense on those deposits sank by more than 25 percent to $9.57 million for the first three months of 2011, compared with the year-earlier period.

“I’m pleased with the momentum that we’ve maintained over the past several quarters,” said Joseph J. MarcAurele, chairman, president and CEO. “All of our lines of business performed well, and we are excited about the growth opportunities presented by our new Burlington, Mass., mortgage office and the East Providence branch office, which will open later this year.”

The bank’s loan portfolio showed some signs of strain.

Washington Trust said total past due loans climbed by $2 million in the first three months of 2011 to $27.29 million, with most of that increase coming from commercial mortgages that were less than 90 days late.

Still, nonperforming assets amounted to 0.77 percent of total assets as of March 31, compared with 0.79 percent three months earlier and a 0.95 percent a year earlier.

In the first quarter, Washington Trust maintained its $1.5 million provision for anticipated bad loans, the same amount set aside the previous quarter and the first quarter in 2010.

As of March 31, Washington Trust’s total assets were $2.89 billion, down about $4 million from a year ago.

The bank’s returns on average equity and average assets for the first quarter were 10.04 percent and 0.94 percent, respectively, compared with 8 percent and 0.71 percent, respectively, for the same period in 2010.

The bank’s net interest margin widened to 3.16 percent in the period ended March 31, up 11 basis points from the fourth quarter of 2009 and up 38 basis points from a year ago.

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