Washington Trust Bancorp, a growing presence in Rhode Island’s trust business, last week announced that it was purchasing Phoenix Investment Management Co. of Providence, effectively doubling the size of its trust business, and expanding its presence in Providence. Until last year, Washington Trust Bancorp, parent of The Washington Trust Co. was mainly in financial services and trust businesses in Rhode Island’s South County and nearby Connecticut. But Washington Trust has been handling Bank Rhode Island’s trust business, and with the acquisition of BankBoston by Fleet, Washington Trust accelerated plans to open a trust office in Providence, actually opening the office in January. That office now has $50 million in assets, said John C. Warren, chairman and chief executive officer of Washington Trust.”.
”We’re very excited about it,” Warren said. “It’s a great strategic investment for us in a business line that we emphasize heavily. It also helps solidify our recent move into the Providence area. We will be adding a group of very talented and dedicated professionals to our roster and Phoenix customers will have access to a wide array of new products and services. Lastly, the acquisition will significantly enhance the value of Washington Trust.
”It reinforces our balance,” Warren said. “We’ve been very aware that we want to emphasize money management in the trust area. This is a quick way to further reinforce that. It expands our fee based business, making us less reliant on the vagaries of interest rate movements.”
Warren said that fee revenues will be about a third of total revenues, “which is a pretty good number,” he said. “We talk about a balanced stream of earnings and different business lines. This is going to provide additional balance.”
The acquisition still needs approval of federal regulators. Warren said he expects it to be completed in June.
Washington Trust says that Phoenix is Rhode Island’s largest independent investment advisory firm, with assets under management, Warren said of nearly $1.1 billion. Washington Trust, he said, has slightly more than $1 billion under management. Phoenix business represents about 70 percent individuals and 30 percent institutions. The acquisition will bring total clients to about 3,000.
Phoenix Management was founded in 1988 by Gerald J. Fogarty, Jr. and Marie J. Langlois, both former Fleet Bank employees. They will remain with the company, along with Phoenix’s six other employees.
”We have affiliated with Washington Trust because of its outstanding reputation for high quality, highly personalized customer service,” Langlois said. Fogarty said it was the company’s intent to “create a structure that will provide us with additional resources to serve our clients, while being able to attract top-notch employees. Our agreement with Washington Trust succeeds on both counts.”
Washington Trust will acquire 100 percent of Phoenix Investment for 1,150,000 shares of Washington Trust Bancorp. Based on the stock’s April 24 closing price of $15, the transaction would be valued at about $17,250,000. Phoenix will continue to operate under its own name, as a separate business unit.
Warren said this is the largest acquisition in the bank’s 200 year history, and, he said about 100 years since the bank acquired its last Phoenix, that being National Phoenix Bank in Westerly, which Washington Trust bought in 1901.
