Westerly-based Washington Trust Bancorp Inc., parent of The Washington Trust
Company, announced Thursday that its third-quarter 2004 earnings were $5.3 million,
13 percent higher than a year before, reflecting growth in all its major business
lines. Diluted earnings per share were 39 cents, up 11 percent from the third
quarter 2003.
Total assets grew by 4.6 percent in the quarter, to $2.28 billion. Total securities as of Sept. 30 were $899.7 million, down 3.7 percent from June 30, but still up 16 percent year-to-date. Loans, meanwhile, grew 8.8 percent in the quarter, and have grown 24.6 percent since Dec. 31, the bank’s statements show.
Total deposits grew by 9.5 percent in the quarter, to $1.47 billion. Overall deposits growth has been strong all year, 21.8 percent, but it accelerated in the quarter. Net interest income was $13.9 million, up 18 percent from the same quarter last year.
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“It was really an exceptional quarter for us,” John C. Warren, Washington Trust chairman and CEO, said in an interview. “When you look at the numbers and you look at the increases in each of our line areas, they’re just trucking along in every area.”
The financial figures bear that out. On the deposit side, all three major categories saw growth, with savings growing most vigorously, by $73.3 million or 12.9 percent, to $640.3 million. Year-to-date savings growth has been 29.6 percent. Demand deposits grew by 7.3 percent in the quarter, to $215.7 million, and time deposits grew by 6.8 percent, to $613 million, primarily due to consumer CDs and brokered CDs.
“We’ve been competitive in the product out there,” Warren said; a recent special on five-year CDs, for example, offered a 4.25 APY while Fleet was offering 3.75. Consumers also remain cautious about jumping back into the stock market, he said. “The stock market continues to gyrate, and people are sensitive to what happened to them before. I think people are diversifying a little bit.”
On the loan side, the balance sheet also shows growth across the board. Business and commercial real-estate loans grew 7.6 percent in the quarter, to $482.4 million, and they’re up 18.1 percent so far this year. Commercial mortgages are up 11.4 percent, to $253.3 million; construction and development loans are up 80.2 percent, to $22.5 million. Other business loans are up 22.5 percent, to $206.6 million.
Washington Trust’s biggest strength is in central and southern Rhode Island, both high-growth areas with bustling real-estate markets, and the bank’s residential loan business is thriving. Mortgages increased by 9.8 percent in the quarter, to $476.7 million, and are up 26.9 percent for the year. Construction loans rose 23.9 percent, to $21.2 million, and are up 49.5 percent year-to-date. Consumer loans are also up; they grew 7.7 percent in just the quarter, to $217.2 million, and are up 33.6 percent so far this year.
And the bank’s trust and investment management revenues are up 20.4 percent, to $9.6 million for the first nine months of 2004, over the same period in 2003. Trust assets under administration were $1.8 billion as of Sept. 30, up 5.5 percent since Dec. 31.
“I think it’s all the pieces coming together,” Warren said of the overall outlook.
BankRI up 22 percent
Bancorp Rhode Island Inc., parent of Bank Rhode Island, reported Tuesday (Oct. 19) that its third-quarter 2004 earnings were a record $2.2 million, up 22 percent from the same period last year, and slightly higher than last quarter. Diluted earnings per share were 52 cents, up 18 percent from 44 cents in the third quarter of 2003.
The bank’s earnings were boosted by a rapid growth in its loan portfolio – and the accompanying interest income. BankRI added $21.8 million worth of commercial loans in the third quarter, for a total of $392 million, and generated nearly $5.9 million in interest income from commercial loans, up from $5 million a year before. In the first nine months of 2004, commercial loans have grown by 18 percent, or $59.8 million.
Consumer loans are also up dramatically, by $19.7 million, or 14 percent, in the last quarter alone, for a total of $160.3 million. Year-to-date growth is 38 percent. Interest income from these loans was up 46.6 percent from the third quarter of 2003.
BankRI’s mortgage portfolio, meanwhile, continued to decline sharply. Total loans dropped by $12.4 million in the third quarter, to $316.7 million. So far this year, mortgages have declined by 13.5 percent. The quarter ended, however, just as interest rates were beginning to rise, with an accompanying decline in adjustable-rate loans’ appeal to consumers.
Total deposits declined slightly during the quarter, from $887.8 million on June 30 to $886 million on Sept. 30. Checking, money market and CD deposits all followed this pattern, while NOW accounts dropped more substantially, by 12.4 percent. Savings deposits, however, more than covered the NOW drop, rising by $21.8 million, or 6.5 percent, to $357.1 million as of Sept. 30.
Year-to-date, BankRI is still well ahead of where it started, up 9 percent from $811.3 million at the end of 2003, and with $667.2 million in core deposits (checking and savings) up 11 percent from $598.5 million at the end of 2003.
Merrill Sherman, president and CEO, focused on the strength of the bank’s loan portfolio. Bank Rhode Island is the fifth-largest bank in the state, and fourth-largest in the Providence market. It has 14 branches in Providence, Kent and Washington counties, and recently announced it plans to add six more in the next several years. It has also expanded its leadership team.
