WESTERLY – Washington Trust Bancorp. Inc. on Monday reported a $11.3 million second-quarter net income, a decrease of $8.7 million, or 43%, from the same quarter a year ago as higher interest rates had the bank paying out millions more to depositors and for other interest expenses.
Earnings per diluted share for the parent company of The Washington Trust Co. decreased 48 cents to 66 cents.
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But the bank’s top executive said other measures of the bank’s second-quarter performance highlighted the “strength and stability of our diversified business model and disciplined approach to capital, credit, and liquidity planning.”
“We’ve had consistent deposit growth, our asset quality remains strong and we surpassed $7 billion in total assets for the first time,” said Edward O. Handy III, Washington Trust CEO and chairman. “During our 223-year history, Washington Trust has weathered many storms and we remain committed to helping our customers through these challenging economic times.”
Still, Washington Trust reported that total interest expense was $41.7 million for the second quarter, more than eight times higher than the $4.5 million it paid in interest during the same period a year ago.
That higher expense was offset partially by increased interest and fees that the bank charged on loans. That income totaled $65.4 million, up from $36.6 million, or 79%, from a year earlier.
Net interest income was $33.5 million for the second quarter of 2023, a 10.6% decrease year over year from $37.5 million. Net interest margin – a measure of the difference between interest income generated by a bank and the amount it paid out, divided by its average earning assets – sank to 2.03% compared with 2.71% in the second quarter of 2022.
Meanwhile, Washington Trust said it had $7.01 billion in assets at the end of the second quarter, a 17.2% increase from $5.98 billion a year earlier. Part of that increase was due to a total loan portfolio that grew from $4.48 billion to $5.38 billion year over year. At the same time, total deposits grew from $5.01 billion to $5.31 billion.
The metrics that indicate the quality of the bank’s loan portfolio improved in the second quarter. The ratio of past due loans to total loans was 0.12%, down from 0.15% in the previous quarter, while the ratio of nonperforming assets to total assets was 0.16%, compared with 0.21% in the first quarter.
On April 19, Washington Trust marked the opening of its 25th branch, this one in Barrington. The bank plans to open two more branches this year the first in the Olneyville section of Providence and another in Smithfield.
