WESTERLY – Washington Trust Bancorp Inc., the parent of Westerly-based The Washington Trust Co., posted a $69.1 million profit in 2019, the company reported Monday.
Year-end earnings represent a 1% increase over the $68.4 million profit in 2018. Earnings per diluted share reached $3.96, compared to $3.93 at the end of 2018.
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The marginal profit increase comes after the bank posted a record 45% earnings growth in 2018, which stemmed in part from a 2017 federal tax overhaul that saved the bank $13.5 million in income tax expenses. Income tax expenses in 2019 were $801,000 less than the prior year.
Total income for 2019 was $264.7 million, an 11.0% increase over $238.5 million the previous year. This included $197.7 million in interest income, stemming primarily from interest and fees on loans, and $67.1 million in non-interest income driven by wealth management and mortgage banking revenues.
Expenses totaled $175.0 million, up 16.4% over the $150.3 million in 2018, reflecting a 53.5% increase in interest expenses on deposits and a 37.2% rise in interest expenses on Federal Home Loan Bank advances. Salaries and benefits increased slightly to $72.8 million versus the $69.3 million at the end of 2018.
Total deposits were $3.5 billion at the end of 2019, a $25.2 million, or 0.7%, decline from a year earlier. Total loans increased $212.7 million and 5.8% to $3.9 billion at the end of 2019.
Average 2019 assets stood at $5.2 billion, up $487.5 million from the end of 2018, driven primarily by an increase in commercial real estate loans.
Net interest margin – the difference between interest income generated and the amount paid out to lenders – decreased 24 basis points from 3.01% to 2.77%, a function of federal interest rate cuts in 2019, the bank stated.
Fourth-quarter earnings of $15.5 million represented an 8.8% decline compared to the $17.0 million profit posted at the end of quarter four 2018. Quarterly earnings per diluted share also dropped from 98 cents to 89 cents.
The decrease reflected a hike in interest expenses on deposits and Federal Home Loan Bank advances, partially offset by an 85.5% increase in mortgage banking revenues.
“Our results reflect the strength and stability of our core business model, which enabled us to generate growth and revenues from key business lines,” Washington Trust CEO and Chairman Edward O. Handy III said in a statement.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
