WESTERLY – Washington Trust Bancorp Inc. reported Monday a 2.3% drop in net income in the second quarter, driven by higher rates paid on wholesale funding sources and promotional certificates of deposit.
Washington Trust reported net income of $17.3 million in the quarter ended June 30, or 99 cents per diluted share, a decrease from $17.7 million, or $1.01 per diluted share, in the second quarter last year.
The Westerly-based bank’s revenue grew by $8 million, or 13.6%, in the quarter to $67.3 million, compared with $59.3 million in the same period a year earlier.
Revenue growth was driven by a 14.5% increase in interest and fees on loans to $42.1 million in the quarter, compared with $36.8 million the second quarter of 2018.
However, the bank’s interest expenses grew by 64%, driven by a more than $4 million increase in expenses related to deposits. In addition, noninterest expenses grew by 7.1%, driven by a $1.1 million increase from salaries and employee benefits.
Wealth management revenue decreased by 0.6% in the second quarter to $9.5 million, compared with $9.6 million a year earlier.
Mortgage banking revenue increased by 23.7% to $3.6 million in the quarter, compared with $2.9 million a year earlier.
Total loans increased 4.9% to $3.7 billion in the quarter, compared with $3.55 billion a year earlier. Loans 30 days or more past due increased 32.5% to $17.9 million in the quarter, compared with $13.5 million a year earlier.
Commercial loans grew by 8.9% to nearly $2.1 billion in the quarter, compared with $1.9 billion a year earlier. Residential real estate loans were flat at $1.35 billion year-over-year.
Total deposits grew 2.6% to$3.5 billion in the quarter, compared with $3.4 billion a year earlier.
Total assets increased by nearly 10% to $5.2 billion in the quarter, compared with $4.7 billion a year earlier. Nonperforming assets grew by 9% to $15 million in the quarter, compared with $13.8 million a year earlier.
“Washington Trust’s second quarter earnings reflect our success at generating revenues from our diversified business model,” Edward O. Handy III, the bank’s chairman and CEO, said in a statement.
“We continue to see positive results from our key business lines, despite a competitive and challenging economic environment,” he added.
Washington Trust, the nation’s oldest community bank, is the third-largest bank in Rhode Island, based on market share of deposits, according to Federal Deposit Insurance Corp. statistics.
The bank is listed on the Nasdaq Stock Exchange under the symbol “WASH.”
Scott Blake is a PBN staff writer. You may reach him at Blake@PBN.com.