Washington Trust Bancorp Inc., the parent of The Washington Trust Co., last week posted a third-quarter profit of $6.56 million that was little changed from the year-ago period’s $6.58 million, but 19.6 percent greater than the revised second-quarter profit of $5.48 million.
“While many institutions have been negatively affected by turmoil in the capital markets, Washington Trust continued to post solid earnings for the quarter,” Chairman and CEO John C. Warren said in a conference call with analysts last Wednesday.
The company said it was restating results for the period ended June 30 – for which it previously posted a profit of $6.3 million – “to correct the accounting treatment related to the sale of certain held-to-maturity investment securities.”
The restatement was required by the company’s decision, once additional regulatory information became available, to discontinue its early adoption of SFAS 159 (Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Liabilities”). It delayed Washington Trust’s quarterly report by about a week, and pared net income for the six months ended June 30 by $828,000 or 6 cents per diluted share.
Earnings per diluted share were 48 cents in the quarter just ended, unchanged from the year-ago quarter but 8 cents higher than the second quarter’s 41 cents per share.
Net interest income shrank to $15.31 million in the third quarter, compared with the second quarter’s $15.93 million and the year-ago quarter’s $15.87 million, as the company continued to be squeezed by interest margins. For the third quarter, it reported a net interest margin of 2.81 percent, an improvement from the second quarter’s 2.76 percent but still narrower than the 2006 third quarter’s 2.86 percent.
Total assets on Sept. 30 grew to $2.43 billion, an increase of about 1.3 percent from the $2.40 billion of a year earlier. The company’s loan portfolio grew to $1.51 billion from the year-ago $1.43 billion, as a 16-percent increase in commercial loans outweighed a 14.7-percent decline in residential mortgages and home construction loans. Deposits shrank 2.6 percent to $1.66 billion from the year ago $1.70 billion.
Warren predicted improvements in mortgage and consumer loan activity.
“Going forward, we believe we’ll benefit as many of the smaller mortgage brokers go by the wayside, the economy improves and borrowers begin to turn to trusted advisers, like Washington Trust, to handle their lending needs,” he said.
Wealth-management assets under administration surged to $4.11 billion on Sept. 30 from the year-ago $3.55 billion, an increase that helped drive an 11-percent increase in revenue from wealth management services, the company said. •
With staff reports by William Hamilton.
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