Westerly-based Washington Trust Bancorp Inc., parent company of The Washington Trust Company, announced Monday first-quarter net income (ended March 31) of $5.4 million, an increase of 9 percent from the $5.0 million reported for the first quarter of 2004. On a diluted earnings per share basis, the corporation earned 40 cents for the first quarter of 2005, up 8 percent from the 37 cents earned for the same quarter in 2004.
The returns on average equity and average assets for the three months ended March 31 were 14.20 percent and 0.94 percent, respectively, compared to 13.90 percent and 1.00 percent, respectively, for the same period in 2004.
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John C. Warren, Washington Trust chairman and CEO, noted that “during the first quarter of 2005, we increased the cash dividend for the 13th consecutive year; announced an agreement to purchase Weston Financial Group, a Wellesley, Mass. registered investment advisor with assets under management in excess of $1.2 billion; and posted a 9 percent increase in earnings. Growth continues to be a key ingredient to the corporation’s success.”
On March 23, Washington Trust announced the signing of a definitive agreement to acquire Weston Financial Group. It is currently anticipated that the acquisition, which is subject to state and federal regulatory approval and other customary conditions to closing, will most likely be completed in the third quarter of 2005.
Net interest income, the primary source of Washington Trust’s operating income, amounted to $14.6 million for the first quarter of 2005, up 12 percent from the $13.1 million reported for the same period a year ago. This increase in net interest income was primarily due to a 17 percent increase in interest-earning assets.
The net interest margin for the three months ended March 31 was 2.76 percent, up 7 basis points from the fourth quarter of 2004, but lower than the 2.87 percent level reported for the first quarter of 2004. The improvement in the net interest margin during the first quarter of 2005 primarily resulted from higher yields on commercial and consumer loans. The decrease in the net interest margin from the first quarter of 2004 was largely attributable to increased funding costs for deposits and borrowed funds, which were partially offset by higher yields on investment securities and loans.
At March 31, total assets amounted to $2.342 billion, up $34.3 million from Dec. 31, 2004. In the first quarter of 2005, total loans increased $44.5 million to $1.294 billion, while deposits rose $71.2 million to $1.529 billion at March 31.
Residential real estate loans grew $35.1 million, or 7 percent, during the first quarter of 2005, including an increase of $20.0 million in purchased residential mortgages. Consumer loans increased $6.6 million in the first three months of 2005, primarily due to growth in home equity lines and loans. Commercial loans, including commercial real estate and construction loans, amounted to $510.5 million at March 31, up $2.8 million from $507.7 million reported at Dec. 31, 2004.
