WESTERLY – Washington Trust Bancorp Inc., parent of The Washington Trust Co., reported Monday a year-over-year 49 percent increase in earnings in 2018, as the Westerly-based bank reached $5 billion in total assets and posted record levels of deposits and loans.
Earnings for 2018 reached a company record $68.4 million, or $3.93 per diluted share, an increase from $45.9 million, or $2.64 per diluted share, for 2017.
However, 2017 earnings were lowered by a $6.2 million charge related to the federal tax overhaul. Excluding that charge, 2018 earnings increased by 31.3 percent over 2017.
Income tax expense totaled $18.3 million in 2018, a decrease of nearly $13.5 million from $31.7 million in 2017.
Total income for 2018 was $238.5 million, an increase of 11.2 percent from $214.4 million for 2017. That included interest income of $176.4 million, driven by interest and fees on loans, and non-interest income of $62.1 million, driven by wealth management revenue.
Income from wealth management totaled $38.3 million for 2018, a 2.6 percent decrease from $39.3 million in 2017. Wealth management assets under administration totaled $5.9 billion as of Dec. 31, a 12 percent decrease from $6.7 billion a year earlier.
Expenses for 2018 totaled $150.3 million, an increase of 12 percent from $134.2 million for 2017, driven by an increase in interest expenses from deposits.
Salaries and benefits increased slightly to $69.3 million in 2018 from $68.9 million in 2017.
Deposits totaled $3.5 billion as of Dec. 31, an increase of $281.3 million, or 8.7 percent, from a year earlier.
Total loans increased by $306.3 million, or 9 percent, year over year as of Dec. 31, 2018.
Assets totaled $5 billion as of Dec. 31, an increase from $4.5 billion at the end of 2017, driven by the increase in loans.
Washington Trust’s net interest margin – the difference between interest income generated and the amount paid out to lenders – improved to 3.01 percent as of Dec. 31, an increase of 8 basis points from 2.93 percent a year earlier.
For the fourth quarter alone, earnings were $17 million, or 98 cents per diluted share, an increase from nearly $8 million, or 46 cents per diluted share, in fourth quarter 2017.
The quarterly increase in earnings was driven by an $8.6 million decrease in income tax expense.
As of Dec. 31, Washington Trust had a leverage capital ratio of 8.9 percent; a tier 1 risk-based capital ratio of 11.8 percent; and a total risked-based capital ratio of 12.6 percent.
In general, banks are required to maintain a leverage capital ratio of at least 4 percent; a tier 1 risk-based capital ratio of at least 6 percent; and a total risk-based capital ratio of at least 8 percent.
“These achievements are testaments to our continued success in growing our key business lines and expanding our presence throughout the region,” said Washington Trust Chairman and CEO Edward O. Handy III.
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.
