WESTERLY – An $18.8 million profit and record-setting assets and deposits helped strengthen Washington Trust Bancorp. Inc’s third-quarter balance sheet, though year-over-year earnings remained relatively flat, the company reported on Monday.
The parent company for Washington Trust Co. said the quarterly profit represents a 2.5% increase over the third quarter of 2020. Earnings per diluted share rose 1 cent to $1.07.
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The biggest successes were instead realized in other areas of the company’s balance sheet, including record $6 billion in assets and the all-time quarterly high of $5.1 billion in deposits.
Asset growth of 2.6% was boosted by the addition of $5.3 million in loans and leases. The total $4.3 billion in loans and leases included $77.4 million in Paycheck Protection Program loans as of Sept. 30.
The 2.2% increase in deposits included some seasonal inflows from institutional and governmental depositors, as well as growth in noninterest bearing demand deposits, money market accounts and negotiable order of withdrawal accounts, the company stated. The $4.3 billion in in-market deposits also marked a new record for the bank.
Net interest income, the difference between revenue generated by interest-bearing assets and the cost of servicing liabilities, grew 14% to $31.1 million, including $2 million in net deferred fee amortization from PPP loans, the company stated. The net interest margin, the difference between interest income generated versus the amount of interest paid out to lenders, also increased by 27 basis points to 2.58%.
Unlike other banks across the region and country that continued to dump loan reserves previously stockpiled during 2020, Washington Trust neither added to nor decreased its loan-loss provisions in the third quarter. This reflected forecasts for economic conditions and continued stable asset-quality metrics, the company stated.
The $39.8 million in interest income represents a 2.5% decline over a year ago, with declining taxable interest on debt securities partially offset by income from interest and fees on loans despite a continued low-interest-rate environment. Interest expenses fell by 59.1% to $3.8 million, with cuts to deposit costs and Federal Home Loan Bank advances.
Noninterest income dropped 19.4% to $20.5 million, with mortgage banking revenue cut in half. But growth in wealth management revenue increased 16.8% from a year ago, to $10.5 million.
Noninterest expenses of $32.5 million remained nearly flat, up just .5%, including $22.2 million in employee salaries and benefits.
“”Washington Trust’s third quarter results reflect the strength and stability of our balance sheet and solid contributions from all business lines,” Edward O. Handy III, chairman and CEO, said in a statement. “We recently announced our intent to open a new branch in Cumberland in 2022, as we believe the key to future growth is providing customers with convenient in-person service and digital banking solutions.”
