WESTERLY – Washington Trust Bancorp Inc. saw its first-quarter earnings rise more than 72% compared to the first quarter of 2020, the company reported on Wednesday.
Much of the increase that resulted in the company’s $20.5 million profit comes from the decision to release millions from its loan loss provisions, mirroring other national and regional banks. The parent company for The Washington Trust Co. reported a negative $2 million in loan loss provisions for the quarter that ended March 31. By comparison, the first quarter of 2020 included $7 million in reserves in anticipation of bad loans due to the pandemic.
The decrease reflects forecasted economic conditions and continued stable asset quality metrics, the company stated.
Earnings per diluted share rose from 68 cents one year prior to $1.17.
The company also reported record wealth management assets under administration of $7 billion, boosting its total wealth management income to $9.9 million, an increase of 13.9% from a year ago. The $11.9 million in mortgage banking revenues also grew, nearly doubling the income from a year ago thanks to a year of record-setting mortgage originations and sales. Together these sources drove a 30.3% spike in non-interest income to $26 million. There was also a $1 million gain in noninterest income from a litigation settlement, the company stated.
Interest income, however, fell 19.3% year over year, reflecting lower market interest rates, although accelerated net deferred fee amortization from forgivable Payroll Protection Program loans offered a boost over the prior quarter, the company stated. Interest expenses also fell 64.6%, resulting in a net interest income of $34.9 million, relatively level with one year prior.
Net interest margin, the difference between interest income generated versus the amount of interest paid out to lenders, also declined by 10 basis points to 2.51%.
Non-interest expenses rose 14% year over year to $34.7 million, which included $3.3 million debt prepayment penalty expense and $21.5 million in employee salaries and benefits.
Total assets stood at $5.7 billion, a 1.8% increase year over year that included $4.2 billion in loans. The company served as the lender for $97 million in PPP loans under second-round funding approved in the first quarter, though this was largely offset by $66 million in previously approved payroll loans that received SBA forgiveness, the company stated.
Total deposits were $4.5 billion at the end of the quarter, a 22.7% increase over a year ago, driven by increases in a variety of types of in-market deposits – partly a temporary reflection of PPP funds as well as consumer behavior fostering excess liquidity industry-wide, the company stated.
“Washington Trust reported reported strong first quarter results, with an increase in profitability from the fourth quarter of 2020,” Chairman and CEO Edward O. Handy III said in a statement. “Our team of employees have worked diligently through the COVID-pandemic to deliver quality service to our customers, and our results reflect the success of their hard work and dedication. We believe in our team and in our business model, and we are well-positioned to continue to navigate forward.”
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
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