WESTERLY – The red-hot housing market remains a boon for Washington Trust Bancorp. Inc., which reported record quarterly loans in its earnings released on Monday.
The all-time quarterly high of $4.5 billion in loans, driven largely by residential real estate loans, comes despite a decline in Paycheck Protection Loans, most of which have been paid off or forgiven.
Building a Stronger Heart: Inside South County Health’s Cardiopulmonary Rehab Program
A Heart-Healthy Start to the Year February is American Heart Month—a time to raise awareness…
Learn More
The parent company for The Washington Trust Co. also saw its quarterly profits increase 14.6% over a year ago, to $20 million. Earnings per diluted share rose 14 cents to $1.14 per share.
Also boosting the company’s earnings were rising interest rates, which contributed to a 7.7% increase in interest income. The $42 million in interest income benefited from $323,000 in net deferred fees from forgiven PPP loans, the company stated.
Recent interest rate hikes also drove up interest-related expenses, up 11.3% to $4.5 million.
Net interest margin, the difference between interest income generated and the amount paid out to lenders – rose 16 basis points to 2.71%.
Non-interest income declined 23.0% to $15.9 million, stemming primarily from losses in mortgage banking revenues due to lower volumes of loans sold to the secondary market and a higher proportion of new loans held in portfolio, the company stated.
Non-interest expenses of $31.1 million marked a 5.9% drop over a year ago, with a cut to salaries and employee benefits due to lower payroll taxes and the share-based compensation costs, the company stated.
Quarterly assets stood at $6.0 billion, up 2.2% over a year ago, driven by the record quarterly loans as well as increases in bank-owned life insurance investments and “other” assets. Total deposits of $5 billion marked a 5.9% jump over a year ago, and included $4.5 billion in in-market deposits, which were concentrated in money market accounts, the company stated.
As of June 30, 2021 – the most recent available – Washington Trust had the third-highest share of in-market deposits in Rhode Island, with 11.2%, according to the Federal Deposit Insurance Corp.
The company also dumped another $3 million from its loan loss reserves, which reflected “low loss rates, strong asset and credit quality metrics, as well as our current estimate of forecasted economic conditions,” the company stated. By comparison, the company neither added to nor released money from its credit loss provisions in the second quarter of 2021.
“Washington Trust posted good second-quarter results, reflecting the strength of our business model which has provided a consistent and diverse stream of earnings over time,” Edward O. “Ned” Handy III, chairman and CEO, said in a statement.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
