WESTERLY – Washington Trust Bancorp Inc. on Monday reported a 35.1 percent year-over-year increase in profit in the third quarter to $17.5 million, or $1.01 per diluted share, driven by growth in deposits, and commercial and residential real estate lending.
The Washington Trust Co., Rhode Island’s third-largest consumer bank based on in-state deposits, reported total interest and non-interest income, including interest received from loans and securities as well as revenue and fees from wealth management and mortgage banking, of $60.4 million, a 9.5 percent increase over the year.
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The total value of residential real estate mortgages and construction loans for one- to four-family dwellings grew 12.9 percent year over year to $1.3 billion in the quarter. Meanwhile, total value of commercial real estate mortgages and construction loans grew 2.4 percent to $1.2 billion from a year earlier.
Commercial-industrial loans grew 11.7 percent to $656.9 million from the same 2017 period. As a result of growth in lending, total assets for the Westerly-based community bank grew 6.7 percent to $4.8 billion.
At the same time, total deposits grew 8.1 percent to $3.4 billion from a year earlier.
“Washington Trust’s third-quarter results reflect another solid operating performance, led by good deposit growth, healthy loan production and increased wealth management asset generation,” Washington Trust Chairman and CEO Edward O. Handy III said in a statement.
Nonperforming assets fell 29.5 percent to $13.8 million in the third quarter, with loans 30 days or more past due dropped 17.8 percent to $13.5 million. The bank’s lending is clustered in Rhode Island, Connecticut and Massachusetts. The provision for loan losses totaled $350,000, compared with $1.3 million in the third quarter of 2017.
Among performance indicators, Washington Trust’s efficiency ratio improved to 53.6 percent in the quarter, from 56.5 percent a year earlier. Generally, an efficiency ratio of 50 percent is considered optimal.
In addition, the bank’s net interest margin improved to 2.99 percent from 2.93 percent a year earlier. The margin measures interest income generated and the amount of interest paid out to lenders.
Washington Trust’s return on average equity also improved to 16.3 percent from 12.4 percent a year earlier. The return measures profitability in relation to average shareholders’ equity.
In September, Washington Trust declared a quarterly dividend of 43 cents per share. Year-to-date dividends have totaled $1.29 per share, a 12 percent increase from the same period last year, the bank said.
Some elements of Washington Trust’s business slowed in the third quarter. Wealth management-related revenue decreased 5.6 percent to $9.5 million, as assets under management fell 1.9 percent to $6.5 billion.
The third quarter was the first in the last five, however, in which net client asset flows were positive, indicating that $9.9 million more were moved into WashTrust-managed assets, compared with outflows in the year-ago period of $86.2 million. Mortgage banking-related revenue dropped 13.6 percent to $2.6 million from a year earlier.
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com
