WESTERLY – Washington Trust Bancorp Inc. (Nasdaq: WASH), parent of The Washington Trust Co., today posted a full-year profit of $22.56 million, down $1.24 million, or 5.21 percent, from the $23.80 million it posted for 2007.
Revenue from interest and non-interest sources totaled $181.78 million in 2008, virtually unchanged from the year before. Earnings per diluted share for the year were $1.59, a 9.14 percent decline from 2007. At the same time, the bank paid dividends of 83 cents per share, a 3 cent increase on the previous year’s level.
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“Washington Trust had a very solid year, despite a national recession, a federal banking crisis and a precipitous decline in the financial markets,” said Chairman and CEO John C. Warren.
The company – the largest independent bank based in Rhode Island – noted that it remains “well-capitalized,” with an estimated risk-based capital ratio of 12.52 percent on Dec. 31, having issued $50 million worth of common stock in a private placement in October.
For the final three months of the year, Washington Trust posted a profit of $4.61 million – a decrease of $1.18 million, or 20.37 percent, from the year-ago period’s $5.79 million – on fourth-quarter revenue that fell 5.47 percent compared with the year-ago period to $43.69 million.
Fourth-quarter earnings per diluted share fell to 29 cents, 14 cents less than in the 2007 fourth quarter. The bank cited a $2.4 million write-down of certain investments to fair value; an increase in its fourth-quarter loan-loss provision – money set aside against anticipated losses on bad loans – to $1.85 million from the year-ago $850,000; and $663,000 in losses on interest-rate swap contracts.
But Washington Trust’s commercial loan portfolio continued to grow, hitting a year-end total of $880.31 million. That represented an increase of $38.48 million compared with the third quarter – making the fourth quarter the company’s ninth consecutive period of quarter-to-quarter growth – and $200.05 million, or 29.4 percent, from the end of 2007.
In light of the economic downturn, asset quality continued to be a concern at Washington Trust, as at many other financial institutions. Nonperforming assets increased to $8.80 million, or 0.30 percent of total assets, in the quarter, compared with $6.82 million, or 0.25 percent of total assets in the third quarter. At the start of 2008, nonperforming assets totaled $4.30 million, or 0.17 percent of total assets. Net charge-offs for the fourth quarter were $776,000, up from $492,000 from the previous quarter.
Still, the bank’s net interest margin widened slightly to 2.65 percent in the period ended Dec. 31, up 3 basis points from the third quarter and unchanged from a year ago.
Although Washington Trust saw a year-over-year increase in fourth-quarter interest income – from $34.93 million in the final quarter of 2007 to $36.37 million in the period just ended – non-interest income declined significantly, in part because of the company’s $2.4 million write-down of certain investments. Non-interest income dropped to $7.32 million in the fourth quarter from $11.29 million in the year-ago period. Wealth-management revenue declined to $6.17 million in the fourth quarter, 17.4 percent less than the $7.48 million in the quarter a year ago.
Washington Trust announced that company President John F. “Jack” Treanor, 62, will take early retirement in October 2009. Treanor, who joined the bank in April 1999 as its president and chief operating officer, is to remain on the board of directors.
Warren, the CEO, is scheduled to retire in April 2010, the bank noted. So the board has launched the process of finding successors for both executives.
Washington Trust Bancorp Inc. (Nasdaq: WASH) is the parent of The Washington Trust Co., a Rhode Island-chartered bank founded in 1800 that has offices in Rhode Island, Massachusetts and southeastern Connecticut. Additional information is available at www.WashTrust.com.
