WESTERLY, R.I., April 22, 2019 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced first quarter 2019 net income of $17.5 million, or $1.00 per diluted share, compared to net income of $17.0 million, or $0.98 per diluted share, reported for the fourth quarter of 2018.

“Washington Trust posted solid first quarter earnings and earnings per share,” stated Edward O. Handy III, Chairman and Chief Executive Officer.  “We had good activity across all business lines resulting from favorable market conditions, recent branch expansion, and continued marketing and business development efforts.”

Selected highlights for the first quarter of 2019 include:

  • Profitability ratios remain strong with returns on average equity and average assets of 15.52% and 1.39%, respectively.
  • Total revenues amounted to $50 million, up by 2% on a linked quarter basis.
  • Wealth management assets under administration were $6.4 billion at March 31, 2019, up by $439 million, or 7%, from the balance at December 31, 2018, reflecting financial market appreciation during the quarter.
  • Total loans were up by $58 million, or 2%, from the end of the prior quarter and up by $351 million, or 10%, from a year ago.

Net Interest Income
Net interest income was $34.6 million for the first quarter of 2019, up by $706 thousand, or 2%, from the fourth quarter of 2018.  The net interest margin was 2.93% for the first quarter, down by 2 basis points from 2.95% reported in the preceding quarter.  Excluding income associated with loan payoffs and prepayment penalties of $49 thousand in the first quarter and $144 thousand in the preceding quarter, the net interest margin was 2.93% for the first quarter, compared to 2.94% reported in the preceding quarter.

Significant linked quarter changes included:

  • Average interest-earning assets increased by $227 million, including increases of $124 million in average investment securities and $97 million in average commercial loans.  The yield on interest-earning assets for the first quarter was 4.24%, up by 11 basis points from the preceding quarter.  Excluding the impact of income associated with loan payoffs and prepayment penalties, the yield on interest-earning assets was 4.24%, up by 13 basis points from the preceding quarter.  The yield benefited from increased market interest rates.
  • Average interest-bearing liabilities increased by $226 million, including increases of $172 million in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances) and $53 million in average in-market deposits.  The cost of interest-bearing liabilities for the first quarter was 1.60%, up by 15 basis points from the preceding quarter.  This increase largely reflected higher rates paid on wholesale funding sources and promotional certificates of deposit.

Noninterest Income
Noninterest income totaled $15.4 million for the first quarter of 2019, up by $204 thousand, or 1%, from the fourth quarter of 2018.  Significant linked quarter changes included:

•         Wealth management revenues were $9.3 million for the first quarter of 2019, up by $240 thousand, or 3%, on a linked quarter basis, reflecting an increase in transaction-based revenues, largely due to tax reporting and preparation fees, which are generally concentrated in the first half of the year.  Asset-based revenues were down modestly by $9 thousand, or 0.1%, on a linked quarter basis.  While the March 31, 2019 end of period balances of wealth management assets under administration increased from the balance at December 31, 2018, the average balance of wealth management assets for the first quarter of 2019 was down slightly by $5 million, or 0.1%, from the fourth quarter of 2018.

  • Mortgage banking revenues were $2.6 million for the first quarter of 2019, up by $668 thousand, or 34%, from the preceding quarter.  First quarter results benefited from an increase in fair value adjustments on mortgage loan commitments and loans held for sale, as well as a relatively higher sales yield on mortgage loans sold in the secondary market.  The increase in the fair value adjustments reflected an increase in the mortgage pipeline and corresponding loan commitment balances as of March 31, 2019.
  • Loan related derivative income was $724 thousand for the first quarter of 2019, down by $650 thousand from the preceding quarter's above-average level of commercial borrower loan related derivative transaction volume.
  • Income from bank-owned life insurance amounted to $649 thousand in the first quarter of 2019, up by $77 thousand, from the preceding quarter.  Included in the first quarter was $91 thousand gain due to the receipt of tax-exempt life insurance proceeds.

Noninterest Expenses
Noninterest expenses totaled $27.0 million for the first quarter of 2019, up by $282 thousand, or 1%, from the fourth quarter of 2018.  The linked quarter comparison of noninterest expenses was impacted by the following:

  • In the fourth quarter of 2018, write-down valuation adjustments on other real estate owned amounting to $833 thousand were recognized and classified in other expenses.  There were no such write-downs in the first quarter of 2019.
  • In the fourth quarter of 2018, a reduction to noninterest expenses of $187 thousand was recognized, resulting from a nontaxable adjustment in the fair value of a contingent consideration liability that was initially recorded upon the completion of a 2015 acquisition.  There was no such reduction in the first quarter of 2019.

Excluding the impact of the aforementioned items, noninterest expenses for the first quarter of 2019 increased by $928 thousand, or 4%, on a linked quarter basis, primarily due to increased salaries and employee benefits expense, which largely reflected a routine increase in payroll taxes associated with the start of the new calendar year.

Income tax expense totaled $4.8 million for the first quarter of 2019, up by $319 thousand from the preceding quarter.  The effective tax rate for the first quarter of 2019 was 21.7%, compared to 21.0% for the preceding quarter.  Based on current federal and applicable state income tax statutes, the Corporation currently expects its 2019 effective tax rate to be approximately 21.5%.

Investment Securities
The securities portfolio totaled $995 million at March 31, 2019, up by $57 million from the balance at December 31, 2018.  The increase reflected first quarter purchases of $73 million in debt securities, with a weighted average yield of 3.69%, as well as an increase in the fair value of available for sale debt securities.  These increases were partially offset by routine principal pay-downs on mortgage-backed securities and a called debt security.  Investment securities represented 19% of total assets at both March 31, 2019 and December 31, 2018.

Loans
Total loans amounted to $3.7 billion at March 31, 2019, up by $58 million, or 2%, from the end of the preceding quarter, reflecting net growth in the commercial real estate portfolio.  The residential real estate loan portfolio decreased by $1 million from the end of the fourth quarter of 2018 and consumer loan portfolio declined by $2 million from the balance at December 31, 2018.  Total loans were up by $351 million, or 10%, from the balance a year ago.

Deposits and Borrowings
Total deposits amounted to $3.5 billion at March 31, 2019, down by $20 million, or 1%, from the end of the preceding quarter.  Excluding the balances of wholesale brokered time deposits, total in-market deposits were down by $27 million, or 1%, reflecting a decline in demand account balances partially offset by growth in promotional certificates of deposit.  Total deposits were up by $248 million, or 8%, from the balance a year ago.

Federal Home Loan Bank advances amounted to $1.1 billion at March 31, 2019, up by $105 million from the balance at December 31, 2018, to fund purchases of investment securities and loan growth.

Asset Quality
Total nonaccrual loans amounted to $12.4 million, or 0.33% of total loans, at March 31, 2019, compared to $11.7 million, or 0.32% of total loans, at December 31, 2018.  Total past due loans amounted to $14.7 million, or 0.39% of total loans, at March 31, 2019, compared to $13.6 million, or 0.37% of total loans, at December 31, 2018.

A loan loss provision totaling $650 thousand was recognized in the first quarter of 2019, compared to a loan loss provision of $800 thousand recognized in the preceding quarter.  These provisions were based on management's assessment of loss exposure, as well as loan loss allocations commensurate with growth and changes in the loan portfolio.  Net charge-offs totaled $78 thousand in the first quarter compared to $237 thousand in the preceding quarter.  The allowance for loan losses amounted to $27.6 million, or 0.74% of total loans, at March 31, 2019, compared to $27.1 million, or 0.74% of total loans, at December 31, 2018.

Capital and Dividends
Total shareholders' equity was $470 million at March 31, 2019, up by $21.7 million from December 31, 2018.  This increase included net income of $17.5 million and an increase of $10.8 million in the accumulated other comprehensive income component of shareholders' equity primarily due to an increase in the fair value of available for sale debt securities, partially offset by $8.2 million in dividend declarations in the first quarter.  The Board of Directors declared a quarterly dividend of 47 cents per share for the quarter ended March 31, 2019.  The dividend was paid on April 12, 2019 to shareholders of record on April 1, 2019.

Capital levels at March 31, 2019 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.59% at March 31, 2019, compared to 12.56% at December 31, 2018.  Book value per share amounted to $27.15 at March 31, 2019, compared to $25.90 at December 31, 2018.

Conference Call
Washington Trust will host a conference call to discuss its first quarter results, business highlights and outlook on Monday, April 22, 2019 at 8:30 a.m. (Eastern Time).  Individuals may dial in to the call at 1-877-407-9208.  An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-844-512-2921 and entering the Replay PIN Number 13689272; the audio replay will be available through May 13, 2019.  Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, http://ir.washtrust.com, and will be available through June 30, 2019.

Background
Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company.  Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies.  Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts.  The Corporation’s common stock trades on NASDAQ under the symbol WASH.  Investor information is available on the Corporation’s web site at http://ir.washtrust.com

Forward-Looking Statements
This press release contains statements that are “forward-looking statements”.  We may also make forward-looking statements in other documents we file with the SEC, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees.  You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters.  You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control.  These risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include the following: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value or outflows of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of our competition; changes in legislation or regulation and accounting principles, policies and guidelines; occurrences of cyberattacks, hacking and identity theft; natural disasters; and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Supplemental Information - Explanation of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures.  Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors.  These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.  Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.


Washington Trust Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)
      
 Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Assets:     
Cash and due from banks$88,242 $89,923 $72,934 $132,068 $85,680 
Short-term investments 3,317  3,552  2,917  2,624  2,322 
Mortgage loans held for sale, at fair value 14,608  20,996  22,571  35,207  19,269 
Securities:     
Available for sale debt securities, at fair value 994,881  927,810  812,647  776,693  787,842 
Held to maturity debt securities, at amortized cost   10,415  10,863  11,412  11,973 
Total securities 994,881  938,225  823,510  788,105  799,815 
Federal Home Loan Bank stock, at cost 48,025  46,068  44,525  46,281  41,127 
Loans:     
Total loans 3,738,469  3,680,360  3,556,203  3,490,230  3,387,406 
Less allowance for loan losses 27,644  27,072  26,509  26,174  25,864 
Net loans 3,710,825  3,653,288  3,529,694  3,464,056  3,361,542 
Premises and equipment, net 29,822  29,005  28,195  28,377  28,316 
Operating lease right-of-use assets 28,249         
Investment in bank-owned life insurance 80,786  80,463  79,891  79,319  73,782 
Goodwill 63,909  63,909  63,909  63,909  63,909 
Identifiable intangible assets, net 7,923  8,162  8,400  8,645  8,893 
Other assets 84,142  77,175  94,126  88,651  81,671 
Total assets$5,154,729 $5,010,766 $4,770,672 $4,737,242 $4,566,326 
Liabilities:     
Deposits:     
Noninterest-bearing deposits$577,319 $603,216 $611,829 $577,656 $601,478 
Interest-bearing deposits 2,926,941  2,920,832  2,802,519  2,743,955  2,654,956 
Total deposits 3,504,260  3,524,048  3,414,348  3,321,611  3,256,434 
Federal Home Loan Bank advances 1,056,129  950,722  828,392  901,053  808,677 
Junior subordinated debentures 22,681  22,681  22,681  22,681  22,681 
Operating lease liabilities 30,187         
Other liabilities 71,629  65,131  77,342  70,326  65,453 
Total liabilities 4,684,886  4,562,582  4,342,763  4,315,671  4,153,245 
Shareholders’ Equity:     
Common stock 1,082  1,081  1,081  1,080  1,079 
Paid-in capital 120,743  119,888  119,220  118,883  118,172 
Retained earnings 365,521  355,524  346,685  336,670  326,505 
Accumulated other comprehensive loss (17,503) (28,309) (39,077) (35,062) (32,675)
Total shareholders’ equity 469,843  448,184  427,909  421,571  413,081 
Total liabilities and shareholders’ equity$5,154,729 $5,010,766 $4,770,672 $4,737,242 $4,566,326 


Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; Dollars and shares in thousands, except per share amounts)
      
For the Three Months EndedMar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Interest income:     
Interest and fees on loans$41,744 $40,299 $38,493 $36,788 $34,352 
Interest on mortgage loans held for sale 180  289  384  313  226 
Taxable interest on debt securities 7,226  5,957  5,383  5,358  5,118 
Nontaxable interest on debt securities 9  9  9  20  23 
Dividends on Federal Home Loan Bank stock 695  669  634  550  516 
Other interest income 340  294  261  257  205 
Total interest and dividend income 50,194  47,517  45,164  43,286  40,440 
Interest expense:     
Deposits 8,696  7,953  6,546  5,254  4,422 
Federal Home Loan Bank advances 6,661  5,446  4,937  4,707  3,983 
Junior subordinated debentures 253  240  232  214  183 
Total interest expense 15,610  13,639  11,715  10,175  8,588 
Net interest income 34,584  33,878  33,449  33,111  31,852 
Provision for loan losses 650  800  350  400   
Net interest income after provision for loan losses 33,934  33,078  33,099  32,711  31,852 
Noninterest income:     
Wealth management revenues 9,252  9,012  9,454  9,602  10,273 
Mortgage banking revenues 2,646  1,978  2,624  2,941  2,838 
Card interchange fees 997  977  983  961  847 
Service charges on deposit accounts 875  977  885  903  863 
Loan related derivative income 724  1,374  278  668  141 
Income from bank-owned life insurance 649  572  572  537  515 
Other income 224  273  419  381  266 
Total noninterest income 15,367  15,163  15,215  15,993  15,743 
Noninterest expense:     
Salaries and employee benefits 17,619  16,918  17,283  17,304  17,772 
Outsourced services 2,606  2,510  1,951  2,350  1,873 
Net occupancy 1,998  1,946  2,013  1,930  2,002 
Equipment 1,011  983  1,080  1,069  1,180 
Legal, audit and professional fees 534  587  559  555  726 
FDIC deposit insurance costs 429  376  410  422  404 
Advertising and promotion 239  460  440  329  177 
Amortization of intangibles 239  239  245  247  248 
Change in fair value of contingent consideration   (187)      
Other expenses 2,289  2,850  2,081  2,082  2,748 
Total noninterest expense 26,964  26,682  26,062  26,288  27,130 
Income before income taxes 22,337  21,559  22,252  22,416  20,465 
Income tax expense 4,842  4,523  4,741  4,742  4,254 
Net income$17,495 $17,036 $17,511 $17,674 $16,211 
      
Net income available to common shareholders$17,461 $17,004 $17,475 $17,636 $16,173 
      
Weighted average common shares outstanding:     
  Basic 17,304  17,297  17,283  17,272  17,234 
  Diluted 17,401  17,385  17,382  17,387  17,345 
Earnings per common share:     
  Basic$1.01 $0.98 $1.01 $1.02 $0.94 
  Diluted$1.00 $0.98 $1.01 $1.01 $0.93 
      
Cash dividends declared per share$0.47 $0.47 $0.43 $0.43 $0.43 


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars and shares in thousands, except per share amounts)
  
 Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Share and Equity Related Data:     
Book value per share$27.15 $25.90 $24.75 $24.40 $23.93 
Tangible book value per share - Non-GAAP (1)$23.00 $21.74 $20.57 $20.20 $19.71 
Market value per share$48.15 $47.53 $55.30 $58.10 $53.75 
Shares issued and outstanding at end of period 17,305  17,302  17,290  17,278  17,262 
                
Capital Ratios (2):               
Tier 1 risk-based capital 11.84% 11.81% 12.00% 11.84% 11.78%
Total risk-based capital 12.59% 12.56% 12.77% 12.61% 12.56%
Tier 1 leverage ratio 8.69% 8.89% 8.91% 8.87% 8.84%
Common equity tier 1 11.25% 11.20% 11.37% 11.20% 11.13%
                
Balance Sheet Ratios:               
Equity to assets 9.11% 8.94% 8.97% 8.90% 9.05%
Tangible equity to tangible assets - Non-GAAP (1) 7.83% 7.62% 7.57% 7.48% 7.57%
Loans to deposits (3) 106.3% 104.3% 104.0% 105.3% 103.8%


For the Three Months EndedMar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Performance Ratios (4):     
Net interest margin (5)2.93%2.95%2.99%3.05%3.03%
Return on average assets (net income divided by average assets)1.39%1.40%1.47%1.53%1.45%
Return on average tangible assets - Non-GAAP (1)1.41%1.42%1.49%1.56%1.48%
Return on average equity (net income available for common shareholders divided by average equity)15.52%15.61%16.26%16.99%15.96%
Return on average tangible equity - Non-GAAP (1)18.43%18.75%19.59%20.58%19.40%
Efficiency ratio (6)54.0%54.4%53.6%53.5%57.0%
  1. See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.
  2. Estimated for March 31, 2019 and actuals for prior periods.
  3. Period-end balances of net loans and mortgage loans held for sale as a percentage of total deposits.
  4. Annualized based on the actual number of days in the period.
  5. Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets.
  6. Total noninterest expense as percentage of total revenues (net interest income and noninterest income).


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands)
  
For the Three Months EndedMar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Wealth Management Results     
Wealth Management Revenues:     
Asset-based revenues$8,921 $8,930 $9,322 $9,136 $9,955 
Transaction-based revenues 331  82  132  466  318 
Total wealth management revenues$9,252 $9,012 $9,454 $9,602 $10,273 
      
Assets Under Administration (AUA):     
Balance at beginning of period$5,910,814 $6,462,340 $6,220,155 $6,343,720 $6,714,637 
Net investment appreciation (depreciation) & income 520,057  (534,847) 232,245  133,450  (32,024)
Net client asset flows (80,743) (16,679) 9,940  (257,015) (338,893)
Balance at end of period$6,350,128 $5,910,814 $6,462,340 $6,220,155 $6,343,720 
      
Percentage of AUA that are managed assets 91% 90% 91% 92% 92%
      
Mortgage Banking Results     
Mortgage Banking Revenues:     
Gains & commissions on loan sales, net (1)$2,474 $1,798 $2,485 $2,786 $2,679 
Loan servicing fee income, net (2) 172  180  139  155  159 
Total mortgage banking revenues$2,646 $1,978 $2,624 $2,941 $2,838 
      
Residential Mortgage Loan Originations:     
Originations for retention in portfolio$51,697 $58,515 $80,751 $128,479 $67,840 
Originations for sale to secondary market (3) 85,826  96,792  119,832  122,693  87,720 
Total mortgage loan originations$137,523 $155,307 $200,583 $251,172 $155,560 
      
Residential Mortgage Loans Sold:     
Sold with servicing rights retained$9,490 $16,577 $24,422 $24,367 $33,575 
Sold with servicing rights released (3) 82,589  81,985  107,694  81,054  63,265 
Total mortgage loans sold$92,079 $98,562 $132,116 $105,421 $96,840 
  1. Includes gains on loan sales, commissions on loans originated for others, servicing right gains, fair value adjustments on mortgage loans held for sale, and fair value adjustments and gains on forward loan commitments.
  2. Represents loan servicing fee income, net of servicing right amortization and valuation adjustments.
  3. Includes loans originated in a broker capacity.


Washington Trust Bancorp, Inc. and Subsidiaries
END OF PERIOD LOAN AND DEPOSIT COMPOSITION
(Unaudited; Dollars in thousands)
  
 Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Loans:     
Commercial real estate (1)$1,463,682 $1,392,408 $1,240,350 $1,218,643 $1,217,278 
Commercial & industrial 610,608  620,704  656,882  632,029  603,830 
Total commercial 2,074,290  2,013,112  1,897,232  1,850,672  1,821,108 
      
Residential real estate (2) 1,359,072  1,360,387  1,349,340  1,327,418  1,249,890 
      
Home equity 279,938  280,626  282,331  283,744  285,723 
Other 25,169  26,235  27,300  28,396  30,685 
Total consumer 305,107  306,861  309,631  312,140  316,408 
Total loans$3,738,469 $3,680,360 $3,556,203 $3,490,230 $3,387,406 
  1. Commercial real estate loans consist of commercial mortgages and construction and development loans.  Commercial mortgages are loans secured by income producing property.
  2. Residential real estate loans consist of mortgage and homeowner construction loans secured by one- to four-family residential properties.


 March 31, 2019 December 31, 2018
 Balance% of Total Balance% of Total
Commercial Real Estate Loans by Property Location:     
Rhode Island$386,990 26% $377,249 27%
Connecticut 582,934 40   570,116 41 
Massachusetts 402,276 28   356,615 26 
Subtotal 1,372,200 94   1,303,980 94 
All other states 91,482 6   88,428 6 
Total commercial real estate loans$1,463,682 100% $1,392,408 100%
          
Residential Real Estate Loans by Property Location:         
Rhode Island$349,232 26% $352,141 26%
Connecticut 142,472 10   141,775 10 
Massachusetts 850,940 63   849,435 63 
Subtotal 1,342,644 99   1,343,351 99 
All other states 16,428 1   17,036 1 
Total residential real estate loans$1,359,072 100% $1,360,387 100%


 Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Deposits:     
Noninterest-bearing demand deposits$577,319 $603,216 $611,829 $577,656 $601,478 
Interest-bearing demand deposits 162,598  178,733  151,322  136,640  83,249 
NOW accounts 471,682  466,568  468,578  481,905  470,112 
Money market accounts 644,949  646,878  650,976  604,954  693,748 
Savings accounts 371,248  373,545  372,425  375,983  376,608 
Time deposits (in-market) 792,470  778,105  715,635  698,286  625,965 
In-market deposits 3,020,266  3,047,045  2,970,765  2,875,424  2,851,160 
Wholesale brokered time deposits 483,994  477,003  443,583  446,187  405,274 
Total deposits$3,504,260 $3,524,048 $3,414,348 $3,321,611 $3,256,434 


Washington Trust Bancorp, Inc. and Subsidiaries
CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
  
 Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Asset Quality Ratios:     
Nonperforming assets to total assets 0.28% 0.28% 0.29% 0.32% 0.30%
Nonaccrual loans to total loans 0.33% 0.32% 0.30% 0.34% 0.31%
Total past due loans to total loans 0.39% 0.37% 0.38% 0.48% 0.57%
Allowance for loan losses to nonaccrual loans 223.57% 231.25% 245.25% 222.85% 245.83%
Allowance for loan losses to total loans 0.74% 0.74% 0.75% 0.75% 0.76%
      
Nonperforming Assets:     
Commercial real estate$926 $925  $—  $—  $— 
Commercial & industrial     122  397  397 
Total commercial 926  925  122  397  397 
Residential real estate 10,032  9,346  9,063  10,206  9,340 
Home equity 1,407  1,436  1,624  1,133  771 
Other consumer       9  13 
Total consumer 1,407  1,436  1,624  1,142  784 
Total nonaccrual loans 12,365  11,707  10,809  11,745  10,521 
Other real estate owned 2,142  2,142  2,974  3,206  3,206 
Total nonperforming assets$14,507 $13,849 $13,783 $14,951 $13,727 
      
Past Due Loans (30 days or more past due):     
Commercial real estate$926 $1,080 $931  $—  $— 
Commercial & industrial 1    142  2,851  3,295 
Total commercial 927  1,080  1,073  2,851  3,295 
Residential real estate 10,849  10,520  9,398  11,243  11,806 
Home equity 2,911  1,989  2,939  2,585  4,235 
Other consumer 13  33  109  16  22 
Total consumer 2,924  2,022  3,048  2,601  4,257 
Total past due loans$14,700 $13,622 $13,519 $16,695 $19,358 
      
Accruing loans 90 days or more past due $—  $—  $—  $—  $— 
Nonaccrual loans included in past due loans$8,563 $8,613 $6,425 $8,575 $7,066 


Washington Trust Bancorp, Inc. and Subsidiaries
CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
      
For the Three Months EndedMar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Nonaccrual Loan Activity:     
Balance at beginning of period$11,707 $10,809 $11,745 $10,521 $15,211 
Additions to nonaccrual status 1,924  2,918  2,179  2,457  1,210 
Loans returned to accruing status (855) (1,500) (361) (475) (344)
Loans charged-off (103) (298) (96) (103) (690)
Loans transferred to other real estate owned         (3,074)
Payments, payoffs and other changes (308) (222) (2,658) (655) (1,792)
Balance at end of period$12,365 $11,707 $10,809 $11,745 $10,521 
      
Allowance for Loan Losses:     
Balance at beginning of period$27,072 $26,509 $26,174 $25,864 $26,488 
Provision charged to earnings 650  800  350  400   
Charge-offs (103) (298) (96) (103) (690)
Recoveries 25  61  81  13  66 
Balance at end of period$27,644 $27,072 $26,509 $26,174 $25,864 
      
Net Loan Charge-Offs (Recoveries):     
Commercial real estate $—  $—  $—  $— $602 
Commercial & industrial 6  (13) (70) (3) (23)
Total commercial 6  (13) (70) (3) 579 
Residential real estate   156  68  5   
Home equity 48  65  (2) 73  28 
Other consumer 24  29  19  15  17 
Total consumer 72  94  17  88  45 
Total$78 $237 $15 $90 $624 
      
Net charge-offs to average loans (annualized) 0.01% 0.03% % 0.01% 0.07%

The following table presents average balance and interest rate information.  Tax-exempt income is converted to a fully taxable equivalent basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit.  Unrealized gains (losses) on available for sale securities and fair value adjustments on mortgage loans held for sale are excluded from the average balance and yield calculations.  Nonaccrual loans, as well as interest recognized on these loans, are included in amounts presented for loans.


Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)
(Unaudited; Dollars in thousands)
For the Three Months EndedMarch 31, 2019 December 31, 2018 Quarter Change
 Average BalanceInterestYield/
Rate
 Average BalanceInterestYield/
Rate
 Average BalanceInterestYield/
Rate
 
Assets:           
Cash, federal funds sold and short-term investments$56,359 $340 2.45% $51,584 $294 2.26% $4,775 $46 0.19%
Mortgage loans held for sale 16,587  180 4.40   24,178  289 4.74   (7,591) (109)(0.34)
Taxable debt securities 1,000,911  7,226 2.93   877,186  5,957 2.69   123,725  1,269 0.24 
Nontaxable debt securities 935  10 4.34   935  12 5.09     (2)(0.75)
Total securities 1,001,846  7,236 2.93   878,121  5,969 2.70   123,725  1,267 0.23 
FHLB stock 46,988  695 6.00   44,662  669 5.94   2,326  26 0.06 
Commercial real estate 1,425,225  16,879 4.80   1,309,957  15,500 4.69   115,268  1,379 0.11 
Commercial & industrial 618,364  7,544 4.95   636,156  7,732 4.82   (17,792) (188)0.13 
Total commercial 2,043,589  24,423 4.85   1,946,113  23,232 4.74   97,476  1,191 0.11 
Residential real estate 1,357,835  13,765 4.11   1,348,993  13,516 3.98   8,842  249 0.13 
Home equity 278,581  3,564 5.19   280,085  3,553 5.03   (1,504) 11 0.16 
Other 25,629  316 5.00   26,679  329 4.89   (1,050) (13)0.11 
Total consumer 304,210  3,880 5.17   306,764  3,882 5.02   (2,554) (2)0.15 
Total loans 3,705,634  42,068 4.60   3,601,870  40,630 4.48   103,764  1,438 0.12 
Total interest-earning assets 4,827,414  50,519 4.24   4,600,415  47,851 4.13   226,999  2,668 0.11 
Noninterest-earning assets 268,689     239,743     28,946   
Total assets$5,096,103    $4,840,158    $255,945   
Liabilities and Shareholders' Equity:           
Interest-bearing demand deposits$165,911 $686 1.68% $148,840 $636 1.70% $17,071 $50 (0.02)%
NOW accounts 454,868  84 0.07   455,052  207 0.18   (184) (123)(0.11)
Money market accounts 646,250  1,609 1.01   649,535  1,449 0.89   (3,285) 160 0.12 
Savings accounts 369,219  61 0.07   369,787  60 0.06   (568) 1 0.01 
Time deposits (in-market) 789,378  3,727 1.91   749,025  3,318 1.76   40,353  409 0.15 
Total interest-bearing in-market deposits 2,425,626  6,167 1.03   2,372,239  5,670 0.95   53,387  497 0.08 
Wholesale brokered time deposits 473,799  2,529 2.16   450,336  2,283 2.01   23,463  246 0.15 
Total interest-bearing deposits 2,899,425  8,696 1.22   2,822,575  7,953 1.12   76,850  743 0.10 
FHLB advances 1,027,285  6,661 2.63   878,250  5,446 2.46   149,035  1,215 0.17 
Junior subordinated debentures 22,681  253 4.52   22,681  240 4.20     13 0.32 
Total interest-bearing liabilities 3,949,391  15,610 1.60   3,723,506  13,639 1.45   225,885  1,971 0.15 
Noninterest-bearing demand deposits 607,033     615,392     (8,359)  
Other liabilities 83,438     69,217     14,221   
Shareholders' equity 456,241     432,043     24,198   
Total liabilities and shareholders' equity$5,096,103    $4,840,158    $255,945   
Net interest income (FTE) $34,909    $34,212    $697  
Interest rate spread  2.64%   2.68%   (0.04)%
Net interest margin  2.93%   2.95%   (0.02)%

Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:

For the Three Months EndedMar 31, 2019Dec 31, 2018Quarter Change
Commercial loans$324 $331 ($7)
Nontaxable debt securities 1  3  (2)
Total$325 $334 ($9)



Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures
(Unaudited; Dollars in thousands, except per share amounts)
  
 Mar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Tangible Book Value per Share:     
Total shareholders' equity, as reported$469,843 $448,184 $427,909 $421,571 $413,081 
Less:     
Goodwill 63,909  63,909  63,909  63,909  63,909 
Identifiable intangible assets, net 7,923  8,162  8,400  8,645  8,893 
Total tangible shareholders' equity$398,011 $376,113 $355,600 $349,017 $340,279 
      
Shares outstanding, as reported 17,305  17,302  17,290  17,278  17,262 
      
Book value per share - GAAP$27.15 $25.90 $24.75 $24.40 $23.93 
Tangible book value per share - Non-GAAP$23.00 $21.74 $20.57 $20.20 $19.71 
      
Tangible Equity to Tangible Assets:     
Total tangible shareholders' equity$398,011 $376,113 $355,600 $349,017 $340,279 
      
Total assets, as reported$5,154,729 $5,010,766 $4,770,672 $4,737,242 $4,566,326 
Less:     
Goodwill 63,909  63,909  63,909  63,909  63,909 
Identifiable intangible assets, net 7,923  8,162  8,400  8,645  8,893 
Total tangible assets$5,082,897 $4,938,695 $4,698,363 $4,664,688 $4,493,524 
      
Equity to assets - GAAP 9.11% 8.94% 8.97% 8.90% 9.05%
Tangible equity to tangible assets - Non-GAAP 7.83% 7.62% 7.57% 7.48% 7.57%



For the Three Months EndedMar 31,
2019
Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Return on Average Tangible Assets:     
Net income, as reported$17,495 $17,036 $17,511 $17,674 $16,211 
                
Total average assets, as reported$5,096,103 $4,840,158 $4,724,898 $4,628,816 $4,529,708 
Less average balances of:               
Goodwill 63,909  63,909  63,909  63,909  63,909 
Identifiable intangible assets, net 8,040  8,278  8,519  8,766  9,014 
Total average tangible assets$5,024,154 $4,767,971 $4,652,470 $4,556,141 $4,456,785 
                
Return on average assets - GAAP 1.39% 1.40% 1.47% 1.53% 1.45%
Return on average tangible assets - Non-GAAP 1.41% 1.42% 1.49% 1.56% 1.48%
                
Return on Average Tangible Equity:               
Net income available to common shareholders, as reported$17,461 $17,004 $17,475 $17,636 $16,173 
                
Total average equity, as reported$456,241 $432,043 $426,306 $416,433 $410,955 
Less average balances of:               
Goodwill 63,909  63,909  63,909  63,909  63,909 
Identifiable intangible assets, net 8,040  8,278  8,519  8,766  9,014 
Total average tangible equity$384,292 $359,856 $353,878 $343,758 $338,032 
                
Return on average equity - GAAP 15.52% 15.61% 16.26% 16.99% 15.96%
Return on average tangible equity - Non-GAAP 18.43% 18.75% 19.59% 20.58% 19.40%


Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone:  (401) 348-1309
E-mail:  ebeckel@washtrust.com