Washington Trust Reports First Quarter 2021 Earnings

WESTERLY, R.I., April 21, 2021 /PRNewswire/ -- Washington Trust Bancorp, Inc. WASH, parent company of The Washington Trust Company, today announced first quarter 2021 net income of $20.5 million, or $1.17 per diluted share, compared to net income of $18.6 million, or $1.07 per diluted share, for the fourth quarter of 2020. 

"Washington Trust reported strong first quarter results, with an increase in profitability from the fourth quarter of 2020," stated Edward O. Handy III, Washington Trust Chairman and Chief Executive Officer.  "Our team of employees have worked diligently throughout the COVID-19 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."

Selected financial highlights for the first quarter of 2021 include:

  • Returns on average equity and average assets for the first quarter were 15.55% and 1.45%, respectively, compared to 13.96% and 1.28%, respectively, in the preceding quarter.
  • The provision for credit losses was a negative $2.0 million in the first quarter, compared to a positive $1.8 million in the preceding quarter.
  • Mortgage banking revenues totaled $11.9 million for the first quarter, down by $2.2 million, or 15%, from the preceding quarter, but up by $5.8 million, or 96%, from the same period in 2020. First quarter mortgage originations and sales were down compared to the preceding quarter, however, both originations and sales were significantly higher than the first quarter a year ago.
  • Wealth management revenues were $9.9 million for the first quarter, up by $689 thousand, or 7%, from the preceding quarter. Wealth management assets under administration ("AUA") amounted to a record $7.0 billion at March 31, 2021.
  • Total loans amounted to $4.2 billion, down slightly from the end of the preceding quarter and up by $104 million, or 3%, from a year ago.
  • In-market deposits (total deposits less out-of-market wholesale brokered deposits) amounted to a record $4.0 billion at March 31, 2021, up by $227 million, or 6%, from the end of the preceding quarter, and up by $739 million, or 23%, from a year ago.

Net Interest Income

Net interest income was $32.9 million for the first quarter of 2021, up by $628 thousand, or 2%, from the fourth quarter of 2020.  The net interest margin was 2.51% for the first quarter, up by 12 basis points from the preceding quarter.  Both net interest income and the net interest margin benefited from accelerated net deferred fee amortization associated with Paycheck Protection Program ("PPP") loans that were forgiven by the Small Business Association ("SBA").  In the first quarter of 2021, accelerated net deferred fee amortization on PPP loans amounted to approximately $1.2 million, or 9 basis points, compared to $423 thousand, or 3 basis points, in the preceding quarter.  Linked quarter changes included:

  • Average interest-earning assets decreased by $47 million, largely due to a decrease of $38 million in average loans. The yield on interest-earning assets for the first quarter was 2.90%, down by 2 basis points from the preceding quarter.
  • Average interest-bearing liabilities decreased by $95 million, resulting from a decrease of $183 million in average wholesale funding balances, partially offset by an increase of $88 million in average in-market deposits. The cost of interest-bearing liabilities for the first quarter of 2021 was 0.50%, down by 17 basis points from the preceding quarter, reflecting the impact of lower market interest rates.

Noninterest Income

Noninterest income totaled $26.0 million for the first quarter of 2021, down by $1.8 million, or 6%, from the fourth quarter of 2020.  Included in other noninterest income in first quarter of 2021 was income of $1.0 million associated with a litigation settlement.  As previously disclosed, included in other noninterest income in the fourth quarter of 2020 was a gain of $1.4 million associated with the sale of our limited partnership interest in a low-income housing tax credit investment.  Excluding the impact of the aforementioned items, noninterest income was down by $1.4 million, or 5%.  Linked quarter changes included:

  • Mortgage banking revenues totaled $11.9 million for the first quarter of 2021, down by $2.2 million, or 15%, from the fourth quarter of 2020. Mortgage loans sold to the secondary market amounted to $292 million in the first quarter of 2020, down by $26 million, or 8%, from the preceding quarter. Also included in mortgage banking revenues was a decrease in the fair value of mortgage loan commitments as of March 31, 2021.
  • Wealth management revenues amounted to $9.9 million in the first quarter of 2021, up by $689 thousand, or 7%, on a linked quarter basis. This included an increase in asset-based revenues of $517 thousand, or 6%, and an increase in transaction-based revenues of $172 thousand, or 123%, from the preceding quarter. The increase in transaction-based revenues was largely due to tax reporting and preparation fees, which are generally concentrated in the first half of the year.

    Wealth management AUA amounted to $7.0 billion at March 31, 2021, up by $182 million, or 3%, from December 31, 2020.  The increase reflected net investment appreciation of $209 million, partially offset by net client asset outflows of $26 million in the first quarter of 2021.  The average balance of AUA for the first quarter of 2021 increased by approximately $298 million, or 5%, from the average balance for the preceding quarter.

Noninterest Expense

Noninterest expense totaled $34.7 million for the first quarter of 2021, up by $604 thousand, or 2%, from the fourth quarter of 2020.  In both the first quarter of 2021 and the fourth quarter of 2020, debt prepayment penalty expense was recognized resulting from paying off higher-yielding FHLB advances.  Debt prepayment penalty expense was $3.3 million in the first quarter of 2021, compared to $1.4 million in the preceding quarter.  Excluding the impact of debt prepayment penalty expense from both periods, noninterest expense was down by $1.3 million, or 4%, from the fourth quarter of 2020.  Linked quarter changes included:

  • Salaries and employee benefits expense, our largest noninterest expense, amounted to $21.5 million for the first quarter of 2021, down by $548 thousand, or 2%, from the preceding quarter. The decline reflected lower incentive compensation and higher deferred labor (contra expense), which were partially offset by higher payroll taxes associated with the start of the new calendar year. Deferred labor increased by approximately $560 thousand on a linked quarter basis and was largely due to first quarter PPP loan originations.
  • Advertising and promotion expense was down by $418 thousand from the preceding quarter, largely due to timing of such activities.
  • Legal, audit and professional fees were down by $417 thousand from the preceding quarter, reflecting a decline in legal expenses.

Income Tax

Income tax expense totaled $5.7 million for the first quarter of 2021, up by $147 thousand from the preceding quarter, reflecting a higher level of pre-tax income.  The effective tax rate for the first quarter of 2021 was 21.7%, compared to 22.9% in the preceding quarter.  Based on current federal and applicable state income statutes, the Corporation currently expects its full-year 2021 effective tax rate to be approximately 22.3%.

Investment Securities

The securities portfolio totaled $948 million at March 31, 2021, up by $54 million, or 6%, from December 31, 2020, reflecting purchases of U.S. government agency and U.S. government-sponsored debt securities, including mortgage-backed securities, which were partially offset by routine pay-downs on mortgage-backed securities and calls of debt securities.  Purchases of debt securities in the first quarter 2021 totaled $208 million, with a weighted average yield of 1.44%.  Securities represented 17% of total assets at March 31, 2021, compared to 16% of total assets at December 31, 2020.

Loans

Total loans amounted to $4.2 billion at March 31, 2021, down by $1 million, from the end of the preceding quarter.  Linked quarter changes included:

  • Commercial loans increased by $9 million, or 0.4%, from December 31, 2020. In the first quarter of 2021, commercial loan originations and construction advances totaled $160 million and included $97 million of PPP loan originations. This was largely offset by payoffs and pay-downs totaling $153 million, which included $66 million of PPP loans that were forgiven by the SBA. Commercial line utilization increased modestly by $2 million.
  • Residential real estate loans decreased by $10 million, or 1%, from December 31, 2020, reflecting continued elevated payoff and refinancing activity.
  • The consumer loan portfolio was essentially unchanged from the balance at December 31, 2020.

Deposits and Borrowings

Total deposits amounted to $4.5 billion at March 31, 2021, up by $171 million, or 4%, from the end of the preceding quarter.  Included in total deposits are out-of-market wholesale brokered time deposits, which decreased by $56 million, or 9%, from December 31, 2020.  Excluding wholesale brokered time deposits, in-market deposits at March 31, 2021 were up by $227 million, or 6%, from the end of the preceding quarter.  This increase reflected a continuation of consumer behavior fostering excess liquidity across the banking industry, as well as temporary increases associated with PPP loan origination funds deposited to customer accounts at Washington Trust.

FHLB advances totaled $467 million at March 31, 2021, down by $127 million from December 31, 2020.

Asset Quality

Nonperforming assets amounted to $13.0 million at March 31, 2021, down by $214 thousand from the end of the preceding quarter.  Total nonaccrual loans amounted to $13.0 million, or 0.31% of total loans, at March 31, 2021, compared to $13.2 million, or 0.31% of total loans, at December 31, 2020.

Total past due loans amounted to $10.9 million, or 0.26% of total loans, at March 31, 2021, compared to $12.4 million, or 0.30% of total loans, at December 31, 2020.

Total troubled debt restructured loans ("TDR") amounted to $14.3 million as of March 31, 2021, down by $1.4 million from December 31, 2020, reflecting payoffs.

Since the beginning of the COVID-19 pandemic, Washington Trust has processed loan payment deferral modifications, or "deferments", on 652 loans totaling $727 million.  The majority of these deferments qualified as eligible loan modifications under Section 4013 of the CARES Act, as amended, and therefore, were not required to be classified as TDRs and were not reported as past due.  As of April 16, 2021, Washington Trust has active deferments remaining on 59 loans totaling $149.7 million, or 4% of the outstanding balance of total loans, excluding PPP loan balances.

The allowance for credit losses ("ACL") on loans amounted to $42.1 million, or 1.00% of total loans, at March 31, 2021, compared to $44.1 million, or 1.05% of total loans, at December 31, 2020.  The ACL on unfunded commitments, included in other liabilities on the Consolidated Balance Sheets, amounted to $2.3 million at March 31, 2021 as compared to $2.4 million, at December 31, 2020.

In the first quarter of 2021, a negative provision for credit losses of $2.0 million was recognized in earnings, compared to a positive provision for credit losses of $1.8 million in the preceding quarter.  The reduction in the provision for credit losses and the ACL reflected our current estimate of forecasted economic conditions and continued stable asset quality metrics.  In the first quarter of 2021, net charge-offs of $18 thousand were recognized, compared to $118 thousand in the preceding quarter.

Capital and Dividends

Total shareholders' equity was $533.6 million at March 31, 2021, down by $596 thousand from December 31, 2020.  The decline reflected a decrease of $12.6 million in the accumulated other comprehensive income component of shareholders' equity largely due to a temporary decline in the fair value of available for sale debt securities, as well as $9.1 million in dividend declarations.  These decreases were partially offset by net income of $20.5 million.

Capital levels at March 31, 2021 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 13.85% at March 31, 2021, compared to 13.51% at December 31, 2020.

Book value per share amounted to $30.83 at March 31, 2021, compared to $30.94 at December 31, 2020.

The Board of Directors declared a quarterly dividend of 52 cents per share for the quarter ended March 31, 2021.  The dividend was paid on April 9, 2021 to shareholders of record on April 1, 2021.

Conference Call

Washington Trust will host a conference call to discuss its first quarter results, business highlights and outlook on Thursday, April 22, 2021 at 8:30 a.m. (Eastern Time).  Individuals may dial in to the call at 1-844-378-6480.  An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-877-344-7529 and entering the Replay PIN Number 10154444; the audio replay will be available through May 6, 2021.  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, 2021.

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: the negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions or adverse economic developments; 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; decreases in the value of securities and other assets; reductions in loan demand; changes in loan collectability, increases in defaults and charge-off rates; changes in the size and nature of our competition; changes in legislation or regulation and accounting principles, policies and guidelines; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; reputational risk relating to our participation in the Paycheck Protection Program and other pandemic-related legislative and regulatory initiatives and programs; 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, 2020, 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,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Assets:











Cash and due from banks

$166,960



$194,143



$204,113



$215,601



$178,678



Short-term investments

3,783



8,125



7,902



7,739



6,591



Mortgage loans held for sale, at fair value

77,450



61,614



68,095



43,997



49,751



Available for sale debt securities, at fair value

948,094



894,571



913,850



938,446



917,392



Federal Home Loan Bank stock, at cost

24,772



30,285



37,469



50,017



53,576



Loans:











Total loans

4,194,666



4,195,990



4,282,047



4,287,641



4,090,396



Less: allowance for credit losses on loans

42,137



44,106



42,645



41,441



39,665



Net loans

4,152,529



4,151,884



4,239,402



4,246,200



4,050,731



Premises and equipment, net

28,953



28,870



27,711



28,067



28,543



Operating lease right-of-use assets

28,761



29,521



29,861



27,022



26,098



Investment in bank-owned life insurance

84,749



84,193



83,623



83,056



83,053



Goodwill

63,909



63,909



63,909



63,909



63,909



Identifiable intangible assets, net

6,079



6,305



6,530



6,759



6,988



Other assets

133,350



159,749



167,327



166,147



155,669



Total assets

$5,719,389



$5,713,169



$5,849,792



$5,876,960



$5,620,979



Liabilities:











Deposits:











Noninterest-bearing deposits

$932,999



$832,287



$840,444



$815,770



$622,893



Interest-bearing deposits

3,616,143



3,546,066



3,445,249



3,285,666



3,083,421



Total deposits

4,549,142



4,378,353



4,285,693



4,101,436



3,706,314



Federal Home Loan Bank advances

466,912



593,859



713,868



1,005,051



1,198,534



Payment Protection Program Lending Facility





105,746



38,900





Junior subordinated debentures

22,681



22,681



22,681



22,681



22,681



Operating lease liabilities

30,974



31,717



32,012



29,125



28,184



Other liabilities

116,081



152,364



162,099



159,604



156,669



Total liabilities

5,185,790



5,178,974



5,322,099



5,356,797



5,112,382



Shareholders' Equity:











Common stock

1,085



1,085



1,085



1,085



1,085



Paid-in capital

124,882



125,610



124,768



123,684



123,167



Retained earnings

429,598



418,246



408,773



399,386



387,243



Accumulated other comprehensive (loss) income

(20,006)



(7,391)



(3,403)



(462)



929



Treasury stock, at cost

(1,960)



(3,355)



(3,530)



(3,530)



(3,827)



Total shareholders' equity

533,599



534,195



527,693



520,163



508,597



Total liabilities and shareholders' equity

$5,719,389



$5,713,169



$5,849,792



$5,876,960



$5,620,979



 

 

Washington Trust Bancorp, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited; Dollars and shares in thousands, except per share amounts)



For the Three Months Ended



Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Interest income:











Interest and fees on loans

$34,159



$34,487



$34,925



$36,005



$40,008



Interest on mortgage loans held for sale

441



569



468



440



285



Taxable interest on debt securities

3,242



3,869



4,870



5,477



5,834



Dividends on Federal Home Loan Bank stock

133



414



532



654



640



Other interest income

33



35



39



36



349



Total interest and dividend income

38,008



39,374



40,834



42,612



47,116



Interest expense:











Deposits

3,663



4,632



5,532



7,112



8,536



Federal Home Loan Bank advances

1,380



2,305



3,354



4,382



5,765



Junior subordinated debentures

94



122



135



171



213



Other interest expense



72



159



2





Total interest expense

5,137



7,131



9,180



11,667



14,514



Net interest income

32,871



32,243



31,654



30,945



32,602



Provision for credit losses

(2,000)



1,781



1,325



2,200



7,036



Net interest income after provision for credit losses

34,871



30,462



30,329



28,745



25,566



Noninterest income:











Wealth management revenues

9,895



9,206



8,954



8,605



8,689



Mortgage banking revenues

11,927



14,077



12,353



14,851



6,096



Card interchange fees

1,133



1,148



1,161



1,031



947



Service charges on deposit accounts

609



767



598



517



860



Loan related derivative income

467



173



1,264



99



2,455



Income from bank-owned life insurance

556



569



567



791



564



Other income

1,387



1,787



571



426



316



Total noninterest income

25,974



27,727



25,468



26,320



19,927



Noninterest expense:











Salaries and employee benefits

21,527



22,075



21,892



19,464



19,468



Outsourced services

3,200



2,950



3,160



2,784



3,000



Net occupancy

2,128



2,083



2,012



1,909



2,019



Equipment

994



1,025



934



895



977



Legal, audit and professional fees

597



1,014



1,252



659



822



FDIC deposit insurance costs

345



330



392



674



422



Advertising and promotion

222



640



384



186



259



Amortization of intangibles

226



226



228



230



230



Debt prepayment penalties

3,335



1,413









Other expenses

2,139



2,353



2,090



1,677



3,256



Total noninterest expense

34,713



34,109



32,344



28,478



30,453



Income before income taxes

26,132



24,080



23,453



26,587



15,040



Income tax expense

5,661



5,514



5,131



5,547



3,139



Net income

$20,471



$18,566



$18,322



$21,040



$11,901















Net income available to common shareholders

$20,415



$18,524



$18,285



$21,000



$11,869















Weighted average common shares outstanding:











  Basic

17,275



17,264



17,260



17,257



17,345



  Diluted

17,431



17,360



17,317



17,292



17,441



Earnings per common share:











  Basic

$1.18



$1.07



$1.06



$1.22



$0.68



  Diluted

$1.17



$1.07



$1.06



$1.21



$0.68















Cash dividends declared per share

$0.52



$0.52



$0.51



$0.51



$0.51



 

 

Washington Trust Bancorp, Inc. and Subsidiaries

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited; Dollars and shares in thousands, except per share amounts)







Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Share and Equity Related Data:











Book value per share

$30.83



$30.94



$30.57



$30.14



$29.48



Tangible book value per share - Non-GAAP (1)

$26.79



$26.87



$26.49



$26.04



$25.37



Market value per share

$51.63



$44.80



$30.66



$32.75



$36.56



Shares issued at end of period

17,363



17,363



17,363



17,363



17,363



Shares outstanding at end of period

17,306



17,265



17,260



17,260



17,252















Capital Ratios (2):











Tier 1 risk-based capital

12.99

%

12.61

%

12.23

%

11.95

%

11.62

%

Total risk-based capital

13.85

%

13.51

%

13.09

%

12.78

%

12.42

%

Tier 1 leverage ratio

9.11

%

8.95

%

8.77

%

8.42

%

8.77

%

Common equity tier 1

12.43

%

12.06

%

11.69

%

11.40

%

11.08

%













Balance Sheet Ratios:











Equity to assets

9.33

%

9.35

%

9.02

%

8.85

%

9.05

%

Tangible equity to tangible assets - Non-GAAP (1)

8.21

%

8.22

%

7.91

%

7.74

%

7.89

%

Loans to deposits (3)

93.0

%

96.2

%

100.5

%

104.6

%

110.6

%











For the Three Months Ended



Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Performance Ratios (4):











Net interest margin (5)

2.51

%

2.39

%

2.31

%

2.31

%

2.61

%

Return on average assets (net income divided by average assets)

1.45

%

1.28

%

1.24

%

1.46

%

0.89

%

Return on average tangible assets - Non-GAAP (1)

1.47

%

1.30

%

1.26

%

1.48

%

0.90

%

Return on average equity (net income available for common shareholders

   divided by average equity)

15.55

%

13.96

%

13.99

%

16.51

%

9.49

%

Return on average tangible equity - Non-GAAP (1)

17.91

%

16.10

%

16.19

%

19.15

%

11.05

%

Efficiency ratio (6)

59.0

%

56.9

%

56.6

%

49.7

%

58.0

%



(1)  See the section labeled "Supplemental Information - Calculation of Non-GAAP Financial Measures" at the end of this document.

(2)  Estimated for March 31, 2021 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 Ended



Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Wealth Management Results











Wealth Management Revenues:











Asset-based revenues

$9,583



$9,066



$8,786



$8,156



$8,355



Transaction-based revenues

312



140



168



449



334



Total wealth management revenues

$9,895



$9,206



$8,954



$8,605



$8,689















Assets Under Administration (AUA):











Balance at beginning of period

$6,866,737



$6,395,652



$6,138,845



$5,337,733



$6,235,801



Net investment appreciation (depreciation) & income

208,953



540,189



335,209



671,602



(772,735)



Net client asset (outflows) inflows

(26,464)



(69,104)



(78,402)



129,510



(125,333)



Balance at end of period

$7,049,226



$6,866,737



$6,395,652



$6,138,845



$5,337,733















Percentage of AUA that are managed assets

91%



91%



90%



90%



89%















Mortgage Banking Results











Mortgage Banking Revenues:











Realized gains on loan sales, net (1)

$13,745



$13,394



$14,280



$10,646



$3,688



Unrealized (losses) gains, net (2)

(1,888)



813



(1,555)



4,415



2,325



Loan servicing fee income, net (3)

70



(130)



(372)



(210)



83



Total mortgage banking revenues

$11,927



$14,077



$12,353



$14,851



$6,096















Residential Mortgage Loan Originations:











Originations for retention in portfolio (4)

$131,791



$134,002



$132,726



$126,894



$108,498



Originations for sale to secondary market (5)

309,325



312,226



377,137



299,321



183,222



Total mortgage loan originations

$441,116



$446,228



$509,863



$426,215



$291,720















Residential Mortgage Loans Sold:











Sold with servicing rights retained

$226,645



$240,104



$317,920



$246,945



$44,498



Sold with servicing rights released (5)

65,374



78,072



36,250



58,279



117,693



Total mortgage loans sold

$292,019



$318,176



$354,170



$305,224



$162,191





(1)  Includes gains on loan sales, commission income on loans originated for others, servicing right gains, and gains (losses) on forward loan commitments.

(2)  Represents fair value adjustments on mortgage loans held for sale and forward loan commitments.

(3)  Represents loan servicing fee income, net of servicing right amortization and valuation adjustments.

(4)  Includes the full commitment amount of homeowner construction loans.

(5)  Includes brokered loans (loans originated for others).

 

 

Washington Trust Bancorp, Inc. and Subsidiaries

END OF PERIOD LOAN COMPOSITION

(Unaudited; Dollars in thousands)







Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Loans:











Commercial real estate (1)

$1,618,540



$1,633,024



$1,665,745



$1,630,998



$1,618,020



Commercial & industrial

840,585



817,408



822,269



852,445



655,157



Total commercial

2,459,125



2,450,432



2,488,014



2,483,443



2,273,177















Residential real estate (2)

1,457,490



1,467,312



1,506,726



1,508,223



1,510,472















Home equity

256,799



259,185



268,551



277,632



287,134



Other

21,252



19,061



18,756



18,343



19,613



Total consumer

278,051



278,246



287,307



295,975



306,747



Total loans

$4,194,666



$4,195,990



$4,282,047



$4,287,641



$4,090,396





(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, 2021



December 31, 2020



Count

Balance

% of Total



Count

Balance

% of Total

Commercial Real Estate Portfolio Segmentation:















Multi-family dwelling

135



$506,813



31

%



137



$524,874



32

%

Retail

131



345,679



21





136



339,569



21



Office

74



292,087



18





73



290,756



18



Hospitality

39



168,094



10





40



157,720



10



Healthcare

15



116,779



7





15



109,321



7



Industrial and warehouse

23



77,537



5





28



97,055



6



Commercial mixed use

20



41,702



3





22



42,405



3



Other

37



69,849



5





38



71,324



3



Commercial real estate loans

474



$1,618,540



100

%



489



$1,633,024



100

%

















Commercial & Industrial Portfolio Segmentation:















Healthcare and social assistance

299



$196,555



23

%



253



$200,217



24

%

Manufacturing

161



89,118



11





146



88,802



11



Owner occupied and other real estate

277



76,704



9





268



74,309



9



Accommodation and food services

359



69,380



8





271



47,020



6



Educational services

65



67,694



8





53



64,969



8



Retail

201



57,128



7





192



63,895



8



Professional, scientific and technical

277



39,957



5





265



39,295



5



Finance and insurance

90



31,185



4





106



26,244



3



Entertainment and recreation

112



30,241



4





91



29,415



4



Information

36



29,005



3





32



28,394



3



Transportation and warehousing

46



23,727



3





42



24,061



3



Public administration

24



19,700



2





26



23,319



3



Other

919



110,191



13





772



107,468



13



Commercial & industrial loans

2,866



$840,585



100

%



2,517



$817,408



100

%

 

 

Washington Trust Bancorp, Inc. and Subsidiaries

SUPPLEMENTAL LOAN PORTFOLIO INFORMATION

(Unaudited; Dollars in thousands)



















March 31, 2021



April 16, 2021



Count

Balance

% of Outstanding Balance, excl PPP loans (1)



Count

Balance

% of Outstanding Balance, excl PPP loans (1)

Loan Deferments by Portfolio:















Commercial Real Estate Deferments by Segment:















Hospitality

16



$69,406



41

%



12



$51,357



31

%

Retail

3



20,600



6





3



20,600



6



Healthcare

1



18,345



16





1



18,385



16



Office

1



1,833



1





1



1,833



1



Other

7



27,749



40





7



27,749



40



Subtotal - commercial real estate deferments

28



137,933



9





24



119,924



7



Commercial & Industrial Deferments by Segment:















Healthcare and social assistance

5



19,855



13





3



12,949



9



Transportation and warehousing

3



814



4











Entertainment and recreation

2



424



2











Owner occupied and other real estate

1



326



1











Accommodation and food services

1



304



1





1



304



1



Other

5



7,693



12











Subtotal - commercial & industrial deferments

17



29,416



5





4



13,253



2



Total commercial deferments

45



167,349



8





28



133,177



6



Residential real estate deferments

38



23,350



2





26



15,813



1



Consumer deferments

5



687







5



687





Total loan deferments

88



$191,386



5

%



59



$149,677



4

%



(1)  Percent of respective outstanding portfolio segment balance, excluding PPP loans, as of March 31, 2021.

 

 



March 31, 2021



December 31, 2020



Count

Balance

% of Total



Count

Balance

% of Total

PPP Loans By Industry:















Accommodation and food services

299



$46,873



21

%



209



$23,678



12

%

Healthcare and social assistance

224



44,902



20





173



47,354



24



Manufacturing

100



22,564



10





89



23,321



12



Professional, scientific and technical

235



21,444



9





220



20,031



10



Retail

143



12,209



5





134



12,107



6



Educational services

43



11,243



5





32



9,681



5



Owner occupied and other real estate

123



9,658



4





115



9,241



5



Entertainment and recreation

85



4,797



2





61



3,386



2



Information

24



3,325



1





20



2,478



1



Transportation and warehousing

23



2,088



1





21



2,059



1



Finance and insurance

37



1,102







55



2,000



1



Public administration

5



421







4



483





Other

724



47,957



22





573



43,961



21



Total PPP loans (included in the commercial & industrial loan portfolio)

2,065



$228,583



100

%



1,706



$199,780



100

%

















Average PPP loan size



$111









$117





Net unamortized fees on PPP loans



$5,747









$3,893





 

 

Washington Trust Bancorp, Inc. and Subsidiaries

END OF PERIOD LOAN AND DEPOSIT COMPOSITION

(Unaudited; Dollars in thousands)















March 31, 2021



December 31, 2020



Balance

% of Total



Balance

% of Total

Commercial Real Estate Loans by Property Location:











Connecticut

$641,757



40

%



$649,919



40

%

Massachusetts

456,379



28





468,947



29



Rhode Island

435,779



27





431,133



26



Subtotal

1,533,915



95





1,549,999



95



All other states

84,625



5





83,025



5



Total commercial real estate loans

$1,618,540



100

%



$1,633,024



100

%













Residential Real Estate Loans by Property Location:











Massachusetts

$985,925



68

%



$994,800



68

%

Rhode Island

332,846



23





331,713



23



Connecticut

117,068



8





122,102



8



Subtotal

1,435,839



99





1,448,615



99



All other states

21,651



1





18,697



1



Total residential real estate loans

$1,457,490



100

%



$1,467,312



100

%

 

 



Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Deposits:











Noninterest-bearing demand deposits

$932,999



$832,287



$840,444



$815,770



$622,893



Interest-bearing demand deposits

171,571



174,290



170,198



158,343



178,391



NOW accounts

745,376



698,706



644,909



617,792



528,650



Money market accounts

950,413



910,167



877,536



834,954



784,893



Savings accounts

511,759



466,507



439,383



417,195



382,509



Time deposits (in-market)

701,524



704,855



729,058



728,801



776,992



In-market deposits

4,013,642



3,786,812



3,701,528



3,572,855



3,274,328



Wholesale brokered time deposits

535,500



591,541



584,165



528,581



431,986



Total deposits

$4,549,142



$4,378,353



$4,285,693



$4,101,436



$3,706,314



 

 

Washington Trust Bancorp, Inc. and Subsidiaries

CREDIT & ASSET QUALITY DATA

(Unaudited; Dollars in thousands)







Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Asset Quality Ratios:











Nonperforming assets to total assets

0.23

%

0.23

%

0.25

%

0.27

%

0.32

%

Nonaccrual loans to total loans

0.31

%

0.31

%

0.34

%

0.37

%

0.44

%

Total past due loans to total loans

0.26

%

0.30

%

0.24

%

0.34

%

0.40

%

Allowance for credit losses on loans to nonaccrual loans

324.56

%

334.21

%

289.31

%

258.73

%

221.37

%

Allowance for credit losses on loans to total loans

1.00

%

1.05

%

1.00

%

0.97

%

0.97

%













Nonperforming Assets:











Commercial real estate

$—



$—



$431



$431



$450



Commercial & industrial









290



Total commercial





431



431



740



Residential real estate

11,748



11,981



12,792



13,850



15,423



Home equity

1,147



1,128



1,429



1,648



1,667



Other consumer

88



88



88



88



88



Total consumer

1,235



1,216



1,517



1,736



1,755



Total nonaccrual loans

12,983



13,197



14,740



16,017



17,918



Other real estate owned









28



Total nonperforming assets

$12,983



$13,197



$14,740



$16,017



$17,946















Past Due Loans (30 days or more past due):











Commercial real estate

$—



$265



$431



$431



$1,275



Commercial & industrial

1



3



21



3



310



Total commercial

1



268



452



434



1,585



Residential real estate

9,661



10,339



8,081



12,499



12,293



Home equity

1,131



1,667



1,753



1,633



2,482



Other consumer

119



118



108



106



115



Total consumer

1,250



1,785



1,861



1,739



2,597



Total past due loans

$10,912



$12,392



$10,394



$14,672



$16,475















Accruing loans 90 days or more past due

$—



$—



$—



$—



$—



Nonaccrual loans included in past due loans

$8,356



$8,521



$8,799



$10,553



$11,385















Troubled Debt Restructurings:











Accruing TDRs

$12,358



$13,340



$5,709



$5,473



$373



Nonaccrual TDRs

1,935



2,345



2,894



998



490



Total TDRs

$14,293



$15,685



$8,603



$6,471



$863



 

 

Washington Trust Bancorp, Inc. and Subsidiaries

CREDIT & ASSET QUALITY DATA

(Unaudited; Dollars in thousands)



For the Three Months Ended



Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Nonaccrual Loan Activity:











Balance at beginning of period

$13,197



$14,740



$16,017



$17,918



$17,408



Additions to nonaccrual status

734



707



971



237



1,729



Loans returned to accruing status

(3)



(1,112)



(1,623)



(154)



(393)



Loans charged-off

(64)



(246)



(111)



(325)



(635)



Loans transferred to other real estate owned



(285)







(28)



Payments, payoffs and other changes

(881)



(607)



(514)



(1,659)



(163)



Balance at end of period

$12,983



$13,197



$14,740



$16,017



$17,918















Allowance for Credit Losses on Loans:











Balance at beginning of period

$44,106



$42,645



$41,441



$39,665



$27,014



Adoption of CECL accounting standard (Topic 326)









6,501



Provision for credit losses on loans (1)

(1,951)



1,579



1,300



2,084



6,773



Charge-offs

(64)



(245)



(111)



(326)



(635)



Recoveries

46



127



15



18



12



Balance at end of period

$42,137



$44,106



$42,645



$41,441



$39,665















Allowance for Credit Losses on Unfunded Commitments:









Balance at beginning of period

$2,382



$2,180



$2,155



$2,039



$293



Adoption of CECL accounting standard (Topic 326)









1,483



Provision for credit losses on unfunded commitments (1)

(49)



202



25



116



263



Balance at end of period (2)

$2,333



$2,382



$2,180



$2,155



$2,039



(1)   Included in provision for credit losses in the Consolidated Statements of Income.

(2)   Included in other liabilities in the Consolidated Balance Sheets.

 

 



For the Three Months Ended



Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Net Loan Charge-Offs (Recoveries):











Commercial real estate

$—



$133



$—



$19



$153



Commercial & industrial

1



(12)





284



290



Total commercial

1



121





303



443



Residential real estate

17



(20)



99







Home equity

(2)



9



(4)



(5)



172



Other consumer

2



8



1



10



8



Total consumer



17



(3)



5



180



Total

$18



$118



$96



$308



$623















Net charge-offs to average loans (annualized)

%

0.01

%

0.01

%

0.03

%

0.06

%

 

 

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 Ended

March 31, 2021



December 31, 2020



Quarter Change



Average

Balance

Interest

Yield/

Rate



Average

Balance

Interest

Yield/

Rate



Average

Balance

Interest

Yield/

Rate

Assets:























Cash, federal funds sold and short-term

   investments

$154,895



$33



0.09

%



$172,731



$35



0.08

%



($17,836)



($2)



0.01

%

Mortgage loans held for sale

61,408



441



2.91





71,113



569



3.18





(9,705)



(128)



(0.27)



Taxable debt securities

915,864



3,242



1.44





892,112



3,869



1.73





23,752



(627)



(0.29)



FHLB stock

28,867



133



1.87





33,320



414



4.94





(4,453)



(281)



(3.07)



Commercial real estate

1,625,859



11,359



2.83





1,658,809



11,905



2.86





(32,950)



(546)



(0.03)



Commercial & industrial

839,740



7,866



3.80





818,611



7,174



3.49





21,129



692



0.31



Total commercial

2,465,599



19,225



3.16





2,477,420



19,079



3.06





(11,821)



146



0.10



Residential real estate

1,454,323



12,817



3.57





1,475,699



13,206



3.56





(21,376)



(389)



0.01



Home equity

257,733



2,122



3.34





264,811



2,229



3.35





(7,078)



(107)



(0.01)



Other

20,106



241



4.86





18,209



226



4.94





1,897



15



(0.08)



Total consumer

277,839



2,363



3.45





283,020



2,455



3.45





(5,181)



(92)





Total loans

4,197,761



34,405



3.32





4,236,139



34,740



3.26





(38,378)



(335)



0.06



Total interest-earning assets

5,358,795



38,254



2.90





5,405,415



39,627



2.92





(46,620)



(1,373)



(0.02)



Noninterest-earning assets

353,136









362,848









(9,712)







Total assets

$5,711,931









$5,768,263









($56,332)







Liabilities and Shareholders' Equity:























Interest-bearing demand deposits

$183,989



$96



0.21

%



$161,664



$81



0.20

%



$22,325



$15



0.01

%

NOW accounts

697,964



102



0.06





664,055



115



0.07





33,909



(13)



(0.01)



Money market accounts

909,890



714



0.32





903,607



963



0.42





6,283



(249)



(0.10)



Savings accounts

489,851



69



0.06





455,933



70



0.06





33,918



(1)





Time deposits (in-market)

703,580



2,238



1.29





711,838



2,566



1.43





(8,258)



(328)



(0.14)



Total interest-bearing in-market deposits

2,985,274



3,219



0.44





2,897,097



3,795



0.52





88,177



(576)



(0.08)



Wholesale brokered time deposits

579,149



444



0.31





589,272



837



0.57





(10,123)



(393)



(0.26)



Total interest-bearing deposits

3,564,423



3,663



0.42





3,486,369



4,632



0.53





78,054



(969)



(0.11)



FHLB advances

542,684



1,380



1.03





634,081



2,305



1.45





(91,397)



(925)



(0.42)



Junior subordinated debentures

22,681



94



1.68





22,681



122



2.14







(28)



(0.46)



PPPLF borrowings









81,858



72



0.35





(81,858)



(72)



(0.35)



Total interest-bearing liabilities

4,129,788



5,137



0.50





4,224,989



7,131



0.67





(95,201)



(1,994)



(0.17)



Noninterest-bearing demand deposits

890,628









838,713









51,915







Other liabilities

159,244









176,592









(17,348)







Shareholders' equity

532,271









527,969









4,302







Total liabilities and shareholders' equity

$5,711,931









$5,768,263









($56,332)







Net interest income (FTE)



$33,117









$32,496









$621





Interest rate spread





2.40

%







2.25

%







0.15

%

Net interest margin





2.51

%







2.39

%







0.12

%

 

 

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

For the Three Months Ended                                                                    

Mar 31,

2021

Dec 31,

2020

Quarter

Change

Commercial loans

$246

$253

($7)

Total

$246

$253

($7)

 

 

Washington Trust Bancorp, Inc. and Subsidiaries

SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures

(Unaudited; Dollars in thousands, except per share amounts)







Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Tangible Book Value per Share:











Total shareholders' equity, as reported

$533,599



$534,195



$527,693



$520,163



$508,597



Less:











Goodwill

63,909



63,909



63,909



63,909



63,909



Identifiable intangible assets, net

6,079



6,305



6,530



6,759



6,988



Total tangible shareholders' equity

$463,611



$463,981



$457,254



$449,495



$437,700















Shares outstanding, as reported

17,306



17,265



17,260



17,260



17,252















Book value per share - GAAP

$30.83



$30.94



$30.57



$30.14



$29.48



Tangible book value per share - Non-GAAP

$26.79



$26.87



$26.49



$26.04



$25.37















Tangible Equity to Tangible Assets:











Total tangible shareholders' equity

$463,611



$463,981



$457,254



$449,495



$437,700















Total assets, as reported

$5,719,389



$5,713,169



$5,849,792



$5,876,960



$5,620,979



Less:











Goodwill

63,909



63,909



63,909



63,909



63,909



Identifiable intangible assets, net

6,079



6,305



6,530



6,759



6,988



Total tangible assets

$5,649,401



$5,642,955



$5,779,353



$5,806,292



$5,550,082















Equity to assets - GAAP

9.33

%

9.35

%

9.02

%

8.85

%

9.05

%

Tangible equity to tangible assets - Non-GAAP

8.21

%

8.22

%

7.91

%

7.74

%

7.89

%







For the Three Months Ended



Mar 31,

2021

Dec 31,

2020

Sep 30,

2020

Jun 30,

2020

Mar 31,

2020

Return on Average Tangible Assets:











Net income, as reported

$20,471



$18,566



$18,322



$21,040



$11,901















Total average assets, as reported

$5,711,931



$5,768,263



$5,864,449



$5,789,692



$5,394,948



Less average balances of:











Goodwill

63,909



63,909



63,909



63,909



63,909



Identifiable intangible assets, net

6,189



6,414



6,641



6,871



7,100



Total average tangible assets

$5,641,833



$5,697,940



$5,793,899



$5,718,912



$5,323,939















Return on average assets - GAAP

1.45

%

1.28

%

1.24

%

1.46

%

0.89

%

Return on average tangible assets - Non-GAAP

1.47

%

1.30

%

1.26

%

1.48

%

0.90

%













Return on Average Tangible Equity:











Net income available to common shareholders, as reported

$20,415



$18,524



$18,285



$21,000



$11,869















Total average equity, as reported

$532,271



$527,969



$519,785



$511,751



$503,124



Less average balances of:











Goodwill

63,909



63,909



63,909



63,909



63,909



Identifiable intangible assets, net

6,189



6,414



6,641



6,871



7,100



Total average tangible equity

$462,173



$457,646



$449,235



$440,971



$432,115















Return on average equity - GAAP

15.55

%

13.96

%

13.99

%

16.51

%

9.49

%

Return on average tangible equity - Non-GAAP

17.91

%

16.10

%

16.19

%

19.15

%

11.05

%

 

Category: Earnings

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/washington-trust-reports-first-quarter-2021-earnings-301274249.html

SOURCE Washington Trust Bancorp, Inc.

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