Washington Trust Reports First Quarter 2021 Earnings
04/21/2021 - 04:16 PM
WESTERLY, R.I. , April 21, 2021 /PRNewswire/ -- Washington Trust Bancorp, Inc. (Nasdaq: WASH), parent company of The Washington Trust Company, today announced first quarter 2021 net income of $20.5 million $1.17 per diluted share, compared to net income of $18.6 million $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 $1.8 million Mortgage banking revenues totaled $11.9 million $2.2 million 15% , from the preceding quarter, but up by $5.8 million 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 $689 thousand 7% , from the preceding quarter. Wealth management assets under administration ("AUA") amounted to a record $7.0 billion March 31, 2021 . Total loans amounted to $4.2 billion $104 million 3% , from a year ago. In-market deposits (total deposits less out-of-market wholesale brokered deposits) amounted to a record $4.0 billion March 31, 2021 , up by $227 million 6% , from the end of the preceding quarter, and up by $739 million 23% , from a year ago. Net Interest Income
Net interest income was $32.9 million $628 thousand 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 $423 thousand , or 3 basis points, in the preceding quarter. Linked quarter changes included:
Average interest-earning assets decreased by $47 million $38 million 2.90% , down by 2 basis points from the preceding quarter. Average interest-bearing liabilities decreased by $95 million $183 million $88 million 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 $1.8 million 6% , from the fourth quarter of 2020. Included in other noninterest income in first quarter of 2021 was income of $1.0 million $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 5% . Linked quarter changes included:
Mortgage banking revenues totaled $11.9 million $2.2 million 15% , from the fourth quarter of 2020. Mortgage loans sold to the secondary market amounted to $292 million $26 million 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 $689 thousand 7% , on a linked quarter basis. This included an increase in asset-based revenues of $517 thousand 6% , and an increase in transaction-based revenues of $172 thousand 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.$7.0 billion $182 million , or 3% , from December 31, 2020. The increase reflected net investment appreciation of $209 million $26 million in the first quarter of 2021. The average balance of AUA for the first quarter of 2021 increased by approximately $298 million 5% , from the average balance for the preceding quarter. Noninterest Expense
Noninterest expense totaled $34.7 million $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 $1.4 million $1.3 million 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 $548 thousand 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 Advertising and promotion expense was down by $418 thousand Legal, audit and professional fees were down by $417 thousand Income Tax
Income tax expense totaled $5.7 million $147 thousand 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 $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
Commercial loans increased by $9 million 0.4% , from December 31, 2020 . In the first quarter of 2021, commercial loan originations and construction advances totaled $160 million $97 million $153 million $66 million $2 million Residential real estate loans decreased by $10 million 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 $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 0.26% of total loans, at March 31, 2021, compared to $12.4 million 0.30% of total loans, at December 31, 2020.
Total troubled debt restructured loans ("TDR") amounted to $14.3 million $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 $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 $118 thousand in the preceding quarter.
Capital and Dividends
Total shareholders' equity was $533 .6 million at March 31, 2021, down by $596 thousand $12.6 million $9.1 million $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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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
(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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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
Interest
Yield/
Rate
Average
Interest
Yield/
Rate
Average
Interest
Yield/
Rate
Assets:
Cash, federal funds sold and short-term
$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,
Dec 31,
Quarter
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
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
http://www.prnewswire.com/news-releases/washington-trust-reports-first-quarter-2021-earnings-301274249.html
SOURCE Washington Trust Bancorp, Inc.
