Wash Trust doubles profit in 1Q
WESTERLY – Washington Trust Bancorp Inc., parent of The Washington Trust Co., said Wednesday that its first-quarter profit nearly doubled to $5.17 million compared with a year-earlier period that included a $2 million one-time charge.
Earnings per diluted share improved to 32 cents from 17 cents from the first quarter 2009 and beat by 2 cents a consensus estimate from analysts who follow Washington Trust, according to Yahoo! Finance.
The bank recorded $41.25 million in interest and non-interest revenue for the first three months of 2010, slightly lower than the $41.37 million a year earlier, when it earned $2.67 million for the quarter.
In the first quarter 2010, Washington Trust recognized a $63,000 charge for securities deemed to be “other than temporarily impaired.” A year ago, the bank was hit with a $2 million charge, which cut its earnings by 8 cents per diluted share.
The bank also benefited from lower interest rates on deposits. While deposits increased to $1.96 billion as of March 31 – up 4.3 percent from $1.88 billion a year earlier – interest expense on deposits declined to $5.77 million, 39.6 percent lower than the $9.55 million recorded in the first quarter of 2009.
The earnings release comes a little more than a week before Washington Trust changes leadership.
John C. Warren, chairman and CEO since 1996, is retiring on April 30, and Joseph A. MarcAurele, the bank’s president and chief operating office since September, has been selected to take over as chairman, president and CEO.
Despite the improved performance in the first quarter, Warren sounded a guarded note.
“We are pleased with our first-quarter results,” he said in a statement Wednesday afternoon; “however, we remain cautious about what lies ahead in 2010.”
In an interview Wednesday, both Warren and MarcAurele said they were pleased with how the bank’s loan portfolio was holding up – the bank decreased its provision for anticipated bad loans to $1.5 million from $1.7 million in the 2009 first quarter – but added that the state’s high unemployment rate would continue to dampen any local economic recovery.
The bank’s asset quality – as with other financial institutions – had shown signs of deterioration in previous quarters. But it appeared that things improved in the first quarter.
Washington Trust said nonperforming assets – typically loans and leases that are more than 90 days overdue – stood at $25.51 million as of March 31, down from $30.51 million three months earlier.
Those nonperforming assets amounted to 0.95 percent of total assets on March 31, compared with 1.06 percent three months earlier.
MarcAurele said those improved numbers were due in part to “rectifying” two commercial loans that were previously classified as nonperforming. The bank received payouts totaling $2 million and charged off another $200,000, he said.
Net charge-offs – loans that the bank has determined are uncollectible – totaled $1.19 million for the first quarter, up from $1.03 million in the previous quarter.
As of March 31, Washington Trust’s total assets were $2.9 billion, up from $2.88 billion a year ago.
The bank’s returns on average equity and average assets for the first quarter were 8 percent and 0.71 percent, respectively, compared with 4.50 percent and 0.37 percent, respectively, for the same period in 2009.
The bank’s net interest margin widened to 2.78 percent in the period ended March 31, up 26 basis points from the fourth quarter of 2009 and up 39 basis points from a year ago.
Additional information is available at www.washtrust.com.
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