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| 8-K - 8-K - WASHINGTON TRUST BANCORP INC | wash-20210421.htm |
Exhibit 99.1
NASDAQ: WASH
Contact: Elizabeth B. Eckel
SVP, Chief Marketing & Corporate Communications Officer
Telephone: (401) 348-1309
E-mail: ebeckel@washtrust.com
Date: April 21, 2021
FOR IMMEDIATE RELEASE
Washington Trust Reports First Quarter 2021 Earnings
WESTERLY, R.I., April 21, 2021 (PR NEWSWIRE)…Washington Trust Bancorp, Inc. (Nasdaq: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.
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April 21, 2021
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
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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
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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.
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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.
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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.
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| 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 | ||||||||||||
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| 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 | ||||||||||||
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| 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).
-9-
| 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).
-10-
| 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 | % | |||||||||||||||
-11-
| 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 | |||||||||||||||||||||
-12-
| 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 | ||||||||||||
-13-
| 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 | ||||||||||||
-14-
| 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 | % | |||||||
-15-
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) | ||||||||
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| 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 | % | |||||||
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