UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
WASHINGTON TRUST BANCORP, INC. |
Rhode Island | 001-32991 | 05-0404671 | ||
(State or other jurisdiction of | (Commission File Number) | (IRS Employer Identification No.) | ||
incorporation) |
23 Broad Street | ||||
Westerly, Rhode Island | 02891 | |||
(Address of Principal Executive Offices) | (Zip Code) |
(401) 348-1200 |
(Registrant's telephone number, including area code) |
N/A |
(Former name or address, if changed from last report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition |
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the |
Exchange Act. o |
(d) | Exhibits. | |||
Exhibit No. | Exhibit | |||
Press release dated July 23, 2018* | ||||
*Filed herewith |
WASHINGTON TRUST BANCORP, INC. | ||||
Date: | July 23, 2018 | By: | /s/ Ronald S. Ohsberg | |
Ronald S. Ohsberg | ||||
Senior Executive Vice President, Chief Financial Officer and Treasurer |
• | Profitability ratios were at their highest levels in over 15 years, with returns on average equity and average assets of 16.99% and 1.53%, respectively. |
• | Total revenues (net interest income and noninterest income) were up by 3% on a linked quarter basis and amounted to $49.1 million, a record level for Washington Trust. |
• | Total loans were up by $103 million, or 3%, from the end of the prior quarter and up by $290 million, or 9%, from a year ago. |
• | Total deposits were up by $65 million, or 2%, from the end of the first quarter and up by $300 million, or 10%, from a year ago. |
• | In June, Washington Trust declared a quarterly dividend of 43 cents per share. Year-to-date dividends declared amounted to 86 cents per share, an increase of 10 cents per share, or 13%, from the same period a year ago. |
• | Average interest-earning assets increased by $91 million, largely due to loan growth. The yield on interest-earning assets for the second quarter was 3.98%, up by 14 basis points from the preceding quarter. Excluding the impact of loan prepayment fee income in each period, the yield on interest-earning assets was 3.94%, up by 10 basis points from the preceding quarter. The yield benefited from increased market rates of interest. |
• | Average interest-bearing liabilities increased by $100 million, reflecting increases in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances) and in-market time deposits. The cost of interest-bearing funds for the second quarter was 1.14%, up by 14 basis points from the preceding quarter, largely due to higher rates paid on promotional time certificates of deposit and wholesale funding liabilities. |
• | Wealth management revenues were $9.6 million for the second quarter of 2018, down by $671 thousand, or 7%, on a linked quarter basis. Asset-based revenues were down by $819 thousand, or 8%, on a linked quarter basis. The decline in asset-based revenues was largely attributable to client outflows that commenced in the latter portion of the first quarter of 2018 and continued into the second quarter. These outflows were associated with the previously reported loss of certain client-facing personnel in the preceding quarter. The decline in asset-based revenues was partially offset by an increase of $148 thousand in transaction-based revenues, largely attributable to tax preparation revenue, which is generally concentrated in the second quarter. |
• | Mortgage banking revenues were $2.9 million for the second quarter of 2018, up by $103 thousand, or 4%, from the preceding quarter. Residential mortgage loans sold to the secondary market were $105 million in the second quarter, up by $8 million from the $97 million sold in the first quarter of 2018. |
• | Loan related derivative income was $668 thousand for the second quarter of 2018, up by $527 thousand from the preceding quarter, due to higher volume of commercial borrower loan related derivative transactions occurring in the second quarter. |
• | As previously reported in the first quarter of 2018, one-time cash incentive bonuses of approximately $450 thousand were expensed and paid to non-executive employees as tax reform provided Washington Trust with an opportunity to further recognize and invest in our employees with special compensation enhancements. |
• | In the second quarter of 2018, software system implementation expenses of $114 thousand were recognized, compared to $681 thousand recognized in the preceding quarter. These were classified as other expenses and primarily related to |
Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
Assets: | |||||||||||||||
Cash and due from banks | $132,068 | $85,680 | $79,853 | $128,580 | $117,608 | ||||||||||
Short-term investments | 2,624 | 2,322 | 3,070 | 2,600 | 2,324 | ||||||||||
Mortgage loans held for sale | 35,207 | 19,269 | 26,943 | 28,484 | 32,784 | ||||||||||
Securities: | |||||||||||||||
Available for sale, at fair value | 776,693 | 787,842 | 780,954 | 714,355 | 749,486 | ||||||||||
Held to maturity, at amortized cost | 11,412 | 11,973 | 12,541 | 13,241 | 13,942 | ||||||||||
Total securities | 788,105 | 799,815 | 793,495 | 727,596 | 763,428 | ||||||||||
Federal Home Loan Bank stock, at cost | 46,281 | 41,127 | 40,517 | 42,173 | 44,640 | ||||||||||
Loans: | |||||||||||||||
Total loans | 3,490,230 | 3,387,406 | 3,374,071 | 3,323,078 | 3,200,100 | ||||||||||
Less allowance for loan losses | 26,174 | 25,864 | 26,488 | 27,308 | 26,662 | ||||||||||
Net loans | 3,464,056 | 3,361,542 | 3,347,583 | 3,295,770 | 3,173,438 | ||||||||||
Premises and equipment, net | 28,377 | 28,316 | 28,333 | 28,591 | 28,508 | ||||||||||
Investment in bank-owned life insurance | 79,319 | 73,782 | 73,267 | 72,729 | 72,183 | ||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
Identifiable intangible assets, net | 8,645 | 8,893 | 9,140 | 9,388 | 9,642 | ||||||||||
Other assets | 88,651 | 81,671 | 63,740 | 69,410 | 67,065 | ||||||||||
Total assets | $4,737,242 | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 | ||||||||||
Liabilities: | |||||||||||||||
Deposits: | |||||||||||||||
Noninterest-bearing deposits | $577,656 | $601,478 | $578,410 | $575,866 | $533,147 | ||||||||||
Interest-bearing deposits | 2,743,955 | 2,654,956 | 2,664,297 | 2,581,215 | 2,488,042 | ||||||||||
Total deposits | 3,321,611 | 3,256,434 | 3,242,707 | 3,157,081 | 3,021,189 | ||||||||||
Federal Home Loan Bank advances | 901,053 | 808,677 | 791,356 | 814,045 | 869,733 | ||||||||||
Junior subordinated debentures | 22,681 | 22,681 | 22,681 | 22,681 | 22,681 | ||||||||||
Other liabilities | 70,326 | 65,453 | 59,822 | 61,195 | 55,884 | ||||||||||
Total liabilities | 4,315,671 | 4,153,245 | 4,116,566 | 4,055,002 | 3,969,487 | ||||||||||
Shareholders’ Equity: | |||||||||||||||
Common stock | 1,080 | 1,079 | 1,077 | 1,076 | 1,076 | ||||||||||
Paid-in capital | 118,883 | 118,172 | 117,961 | 117,189 | 116,484 | ||||||||||
Retained earnings | 336,670 | 326,505 | 317,756 | 312,334 | 306,151 | ||||||||||
Accumulated other comprehensive loss | (35,062 | ) | (32,675 | ) | (23,510 | ) | (16,371 | ) | (17,669 | ) | |||||
Total shareholders’ equity | 421,571 | 413,081 | 413,284 | 414,228 | 406,042 | ||||||||||
Total liabilities and shareholders’ equity | $4,737,242 | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 |
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||
(Unaudited; Dollars in thousands, except per share amounts) | ||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
Interest income: | ||||||||||||||||||||||
Interest and fees on loans | $37,101 | $34,578 | $33,459 | $32,509 | $31,642 | $71,679 | $61,994 | |||||||||||||||
Taxable interest on securities | 5,358 | 5,118 | 4,719 | 4,655 | 4,844 | 10,476 | 9,553 | |||||||||||||||
Nontaxable interest on securities | 20 | 23 | 24 | 41 | 72 | 43 | 184 | |||||||||||||||
Dividends on Federal Home Loan Bank stock | 550 | 516 | 481 | 467 | 439 | 1,066 | 826 | |||||||||||||||
Other interest income | 257 | 205 | 217 | 197 | 156 | 462 | 260 | |||||||||||||||
Total interest and dividend income | 43,286 | 40,440 | 38,900 | 37,869 | 37,153 | 83,726 | 72,817 | |||||||||||||||
Interest expense: | ||||||||||||||||||||||
Deposits | 5,254 | 4,422 | 4,136 | 3,835 | 3,591 | 9,676 | 7,093 | |||||||||||||||
Federal Home Loan Bank advances | 4,707 | 3,983 | 3,708 | 3,816 | 3,509 | 8,690 | 6,853 | |||||||||||||||
Junior subordinated debentures | 214 | 183 | 167 | 159 | 149 | 397 | 287 | |||||||||||||||
Other interest expense | — | — | — | — | — | — | 1 | |||||||||||||||
Total interest expense | 10,175 | 8,588 | 8,011 | 7,810 | 7,249 | 18,763 | 14,234 | |||||||||||||||
Net interest income | 33,111 | 31,852 | 30,889 | 30,059 | 29,904 | 64,963 | 58,583 | |||||||||||||||
Provision for loan losses | 400 | — | 200 | 1,300 | 700 | 400 | 1,100 | |||||||||||||||
Net interest income after provision for loan losses | 32,711 | 31,852 | 30,689 | 28,759 | 29,204 | 64,563 | 57,483 | |||||||||||||||
Noninterest income: | ||||||||||||||||||||||
Wealth management revenues | 9,602 | 10,273 | 9,914 | 10,013 | 9,942 | 19,875 | 19,419 | |||||||||||||||
Mortgage banking revenues | 2,941 | 2,838 | 3,097 | 3,036 | 2,919 | 5,779 | 5,259 | |||||||||||||||
Service charges on deposit accounts | 903 | 863 | 946 | 942 | 901 | 1,766 | 1,784 | |||||||||||||||
Card interchange fees | 961 | 847 | 904 | 894 | 902 | 1,808 | 1,704 | |||||||||||||||
Income from bank-owned life insurance | 537 | 515 | 537 | 546 | 542 | 1,052 | 1,078 | |||||||||||||||
Loan related derivative income | 668 | 141 | 470 | 1,452 | 1,144 | 809 | 1,292 | |||||||||||||||
Other income | 381 | 266 | 342 | 400 | 456 | 647 | 780 | |||||||||||||||
Total noninterest income | 15,993 | 15,743 | 16,210 | 17,283 | 16,806 | 31,736 | 31,316 | |||||||||||||||
Noninterest expense: | ||||||||||||||||||||||
Salaries and employee benefits | 17,304 | 17,772 | 17,194 | 17,362 | 17,418 | 35,076 | 34,335 | |||||||||||||||
Net occupancy | 1,930 | 2,002 | 1,859 | 1,928 | 1,767 | 3,932 | 3,734 | |||||||||||||||
Outsourced services | 2,350 | 1,873 | 1,960 | 1,793 | 1,710 | 4,223 | 3,167 | |||||||||||||||
Equipment | 1,069 | 1,180 | 1,198 | 1,380 | 1,313 | 2,249 | 2,780 | |||||||||||||||
Legal, audit and professional fees | 555 | 726 | 562 | 534 | 582 | 1,281 | 1,198 | |||||||||||||||
FDIC deposit insurance costs | 422 | 404 | 389 | 308 | 469 | 826 | 950 | |||||||||||||||
Advertising and promotion | 329 | 177 | 466 | 416 | 362 | 506 | 599 | |||||||||||||||
Amortization of intangibles | 247 | 248 | 248 | 253 | 257 | 495 | 534 | |||||||||||||||
Change in fair value of contingent consideration | — | — | (333 | ) | — | — | — | (310 | ) | |||||||||||||
Other expenses | 2,082 | 2,748 | 2,211 | 2,780 | 2,428 | 4,830 | 4,605 | |||||||||||||||
Total noninterest expense | 26,288 | 27,130 | 25,754 | 26,754 | 26,306 | 53,418 | 51,592 | |||||||||||||||
Income before income taxes | 22,416 | 20,465 | 21,145 | 19,288 | 19,704 | 42,881 | 37,207 | |||||||||||||||
Income tax expense | 4,742 | 4,254 | 13,163 | 6,326 | 6,505 | 8,996 | 12,226 | |||||||||||||||
Net income | $17,674 | $16,211 | $7,982 | $12,962 | $13,199 | $33,885 | $24,981 | |||||||||||||||
Net income available to common shareholders | $17,636 | $16,173 | $7,958 | $12,934 | $13,170 | $33,809 | $24,925 | |||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||
Basic | 17,272 | 17,234 | 17,223 | 17,212 | 17,206 | 17,253 | 17,196 | |||||||||||||||
Diluted | 17,387 | 17,345 | 17,349 | 17,318 | 17,316 | 17,384 | 17,312 | |||||||||||||||
Earnings per common share: | ||||||||||||||||||||||
Basic | $1.02 | $0.94 | $0.46 | $0.75 | $0.77 | $1.96 | $1.45 | |||||||||||||||
Diluted | $1.01 | $0.93 | $0.46 | $0.75 | $0.76 | $1.94 | $1.44 | |||||||||||||||
Cash dividends declared per share | $0.43 | $0.43 | $0.39 | $0.39 | $0.38 | $0.86 | $0.76 |
SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||
(Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
Share and Equity Related Data: | |||||||||||||||
Book value per share | $24.40 | $23.93 | $23.99 | $24.06 | $23.59 | ||||||||||
Tangible book value per share - Non-GAAP (1) | $20.20 | $19.71 | $19.75 | $19.81 | $19.32 | ||||||||||
Market value per share | $58.10 | $53.75 | $53.25 | $57.25 | $51.55 | ||||||||||
Shares issued and outstanding at end of period | 17,278 | 17,262 | 17,227 | 17,214 | 17,210 | ||||||||||
Capital Ratios (2): | |||||||||||||||
Tier 1 risk-based capital | 11.84 | % | 11.78 | % | 11.65 | % | 11.69 | % | 11.92 | % | |||||
Total risk-based capital | 12.61 | % | 12.56 | % | 12.45 | % | 12.53 | % | 12.78 | % | |||||
Tier 1 leverage ratio | 8.87 | % | 8.84 | % | 8.79 | % | 8.83 | % | 8.78 | % | |||||
Common equity tier 1 | 11.20 | % | 11.13 | % | 10.99 | % | 11.02 | % | 11.23 | % | |||||
Balance Sheet Ratios: | |||||||||||||||
Equity to assets | 8.90 | % | 9.05 | % | 9.12 | % | 9.27 | % | 9.28 | % | |||||
Tangible equity to tangible assets - Non-GAAP (1) | 7.48 | % | 7.57 | % | 7.63 | % | 7.76 | % | 7.73 | % | |||||
Loans to deposits (3) | 105.3 | % | 103.8 | % | 104.1 | % | 105.3 | % | 106.1 | % |
For the Six Months Ended | |||||||||||||||
For the Three Months Ended | |||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | |||||||||
Performance Ratios (4): | |||||||||||||||
Net interest margin (5) | 3.05 | % | 3.03 | % | 2.95 | % | 2.93 | % | 2.97 | % | 3.04 | % | 2.92 | % | |
Return on average assets (net income divided by average assets) | 1.53 | % | 1.45 | % | 0.71 | % | 1.17 | % | 1.22 | % | 1.49 | % | 1.16 | % | |
Return on average tangible assets - Non-GAAP (1) | 1.56 | % | 1.48 | % | 0.72 | % | 1.19 | % | 1.24 | % | 1.52 | % | 1.18 | % | |
Return on average equity (net income available for common shareholders divided by average equity) | 16.99 | % | 15.96 | % | 7.56 | % | 12.43 | % | 13.07 | % | 16.48 | % | 12.54 | % | |
Return on average tangible equity - Non-GAAP (1) | 20.58 | % | 19.40 | % | 9.17 | % | 15.12 | % | 15.99 | % | 20.00 | % | 15.38 | % | |
Efficiency ratio (6) | 53.5 | % | 57.0 | % | 54.7 | % | 56.5 | % | 56.3 | % | 55.2 | % | 57.4 | % |
(1) | See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document. |
(2) | Estimated for June 30, 2018 and actuals for the remaining periods. |
(3) | Period-end balances of net loans and mortgage loans held 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). |
SELECTED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||
(Unaudited; Dollars in thousands) | ||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
Wealth Management Results | ||||||||||||||||||||||
Wealth Management Revenues: | ||||||||||||||||||||||
Asset-based revenues | $9,136 | $9,955 | $9,686 | $9,791 | $9,401 | $19,091 | $18,648 | |||||||||||||||
Transaction-based revenues | 466 | 318 | 228 | 222 | 541 | 784 | 771 | |||||||||||||||
Total wealth management revenues | $9,602 | $10,273 | $9,914 | $10,013 | $9,942 | $19,875 | $19,419 | |||||||||||||||
Assets Under Administration (AUA): | ||||||||||||||||||||||
Balance at beginning of period | $6,343,720 | $6,714,637 | $6,587,899 | $6,403,501 | $6,243,301 | $6,714,637 | $6,063,293 | |||||||||||||||
Net investment appreciation (depreciation) & income | 133,450 | (32,024 | ) | 163,681 | 270,549 | 162,924 | 101,426 | 383,347 | ||||||||||||||
Net client asset flows | (257,015 | ) | (338,893 | ) | (36,943 | ) | (86,151 | ) | (2,724 | ) | (595,908 | ) | (43,139 | ) | ||||||||
Balance at end of period | $6,220,155 | $6,343,720 | $6,714,637 | $6,587,899 | $6,403,501 | $6,220,155 | $6,403,501 | |||||||||||||||
Percentage of AUA that are managed assets | 92% | 92% | 93% | 92% | 93% | 92% | 93% | |||||||||||||||
Mortgage Banking Results | ||||||||||||||||||||||
Mortgage Banking Revenues: | ||||||||||||||||||||||
Gains & commissions on loan sales, net | $2,786 | $2,679 | $2,987 | $2,952 | $2,784 | $5,465 | $5,052 | |||||||||||||||
Residential mortgage servicing fee income, net | 155 | 159 | 110 | 84 | 135 | 314 | 207 | |||||||||||||||
Total mortgage banking revenues | $2,941 | $2,838 | $3,097 | $3,036 | $2,919 | $5,779 | $5,259 | |||||||||||||||
Residential Mortgage Loan Originations: | ||||||||||||||||||||||
Originations for retention in portfolio | $128,479 | $67,840 | $75,595 | $90,378 | $94,794 | $196,319 | $152,701 | |||||||||||||||
Originations for sale to secondary market (1) | 122,693 | 87,720 | 143,834 | 143,112 | 144,491 | 210,413 | 246,932 | |||||||||||||||
Total mortgage loan originations | $251,172 | $155,560 | $219,429 | $233,490 | $239,285 | $406,732 | $399,633 | |||||||||||||||
Residential Mortgage Loans Sold: | ||||||||||||||||||||||
Sold with servicing rights retained | $24,367 | $33,575 | $39,769 | $37,823 | $29,199 | $57,942 | $51,766 | |||||||||||||||
Sold with servicing rights released (1) | 81,054 | 63,265 | 105,416 | 109,508 | 108,245 | 144,319 | 192,590 | |||||||||||||||
Total mortgage loans sold | $105,421 | $96,840 | $145,185 | $147,331 | $137,444 | $202,261 | $244,356 |
(1) | Also includes loans originated in a broker capacity. |
END OF PERIOD LOAN AND DEPOSIT COMPOSITION | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
Loans: | |||||||||||||||
Commercial real estate (1) | $1,218,643 | $1,217,278 | $1,210,495 | $1,211,792 | $1,121,273 | ||||||||||
Commercial & industrial | 632,029 | 603,830 | 612,334 | 588,324 | 577,116 | ||||||||||
Total commercial | 1,850,672 | 1,821,108 | 1,822,829 | 1,800,116 | 1,698,389 | ||||||||||
Residential real estate (2) | 1,327,418 | 1,249,890 | 1,227,248 | 1,195,537 | 1,168,105 | ||||||||||
Home equity | 283,744 | 285,723 | 292,467 | 294,657 | 299,107 | ||||||||||
Other | 28,396 | 30,685 | 31,527 | 32,768 | 34,499 | ||||||||||
Total consumer | 312,140 | 316,408 | 323,994 | 327,425 | 333,606 | ||||||||||
Total loans | $3,490,230 | $3,387,406 | $3,374,071 | $3,323,078 | $3,200,100 |
(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. |
June 30, 2018 | December 31, 2017 | ||||||||||
Balance | % of Total | Balance | % of Total | ||||||||
Commercial Real Estate Loans by Property Location: | |||||||||||
Rhode Island | $346,215 | 28.4 | % | $360,834 | 29.8 | % | |||||
Connecticut | 488,429 | 40.1 | 309,013 | 25.5 | |||||||
Massachusetts | 300,353 | 24.6 | 461,230 | 38.1 | |||||||
Subtotal | 1,134,997 | 93.1 | 1,131,077 | 93.4 | |||||||
All other states | 83,646 | 6.9 | 79,418 | 6.6 | |||||||
Total commercial real estate loans | $1,218,643 | 100.0 | % | $1,210,495 | 100.0 | % | |||||
Residential Real Estate Loans by Property Location: | |||||||||||
Rhode Island | $347,605 | 26.2 | % | $343,340 | 28.0 | % | |||||
Connecticut | 145,949 | 11.0 | 140,843 | 11.5 | |||||||
Massachusetts | 817,288 | 61.6 | 726,712 | 59.2 | |||||||
Subtotal | 1,310,842 | 98.8 | 1,210,895 | 98.7 | |||||||
All other states | 16,576 | 1.2 | 16,353 | 1.3 | |||||||
Total residential real estate loans | $1,327,418 | 100.0 | % | $1,227,248 | 100.0 | % |
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
Deposits: | |||||||||||||||
Noninterest-bearing demand deposits | $577,656 | $601,478 | $578,410 | $575,866 | $533,147 | ||||||||||
Interest-bearing demand deposits | 136,640 | 83,249 | 82,728 | 45,407 | 54,666 | ||||||||||
NOW accounts | 481,905 | 470,112 | 466,605 | 448,128 | 448,617 | ||||||||||
Money market accounts | 604,954 | 693,748 | 731,345 | 716,827 | 666,047 | ||||||||||
Savings accounts | 375,983 | 376,608 | 368,524 | 367,912 | 364,002 | ||||||||||
Time deposits (in-market) | 698,286 | 625,965 | 617,368 | 587,166 | 553,783 | ||||||||||
Wholesale brokered time deposits | 446,187 | 405,274 | 397,727 | 415,775 | 400,927 | ||||||||||
Total deposits | $3,321,611 | $3,256,434 | $3,242,707 | $3,157,081 | $3,021,189 |
CREDIT & ASSET QUALITY DATA | |||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
Asset Quality Ratios: | |||||||||||||||
Nonperforming assets to total assets | 0.32 | % | 0.30 | % | 0.34 | % | 0.44 | % | 0.49 | % | |||||
Nonaccrual loans to total loans | 0.34 | % | 0.31 | % | 0.45 | % | 0.56 | % | 0.63 | % | |||||
Total past due loans to total loans | 0.48 | % | 0.57 | % | 0.59 | % | 0.49 | % | 0.66 | % | |||||
Allowance for loan losses to nonaccrual loans | 222.85 | % | 245.83 | % | 174.14 | % | 147.52 | % | 132.00 | % | |||||
Allowance for loan losses to total loans | 0.75 | % | 0.76 | % | 0.79 | % | 0.82 | % | 0.83 | % | |||||
Nonperforming Assets: | |||||||||||||||
Commercial real estate | $— | $— | $4,954 | $5,887 | $6,422 | ||||||||||
Commercial & industrial | 397 | 397 | 283 | 429 | 1,232 | ||||||||||
Total commercial | 397 | 397 | 5,237 | 6,316 | 7,654 | ||||||||||
Residential real estate | 10,206 | 9,340 | 9,414 | 11,699 | 11,815 | ||||||||||
Home equity | 1,133 | 771 | 544 | 480 | 620 | ||||||||||
Other consumer | 9 | 13 | 16 | 16 | 109 | ||||||||||
Total consumer | 1,142 | 784 | 560 | 496 | 729 | ||||||||||
Total nonaccrual loans | 11,745 | 10,521 | 15,211 | 18,511 | 20,198 | ||||||||||
Other real estate owned | 3,206 | 3,206 | 131 | 1,038 | 1,342 | ||||||||||
Total nonperforming assets | $14,951 | $13,727 | $15,342 | $19,549 | $21,540 | ||||||||||
Past Due Loans (30 days or more past due): | |||||||||||||||
Commercial real estate | $— | $— | $4,960 | $5,887 | $6,422 | ||||||||||
Commercial & industrial | 2,851 | 3,295 | 4,076 | 455 | 4,009 | ||||||||||
Total commercial | 2,851 | 3,295 | 9,036 | 6,342 | 10,431 | ||||||||||
Residential real estate | 11,243 | 11,806 | 7,855 | 7,802 | 8,857 | ||||||||||
Home equity | 2,585 | 4,235 | 3,141 | 2,268 | 1,806 | ||||||||||
Other consumer | 16 | 22 | 43 | 35 | 26 | ||||||||||
Total consumer | 2,601 | 4,257 | 3,184 | 2,303 | 1,832 | ||||||||||
Total past due loans | $16,695 | $19,358 | $20,075 | $16,447 | $21,120 | ||||||||||
Accruing loans 90 days or more past due | $— | $— | $— | $— | $— | ||||||||||
Nonaccrual loans included in past due loans | $8,575 | $7,066 | $11,788 | $13,216 | $14,490 |
CREDIT & ASSET QUALITY DATA | ||||||||||||||||||||||
(Unaudited; Dollars in thousands) | ||||||||||||||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
Nonaccrual Loan Activity: | ||||||||||||||||||||||
Balance at beginning of period | $10,521 | $15,211 | $18,511 | $20,198 | $22,127 | $15,211 | $22,058 | |||||||||||||||
Additions to nonaccrual status | 2,457 | 1,210 | 462 | 1,969 | 1,946 | 3,667 | 4,084 | |||||||||||||||
Loans returned to accruing status | (475 | ) | (344 | ) | (1,316 | ) | (1,411 | ) | (778 | ) | (819 | ) | (1,325 | ) | ||||||||
Loans charged-off | (103 | ) | (690 | ) | (1,047 | ) | (694 | ) | (642 | ) | (793 | ) | (721 | ) | ||||||||
Loans transferred to other real estate owned | — | (3,074 | ) | — | — | (98 | ) | (3,074 | ) | (576 | ) | |||||||||||
Payments, payoffs and other changes | (655 | ) | (1,792 | ) | (1,399 | ) | (1,551 | ) | (2,357 | ) | (2,447 | ) | (3,322 | ) | ||||||||
Balance at end of period | $11,745 | $10,521 | $15,211 | $18,511 | $20,198 | $11,745 | $20,198 | |||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||
Balance at beginning of period | $25,864 | $26,488 | $27,308 | $26,662 | $26,446 | $26,488 | $26,004 | |||||||||||||||
Provision charged to earnings | 400 | — | 200 | 1,300 | 700 | 400 | 1,100 | |||||||||||||||
Charge-offs | (103 | ) | (690 | ) | (1,047 | ) | (694 | ) | (642 | ) | (793 | ) | (721 | ) | ||||||||
Recoveries | 13 | 66 | 27 | 40 | 158 | 79 | 279 | |||||||||||||||
Balance at end of period | $26,174 | $25,864 | $26,488 | $27,308 | $26,662 | $26,174 | $26,662 | |||||||||||||||
Net Loan Charge-Offs (Recoveries): | ||||||||||||||||||||||
Commercial real estate | $— | $602 | $932 | $535 | $318 | $602 | $318 | |||||||||||||||
Commercial & industrial | (3 | ) | (23 | ) | 43 | 114 | 115 | (26 | ) | 10 | ||||||||||||
Total commercial | (3 | ) | 579 | 975 | 649 | 433 | 576 | 328 | ||||||||||||||
Residential real estate | 5 | — | 32 | (1 | ) | 8 | 5 | 4 | ||||||||||||||
Home equity | 73 | 28 | (2 | ) | (7 | ) | 12 | 101 | 55 | |||||||||||||
Other consumer | 15 | 17 | 15 | 13 | 31 | 32 | 55 | |||||||||||||||
Total consumer | 88 | 45 | 13 | 6 | 43 | 133 | 110 | |||||||||||||||
Total | $90 | $624 | $1,020 | $654 | $484 | $714 | $442 | |||||||||||||||
Net charge-offs to average loans (annualized) | 0.01 | % | 0.07 | % | 0.12 | % | 0.08 | % | 0.06 | % | 0.04 | % | 0.03 | % |
CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | ||||||||||||||||||||||||||
(Unaudited; Dollars in thousands) | ||||||||||||||||||||||||||
For the Three Months Ended | June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | ||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Cash, federal funds sold and short-term investments | $56,142 | $257 | 1.84 | % | $53,138 | $205 | 1.56 | % | $60,428 | $156 | 1.04 | % | ||||||||||||||
Mortgage loans held for sale | $30,203 | $313 | 4.16 | $24,424 | $226 | 3.75 | $21,977 | $223 | 4.07 | |||||||||||||||||
Taxable debt securities | 821,772 | 5,358 | 2.62 | 804,518 | 5,118 | 2.58 | 773,280 | 4,844 | 2.51 | |||||||||||||||||
Nontaxable debt securities | 1,956 | 26 | 5.33 | 2,355 | 29 | 4.99 | 7,076 | 109 | 6.18 | |||||||||||||||||
Total securities | 823,728 | 5,384 | 2.62 | 806,873 | 5,147 | 2.59 | 780,356 | 4,953 | 2.55 | |||||||||||||||||
FHLB stock | 43,331 | 550 | 5.09 | 40,888 | 516 | 5.12 | 44,362 | 439 | 3.97 | |||||||||||||||||
Commercial real estate | 1,225,926 | 13,463 | 4.40 | 1,218,702 | 12,346 | 4.11 | 1,162,002 | 11,032 | 3.81 | |||||||||||||||||
Commercial & industrial | 622,141 | 7,569 | 4.88 | 608,784 | 6,823 | 4.55 | 576,312 | 6,607 | 4.60 | |||||||||||||||||
Total commercial | 1,848,067 | $21,032 | 4.56 | 1,827,486 | $19,169 | 4.25 | 1,738,314 | $17,639 | 4.07 | |||||||||||||||||
Residential real estate | 1,275,171 | 12,426 | 3.91 | 1,228,379 | 11,929 | 3.94 | 1,140,918 | 10,865 | 3.82 | |||||||||||||||||
Home equity | 284,188 | 3,278 | 4.63 | 287,176 | 3,160 | 4.46 | 296,971 | 3,047 | 4.12 | |||||||||||||||||
Other | 29,696 | 360 | 4.86 | 30,706 | 370 | 4.89 | 35,082 | 417 | 4.77 | |||||||||||||||||
Total consumer | 313,884 | 3,638 | 4.65 | 317,882 | 3,530 | 4.50 | 332,053 | 3,464 | 4.18 | |||||||||||||||||
Total loans | 3,437,122 | 37,096 | 4.33 | 3,373,747 | 34,628 | 4.16 | 3,211,285 | 31,968 | 3.99 | |||||||||||||||||
Total interest-earning assets | 4,390,526 | 43,600 | 3.98 | 4,299,070 | 40,722 | 3.84 | 4,118,408 | 37,739 | 3.68 | |||||||||||||||||
Noninterest-earning assets | 238,290 | 230,638 | 236,056 | |||||||||||||||||||||||
Total assets | $4,628,816 | $4,529,708 | $4,354,464 | |||||||||||||||||||||||
Liabilities and Shareholders' Equity: | ||||||||||||||||||||||||||
Interest-bearing demand deposits | $86,204 | $101 | 0.47 | % | $80,502 | $28 | 0.14 | % | $54,675 | ($8 | ) | (0.06 | )% | |||||||||||||
NOW accounts | 460,712 | 57 | 0.05 | 449,298 | 54 | 0.05 | 437,282 | 57 | 0.05 | |||||||||||||||||
Money market accounts | 664,127 | 960 | 0.58 | 718,664 | 880 | 0.50 | 711,711 | 640 | 0.36 | |||||||||||||||||
Savings accounts | 375,690 | 57 | 0.06 | 368,012 | 57 | 0.06 | 361,545 | 52 | 0.06 | |||||||||||||||||
Time deposits (in-market) | 662,969 | 2,265 | 1.37 | 617,878 | 1,820 | 1.19 | 559,442 | 1,460 | 1.05 | |||||||||||||||||
Wholesale brokered time deposits | 430,118 | 1,814 | 1.69 | 409,243 | 1,583 | 1.57 | 392,734 | 1,390 | 1.42 | |||||||||||||||||
Total interest-bearing deposits | 2,679,820 | 5,254 | 0.79 | 2,643,597 | 4,422 | 0.68 | 2,517,389 | 3,591 | 0.57 | |||||||||||||||||
FHLB advances | 874,746 | 4,707 | 2.16 | 810,967 | 3,983 | 1.99 | 817,349 | 3,509 | 1.72 | |||||||||||||||||
Junior subordinated debentures | 22,681 | 214 | 3.78 | 22,681 | 183 | 3.27 | 22,681 | 149 | 2.63 | |||||||||||||||||
Other | — | — | — | — | — | — | 13 | — | — | |||||||||||||||||
Total interest-bearing liabilities | 3,577,247 | 10,175 | 1.14 | 3,477,245 | 8,588 | 1.00 | 3,357,432 | 7,249 | 0.87 | |||||||||||||||||
Noninterest-bearing demand deposits | 574,258 | 584,557 | 543,781 | |||||||||||||||||||||||
Other liabilities | 60,878 | 56,951 | 49,013 | |||||||||||||||||||||||
Shareholders' equity | 416,433 | 410,955 | 404,238 | |||||||||||||||||||||||
Total liabilities and shareholders' equity | $4,628,816 | $4,529,708 | $4,354,464 | |||||||||||||||||||||||
Net interest income (FTE) | $33,425 | $32,134 | $30,490 | |||||||||||||||||||||||
Interest rate spread | 2.84 | % | 2.84 | % | 2.81 | % | ||||||||||||||||||||
Net interest margin | 3.05 | % | 3.03 | % | 2.97 | % |
For the Three Months Ended | Jun 30, 2018 | Mar 31, 2018 | Jun 30, 2017 | ||||||
Commercial loans | $308 | $276 | $549 | ||||||
Nontaxable debt securities | 6 | 6 | 37 | ||||||
Total | $314 | $282 | $586 |
CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | |||||||||||||||||
(Unaudited; Dollars in thousands) | |||||||||||||||||
For the Six Months Ended | June 30, 2018 | June 30, 2017 | |||||||||||||||
Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | ||||||||||||
Assets: | |||||||||||||||||
Cash, federal funds sold and short-term investments | $54,649 | $462 | 1.70 | % | $58,323 | $260 | 0.90 | % | |||||||||
Mortgage loans for sale | 27,329 | 539 | 3.98 | 23,194 | 445 | 3.87 | |||||||||||
Taxable debt securities | 813,193 | 10,476 | 2.60 | 764,666 | 9,553 | 2.52 | |||||||||||
Nontaxable debt securities | 2,154 | 55 | 5.15 | 9,286 | 282 | 6.12 | |||||||||||
Total securities | 815,347 | 10,531 | 2.60 | 773,952 | 9,835 | 2.56 | |||||||||||
FHLB stock | 42,116 | 1,066 | 5.10 | 43,994 | 826 | 3.79 | |||||||||||
Commercial real estate | 1,222,136 | 25,809 | 4.26 | 1,184,294 | 21,588 | 3.68 | |||||||||||
Commercial & industrial | 615,698 | 14,392 | 4.71 | 575,162 | 12,765 | 4.48 | |||||||||||
Total commercial | 1,837,834 | 40,201 | 4.41 | 1,759,456 | 34,353 | 3.94 | |||||||||||
Residential real estate | 1,251,904 | 24,355 | 3.92 | 1,134,516 | 21,511 | 3.82 | |||||||||||
Home equity | 285,684 | 6,439 | 4.55 | 297,481 | 5,924 | 4.02 | |||||||||||
Other | 30,188 | 729 | 4.87 | 36,064 | 863 | 4.83 | |||||||||||
Total consumer | 315,872 | 7,168 | 4.58 | 333,545 | 6,787 | 4.10 | |||||||||||
Total loans | 3,405,610 | 71,724 | 4.25 | 3,227,517 | 62,651 | 3.91 | |||||||||||
Total interest-earning assets | 4,345,051 | 84,322 | 3.91 | 4,126,980 | 74,017 | 3.62 | |||||||||||
Noninterest-earning assets | 234,485 | 232,957 | |||||||||||||||
Total assets | $4,579,536 | $4,359,937 | |||||||||||||||
Liabilities and Shareholders' Equity: | |||||||||||||||||
Interest-bearing demand deposits | $83,368 | $129 | 0.31 | % | $55,722 | $7 | 0.03 | % | |||||||||
NOW accounts | 455,036 | 111 | 0.05 | 428,998 | 108 | 0.05 | |||||||||||
Money market accounts | 691,245 | 1,840 | 0.54 | 732,988 | 1,239 | 0.34 | |||||||||||
Savings accounts | 371,873 | 114 | 0.06 | 359,730 | 102 | 0.06 | |||||||||||
Time deposits (in-market) | 640,548 | 4,085 | 1.29 | 557,161 | 2,878 | 1.04 | |||||||||||
Wholesale brokered time deposits | 419,738 | 3,397 | 1.63 | 394,992 | 2,759 | 1.41 | |||||||||||
Total interest-bearing deposits | 2,661,808 | 9,676 | 0.73 | 2,529,591 | 7,093 | 0.57 | |||||||||||
FHLB advances | 843,033 | 8,690 | 2.08 | 824,442 | 6,853 | 1.68 | |||||||||||
Junior subordinated debentures | 22,681 | 397 | 3.53 | 22,681 | 287 | 2.55 | |||||||||||
Other | — | — | — | 20 | 1 | 10.08 | |||||||||||
Total interest-bearing liabilities | 3,527,522 | 18,763 | 1.07 | 3,376,734 | 14,234 | 0.85 | |||||||||||
Noninterest-bearing demand deposits | 579,379 | 535,544 | |||||||||||||||
Other liabilities | 58,926 | 46,962 | |||||||||||||||
Shareholders' equity | 413,709 | 400,697 | |||||||||||||||
Total liabilities and shareholders' equity | $4,579,536 | $4,359,937 | |||||||||||||||
Net interest income (FTE) | $65,559 | $59,783 | |||||||||||||||
Interest rate spread | 2.84 | % | 2.77 | % | |||||||||||||
Net interest margin | 3.04 | % | 2.92 | % |
For the Six Months Ended | Jun 30, 2018 | Jun 30, 2017 | ||||
Commercial loans | $584 | $1,102 | ||||
Nontaxable debt securities | 12 | 98 | ||||
Total | $596 | $1,200 |
SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures | |||||||||||||||
(Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | |||||||||||
Tangible Book Value per Share: | |||||||||||||||
Total shareholders' equity, as reported | $421,571 | $413,081 | $413,284 | $414,228 | $406,042 | ||||||||||
Less: | |||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
Identifiable intangible assets, net | 8,645 | 8,893 | 9,140 | 9,388 | 9,642 | ||||||||||
Total tangible shareholders' equity | $349,017 | $340,279 | $340,235 | $340,931 | $332,491 | ||||||||||
Shares outstanding, as reported | 17,278 | 17,262 | 17,227 | 17,214 | 17,210 | ||||||||||
Book value per share - GAAP | $24.40 | $23.93 | $23.99 | $24.06 | $23.59 | ||||||||||
Tangible book value per share - Non-GAAP | $20.20 | $19.71 | $19.75 | $19.81 | $19.32 | ||||||||||
Tangible Equity to Tangible Assets: | |||||||||||||||
Total tangible shareholders' equity | $349,017 | $340,279 | $340,235 | $340,931 | $332,491 | ||||||||||
Total assets, as reported | $4,737,242 | $4,566,326 | $4,529,850 | $4,469,230 | $4,375,529 | ||||||||||
Less: | |||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||
Identifiable intangible assets, net | 8,645 | 8,893 | 9,140 | 9,388 | 9,642 | ||||||||||
Total tangible assets | $4,664,688 | $4,493,524 | $4,456,801 | $4,395,933 | $4,301,978 | ||||||||||
Equity to assets - GAAP | 8.90 | % | 9.05 | % | 9.12 | % | 9.27 | % | 9.28 | % | |||||
Tangible equity to tangible assets - Non-GAAP | 7.48 | % | 7.57 | % | 7.63 | % | 7.76 | % | 7.73 | % |
For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||
Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Jun 30, 2018 | Jun 30, 2017 | ||||||||||||||||
Return on Average Tangible Assets: | ||||||||||||||||||||||
Net income, as reported | $17,674 | $16,211 | $7,982 | $12,962 | $13,199 | $33,885 | $24,981 | |||||||||||||||
Total average assets, as reported | $4,628,816 | $4,529,708 | $4,473,340 | $4,401,536 | $4,354,464 | $4,579,536 | $4,359,937 | |||||||||||||||
Less average balances of: | ||||||||||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 64,058 | 63,909 | 64,059 | |||||||||||||||
Identifiable intangible assets, net | 8,766 | 9,014 | 9,261 | 9,511 | 9,767 | 8,889 | 9,896 | |||||||||||||||
Total average tangible assets | $4,556,141 | $4,456,785 | $4,400,170 | $4,328,116 | $4,280,639 | $4,506,738 | $4,285,982 | |||||||||||||||
Return on average assets - GAAP | 1.53 | % | 1.45 | % | 0.71 | % | 1.17 | % | 1.22 | % | 1.49 | % | 1.16 | % | ||||||||
Return on average tangible assets - Non-GAAP | 1.56 | % | 1.48 | % | 0.72 | % | 1.19 | % | 1.24 | % | 1.52 | % | 1.18 | % | ||||||||
Return on Average Tangible Equity: | ||||||||||||||||||||||
Net income available to common shareholders, as reported | $17,636 | $16,173 | $7,958 | $12,934 | $13,170 | $33,809 | $24,925 | |||||||||||||||
Total average equity, as reported | $416,433 | $410,955 | $417,568 | $412,862 | $404,238 | $413,709 | $400,697 | |||||||||||||||
Less average balances of: | ||||||||||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 64,058 | 63,909 | 64,059 | |||||||||||||||
Identifiable intangible assets, net | 8,766 | 9,014 | 9,261 | 9,511 | 9,767 | 8,889 | 9,896 | |||||||||||||||
Total average tangible equity | $343,758 | $338,032 | $344,398 | $339,442 | $330,413 | $340,911 | $326,742 | |||||||||||||||
Return on average equity - GAAP | 16.99 | % | 15.96 | % | 7.56 | % | 12.43 | % | 13.07 | % | 16.48 | % | 12.54 | % | ||||||||
Return on average tangible equity - Non-GAAP | 20.58 | % | 19.40 | % | 9.17 | % | 15.12 | % | 15.99 | % | 20.00 | % | 15.38 | % |
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