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: October 25, 2021
FOR IMMEDIATE RELEASE
Washington Trust Reports Third Quarter 2021 Earnings
WESTERLY, R.I., October 25, 2021 (PR NEWSWIRE)…Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced third quarter 2021 net income of $18.8 million, or $1.07 per diluted share, compared to net income of $17.5 million, or $1.00 per diluted share, for the second quarter of 2021.
“Washington Trust’s third quarter results reflect the strength and stability of our balance sheet and solid contributions from all business lines,” stated Edward O. Handy III, Chairman and Chief Executive Officer. “We posted increased quarterly earnings, reported a record $6 billion in assets, and reached an all-time high $5 billion in deposits. We recently announced our intent to open a new branch in Cumberland, RI in 2022, as we believe the key to future growth is providing customers with convenient in-person service and digital banking solutions.”
Selected financial highlights for the third quarter of 2021 include:
•Returns on average equity and average assets for the third quarter were 13.37% and 1.26%, respectively, compared to 12.92% and 1.20%, respectively, in the preceding quarter.
•For both the third quarter and the second quarter of 2021, there was no provision for credit losses recognized in earnings.
•Wealth management revenues were $10.5 million for the third quarter, up by $27 thousand, from the preceding quarter, as higher quarterly asset-based revenues were partially offset by seasonal declines in transaction-based revenues.
•Mortgage banking revenues were $6.4 million for the third quarter, up by $379 thousand, or 6%, from the preceding quarter.
•Total loans amounted to $4.3 billion, down by $13 million, or 0.3%, from the end of the preceding quarter and up by $4 million, or 0.1%, from a year ago. Total loans excluding Paycheck Protection Program ("PPP") loans amounted to $4.2 billion, up by $56 million, or 1%, from the end of the preceding quarter and up by $144 million, or 4%, from a year ago.
•In-market deposits (total deposits less out-of-market wholesale brokered deposits) amounted to a record $4.3 billion at September 30, 2021, up by $310 million, or 8%, from the end of the preceding quarter, and up by $602 million, or 16%, from a year ago.
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Washington Trust
October 25, 2021
Net Interest Income
Net interest income was $36.1 million for the third quarter of 2021, up by $1.3 million, or 4%, from the second quarter of 2021. The net interest margin was 2.58% for the third quarter, up by 3 basis points from the preceding quarter. Both net interest income and the net interest margin benefited from accelerated net deferred fee amortization associated with PPP loans that were forgiven by the Small Business Administration. In the third quarter of 2021, accelerated net deferred fee amortization on PPP loans amounted to $2.0 million, or 13 basis points, compared to $1.0 million, or 7 basis points, in the preceding quarter. Additionally, there was no commercial loan prepayment fee income in the third quarter of 2021, compared to $717 thousand, or 5 basis points, of commercial prepayment fee income in the preceding quarter. Excluding the impact of these items for both periods, the net interest margin was 2.45% in the third quarter of 2021, up from 2.42% in the preceding quarter. Linked quarter changes included:
•Average interest-earning assets increased by $69 million, with an increase of $42 million in average loans and an increase in average investment securities of $16 million. The yield on interest-earning assets for the third quarter was 2.85%, unchanged from the preceding quarter. Excluding the impact of accelerated net deferred fee amortization on PPP loans and commercial loan prepayment fee income for both periods, the yield on interest-earning assets for the third quarter was 2.57%, down by 2 basis points from 2.59% in the preceding quarter, mainly due to a lower yield on the average balances of residential real estate loans.
•Average interest-bearing liabilities increased by $29 million, with an increase of $108 million in average in-market deposits, partially offset by a decrease of $79 million in average wholesale funding balances. The cost of interest-bearing liabilities for the third quarter of 2021 was 0.35%, down by 3 basis points from the preceding quarter, reflecting the impact of lower market interest rates.
Noninterest Income
Noninterest income totaled $20.5 million for the third quarter of 2021, down by $73 thousand, or 0.4%, from the second quarter of 2021. Linked quarter changes included:
•Wealth management revenues amounted to $10.5 million in the third quarter of 2021, up by $27 thousand, or 0.3%, on a linked quarter basis. This included an increase in asset-based revenues of $233 thousand, or 2%, and a decrease in transaction-based revenues of $206 thousand, or 47%, from the preceding quarter. The linked quarter decline in transaction-based revenues was mainly due to tax reporting and preparation fees, which are generally concentrated in the first half of the year.
Wealth management assets under administration ("AUA") amounted to $7.4 billion at September 30, 2021, up by $2 million from June 30, 2021. The increase reflected net client asset inflows of $7 million in the third quarter of 2021, partially offset by net investment depreciation of $5 million. The average balance of AUA for the third quarter of 2021 increased by approximately $249 million, or 3%, from the average balance for the preceding quarter.
•Mortgage banking revenues totaled $6.4 million for the third quarter of 2021, up by $379 thousand, or 6%, from the second quarter of 2021, as changes in fair value of mortgage loan commitments were partially offset by a $2.8 million, or 33%, decrease in realized gains on sales of loans. The decrease in realized gains on sales of loans reflected a lower volume of loans sold to the secondary market, which was partially offset by a higher sales yield. Mortgage loans sold to the secondary market amounted to $174 million in the third quarter of 2021, down by $117 million, or 40%, from the preceding quarter.
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Washington Trust
October 25, 2021
•Loan related derivative income was $728 thousand in the third quarter of 2021, down by $447 thousand from the preceding quarter, reflecting a lower volume of commercial borrower interest rate swap transactions.
Noninterest Expense
Noninterest expense totaled $32.5 million for the third quarter of 2021, down by $492 thousand, or 1%, from the second quarter of 2021. In the second quarter of 2021, debt prepayment penalty expense of $895 thousand was recognized associated with paying off higher-yielding FHLB advances. There was no such debt prepayment penalty expense recognized in the third quarter of 2021. Excluding the impact of debt prepayment penalty expense, noninterest expense was up by $403 thousand, or 1%, including an increase of $108 thousand in FDIC deposit insurance costs and modest increases across a variety of expense categories. Salaries and employee benefits expense, our largest component of noninterest expense, amounted to $22.2 million for the third quarter of 2021, up by $80 thousand, or 0.4%, from the preceding quarter as increases in performance-based compensation accruals were partially offset by volume-related decreases in mortgage originator compensation expense.
Income Tax
Income tax expense totaled $5.3 million for the third quarter of 2021, up by $444 thousand from the preceding quarter, reflecting a higher level of pre-tax income. The effective tax rate for the third quarter of 2021 was 22.1%, compared to 21.8% 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 22.0%.
Investment Securities
The securities portfolio totaled $1.0 billion at September 30, 2021, down by $7 million, or 1%, from June 30, 2021, reflecting routine pay-downs on mortgage-backed securities and calls of debt securities, partially offset by purchases of U.S. government agency and U.S. government-sponsored debt securities, including mortgage-backed securities. Purchases of debt securities in the third quarter 2021 totaled $117 million, with a weighted average yield of 1.58%. Securities represented 17% of total assets at September 30, 2021, compared to 18% of total assets at June 30, 2021.
Loans
Total loans amounted to $4.3 billion at September 30, 2021, down by $13 million, from the end of the preceding quarter. Linked quarter changes included:
•Commercial loans decreased by $90 million, or 3.7%, from June 30, 2021, which included a net reduction in PPP loans of $70 million. Excluding PPP loans, commercial loans decreased by $20 million, or 1%, from June 30, 2021, reflecting payoffs and pay-downs of $103 million and lower line utilization of $17 million, partially offset by commercial loan originations and advances totaling $100 million.
•Residential real estate loans increased by $82 million, or 5%, from June 30, 2021, reflecting a higher proportion of loans originated for portfolio.
•The consumer loan portfolio decreased by $6 million, or 2% from the balance at June 30, 2021.
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Washington Trust
October 25, 2021
Deposits and Borrowings
Total deposits amounted to $5.1 billion at September 30, 2021, up by $332 million, or 7%, from the end of the preceding quarter. Included in total deposits are out-of-market wholesale brokered time deposits, which increased by $23 million, or 3%, from June 30, 2021. Excluding wholesale brokered time deposits, in-market deposits at September 30, 2021 were up by $310 million, or 8%, from the end of the preceding quarter. This increase included seasonal inflows of various institutional and governmental depositors based on their underlying business cycles, as well as growth in promotional time certificates of deposit.
FHLB advances totaled $223 million at September 30, 2021, down by $186 million from June 30, 2021.
Asset Quality
Total nonaccrual loans amounted to $11.0 million, or 0.26% of total loans, at September 30, 2021, compared to $10.5 million, or 0.24% of total loans, at June 30, 2021.
Total past due loans amounted to $9.5 million, or 0.22% of total loans, at September 30, 2021, compared to $8.5 million, or 0.20% of total loans, at June 30, 2021.
Total troubled debt restructured loans ("TDR") amounted to $9.7 million as of September 30, 2021, down by $1.1 million from June 30, 2021.
As of September 30, 2021, active loan payment deferral modifications, or "deferments", in response to the COVID-19 pandemic remain on 5 loans totaling $38.0 million, or 1% of the outstanding balance of total loans excluding PPP loan balances. This is down from active deferments on 22 loans totaling $93.4 million, or 2% of the outstanding balance of total loans excluding PPP loan balances, as of June 30, 2021.
The allowance for credit losses ("ACL") on loans amounted to $41.7 million, or 0.97% of total loans, at September 30, 2021, compared to $41.9 million, or 0.97% of total loans, at June 30, 2021. The ACL on unfunded commitments, included in other liabilities on the Consolidated Balance Sheets, amounted to $2.3 million at September 30, 2021, unchanged from the balance at June 30, 2021.
For both the third quarter and the second quarter of 2021, there was no provision for credit losses recognized in earnings. The provision for credit losses and the related ACL reflected our current estimate of forecasted economic conditions and continued stable asset quality metrics. In the third quarter of 2021, net charge-offs of $168 thousand were recognized, compared to $258 thousand in the preceding quarter.
Capital and Dividends
Total shareholders' equity was $555.3 million at September 30, 2021, up by $7.5 million from June 30, 2021. This increase included net income of $18.8 million, partially offset by $9.1 million in dividend declarations, as well as a decrease of $3.0 million in the accumulated other comprehensive income component of shareholders' equity, largely due to a temporary decrease in the fair value of available for sale debt securities.
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Washington Trust
October 25, 2021
Capital levels at September 30, 2021 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 13.83% at September 30, 2021, compared to 13.65% at June 30, 2021.
Book value per share was $32.06 at September 30, 2021, compared to $31.63 at June 30, 2021.
The Board of Directors declared a quarterly dividend of 52 cents per share for the quarter ended September 30, 2021. The dividend was paid on October 8, 2021 to shareholders of record on October 1, 2021.
Conference Call
Washington Trust will host a conference call to discuss its third quarter results, business highlights and outlook on Tuesday, October 26, 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 10161085; the audio replay will be available through November 9, 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 December 31, 2021.
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Washington Trust
October 25, 2021
Background
Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company. Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies. Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts. The Corporation’s common stock trades on NASDAQ under the symbol WASH. Investor information is available on the Corporation’s web site at http://ir.washtrust.com.
Forward-Looking Statements
This press release contains statements that are “forward-looking statements”. We may also make forward-looking statements in other documents we file with the SEC, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters. You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. These risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.
Some of the factors that might cause these differences include the following: the negative impacts and disruptions of the COVID-19 pandemic and measures taken to contain its spread on our employees, customers, business operations, credit quality, financial position, liquidity and results of operations; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; the possibility that future credits losses are higher than currently expected due to changes in economic assumptions or adverse economic developments; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value or outflows of wealth management assets under administration; decreases in the value of securities and other assets; reductions in loan demand; changes in loan collectability, increases in defaults and charge-off rates; changes related to the discontinuation and replacement of LIBOR; 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) | |||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |||||||||||||
| Assets: | |||||||||||||||||
| Cash and due from banks | $297,039 | $127,743 | $166,960 | $194,143 | $204,113 | ||||||||||||
| Short-term investments | 3,349 | 4,463 | 3,783 | 8,125 | 7,902 | ||||||||||||
Mortgage loans held for sale, at fair value | 48,705 | 31,492 | 77,450 | 61,614 | 68,095 | ||||||||||||
| Available for sale debt securities, at fair value | 1,045,833 | 1,052,577 | 948,094 | 894,571 | 913,850 | ||||||||||||
| Federal Home Loan Bank stock, at cost | 15,094 | 22,757 | 24,772 | 30,285 | 37,469 | ||||||||||||
| Loans: | |||||||||||||||||
Total loans | 4,286,404 | 4,299,800 | 4,194,666 | 4,195,990 | 4,282,047 | ||||||||||||
Less: allowance for credit losses on loans | 41,711 | 41,879 | 42,137 | 44,106 | 42,645 | ||||||||||||
Net loans | 4,244,693 | 4,257,921 | 4,152,529 | 4,151,884 | 4,239,402 | ||||||||||||
| Premises and equipment, net | 28,488 | 29,031 | 28,953 | 28,870 | 27,711 | ||||||||||||
| Operating lease right-of-use assets | 27,518 | 28,329 | 28,761 | 29,521 | 29,861 | ||||||||||||
| Investment in bank-owned life insurance | 92,974 | 92,355 | 84,749 | 84,193 | 83,623 | ||||||||||||
| Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||||
| Identifiable intangible assets, net | 5,631 | 5,853 | 6,079 | 6,305 | 6,530 | ||||||||||||
| Other assets | 129,410 | 135,550 | 133,350 | 159,749 | 167,327 | ||||||||||||
Total assets | $6,002,643 | $5,851,980 | $5,719,389 | $5,713,169 | $5,849,792 | ||||||||||||
| Liabilities: | |||||||||||||||||
| Deposits: | |||||||||||||||||
Noninterest-bearing deposits | $950,974 | $901,801 | $932,999 | $832,287 | $840,444 | ||||||||||||
Interest-bearing deposits | 4,107,168 | 3,823,858 | 3,616,143 | 3,546,066 | 3,445,249 | ||||||||||||
Total deposits | 5,058,142 | 4,725,659 | 4,549,142 | 4,378,353 | 4,285,693 | ||||||||||||
| Federal Home Loan Bank advances | 222,592 | 408,592 | 466,912 | 593,859 | 713,868 | ||||||||||||
| Payment Protection Program Lending Facility | — | — | — | — | 105,746 | ||||||||||||
| Junior subordinated debentures | 22,681 | 22,681 | 22,681 | 22,681 | 22,681 | ||||||||||||
| Operating lease liabilities | 29,810 | 30,558 | 30,974 | 31,717 | 32,012 | ||||||||||||
| Other liabilities | 114,100 | 116,634 | 116,081 | 152,364 | 162,099 | ||||||||||||
Total liabilities | 5,447,325 | 5,304,124 | 5,185,790 | 5,178,974 | 5,322,099 | ||||||||||||
| Shareholders’ Equity: | |||||||||||||||||
Common stock | 1,085 | 1,085 | 1,085 | 1,085 | 1,085 | ||||||||||||
| Paid-in capital | 126,265 | 125,442 | 124,882 | 125,610 | 124,768 | ||||||||||||
| Retained earnings | 447,566 | 437,927 | 429,598 | 418,246 | 408,773 | ||||||||||||
| Accumulated other comprehensive (loss) income | (18,128) | (15,128) | (20,006) | (7,391) | (3,403) | ||||||||||||
| Treasury stock, at cost | (1,470) | (1,470) | (1,960) | (3,355) | (3,530) | ||||||||||||
Total shareholders’ equity | 555,318 | 547,856 | 533,599 | 534,195 | 527,693 | ||||||||||||
Total liabilities and shareholders’ equity | $6,002,643 | $5,851,980 | $5,719,389 | $5,713,169 | $5,849,792 | ||||||||||||
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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 | For the Nine Months Ended | |||||||||||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Sep 30, 2021 | Sep 30, 2020 | ||||||||||||||||||||
| Interest income: | ||||||||||||||||||||||||||
Interest and fees on loans | $35,691 | $34,820 | $34,159 | $34,487 | $34,925 | $104,670 | $110,938 | |||||||||||||||||||
Interest on mortgage loans held for sale | 298 | 405 | 441 | 569 | 468 | 1,144 | 1,193 | |||||||||||||||||||
Taxable interest on debt securities | 3,683 | 3,441 | 3,242 | 3,869 | 4,870 | 10,366 | 16,181 | |||||||||||||||||||
Dividends on Federal Home Loan Bank stock | 95 | 110 | 133 | 414 | 532 | 338 | 1,826 | |||||||||||||||||||
Other interest income | 56 | 32 | 33 | 35 | 39 | 121 | 424 | |||||||||||||||||||
Total interest and dividend income | 39,823 | 38,808 | 38,008 | 39,374 | 40,834 | 116,639 | 130,562 | |||||||||||||||||||
| Interest expense: | ||||||||||||||||||||||||||
Deposits | 2,789 | 2,961 | 3,663 | 4,632 | 5,532 | 9,413 | 21,180 | |||||||||||||||||||
Federal Home Loan Bank advances | 872 | 1,001 | 1,380 | 2,305 | 3,354 | 3,253 | 13,501 | |||||||||||||||||||
Junior subordinated debentures | 92 | 92 | 94 | 122 | 135 | 278 | 519 | |||||||||||||||||||
Other interest expense | — | — | — | 72 | 159 | — | 161 | |||||||||||||||||||
Total interest expense | 3,753 | 4,054 | 5,137 | 7,131 | 9,180 | 12,944 | 35,361 | |||||||||||||||||||
| Net interest income | 36,070 | 34,754 | 32,871 | 32,243 | 31,654 | 103,695 | 95,201 | |||||||||||||||||||
| Provision for credit losses | — | — | (2,000) | 1,781 | 1,325 | (2,000) | 10,561 | |||||||||||||||||||
| Net interest income after provision for credit losses | 36,070 | 34,754 | 34,871 | 30,462 | 30,329 | 105,695 | 84,640 | |||||||||||||||||||
| Noninterest income: | ||||||||||||||||||||||||||
Wealth management revenues | 10,455 | 10,428 | 9,895 | 9,206 | 8,954 | 30,778 | 26,248 | |||||||||||||||||||
Mortgage banking revenues | 6,373 | 5,994 | 11,927 | 14,077 | 12,353 | 24,294 | 33,300 | |||||||||||||||||||
Card interchange fees | 1,265 | 1,316 | 1,133 | 1,148 | 1,161 | 3,714 | 3,139 | |||||||||||||||||||
Service charges on deposit accounts | 673 | 635 | 609 | 767 | 598 | 1,917 | 1,975 | |||||||||||||||||||
Loan related derivative income | 728 | 1,175 | 467 | 173 | 1,264 | 2,370 | 3,818 | |||||||||||||||||||
Income from bank-owned life insurance | 618 | 607 | 556 | 569 | 567 | 1,781 | 1,922 | |||||||||||||||||||
Other income | 408 | 438 | 1,387 | 1,787 | 571 | 2,233 | 1,313 | |||||||||||||||||||
Total noninterest income | 20,520 | 20,593 | 25,974 | 27,727 | 25,468 | 67,087 | 71,715 | |||||||||||||||||||
| Noninterest expense: | ||||||||||||||||||||||||||
Salaries and employee benefits | 22,162 | 22,082 | 21,527 | 22,075 | 21,892 | 65,771 | 60,824 | |||||||||||||||||||
Outsourced services | 3,294 | 3,217 | 3,200 | 2,950 | 3,160 | 9,711 | 8,944 | |||||||||||||||||||
Net occupancy | 2,134 | 2,042 | 2,128 | 2,083 | 2,012 | 6,304 | 5,940 | |||||||||||||||||||
Equipment | 977 | 975 | 994 | 1,025 | 934 | 2,946 | 2,806 | |||||||||||||||||||
Legal, audit and professional fees | 767 | 678 | 597 | 1,014 | 1,252 | 2,042 | 2,733 | |||||||||||||||||||
FDIC deposit insurance costs | 482 | 374 | 345 | 330 | 392 | 1,201 | 1,488 | |||||||||||||||||||
Advertising and promotion | 559 | 560 | 222 | 640 | 384 | 1,341 | 829 | |||||||||||||||||||
Amortization of intangibles | 223 | 225 | 226 | 226 | 228 | 674 | 688 | |||||||||||||||||||
Debt prepayment penalties | — | 895 | 3,335 | 1,413 | — | 4,230 | — | |||||||||||||||||||
Other expenses | 1,922 | 1,964 | 2,139 | 2,353 | 2,090 | 6,025 | 7,023 | |||||||||||||||||||
Total noninterest expense | 32,520 | 33,012 | 34,713 | 34,109 | 32,344 | 100,245 | 91,275 | |||||||||||||||||||
| Income before income taxes | 24,070 | 22,335 | 26,132 | 24,080 | 23,453 | 72,537 | 65,080 | |||||||||||||||||||
| Income tax expense | 5,319 | 4,875 | 5,661 | 5,514 | 5,131 | 15,855 | 13,817 | |||||||||||||||||||
Net income | $18,751 | $17,460 | $20,471 | $18,566 | $18,322 | $56,682 | $51,263 | |||||||||||||||||||
| Net income available to common shareholders | $18,697 | $17,408 | $20,415 | $18,524 | $18,285 | $56,520 | $51,154 | |||||||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||||
| Basic | 17,320 | 17,314 | 17,275 | 17,264 | 17,260 | 17,303 | 17,287 | |||||||||||||||||||
| Diluted | 17,444 | 17,436 | 17,431 | 17,360 | 17,317 | 17,451 | 17,369 | |||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||
| Basic | $1.08 | $1.01 | $1.18 | $1.07 | $1.06 | $3.27 | $2.96 | |||||||||||||||||||
| Diluted | $1.07 | $1.00 | $1.17 | $1.07 | $1.06 | $3.24 | $2.95 | |||||||||||||||||||
| Cash dividends declared per share | $0.52 | $0.52 | $0.52 | $0.52 | $0.51 | $1.56 | $1.53 | |||||||||||||||||||
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| Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||||
| SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||||
| (Unaudited; Dollars and shares in thousands, except per share amounts) | |||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |||||||||||||
| Share and Equity Related Data: | |||||||||||||||||
| Book value per share | $32.06 | $31.63 | $30.83 | $30.94 | $30.57 | ||||||||||||
Tangible book value per share - Non-GAAP (1) | $28.05 | $27.60 | $26.79 | $26.87 | $26.49 | ||||||||||||
| Market value per share | $52.98 | $51.35 | $51.63 | $44.80 | $30.66 | ||||||||||||
| Shares issued at end of period | 17,363 | 17,363 | 17,363 | 17,363 | 17,363 | ||||||||||||
| Shares outstanding at end of period | 17,320 | 17,320 | 17,306 | 17,265 | 17,260 | ||||||||||||
Capital Ratios (2): | |||||||||||||||||
| Tier 1 risk-based capital | 13.01 | % | 12.82 | % | 12.99 | % | 12.61 | % | 12.23 | % | |||||||
| Total risk-based capital | 13.83 | % | 13.65 | % | 13.85 | % | 13.51 | % | 13.09 | % | |||||||
| Tier 1 leverage ratio | 9.12 | % | 9.07 | % | 9.11 | % | 8.95 | % | 8.77 | % | |||||||
| Common equity tier 1 | 12.47 | % | 12.28 | % | 12.43 | % | 12.06 | % | 11.69 | % | |||||||
| Balance Sheet Ratios: | |||||||||||||||||
| Equity to assets | 9.25 | % | 9.36 | % | 9.33 | % | 9.35 | % | 9.02 | % | |||||||
Tangible equity to tangible assets - Non-GAAP (1) | 8.19 | % | 8.27 | % | 8.21 | % | 8.22 | % | 7.91 | % | |||||||
Loans to deposits (3) | 84.9 | % | 90.8 | % | 93.0 | % | 96.2 | % | 100.5 | % | |||||||
| For the Nine Months Ended | ||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Sep 30, 2021 | Sep 30, 2020 | ||||||||||||||||||||
Performance Ratios (4): | ||||||||||||||||||||||||||
Net interest margin (5) | 2.58 | % | 2.55 | % | 2.51 | % | 2.39 | % | 2.31 | % | 2.55 | % | 2.41 | % | ||||||||||||
Return on average assets (net income divided by average assets) | 1.26 | % | 1.20 | % | 1.45 | % | 1.28 | % | 1.24 | % | 1.30 | % | 1.20 | % | ||||||||||||
Return on average tangible assets - Non-GAAP (1) | 1.27 | % | 1.22 | % | 1.47 | % | 1.30 | % | 1.26 | % | 1.32 | % | 1.22 | % | ||||||||||||
Return on average equity (net income available for common shareholders divided by average equity) | 13.37 | % | 12.92 | % | 15.55 | % | 13.96 | % | 13.99 | % | 13.93 | % | 13.36 | % | ||||||||||||
Return on average tangible equity - Non-GAAP (1) | 15.29 | % | 14.84 | % | 17.91 | % | 16.10 | % | 16.19 | % | 15.98 | % | 15.50 | % | ||||||||||||
Efficiency ratio (6) | 57.5 | % | 59.6 | % | 59.0 | % | 56.9 | % | 56.6 | % | 58.7 | % | 54.7 | % | ||||||||||||
(1)See the section labeled “Supplemental Information - Calculation of Non-GAAP Financial Measures” at the end of this document.
(2)Estimated for September 30, 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 | For the Nine Months Ended | |||||||||||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Sep 30, 2021 | Sep 30, 2020 | ||||||||||||||||||||
| Wealth Management Results | ||||||||||||||||||||||||||
| Wealth Management Revenues: | ||||||||||||||||||||||||||
| Asset-based revenues | $10,224 | $9,991 | $9,583 | $9,066 | $8,786 | $29,798 | $25,297 | |||||||||||||||||||
| Transaction-based revenues | 231 | 437 | 312 | 140 | 168 | 980 | 951 | |||||||||||||||||||
| Total wealth management revenues | $10,455 | $10,428 | $9,895 | $9,206 | $8,954 | $30,778 | $26,248 | |||||||||||||||||||
| Assets Under Administration (AUA): | ||||||||||||||||||||||||||
| Balance at beginning of period | $7,441,519 | $7,049,226 | $6,866,737 | $6,395,652 | $6,138,845 | $6,866,737 | $6,235,801 | |||||||||||||||||||
Net investment appreciation (depreciation) & income | (4,830) | 368,383 | 208,953 | 540,189 | 335,209 | 572,506 | 234,076 | |||||||||||||||||||
| Net client asset inflows (outflows) | 6,707 | 23,910 | (26,464) | (69,104) | (78,402) | 4,153 | (74,225) | |||||||||||||||||||
| Balance at end of period | $7,443,396 | $7,441,519 | $7,049,226 | $6,866,737 | $6,395,652 | $7,443,396 | $6,395,652 | |||||||||||||||||||
Percentage of AUA that are managed assets | 91% | 92% | 91% | 91% | 90% | 91% | 90% | |||||||||||||||||||
| Mortgage Banking Results | ||||||||||||||||||||||||||
| Mortgage Banking Revenues: | ||||||||||||||||||||||||||
Realized gains on loan sales, net (1) | $5,750 | $8,562 | $13,745 | $13,394 | $14,280 | $28,057 | $28,614 | |||||||||||||||||||
Changes in fair value, net (2) | 467 | (2,543) | (1,888) | 813 | (1,555) | (3,964) | 5,185 | |||||||||||||||||||
Loan servicing fee income, net (3) | 156 | (25) | 70 | (130) | (372) | 201 | (499) | |||||||||||||||||||
| Total mortgage banking revenues | $6,373 | $5,994 | $11,927 | $14,077 | $12,353 | $24,294 | $33,300 | |||||||||||||||||||
| Residential Mortgage Loan Originations: | ||||||||||||||||||||||||||
Originations for retention in portfolio (4) | $205,293 | $244,821 | $131,791 | $134,002 | $132,726 | $581,905 | $368,118 | |||||||||||||||||||
Originations for sale to secondary market (5) | 190,702 | 244,562 | 309,325 | 312,226 | 377,137 | 744,589 | 859,680 | |||||||||||||||||||
| Total mortgage loan originations | $395,995 | $489,383 | $441,116 | $446,228 | $509,863 | $1,326,494 | $1,227,798 | |||||||||||||||||||
| Residential Mortgage Loans Sold: | ||||||||||||||||||||||||||
| Sold with servicing rights retained | $108,445 | $235,280 | $226,645 | $240,104 | $317,920 | $570,370 | $609,363 | |||||||||||||||||||
Sold with servicing rights released (5) | 65,416 | 55,278 | 65,374 | 78,072 | 36,250 | 186,068 | 212,222 | |||||||||||||||||||
| Total mortgage loans sold | $173,861 | $290,558 | $292,019 | $318,176 | $354,170 | $756,438 | $821,585 | |||||||||||||||||||
(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 changes 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) | |||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |||||||||||||
| Loans: | |||||||||||||||||
| Commercial real estate (1) | $1,661,785 | $1,669,624 | $1,618,540 | $1,633,024 | $1,665,745 | ||||||||||||
| Commercial & industrial | 682,774 | 764,509 | 840,585 | 817,408 | 822,269 | ||||||||||||
| Total commercial | 2,344,559 | 2,434,133 | 2,459,125 | 2,450,432 | 2,488,014 | ||||||||||||
| Residential real estate (2) | 1,672,364 | 1,590,389 | 1,457,490 | 1,467,312 | 1,506,726 | ||||||||||||
| Home equity | 249,874 | 254,802 | 256,799 | 259,185 | 268,551 | ||||||||||||
| Other | 19,607 | 20,476 | 21,252 | 19,061 | 18,756 | ||||||||||||
| Total consumer | 269,481 | 275,278 | 278,051 | 278,246 | 287,307 | ||||||||||||
| Total loans | $4,286,404 | $4,299,800 | $4,194,666 | $4,195,990 | $4,282,047 | ||||||||||||
(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.
| September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||
| Count | Balance | % of Total | Count | Balance | % of Total | ||||||||||||||||||
| Commercial Real Estate Portfolio Segmentation: | |||||||||||||||||||||||
| Multi-family dwelling | 130 | $488,500 | 29 | % | 137 | $524,874 | 32 | % | |||||||||||||||
| Retail | 127 | 353,103 | 21 | 136 | 339,569 | 21 | |||||||||||||||||
| Office | 62 | 229,846 | 14 | 73 | 290,756 | 18 | |||||||||||||||||
| Hospitality | 39 | 199,379 | 12 | 40 | 157,720 | 10 | |||||||||||||||||
| Industrial and warehouse | 37 | 143,597 | 9 | 28 | 97,055 | 6 | |||||||||||||||||
| Healthcare | 15 | 136,615 | 8 | 15 | 109,321 | 7 | |||||||||||||||||
| Commercial mixed use | 20 | 39,293 | 2 | 22 | 42,405 | 3 | |||||||||||||||||
| Other | 36 | 71,452 | 5 | 38 | 71,324 | 3 | |||||||||||||||||
Commercial real estate loans | 466 | $1,661,785 | 100 | % | 489 | $1,633,024 | 100 | % | |||||||||||||||
| Commercial & Industrial Portfolio Segmentation: | |||||||||||||||||||||||
| Healthcare and social assistance | 138 | $184,906 | 27 | % | 253 | $200,217 | 24 | % | |||||||||||||||
| Owner occupied and other real estate | 193 | 76,104 | 11 | 268 | 74,309 | 9 | |||||||||||||||||
| Manufacturing | 78 | 64,447 | 9 | 146 | 88,802 | 11 | |||||||||||||||||
| Accommodation and food services | 162 | 57,513 | 8 | 271 | 47,020 | 6 | |||||||||||||||||
| Retail | 92 | 49,741 | 7 | 192 | 63,895 | 8 | |||||||||||||||||
| Educational services | 33 | 49,566 | 7 | 53 | 64,969 | 8 | |||||||||||||||||
Entertainment and recreation | 54 | 33,756 | 5 | 91 | 29,415 | 4 | |||||||||||||||||
Finance and insurance | 65 | 33,129 | 5 | 106 | 26,244 | 3 | |||||||||||||||||
Information | 18 | 25,536 | 4 | 32 | 28,394 | 3 | |||||||||||||||||
Transportation and warehousing | 32 | 20,637 | 3 | 42 | 24,061 | 3 | |||||||||||||||||
Professional, scientific and technical | 93 | 12,073 | 2 | 265 | 39,295 | 5 | |||||||||||||||||
Public administration | 19 | 6,308 | 1 | 26 | 23,319 | 3 | |||||||||||||||||
Other | 394 | 69,058 | 11 | 772 | 107,468 | 13 | |||||||||||||||||
Commercial & industrial loans | 1,371 | $682,774 | 100 | % | 2,517 | $817,408 | 100 | % | |||||||||||||||
-11-
| Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||||||||||
| SUPPLEMENTAL LOAN PORTFOLIO INFORMATION | |||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||||||||
| September 30, 2021 | December 31, 2020 | ||||||||||||||||||||||
| Count | Balance | % of Total | Count | Balance | % of Total | ||||||||||||||||||
| PPP Loans By Industry: | |||||||||||||||||||||||
| Accommodation and food services | 111 | $24,560 | 32 | % | 209 | $23,678 | 12 | % | |||||||||||||||
| Healthcare and social assistance | 71 | 15,684 | 20 | 173 | 47,354 | 24 | |||||||||||||||||
Professional, scientific and technical | 61 | 6,078 | 8 | 220 | 20,031 | 10 | |||||||||||||||||
| Manufacturing | 25 | 5,662 | 7 | 89 | 23,321 | 12 | |||||||||||||||||
Entertainment and recreation | 27 | 2,597 | 3 | 61 | 3,386 | 2 | |||||||||||||||||
| Educational services | 15 | 2,512 | 3 | 32 | 9,681 | 5 | |||||||||||||||||
| Retail | 37 | 2,222 | 3 | 134 | 12,107 | 6 | |||||||||||||||||
Information | 8 | 2,130 | 3 | 20 | 2,478 | 1 | |||||||||||||||||
| Owner occupied and other real estate | 33 | 1,412 | 2 | 115 | 9,241 | 5 | |||||||||||||||||
Public administration | 3 | 417 | 1 | 4 | 483 | — | |||||||||||||||||
Finance and insurance | 11 | 405 | 1 | 55 | 2,000 | 1 | |||||||||||||||||
Transportation and warehousing | 10 | 360 | — | 21 | 2,059 | 1 | |||||||||||||||||
Other | 218 | 13,344 | 17 | 573 | 43,961 | 21 | |||||||||||||||||
Total PPP loans (included in the commercial & industrial loan portfolio) | 630 | $77,383 | 100 | % | 1,706 | $199,780 | 100 | % | |||||||||||||||
| Average PPP loan size | $123 | $117 | |||||||||||||||||||||
| Net unamortized fees on PPP loans | $2,618 | $3,893 | |||||||||||||||||||||
| September 30, 2021 | June 30, 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 | 5 | $37,955 | 2 | % | 14 | $87,363 | 5 | % | |||||||||||||||
Commercial & industrial deferments | — | — | — | — | — | — | |||||||||||||||||
| Total commercial deferments | 5 | 37,955 | 2 | 14 | 87,363 | 5 | |||||||||||||||||
| Residential real estate deferments | — | — | — | 8 | 6,027 | — | |||||||||||||||||
| Total consumer deferments | — | — | — | — | — | — | |||||||||||||||||
| Total loan deferments | 5 | $37,955 | 1 | % | 22 | $93,390 | 2 | % | |||||||||||||||
(1)Percent of respective outstanding portfolio segment balance excluding balance of PPP loans for each respective period.
-12-
| Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||||
| END OF PERIOD LOAN AND DEPOSIT COMPOSITION | |||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||
| September 30, 2021 | December 31, 2020 | ||||||||||||||||
| Balance | % of Total | Balance | % of Total | ||||||||||||||
| Commercial Real Estate Loans by Property Location: | |||||||||||||||||
| Connecticut | $632,339 | 38 | % | $649,919 | 40 | % | |||||||||||
| Rhode Island | 467,182 | 28 | 431,133 | 26 | |||||||||||||
| Massachusetts | 462,456 | 28 | 468,947 | 29 | |||||||||||||
Subtotal | 1,561,977 | 94 | 1,549,999 | 95 | |||||||||||||
| All other states | 99,808 | 6 | 83,025 | 5 | |||||||||||||
Total commercial real estate loans | $1,661,785 | 100 | % | $1,633,024 | 100 | % | |||||||||||
Residential Real Estate Loans by Property Location: | |||||||||||||||||
Massachusetts | $1,161,977 | 69 | % | $994,800 | 68 | % | |||||||||||
Rhode Island | 357,445 | 21 | 331,713 | 23 | |||||||||||||
Connecticut | 131,832 | 8 | 122,102 | 8 | |||||||||||||
Subtotal | 1,651,254 | 99 | 1,448,615 | 99 | |||||||||||||
All other states | 21,110 | 1 | 18,697 | 1 | |||||||||||||
Total residential real estate loans | $1,672,364 | 100 | % | $1,467,312 | 100 | % | |||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |||||||||||||
| Deposits: | |||||||||||||||||
| Noninterest-bearing demand deposits | $950,974 | $901,801 | $932,999 | $832,287 | $840,444 | ||||||||||||
| Interest-bearing demand deposits | 238,317 | 174,165 | 171,571 | 174,290 | 170,198 | ||||||||||||
| NOW accounts | 817,937 | 774,693 | 745,376 | 698,706 | 644,909 | ||||||||||||
| Money market accounts | 1,046,324 | 941,511 | 950,413 | 910,167 | 877,536 | ||||||||||||
| Savings accounts | 540,306 | 524,155 | 511,759 | 466,507 | 439,383 | ||||||||||||
| Time deposits (in-market) | 709,288 | 677,061 | 701,524 | 704,855 | 729,058 | ||||||||||||
In-market deposits | 4,303,146 | 3,993,386 | 4,013,642 | 3,786,812 | 3,701,528 | ||||||||||||
| Wholesale brokered time deposits | 754,996 | 732,273 | 535,500 | 591,541 | 584,165 | ||||||||||||
Total deposits | $5,058,142 | $4,725,659 | $4,549,142 | $4,378,353 | $4,285,693 | ||||||||||||
-13-
| Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||||
| CREDIT & ASSET QUALITY DATA | |||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |||||||||||||
| Asset Quality Ratios: | |||||||||||||||||
| Nonperforming assets to total assets | 0.18 | % | 0.18 | % | 0.23 | % | 0.23 | % | 0.25 | % | |||||||
| Nonaccrual loans to total loans | 0.26 | % | 0.24 | % | 0.31 | % | 0.31 | % | 0.34 | % | |||||||
| Total past due loans to total loans | 0.22 | % | 0.20 | % | 0.26 | % | 0.30 | % | 0.24 | % | |||||||
| Allowance for credit losses on loans to nonaccrual loans | 380.02 | % | 399.57 | % | 324.56 | % | 334.21 | % | 289.31 | % | |||||||
| Allowance for credit losses on loans to total loans | 0.97 | % | 0.97 | % | 1.00 | % | 1.05 | % | 1.00 | % | |||||||
| Nonperforming Assets: | |||||||||||||||||
| Commercial real estate | $— | $— | $— | $— | $431 | ||||||||||||
| Commercial & industrial | — | 539 | — | — | — | ||||||||||||
| Total commercial | — | 539 | — | — | 431 | ||||||||||||
| Residential real estate | 10,321 | 8,926 | 11,748 | 11,981 | 12,792 | ||||||||||||
| Home equity | 655 | 1,016 | 1,147 | 1,128 | 1,429 | ||||||||||||
| Other consumer | — | — | 88 | 88 | 88 | ||||||||||||
| Total consumer | 655 | 1,016 | 1,235 | 1,216 | 1,517 | ||||||||||||
| Total nonaccrual loans | 10,976 | 10,481 | 12,983 | 13,197 | 14,740 | ||||||||||||
| Other real estate owned | — | — | — | — | — | ||||||||||||
| Total nonperforming assets | $10,976 | $10,481 | $12,983 | $13,197 | $14,740 | ||||||||||||
| Past Due Loans (30 days or more past due): | |||||||||||||||||
| Commercial real estate | $— | $— | $— | $265 | $431 | ||||||||||||
| Commercial & industrial | 2 | 540 | 1 | 3 | 21 | ||||||||||||
| Total commercial | 2 | 540 | 1 | 268 | 452 | ||||||||||||
| Residential real estate | 8,698 | 6,656 | 9,661 | 10,339 | 8,081 | ||||||||||||
| Home equity | 824 | 1,231 | 1,131 | 1,667 | 1,753 | ||||||||||||
| Other consumer | 24 | 28 | 119 | 118 | 108 | ||||||||||||
| Total consumer | 848 | 1,259 | 1,250 | 1,785 | 1,861 | ||||||||||||
| Total past due loans | $9,548 | $8,455 | $10,912 | $12,392 | $10,394 | ||||||||||||
| Accruing loans 90 days or more past due | $— | $— | $— | $— | $— | ||||||||||||
| Nonaccrual loans included in past due loans | $6,930 | $5,773 | $8,356 | $8,521 | $8,799 | ||||||||||||
| Troubled Debt Restructurings: | |||||||||||||||||
| Accruing TDRs | $7,979 | $8,541 | $12,358 | $13,340 | $5,709 | ||||||||||||
| Nonaccrual TDRs | 1,732 | 2,278 | 1,935 | 2,345 | 2,894 | ||||||||||||
| Total TDRs | $9,711 | $10,819 | $14,293 | $15,685 | $8,603 | ||||||||||||
| Washington Trust Bancorp, Inc. and Subsidiaries | ||||||||||||||||||||||||||
| CREDIT & ASSET QUALITY DATA | ||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | ||||||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Sep 30, 2021 | Sep 30, 2020 | ||||||||||||||||||||
| Nonaccrual Loan Activity: | ||||||||||||||||||||||||||
| Balance at beginning of period | $10,481 | $12,983 | $13,197 | $14,740 | $16,017 | $13,197 | $17,408 | |||||||||||||||||||
| Additions to nonaccrual status | 2,583 | 537 | 734 | 707 | 971 | 3,854 | 2,937 | |||||||||||||||||||
| Loans returned to accruing status | — | (874) | (3) | (1,112) | (1,623) | (877) | (2,170) | |||||||||||||||||||
| Loans charged-off | (249) | (317) | (64) | (246) | (111) | (630) | (1,071) | |||||||||||||||||||
| Loans transferred to other real estate owned | — | — | — | (285) | — | — | (28) | |||||||||||||||||||
| Payments, payoffs and other changes | (1,839) | (1,848) | (881) | (607) | (514) | (4,568) | (2,336) | |||||||||||||||||||
| Balance at end of period | $10,976 | $10,481 | $12,983 | $13,197 | $14,740 | $10,976 | $14,740 | |||||||||||||||||||
| Allowance for Credit Losses on Loans: | ||||||||||||||||||||||||||
| Balance at beginning of period | $41,879 | $42,137 | $44,106 | $42,645 | $41,441 | $44,106 | $27,014 | |||||||||||||||||||
| Adoption of CECL accounting standard (Topic 326) | — | — | — | — | — | — | 6,501 | |||||||||||||||||||
Provision for credit losses on loans (1) | — | — | (1,951) | 1,579 | 1,300 | (1,951) | 10,157 | |||||||||||||||||||
| Charge-offs | (249) | (317) | (64) | (245) | (111) | (630) | (1,072) | |||||||||||||||||||
| Recoveries | 81 | 59 | 46 | 127 | 15 | 186 | 45 | |||||||||||||||||||
| Balance at end of period | $41,711 | $41,879 | $42,137 | $44,106 | $42,645 | $41,711 | $42,645 | |||||||||||||||||||
| Allowance for Credit Losses on Unfunded Commitments: | ||||||||||||||||||||||||||
| Balance at beginning of period | $2,333 | $2,333 | $2,382 | $2,180 | $2,155 | $2,382 | $293 | |||||||||||||||||||
| Adoption of CECL accounting standard (Topic 326) | — | — | — | — | — | — | 1,483 | |||||||||||||||||||
Provision for credit losses on unfunded commitments (1) | — | — | (49) | 202 | 25 | (49) | 404 | |||||||||||||||||||
Balance at end of period (2) | $2,333 | $2,333 | $2,333 | $2,382 | $2,180 | $2,333 | $2,180 | |||||||||||||||||||
(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 | For the Nine Months Ended | |||||||||||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Sep 30, 2021 | Sep 30, 2020 | ||||||||||||||||||||
| Net Loan Charge-Offs (Recoveries): | ||||||||||||||||||||||||||
| Commercial real estate | $— | $— | $— | $133 | $— | $— | $172 | |||||||||||||||||||
| Commercial & industrial | (2) | 302 | 1 | (12) | — | 301 | 574 | |||||||||||||||||||
| Total commercial | (2) | 302 | 1 | 121 | — | 301 | 746 | |||||||||||||||||||
| Residential real estate | 52 | (47) | 17 | (20) | 99 | 22 | 99 | |||||||||||||||||||
| Home equity | 110 | (4) | (2) | 9 | (4) | 104 | 163 | |||||||||||||||||||
| Other consumer | 8 | 7 | 2 | 8 | 1 | 17 | 19 | |||||||||||||||||||
| Total consumer | 118 | 3 | — | 17 | (3) | 121 | 182 | |||||||||||||||||||
| Total | $168 | $258 | $18 | $118 | $96 | $444 | $1,027 | |||||||||||||||||||
| Net charge-offs to average loans (annualized) | 0.02 | % | 0.02 | % | — | % | 0.01 | % | 0.01 | % | 0.01 | % | 0.03 | % | ||||||||||||
-14-
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 changes in fair value 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 | September 30, 2021 | June 30, 2021 | 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 | $179,574 | $56 | 0.12 | % | $146,313 | $32 | 0.09 | % | $33,261 | $24 | 0.03 | % | |||||||||||||||||||||||
| Mortgage loans held for sale | 41,261 | 298 | 2.87 | 57,473 | 405 | 2.83 | (16,212) | (107) | 0.04 | ||||||||||||||||||||||||||
| Taxable debt securities | 1,045,997 | 3,683 | 1.40 | 1,029,933 | 3,441 | 1.34 | 16,064 | 242 | 0.06 | ||||||||||||||||||||||||||
| FHLB stock | 18,909 | 95 | 1.99 | 25,128 | 110 | 1.76 | (6,219) | (15) | 0.23 | ||||||||||||||||||||||||||
| Commercial real estate | 1,648,972 | 12,209 | 2.94 | 1,639,515 | 11,701 | 2.86 | 9,457 | 508 | 0.08 | ||||||||||||||||||||||||||
| Commercial & industrial | 736,073 | 7,886 | 4.25 | 807,598 | 8,113 | 4.03 | (71,525) | (227) | 0.22 | ||||||||||||||||||||||||||
Total commercial | 2,385,045 | 20,095 | 3.34 | 2,447,113 | 19,814 | 3.25 | (62,068) | 281 | 0.09 | ||||||||||||||||||||||||||
Residential real estate | 1,623,913 | 13,511 | 3.30 | 1,514,487 | 12,920 | 3.42 | 109,426 | 591 | (0.12) | ||||||||||||||||||||||||||
| Home equity | 252,938 | 2,043 | 3.20 | 257,257 | 2,056 | 3.21 | (4,319) | (13) | (0.01) | ||||||||||||||||||||||||||
| Other | 19,822 | 247 | 4.94 | 20,979 | 253 | 4.84 | (1,157) | (6) | 0.10 | ||||||||||||||||||||||||||
| Total consumer | 272,760 | 2,290 | 3.33 | 278,236 | 2,309 | 3.33 | (5,476) | (19) | — | ||||||||||||||||||||||||||
Total loans | 4,281,718 | 35,896 | 3.33 | 4,239,836 | 35,043 | 3.32 | 41,882 | 853 | 0.01 | ||||||||||||||||||||||||||
Total interest-earning assets | 5,567,459 | 40,028 | 2.85 | 5,498,683 | 39,031 | 2.85 | 68,776 | 997 | — | ||||||||||||||||||||||||||
| Noninterest-earning assets | 351,678 | 334,742 | 16,936 | ||||||||||||||||||||||||||||||||
Total assets | $5,919,137 | $5,833,425 | $85,712 | ||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $206,237 | $51 | 0.10 | % | $182,465 | $49 | 0.11 | % | $23,772 | $2 | (0.01 | %) | |||||||||||||||||||||||
| NOW accounts | 782,963 | 129 | 0.07 | 760,294 | 119 | 0.06 | 22,669 | 10 | 0.01 | ||||||||||||||||||||||||||
| Money market accounts | 1,014,204 | 586 | 0.23 | 951,194 | 552 | 0.23 | 63,010 | 34 | — | ||||||||||||||||||||||||||
| Savings accounts | 530,956 | 70 | 0.05 | 518,072 | 72 | 0.06 | 12,884 | (2) | (0.01) | ||||||||||||||||||||||||||
| Time deposits (in-market) | 672,012 | 1,695 | 1.00 | 686,590 | 1,889 | 1.10 | (14,578) | (194) | (0.10) | ||||||||||||||||||||||||||
| Total interest-bearing in-market deposits | 3,206,372 | 2,531 | 0.31 | 3,098,615 | 2,681 | 0.35 | 107,757 | (150) | (0.04) | ||||||||||||||||||||||||||
| Wholesale brokered time deposits | 722,233 | 258 | 0.14 | 662,541 | 280 | 0.17 | 59,692 | (22) | (0.03) | ||||||||||||||||||||||||||
| Total interest-bearing deposits | 3,928,605 | 2,789 | 0.28 | 3,761,156 | 2,961 | 0.32 | 167,449 | (172) | (0.04) | ||||||||||||||||||||||||||
| FHLB advances | 317,766 | 872 | 1.09 | 456,661 | 1,001 | 0.88 | (138,895) | (129) | 0.21 | ||||||||||||||||||||||||||
| Junior subordinated debentures | 22,681 | 92 | 1.61 | 22,681 | 92 | 1.63 | — | — | (0.02) | ||||||||||||||||||||||||||
| PPPLF borrowings | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Total interest-bearing liabilities | 4,269,052 | 3,753 | 0.35 | 4,240,498 | 4,054 | 0.38 | 28,554 | (301) | (0.03) | ||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 952,676 | 912,295 | 40,381 | ||||||||||||||||||||||||||||||||
| Other liabilities | 142,562 | 140,108 | 2,454 | ||||||||||||||||||||||||||||||||
| Shareholders' equity | 554,847 | 540,524 | 14,323 | ||||||||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $5,919,137 | $5,833,425 | $85,712 | ||||||||||||||||||||||||||||||||
Net interest income (FTE) | $36,275 | $34,977 | $1,298 | ||||||||||||||||||||||||||||||||
| Interest rate spread | 2.50 | % | 2.47 | % | 0.03 | % | |||||||||||||||||||||||||||||
| Net interest margin | 2.58 | % | 2.55 | % | 0.03 | % | |||||||||||||||||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Three Months Ended | Sep 30, 2021 | Jun 30, 2021 | Change | ||||||||
| Commercial loans | $205 | $223 | ($18) | ||||||||
| Total | $205 | $223 | ($18) | ||||||||
-15-
| Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis) | |||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||||||||||||||
| For the Nine Months Ended | September 30, 2021 | September 30, 2020 | 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 | $160,350 | $121 | 0.10 | % | $156,296 | $424 | 0.36 | % | $4,054 | ($303) | (0.26 | %) | |||||||||||||||||
| Mortgage loans for sale | 53,307 | 1,144 | 2.87 | 48,570 | 1,193 | 3.28 | 4,737 | (49) | (0.41) | ||||||||||||||||||||
| Taxable debt securities | 997,741 | 10,366 | 1.39 | 905,692 | 16,181 | 2.39 | 92,049 | (5,815) | (1.00) | ||||||||||||||||||||
| FHLB stock | 24,265 | 338 | 1.86 | 49,236 | 1,826 | 4.95 | (24,971) | (1,488) | (3.09) | ||||||||||||||||||||
| Commercial real estate | 1,638,200 | 35,269 | 2.88 | 1,623,612 | 40,326 | 3.32 | 14,588 | (5,057) | (0.44) | ||||||||||||||||||||
| Commercial & industrial | 794,091 | 23,865 | 4.02 | 749,905 | 20,214 | 3.60 | 44,186 | 3,651 | 0.42 | ||||||||||||||||||||
Total commercial | 2,432,291 | 59,134 | 3.25 | 2,373,517 | 60,540 | 3.41 | 58,774 | (1,406) | (0.16) | ||||||||||||||||||||
Residential real estate | 1,531,529 | 39,248 | 3.43 | 1,492,589 | 42,660 | 3.82 | 38,940 | (3,412) | (0.39) | ||||||||||||||||||||
| Home equity | 255,959 | 6,220 | 3.25 | 281,488 | 7,802 | 3.70 | (25,529) | (1,582) | (0.45) | ||||||||||||||||||||
| Other | 20,301 | 742 | 4.89 | 19,171 | 716 | 4.99 | 1,130 | 26 | (0.10) | ||||||||||||||||||||
| Total consumer | 276,260 | 6,962 | 3.37 | 300,659 | 8,518 | 3.78 | (24,399) | (1,556) | (0.41) | ||||||||||||||||||||
Total loans | 4,240,080 | 105,344 | 3.32 | 4,166,765 | 111,718 | 3.58 | 73,315 | (6,374) | (0.26) | ||||||||||||||||||||
Total interest-earning assets | 5,475,743 | 117,313 | 2.86 | 5,326,559 | 131,342 | 3.29 | 149,184 | (14,029) | (0.43) | ||||||||||||||||||||
| Noninterest-earning assets | 346,514 | 357,133 | (10,619) | ||||||||||||||||||||||||||
Total assets | $5,822,257 | $5,683,692 | $138,565 | ||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $190,979 | $196 | 0.14 | % | $158,594 | $725 | 0.61 | % | $32,385 | ($529) | (0.47 | %) | |||||||||||||||||
| NOW accounts | 747,385 | 350 | 0.06 | 569,283 | 253 | 0.06 | 178,102 | 97 | — | ||||||||||||||||||||
| Money market accounts | 958,812 | 1,852 | 0.26 | 818,530 | 4,439 | 0.72 | 140,282 | (2,587) | (0.46) | ||||||||||||||||||||
| Savings accounts | 513,110 | 211 | 0.05 | 402,243 | 195 | 0.06 | 110,867 | 16 | (0.01) | ||||||||||||||||||||
| Time deposits (in-market) | 687,278 | 5,822 | 1.13 | 752,443 | 10,571 | 1.88 | (65,165) | (4,749) | (0.75) | ||||||||||||||||||||
| Total interest-bearing in-market deposits | 3,097,564 | 8,431 | 0.36 | 2,701,093 | 16,183 | 0.80 | 396,471 | (7,752) | (0.44) | ||||||||||||||||||||
| Wholesale brokered time deposits | 655,165 | 982 | 0.20 | 471,771 | 4,997 | 1.41 | 183,394 | (4,015) | (1.21) | ||||||||||||||||||||
| Total interest-bearing deposits | 3,752,729 | 9,413 | 0.34 | 3,172,864 | 21,180 | 0.89 | 579,865 | (11,767) | (0.55) | ||||||||||||||||||||
| FHLB advances | 438,213 | 3,253 | 0.99 | 1,016,943 | 13,501 | 1.77 | (578,730) | (10,248) | (0.78) | ||||||||||||||||||||
| Junior subordinated debentures | 22,681 | 278 | 1.64 | 22,681 | 519 | 3.06 | — | (241) | (1.42) | ||||||||||||||||||||
| PPPLF borrowings | — | — | — | 61,333 | 161 | 0.35 | (61,333) | (161) | (0.35) | ||||||||||||||||||||
Total interest-bearing liabilities | 4,213,623 | 12,944 | 0.41 | 4,273,821 | 35,361 | 1.11 | (60,198) | (22,417) | (0.70) | ||||||||||||||||||||
| Noninterest-bearing demand deposits | 918,760 | 733,359 | 185,401 | ||||||||||||||||||||||||||
| Other liabilities | 147,244 | 164,928 | (17,684) | ||||||||||||||||||||||||||
| Shareholders' equity | 542,630 | 511,584 | 31,046 | ||||||||||||||||||||||||||
Total liabilities and shareholders' equity | $5,822,257 | $5,683,692 | $138,565 | ||||||||||||||||||||||||||
Net interest income (FTE) | $104,369 | $95,981 | $8,388 | ||||||||||||||||||||||||||
| Interest rate spread | 2.45 | % | 2.18 | % | 0.27 | % | |||||||||||||||||||||||
| Net interest margin | 2.55 | % | 2.41 | % | 0.14 | % | |||||||||||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Nine Months Ended | Sep 30, 2021 | Sep 30, 2020 | Change | ||||||||
| Commercial loans | $674 | $780 | ($106) | ||||||||
| Total | $674 | $780 | ($106) | ||||||||
-16-
| Washington Trust Bancorp, Inc. and Subsidiaries | |||||||||||||||||
| SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures | |||||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |||||||||||||
| Tangible Book Value per Share: | |||||||||||||||||
| Total shareholders' equity, as reported | $555,318 | $547,856 | $533,599 | $534,195 | $527,693 | ||||||||||||
| Less: | |||||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||||
Identifiable intangible assets, net | 5,631 | 5,853 | 6,079 | 6,305 | 6,530 | ||||||||||||
| Total tangible shareholders' equity | $485,778 | $478,094 | $463,611 | $463,981 | $457,254 | ||||||||||||
| Shares outstanding, as reported | 17,320 | 17,320 | 17,306 | 17,265 | 17,260 | ||||||||||||
| Book value per share - GAAP | $32.06 | $31.63 | $30.83 | $30.94 | $30.57 | ||||||||||||
| Tangible book value per share - Non-GAAP | $28.05 | $27.60 | $26.79 | $26.87 | $26.49 | ||||||||||||
| Tangible Equity to Tangible Assets: | |||||||||||||||||
| Total tangible shareholders' equity | $485,778 | $478,094 | $463,611 | $463,981 | $457,254 | ||||||||||||
| Total assets, as reported | $6,002,643 | $5,851,980 | $5,719,389 | $5,713,169 | $5,849,792 | ||||||||||||
| Less: | |||||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | ||||||||||||
Identifiable intangible assets, net | 5,631 | 5,853 | 6,079 | 6,305 | 6,530 | ||||||||||||
| Total tangible assets | $5,933,103 | $5,782,218 | $5,649,401 | $5,642,955 | $5,779,353 | ||||||||||||
| Equity to assets - GAAP | 9.25 | % | 9.36 | % | 9.33 | % | 9.35 | % | 9.02 | % | |||||||
| Tangible equity to tangible assets - Non-GAAP | 8.19 | % | 8.27 | % | 8.21 | % | 8.22 | % | 7.91 | % | |||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||
| Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Sep 30, 2021 | Sep 30, 2020 | ||||||||||||||||||||
| Return on Average Tangible Assets: | ||||||||||||||||||||||||||
| Net income, as reported | $18,751 | $17,460 | $20,471 | $18,566 | $18,322 | $56,682 | $51,263 | |||||||||||||||||||
| Total average assets, as reported | $5,919,137 | $5,833,425 | $5,711,931 | $5,768,263 | $5,864,449 | $5,822,257 | $5,683,692 | |||||||||||||||||||
| Less average balances of: | ||||||||||||||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | |||||||||||||||||||
Identifiable intangible assets, net | 5,739 | 5,963 | 6,189 | 6,414 | 6,641 | 5,962 | 6,870 | |||||||||||||||||||
| Total average tangible assets | $5,849,489 | $5,763,553 | $5,641,833 | $5,697,940 | $5,793,899 | $5,752,386 | $5,612,913 | |||||||||||||||||||
| Return on average assets - GAAP | 1.26 | % | 1.20 | % | 1.45 | % | 1.28 | % | 1.24 | % | 1.30 | % | 1.20 | % | ||||||||||||
Return on average tangible assets - Non-GAAP | 1.27 | % | 1.22 | % | 1.47 | % | 1.30 | % | 1.26 | % | 1.32 | % | 1.22 | % | ||||||||||||
| Return on Average Tangible Equity: | ||||||||||||||||||||||||||
Net income available to common shareholders, as reported | $18,697 | $17,408 | $20,415 | $18,524 | $18,285 | $56,520 | $51,154 | |||||||||||||||||||
| Total average equity, as reported | $554,847 | $540,524 | $532,271 | $527,969 | $519,785 | $542,630 | $511,584 | |||||||||||||||||||
| Less average balances of: | ||||||||||||||||||||||||||
Goodwill | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | 63,909 | |||||||||||||||||||
Identifiable intangible assets, net | 5,739 | 5,963 | 6,189 | 6,414 | 6,641 | 5,962 | 6,870 | |||||||||||||||||||
| Total average tangible equity | $485,199 | $470,652 | $462,173 | $457,646 | $449,235 | $472,759 | $440,805 | |||||||||||||||||||
| Return on average equity - GAAP | 13.37 | % | 12.92 | % | 15.55 | % | 13.96 | % | 13.99 | % | 13.93 | % | 13.36 | % | ||||||||||||
Return on average tangible equity - Non-GAAP | 15.29 | % | 14.84 | % | 17.91 | % | 16.10 | % | 16.19 | % | 15.98 | % | 15.50 | % | ||||||||||||
-17-