Washington Trust Reports Record 2015 Earnings

| Source: Washington Trust Bancorp, Inc. Washington Trust Bancorp, Inc.

WESTERLY, R.I., Jan. 26, 2016 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced net income of $10.7 million, or 62 cents per diluted share, for the fourth quarter of 2015.  Net income was up by 5% from the $10.2 million, or 60 cents per diluted share, reported for the third quarter of 2015. 

For the year ended December 31, 2015, net income totaled $43.5 million, or $2.54 per diluted share.  Full-year net income increased by 6%, from the $40.8 million, or $2.41 per diluted share, reported for 2014.  Returns on average equity and average assets in 2015 were 12.00% and 1.19%, respectively, compared to 11.87% and 1.23%, respectively, for the same period in 2014.

"Washington Trust marked its 215th year of service on a positive note, as solid fourth quarter results led to all-time record earnings for 2015," stated Joseph J. MarcAurele, Washington Trust Chairman and CEO.  "Our 2015 performance once again reflects Washington Trust’s ability to achieve continued growth and profitability in a challenging and competitive environment."

Selected highlights for the fourth quarter of 2015 include:

  • Total loans rose by 2.1%, led by a solid increase of $75 million, or 4.7%, in commercial loan balances.  Total loans rose by $154 million, or 5.4% in the year 2015.
  • Total deposits grew by $98 million, or 3.5%, in the quarter, including a $77 million, or 8.8%, increase in demand and NOW deposits.  Total deposit growth for the year 2015 amounted to $179 million, or 6.5%.

Net Interest Income

Net interest income totaled $26.3 million for the fourth quarter of 2015, up by $258 thousand from the third quarter of 2015.   The net interest margin was 3.08% for the fourth quarter of 2015, up 1 basis point from the previous quarter.  Changes compared to the third quarter included:

  • Average interest-earning assets increased by $22 million, reflecting growth in average balances of commercial loans and investment securities.  The yield on interest-earning assets was 3.68% for the fourth quarter, compared to 3.70% in the third quarter.
  • Average interest-bearing liabilities rose by $11 million, reflecting growth in average in-market interest-bearing deposits, partially offset by a decrease in wholesale funding balances.  The cost of funds was reduced by 5 basis points from the previous quarter.

Noninterest Income

Noninterest income totaled $15.1 million for the fourth quarter of 2015, up by $1.2 million, or 9%, from the third quarter of 2015.  Significant linked quarter changes included:

  • Wealth management revenues totaled $9.2 million for the fourth quarter, up by $265 thousand, or 3%, from the previous quarter.  Wealth management assets under administration amounted to $5.8 billion at December 31, 2015, up by $130 million, or 2%, in the fourth quarter, largely due to financial market appreciation following declines in the previous quarter.  Managed assets represented approximately 93% of total wealth management assets at December 31, 2015.

    Total wealth management revenues in 2015 amounted to $35.4 million, an all-time high level for Washington Trust.
  • Mortgage banking revenues, including gains and commissions on loan sales and mortgage servicing fee income, totaled $2.6 million for the fourth quarter, up by $592 thousand, or 30%, on a linked quarter basis, reflecting a higher yield on loan sales sold to the secondary market.  Residential mortgage loans sold to the secondary market amounted to $127.4 million in the fourth quarter, compared to $132.4 million in the previous quarter.

    Total mortgage banking revenues for the year 2015 amounted to $9.9 million, up $2.7 million, or 38%, over the prior year.
  • Loan related derivative income amounted to $752 thousand in the fourth quarter, up by $425 thousand from the prior quarter.

Noninterest Expenses

Noninterest expenses totaled $24.6 million for the fourth quarter of 2015, compared to $24.5 million for the third quarter of 2015.  Included in noninterest expenses were costs associated with the third quarter acquisition of Halsey Associates, Inc. amounting to $52 thousand in the fourth quarter and $504 thousand in the third quarter.  Excluding the acquisition related expenses, noninterest expenses rose by $475 thousand, or 2%, on a linked quarter basis.  This included an increase of $195 thousand in legal, audit and professional fees, primarily associated with non-routine matters.

Income tax expense amounted to $5.3 million for the fourth quarter of 2015, up by $382 thousand from the amount recognized in the previous quarter.  The effective tax rate for the fourth quarter of 2015 was 33.2%, compared to 32.7% for the third quarter of 2015.  Based on the current federal and applicable state income tax statutes, the Corporation currently expects the 2016 effective tax rate will be approximately 33.0%.

Loans

Total loans amounted to $3.0 billion at December 31, 2015, up by $63 million, or 2.1%, from the balance at the end of the third quarter and up by $154 million, or 5.4%, during the last twelve months.  Significant changes included:

  • Total commercial loans increased by $75 million, or 4.7%, in the quarter, including growth of $59 million in commercial real estate and construction loans and $16 million in commercial and industrial loans.  Total commercial loans were up by $119 million, or 7.8%, in 2015.
  • The residential real estate loan portfolio declined by $11 million, or 1.0%, in the quarter.  The residential portfolio grew by $28 million, or 2.9%, in the last twelve months.
  • Consumer loans decreased modestly in the fourth quarter.  Total consumer portfolio balances increased by $7 million, or 2.0%, during 2015.

Investment Securities

The securities portfolio amounted to $395 million at December 31, 2015, up by $50 million, or 14.5%, from the balance at September 30, 2015 and up by $12 million, or 3.2%, from a year ago.  The increase reflects purchases of government agency and agency mortgage-backed debt securities, partially offset by calls of securities and routine principal pay-downs on mortgage-backed securities.

Deposits and Borrowings

Total deposits amounted to $2.9 billion at December 31, 2015, up by $98 million, or 3.5%, in the fourth quarter and up by $179 million, or 6.5%, in the last twelve months.  Excluding wholesale brokered time deposits, in-market deposits increased by $63 million, or 2.5%, in the quarter and by $176 million, or 7.2%, from a year ago.  Deposit growth was led by significant increases in the combined amounts of demand and NOW accounts, which rose by $77 million, or 8.8%, in the fourth quarter and $164 million, or 20.8%, in the last twelve months.

FHLBB advances amounted to $379 million at December 31, 2015, down by $3 million, from September 30, 2015 and down by $27 million from December 31, 2014.

Asset Quality

Total past due loans amounted to $18 million, or 0.58% of total loans, at December 31, 2015, down from $22 million, or 0.74% of total loans, at September 30, 2015.  Total nonaccrual loans amounted to $21 million, or 0.70% of total loans, at December 31, 2015, compared to $17 million, or 0.57%, at September 30, 2015.  The increase in nonaccrual loans reflects the classification into nonaccrual status of two commercial loans with a carrying value of $2.9 million.

A loan loss provision totaling $750 thousand was charged to earnings in the fourth quarter of 2015, compared to a loan loss provision of $200 thousand recognized in the third quarter of 2015.  The increase in the quarterly provision was largely attributable to loan portfolio growth and changes in specific loss allocations on nonaccrual loans.  Net charge-offs amounted to $842 thousand in the fourth quarter of 2015, compared to $626 thousand in the third quarter of 2015.  The allowance for loan losses was $27.1 million, or 0.90% of total loans, at December 31, 2015, compared to $27.2 million, or 0.92% of total loans, at September 30, 2015.  Net charge-offs for the year 2015 amounted to $2.0 million, or 0.07% of total average loans, compared to $1.7 million, or 0.07%, for the year 2014.

Capital and Dividends

Total shareholder's equity was $375 million at December 31, 2015, up by $5 million from September 30, 2015.  Capital levels at December 31, 2015 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.58% at December 31, 2015, compared to 12.80% at September 30, 2015.

The Board of Directors declared a quarterly dividend of 34 cents per share for the quarter ended December 31, 2015.  The dividend was paid on January 14, 2016 to shareholders of record on January 4, 2016.

Conference Call

Washington Trust will host a conference call to discuss its fourth quarter results, business highlights and outlook on Wednesday, January 27, 2016 at 8:30 a.m. (Eastern Time).  Individuals may dial in to the call at 1-877-407-0784.  An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-877-870-5176 and entering the Replay PIN Number 13627947; the audio replay will be available through February 6, 2016.  Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, www.washtrustbancorp.com, and will be available through March 31, 2016.

Background

Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a state-chartered bank headquartered in Westerly, Rhode Island. Founded in 1800, Washington Trust is the oldest community bank in the nation and is the largest independent bank headquartered in Rhode Island. Washington Trust offers a full range of financial services, including commercial banking, small business 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 OMX® under the symbol WASH. Investor information is available on the Corporation’s web site: www.washtrustbancorp.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 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 the control of Washington Trust.  These risks, uncertainties and other factors may cause the actual results, performance or achievements of Washington Trust 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: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; additional government intervention in the U.S. financial system; 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 of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of the our competition; changes in legislation or regulation and accounting principles, policies and guidelines; the ability to fully realize the expected cost savings and revenues from the Halsey acquisition; 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, 2014, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Supplemental Information - Explanation of Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures.  Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors.  These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.  Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.



Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS (unaudited)
 
(Dollars in thousands, except par value) Dec 31,
 2015		 Dec 31,
 2014
Assets:    
Cash and due from banks $93,222   $76,386  
Short-term investments  4,409    3,964  
Mortgage loans held for sale (including $33,969 in 2015 and $30,321 in 2014 measured at fair value)  38,554    45,693  
Securities:    
Available for sale, at fair value  375,044    357,662  
Held to maturity, at amortized cost (fair value $20,516 in 2015 and $26,008 in 2014)  20,023    25,222  
Total securities  395,067    382,884  
Federal Home Loan Bank stock, at cost  24,316    37,730  
Loans:    
Commercial  1,654,547    1,535,488  
Residential real estate  1,013,555    985,415  
Consumer  345,025    338,373  
Total loans  3,013,127    2,859,276  
Less allowance for loan losses  27,069    28,023  
Net loans  2,986,058    2,831,253  
Premises and equipment, net  29,593    27,495  
Investment in bank-owned life insurance  65,501    63,519  
Goodwill  64,059    58,114  
Identifiable intangible assets, net  11,460    4,849  
Other assets  59,365    54,987  
Total assets $3,771,604   $3,586,874  
Liabilities:    
Deposits:    
Demand deposits $537,298   $459,852  
NOW accounts  412,602    326,375  
Money market accounts  823,490    802,764  
Savings accounts  326,967    291,725  
Time deposits  833,898    874,102  
Total deposits  2,934,255    2,754,818  
Federal Home Loan Bank advances  378,973    406,297  
Junior subordinated debentures  22,681    22,681  
Other liabilities  60,307    56,799  
Total liabilities  3,396,216    3,240,595  
Shareholders’ Equity:    
Common stock of $.0625 par value; authorized 30,000,000 shares; issued and outstanding 17,019,578 shares in 2015 and 16,746,363 shares in 2014  1,064    1,047  
Paid-in capital  110,949    101,204  
Retained earnings  273,074    252,837  
Accumulated other comprehensive loss  (9,699)   (8,809) 
Total shareholders’ equity  375,388    346,279  
Total liabilities and shareholders’ equity $3,771,604   $3,586,874  


Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
    
(Dollars and shares in thousands, except per share amounts)Three Months Twelve Months
Periods ended December 30,2015 2014 2015 2014
Interest income:       
Interest and fees on loans $28,511   $28,845   $114,229   $107,842  
Interest on securities:Taxable 2,262    2,399    8,875    10,437  
 Nontaxable 352    491    1,555    2,149  
Dividends on Federal Home Loan Bank stock 315    141    953    561  
Other interest income 37    29    138    128  
Total interest and dividend income 31,477    31,905    125,750    121,117  
Interest expense:       
Deposits 3,097    3,531    13,142    12,937  
Federal Home Loan Bank advances 1,966    1,867    7,746    7,698  
Junior subordinated debentures 157    241    871    964  
Other interest expense 2    3    9    13  
Total interest expense 5,222    5,642    21,768    21,612  
Net interest income 26,255    26,263    103,982    99,505  
Provision for loan losses 750    500    1,050    1,850  
Net interest income after provision for loan losses 25,505    25,763    102,932    97,655  
Noninterest income:       
Wealth management revenues 9,167    8,409    35,416    33,378  
Merchant processing fees —    —    —    1,291  
Mortgage banking revenues (1) 2,582    2,196    9,901    7,152  
Service charges on deposit accounts 971    936    3,865    3,395  
Card interchange fees 810    793    3,199    3,057  
Income from bank-owned life insurance 502    492    1,982    1,846  
Loan related derivative income 752    574    2,441    1,136  
Equity in earnings (losses) of unconsolidated subsidiaries (69)   (63)    (293)   (276) 
Gain on sale of business line —    —    —    6,265  
Other income (1) 431    369    1,829    1,771  
Total noninterest income 15,146    13,706    58,340    59,015  
Noninterest expense:       
Salaries and employee benefits 16,053    14,685    63,024    58,530  
Net occupancy 1,724    1,640    7,000    6,312  
Equipment 1,393    1,221    5,533    4,903  
Merchant processing costs —    —    —    1,050  
Outsourced services 1,337    1,286    5,111    4,483  
Legal, audit and professional fees 825    626    2,741    2,336  
FDIC deposit insurance costs 470    467    1,846    1,762  
Advertising and promotion 325    406    1,526    1,546  
Amortization of intangibles 333    155    904    644  
Debt prepayment penalties —    —    —    6,294  
Acquisition related expenses 52    —    989    —  
Other expenses 2,049    2,574    8,255    8,987  
Total noninterest expense 24,561    23,060    96,929    96,847  
Income before income taxes 16,090    16,409    64,343    59,823  
Income tax expense 5,346    5,218    20,878    18,999  
Net income$10,744   $11,191   $43,465   $40,824  
        
Weighted average common shares outstanding - basic 17,004    16,735    16,879    16,689  
Weighted average common shares outstanding - diluted 17,167    16,911    17,067    16,872  
Per share information:Basic earnings per common share$0.63   $0.67   $2.57   $2.44  
 Diluted earnings per common share$0.62   $0.66   $2.54   $2.41  
 Cash dividends declared per share$0.34   $0.32   $1.36   $1.22  
 
(1) Mortgage banking revenues include gains and commissions on loan sales and mortgage servicing fee income.  Previously, mortgage servicing fee income was included in Other income. 
Prior period amounts have been reclassified to conform to current period presentation.


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
 
 At or for the Quarters Ended
(Dollars and shares in thousands, except per share amounts)Dec 31,
 2015		 Sep 30,
 2015		 Jun 30,
 2015		 Mar 31,
 2015		 Dec 31,
 2014
Financial Data:         
Total assets$3,771,604   $3,674,836   $3,644,477   $3,602,514   $3,586,874  
Total loans 3,013,127    2,949,918    2,928,584    2,880,592    2,859,276  
Total securities 395,067    344,935    373,901    364,967    382,884  
Total deposits 2,934,255    2,836,280    2,739,119    2,783,143    2,754,818  
Total shareholders' equity 375,388    370,527    359,167    353,879    346,279  
Net interest income 26,255    25,997    26,028    25,702    26,263  
Provision for loan losses 750    200    100    —    500  
Noninterest income 15,146    13,913    15,261    14,020    13,706  
Noninterest expense 24,561    24,538    24,299    23,531    23,060  
Income tax expense 5,346    4,964    5,387    5,181    5,218  
Net income 10,744    10,208    11,503    11,010    11,191  
          
Share Data:         
Basic earnings per common share$0.63   $0.60   $0.68   $0.65   $0.67  
Diluted earnings per common share$0.62   $0.60   $0.68   $0.65   $0.66  
Dividends declared per share$0.34   $0.34   $0.34   $0.34   $0.32  
Book value per share$22.06   $21.82   $21.34   $21.10   $20.68  
Tangible book value per share - Non-GAAP (1)$17.62   $17.36   $17.61   $17.35   $16.92  
Market value per share$39.52   $38.45   $39.48   $38.19   $40.18  
Shares outstanding at end of period 17,020    16,985    16,834    16,773    16,746  
Weighted average common shares outstanding - basic 17,004    16,939    16,811    16,759    16,735  
Weighted average common shares outstanding - diluted 17,167    17,102    16,989    16,939    16,911  
          
Key Ratios:         
Return on average assets 1.16 %  1.11 %  1.27 %  1.23 %  1.27 %
Return on average tangible assets - Non-GAAP (1) 1.19 %  1.13 %  1.29 %  1.25 %  1.29 %
Return on average equity 11.52 %  11.13 %  12.88 %  12.54 %  12.68 %
Return on average tangible equity - Non-GAAP (1) 14.45 %  13.82 %  15.62 %  15.27 %  15.44 %
Tier 1 risk-based capital11.64% (i)  11.83 %  11.79 %  11.78 %  11.52 %
Total risk-based capital12.58% (i)  12.80 %  12.78 %  12.80 %  12.56 %
Tier 1 leverage ratio9.37% (i)  9.26 %  9.31 %  9.21 %  9.14 %
Tier 1 common equity (2)10.89% (i)  11.05 %  11.00 %  10.98 %  N/A  
Equity to assets 9.95 %  10.08 %  9.86 %  9.82 %  9.65 %
Tangible equity to tangible assets - Non-GAAP (1) 8.11 %  8.18 %  8.28 %  8.22 %  8.04 %
(i) - estimated         
          
Wealth Management Revenues:         
Trust and investment management fees$8,001   $7,768   $7,238   $7,142   $7,059  
Mutual fund fees 952    989    1,032    1,036    1,068  
  Asset-based revenues 8,953    8,757    8,270    8,178    8,127  
Transaction-based revenues 214    145    642    257    282  
Total wealth management revenues$9,167   $8,902   $8,912   $8,435   $8,409  
          
Wealth Management Assets Under Administration:         
Balance at beginning of period$5,714,201   $5,211,548   $5,159,663   $5,069,966   $4,983,464  
Acquisition of Halsey Associates, Inc. (Aug. 1, 2015) —    839,994    —    —    —  
Net investment appreciation (depreciation) & income 153,953    (316,121)    (13,932)   80,872    111,715  
Net client cash flows (23,518)    (21,220)    65,817)    8,825    (25,213) 
Balance at end of period$5,844,636   $5,714,201   $5,211,548   $5,159,663   $5,069,966  
 
(1) See the section labeled “Supplemental Information - Non-GAAP Financial Measures” at the end of this document.
(2) New capital ratio effective January 1, 2015 under the Basel III capital requirements.


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
 
 Twelve Months Ended
(Dollars in thousands)Dec 31,
 2015		 Dec 31,
 2014
Key Ratios:   
Return on average assets 1.19%  1.23%
Return on average tangible assets - Non-GAAP (1) 1.21%  1.25%
Return on average equity 12.00%  11.87%
Return on average tangible equity - Non-GAAP (1) 14.79%  14.55%
    
Allowance for Loan Losses:   
Balance at beginning of period$28,023   $27,886  
Provision charged to earnings 1,050    1,850  
Charge-offs (2,305)   (1,949) 
Recoveries 301    236  
Balance at end of period$27,069   $28,023  
    
Net Loan Charge-Offs (Recoveries):   
Commercial mortgages$717   $953  
Commercial & industrial 584    472  
Residential real estate mortgages 179    81  
Consumer 524    207  
Total$2,004   $1,713  
    
Net charge-offs to average loans (annualized) 0.07%  0.07%
    
Wealth Management Revenues:   
Trust and investment management fees$30,149   $27,554  
Mutual fund fees 4,009    4,335  
Asset-based revenues 34,158    31,889  
Transaction-based revenues 1,258    1,489  
Total wealth management revenues$35,416   $33,378  
    
Wealth Management Assets Under Administration:   
Balance at beginning of period$5,069,966   $4,781,958  
Acquisition of Halsey Associates, Inc. (Aug. 1, 2015) 839,994    —  
Net investment appreciation & income (95,228)   258,120  
Net client cash flows 29,904    29,888  
Balance at end of period$5,844,636   $5,069,966  
 
(1) See the section labeled “Supplemental Information - Non-GAAP Financial Measures” at the end of this document.


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
 
 For the Quarters Ended
 Dec 31,
 2015		 Sep 30,
 2015		 Jun 30,
 2015		 Mar 31,
 2015		 Dec 31,
 2014
Average Yield / Rate (taxable equivalent basis):         
Assets:         
Commercial loans3.82% 3.91% 4.06% 4.02% 4.23%
Residential real estate loans, including mortgage loans held for sale3.91% 3.90% 3.95% 4.06% 4.06%
Consumer loans3.74% 3.79% 3.77% 3.82% 3.79%
Total loans3.84% 3.89% 3.99% 4.01% 4.12%
Cash, federal funds sold and other short-term investments0.20% 0.21% 0.18% 0.20% 0.18%
FHLBB stock5.14% 3.25% 1.74% 1.77% 1.48%
Taxable debt securities2.63% 2.73% 2.72% 2.84% 2.83%
Nontaxable debt securities6.10% 5.95% 6.15% 6.03% 5.87%
Total securities2.96% 3.08% 3.11% 3.23% 3.22%
Total interest-earning assets3.68% 3.70% 3.80% 3.84% 3.91%
Liabilities:         
Interest-bearing demand deposits0.10% 0.07% 0.03% 0.09% —%
NOW accounts0.06% 0.06% 0.06% 0.06% 0.06%
Money market accounts0.33% 0.46% 0.46% 0.45% 0.43%
Savings accounts0.06% 0.07% 0.07% 0.06% 0.06%
Time deposits (in-market)0.99% 0.98% 1.00% 1.05% 1.14%
Wholesale brokered time deposits1.35% 1.29% 1.28% 1.29% 1.23%
FHLBB advances2.09% 1.85% 1.94% 1.91% 2.28%
Junior subordinated debentures2.75% 4.06% 4.26% 4.31% 4.22%
Other8.62% 7.63% 6.92% 9.51% 8.50%
Total interest-bearing liabilities0.74% 0.79% 0.79% 0.82% 0.84%
          
Interest rate spread (taxable equivalent basis)2.94% 2.91% 3.01% 3.02% 3.07%
Net interest margin (taxable equivalent basis)3.08% 3.07% 3.15% 3.18% 3.23%


  At December 31, 2015
  Amortized Unrealized Unrealized Fair
(Dollars in thousands) Cost Gains Losses Value
Securities Available for Sale:        
Obligations of U.S. government-sponsored enterprises $77,330   $73   $(388)   $77,015  
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises  228,908    6,398    (450)    234,856  
Obligations of states and political subdivisions  35,353    727    —    36,080  
Individual name issuer trust preferred debt securities  29,815    —    (4,677)    25,138  
Corporate bonds  1,970    5    (20)    1,955  
Total securities available for sale  373,376    7,203    (5,535)    375,044  
Held to Maturity:        
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises  20,023    493    —    20,516  
Total securities held to maturity  20,023    493    —    20,516  
Total securities $393,399   $7,696   $(5,535)   $395,560  


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
 
 Period End Balances At
(Dollars in thousands)Dec 31,
 2015		 Sep 30,
 2015		 Jun 30,
 2015		 Mar 31,
 2015		 Dec 31,
 2014
Loans:         
Commercial:Mortgages$931,953   $873,767   $876,589   $865,042   $843,978  
 Construction & development 122,297    121,857    110,989    89,851    79,592  
 Commercial & industrial 600,297    584,230    595,959    604,630    611,918  
 Total commercial 1,654,547    1,579,854    1,583,537    1,559,523    1,535,488  
Residential real estate:Mortgages 984,437    994,808    971,705    954,905    948,731  
 Homeowner construction 29,118    29,406    29,558    32,659    36,684  
 Total residential real estate 1,013,555    1,024,214    1,001,263    987,564    985,415  
Consumer:Home equity lines 255,565    252,862    249,845    239,537    242,480  
 Home equity loans 46,649    47,610    47,437    46,727    46,967  
 Other 42,811    45,378    46,502    47,241    48,926  
 Total consumer 345,025    345,850    343,784    333,505    338,373  
 Total loans$3,013,127   $2,949,918   $2,928,584   $2,880,592   $2,859,276  


 At December 31, 2015
(Dollars in thousands)Balance % of Total
Commercial Real Estate Loans by Property Location:   
Rhode Island, Connecticut, Massachusetts$959,883  91.0%
New York, New Jersey, Pennsylvania 80,989  7.7%
New Hampshire 13,377  1.3%
Total commercial real estate loans (1)$1,054,249  100.0%
 
(1) Commercial real estate loans consist of commercial mortgages and construction and development loans.  Commercial mortgages are loans secured by income producing property.


 At December 31, 2015
(Dollars in thousands)Balance % of Total
Residential Mortgages by Property Location:   
Rhode Island, Connecticut, Massachusetts$995,743   98.2%
New Hampshire 10,186   1.0%
New York, Virginia, New Jersey, Maryland, Pennsylvania 4,163   0.4%
Ohio 1,557   0.2%
Other 1,906   0.2%
Total residential mortgages$1,013,555   100.0%


  Period End Balances At
(Dollars in thousands) Dec 31,
 2015		 Sep 30,
 2015		 Jun 30,
 2015		 Mar 31,
 2015		 Dec 31,
 2014
Deposits:          
Demand deposits $537,298   $513,856   $457,755   $477,046   $459,852  
NOW accounts  412,602    358,973    357,922    333,321    326,375  
Money market accounts  823,490    855,858    789,334    821,353    802,764  
Savings accounts  326,967    305,775    300,108    298,802    291,725  
Time deposits  833,898    801,818    834,000    852,621    874,102  
Total deposits $2,934,255   $2,836,280   $2,739,119   $2,783,143   $2,754,818  
           
Out-of-market brokered certificates of deposits included in time deposits $302,479   $267,552   $284,590   $290,863   $299,129  
In-market deposits, excluding out-of-market brokered certificates of deposit $2,631,776   $2,568,728   $2,454,529   $2,492,280   $2,455,689  


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
 
 Period End Balances At
(Dollars in thousands)Dec 31,
 2015		 Sep 30,
 2015		 Jun 30,
 2015		 Mar 31,
 2015		 Dec 31,
 2014
Asset Quality Ratios:         
Total past due loans to total loans 0.58 %  0.74 %  0.82 %  0.66 %  0.63 %
Nonperforming assets to total assets 0.58 %  0.48 %  0.45 %  0.48 %  0.48 %
Nonaccrual loans to total loans 0.70 %  0.57 %  0.52 %  0.55 %  0.56 %
Allowance for loan losses to nonaccrual loans 128.61 %  161.25 %  182.32 %  175.29 %  175.75 %
Allowance for loan losses to total loans 0.90 %  0.92 %  0.94 %  0.97 %  0.98 %
          
Nonperforming Assets:         
Commercial mortgages$5,711   $4,915   $4,915   $5,115   $5,315  
Commercial construction & development —    —    —    —    —  
Commercial & industrial 3,018    1,137    1,039    2,193    1,969  
Residential real estate mortgages 10,666    9,472    7,411    6,956    7,124  
Consumer 1,652    1,320    1,766    1,601    1,537  
Total nonaccrual loans 21,047    16,844    15,131    15,865    15,945  
Nonaccrual investment securities —    —    —    —    —  
Property acquired through foreclosure or repossession 716    955    1,388    1,398    1,176  
Total nonperforming assets$21,763   $17,799   $16,519   $17,263   $17,121  
          
Troubled Debt Restructured Loans:         
Accruing troubled debt restructured loans:         
Commercial mortgages$9,430   $10,637   $9,448   $9,448   $9,676  
Commercial & industrial 853    2,069    2,209    881    954  
Residential real estate mortgages 669    674    679    684    1,252  
Consumer 228    232    201    134    135  
Accruing troubled debt restructured loans 11,180    13,612    12,537    11,147    12,017  
Nonaccrual troubled debt restructured loans:         
Commercial mortgages 5,296    4,498    4,498    4,698    4,898  
Commercial & industrial 1,371    380    381    1,442    1,193  
Residential real estate mortgages 596    613    92    338    248  
Consumer —   —    33    34    —  
Nonaccrual troubled debt restructured loans 7,263    5,491    5,004    6,512    6,339  
Total troubled debt restructured loans$18,443   $19,103   $17,541   $17,659   $18,356  


Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
 
 Period End Balances At
(Dollars in thousands)Dec 31,
 2015		 Sep 30,
 2015		 Jun 30,
 2015		 Mar 31,
 2015		 Dec 31,
 2014
Past Due Loans:         
Loans 30-59 Days Past Due:         
Commercial mortgages$51   $147   $14   $497   $—  
Commercial & industrial 405    162    2,581    229    2,136  
Residential real estate mortgages 3,028    3,610    5,120    4,470    2,943  
Consumer loans 1,653    899    1,634    1,512    954  
Loans 30-59 days past due$5,137   $4,818   $9,349   $6,708   $6,033  
          
Loans 60-89 Days Past Due:         
Commercial mortgages$—   $—   $—   $61   $—  
Commercial & industrial 9    3,455    2,299    229    1,202  
Residential real estate mortgages 2,964    2,458    913    1,352    821  
Consumer loans 863    338    397    565    345  
Loans 60-89 days past due$3,836   $6,251   $3,609   $2,207   $2,368  
          
Loans 90 Days or More Past Due:         
Commercial mortgages$4,504   $4,915   $4,915   $5,115   $5,315  
Commercial & industrial 48    720    638    721    181  
Residential real estate mortgages 3,294    4,499    4,871    3,607    3,284  
Consumer loans 740    608    647    723    897  
Loans 90 days or more past due$8,586   $10,742   $11,071   $10,166   $9,677  
          
Total Past Due Loans:         
Commercial mortgages$4,555   $5,062   $4,929   $5,673   $5,315  
Commercial & industrial 462    4,337    5,518    1,179    3,519  
Residential real estate mortgages 9,286    10,567    10,904    9,429    7,048  
Consumer loans 3,256    1,845    2,678    2,800    2,196  
Total past due loans$17,559   $21,811   $24,029   $19,081   $18,078  
          
Accruing loans 90 days or more past due$—   $—   $—   $—   $—  
Nonaccrual loans included in past due loans$13,635   $13,964   $12,397   $12,314   $12,721  


 For the Quarters Ended
(Dollars in thousands)Dec 31,
 2015		 Sep 30,
 2015		 Jun 30,
 2015		 Mar 31,
 2015		 Dec 31,
 2014
Allowance for Loan Losses:         
Balance at beginning of period$27,161   $27,587   $27,810   $28,023   $ 27,768   
Provision charged to earnings 750    200    100    —     500   
Charge-offs (904)   (725)   (355)   (321)    (311)   
Recoveries 62    99    32    108     66   
Balance at end of period$27,069   $27,161   $27,587   $27,810   $ 28,023   
          
Net Loan Charge-Offs (Recoveries):         
Commercial mortgages$405   $(4)  $196   $120   $ (5)  
Commercial & industrial 217    348    26    (7)    144   
Residential real estate mortgages 117    12    4    46     45   
Consumer 103    270    97    54     61   
Total$842   $626   $323   $213   $ 245   

 

The following tables present 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.  For dividends on corporate stocks, the 70% federal dividends received deduction is also used in the calculation of tax equivalency.  Unrealized gains (losses) on available for sale securities are excluded from the average balance and yield calculations.  Nonaccrual and renegotiated loans, as well as interest earned on these loans (to the extent recognized in the Consolidated Statements of Income) are included in amounts presented for loans.


Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
 
  Three Months Ended
  December 31, 2015 September 30, 2015 December 31, 2014
  Average
Balance		InterestYield/
Rate		 Average
Balance		InterestYield/
Rate		 Average
Balance		InterestYield/
 Rate
(Dollars in thousands) 
Assets:            
Commercial loans $1,601,794  $15,411  3.82% $1,571,645  $15,475  3.91% $1,470,360  $15,688  4.23%
Residential real estate loans, including loans held for sale  1,049,007   10,338  3.91%  1,050,949   10,329  3.90%  1,009,382   10,329  4.06%
Consumer loans  344,690   3,251  3.74%  343,603   3,283  3.79%  338,050   3,231  3.79%
Total loans  2,995,491   29,000  3.84%  2,966,197   29,087  3.89%  2,817,792   29,248  4.12%
Cash, federal funds sold and short-term investments  72,031   37  0.20%  89,280   47  0.21%  63,736   29  0.18%
FHLBB stock  24,316   315  5.14%  37,730   309  3.25%  37,730   141  1.48%
Taxable debt securities  341,130   2,262  2.63%  316,214   2,178  2.73%  336,661   2,399  2.83%
Nontaxable debt securities  35,799   550  6.10%  37,780   567  5.95%  50,505   747  5.87%
Total securities  376,929   2,812  2.96%  353,994   2,745  3.08%  387,166   3,146  3.22%
Total interest-earning assets  3,468,767   32,164  3.68%  3,447,201   32,188  3.70%  3,306,424   32,564  3.91%
Noninterest-earning assets  231,674      231,286      215,079    
Total assets $3,700,441     $3,678,487     $3,521,503    
Liabilities and Shareholders' Equity:            
Interest-bearing demand deposits $42,324  $11  0.10% $30,392  $5  0.07% $19,163  $—  —%
NOW accounts  376,185   56  0.06%  357,128   53  0.06%  320,313   49  0.06%
Money market accounts  856,405   707  0.33%  820,597   951  0.46%  829,472   903  0.43%
Savings accounts  310,608   47  0.06%  303,587   52  0.07%  291,683   45  0.06%
Time deposits (in-market)  533,224   1,333  0.99%  541,486   1,338  0.98%  602,005   1,735  1.14%
Wholesale brokered time deposits  277,681   943  1.35%  279,839   909  1.29%  257,415   799  1.23%
FHLBB advances  373,652   1,966  2.09%  425,931   1,987  1.85%  325,518   1,867  2.28%
Junior subordinated debentures  22,681   157  2.75%  22,681   232  4.06%  22,681   241  4.22%
Other  92   2  8.62%  104   2  7.63%  140   3  8.50%
Total interest-bearing liabilities  2,792,852   5,222  0.74%  2,781,745   5,529  0.79%  2,668,390   5,642  0.84%
Demand deposits  475,215      477,393      458,782    
Other liabilities  59,177      52,625      41,415    
Shareholders' equity  373,197      366,724      352,916    
Total liabilities and shareholders' equity $3,700,441     $3,678,487     $3,521,503    
Net interest income (FTE)  $26,942     $26,659     $26,922   
Interest rate spread   2.94%   2.91%   3.07%
Net interest margin   3.08%   3.07%   3.23%
 
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:

 

(Dollars in thousands)Three Months Ended
 Dec 31,
2015		 Sep 30,
2015		 Dec 31,
2014
Commercial loans$489   $461   $403  
Nontaxable debt securities 198    201    256  
Total$687   $662   $659  


 
Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED AVERAGE BALANCE SHEETS (unaudited)
 
  Twelve Months Ended
  December 31, 2015 December 31, 2014
  Average
Balance		InterestYield/
Rate		 Average
Balance		InterestYield/
 Rate
(Dollars in thousands) 
Assets:        
Commercial loans $1,573,238  $62,128  3.95% $1,382,036  $59,421  4.30%
Residential real estate loans, including loans held for sale  1,038,836   41,083  3.95%  904,556   37,033  4.09%
Consumer loans  340,889   12,885  3.78%  334,368   12,758  3.82%
Total loans  2,952,963   116,096  3.93%  2,620,960   109,212  4.17%
Cash, federal funds sold and short-term investments  69,169   138  0.20%  65,045   128  0.20%
FHLBB stock  34,349   953  2.77%  37,730   561  1.49%
Taxable debt securities  325,166   8,875  2.73%  331,514   10,437  3.15%
Nontaxable debt securities  39,751   2,408  6.06%  55,283   3,267  5.91%
Total securities  364,917   11,283  3.09%  386,797   13,704  3.54%
Total interest-earning assets  3,421,398   128,470  3.75%  3,110,532   123,605  3.97%
Noninterest-earning assets  226,623      210,746    
Total assets $3,648,021     $3,321,278    
Liabilities and Shareholders' Equity:        
Interest-bearing demand deposits $37,168  $27  0.07% $12,988  $—  —%
NOW accounts  356,713   209  0.06%  311,927   190  0.06%
Money market accounts  824,625   3,482  0.42%  768,626   3,054  0.40%
Savings accounts  301,652   196  0.06%  291,880   182  0.06%
Time deposits (in-market)  549,039   5,531  1.01%  637,279   7,380  1.16%
Wholesale brokered time deposits  284,448   3,697  1.30%  187,325   2,131  1.14%
FHLBB advances  398,866   7,746  1.94%  274,879   7,698  2.80%
Junior subordinated debentures  22,681   871  3.84%  22,681   964  4.25%
Other  110   9  8.18%  157   13  8.28%
Total interest-bearing liabilities  2,775,302   21,768  0.78%  2,507,742   21,612  0.86%
Demand deposits  458,369      432,857    
Other liabilities  52,152      36,868    
Shareholders' equity  362,198      343,811    
Total liabilities and shareholders' equity $3,648,021     $3,321,278    
Net interest income (FTE)  $106,702     $101,993   
Interest rate spread   2.97%   3.11%
Net interest margin   3.12%   3.28%


    
(Dollars in thousands)Twelve Months Ended
 Dec 31,
2015		 Dec 31,
2014
Commercial loans$1,867   $1,370  
Nontaxable debt securities 853    1,118  
Total$2,720   $2,488  


Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION - Non-GAAP Financial Measures (unaudited)
 
 At or for the Quarters Ended
(Dollars in thousands, except per share amounts)Dec 31,
 2015		 Sep 30,
 2015		 Jun 30,
 2015		 Mar 31,
 2015		 Dec 31,
 2014
Calculation of Tangible Book Value per Share:         
Total shareholders' equity at end of period$375,388   $370,527   $359,167   $353,879   $346,279  
Less:         
Goodwill 64,059    64,196    58,114    58,114    58,114  
Identifiable intangible assets, net 11,460    11,793    4,539    4,694    4,849  
Total tangible shareholders' equity at end of period$299,869   $294,538   $296,514   $291,071   $283,316  
          
Shares outstanding at end of period 17,020    16,985    16,834    16,773    16,746  
          
Book value per share - GAAP$22.06   $21.82   $21.34   $21.10   $20.68  
Tangible book value per share - Non-GAAP$17.62   $17.34   $17.61   $17.35   $16.92  
          
Calculation of Tangible Equity to Tangible Assets:         
Total tangible shareholders' equity at end of period$299,869   $294,538   $296,514   $291,071   $283,316  
          
Total assets at end of period$3,771,604   $3,674,836   $3,644,477   $3,602,514   $3,586,874  
Less:         
Goodwill 64,059    64,196    58,114    58,114    58,114  
Identifiable intangible assets, net 11,460    11,793    4,539    4,694    4,849  
Total tangible assets at end of period$3,696,085   $3,598,847   $3,581,824   $3,539,706   $3,523,911  
          
Equity to assets - GAAP 9.95%  10.08%  9.86%  9.82%  9.65%
Tangible equity to tangible assets - Non-GAAP 8.11%  8.18%  8.28%  8.22%  8.04%
          
Calculation of Return on Average Tangible Assets:         
Net income$10,744   $10,208   $11,503   $11,010   $11,191  
          
Total average assets$3,700,441   $3,678,487   $3,622,715   $3,588,881   $3,521,503  
Less:         
Average goodwill 64,194    62,524    58,114    58,114    58,114  
Average identifiable intangible assets, net 11,616    8,768    4,614    4,770    4,924  
Total average tangible assets$3,624,631   $3,607,195   $3,559,987   $3,525,997   $3,458,465  
          
Return on average assets - GAAP 1.16%  1.11%  1.27%  1.23%  1.27%
Return on average tangible assets - Non-GAAP 1.19%  1.13%  1.29%  1.25%  1.29%
          
Calculation of Return on Average Tangible Equity:         
Net income$10,744   $10,208   $11,503   $11,010   $11,191  
          
Total average shareholders' equity$373,197   $366,724   $357,365   $351,215   $352,916  
Less:         
Average goodwill 64,194    62,524    58,114    58,114    58,114  
Average identifiable intangible assets, net 11,616    8,768    4,614    4,770    4,924  
Total average tangible shareholders' equity$297,387   $295,432   $294,637   $288,331   $289,878  
          
Return on average shareholders' equity - GAAP 11.52%  11.13%  12.88%  12.54%  12.68%
Return on average tangible shareholders' equity - Non-GAAP 14.45%  13.82%  15.62%  15.27%  15.44%


    
Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION - Non-GAAP Financial Measures (unaudited)
  
 Twelve Months Ended
(Dollars in thousands)Dec 31,
 2015		 Dec 31,
 2014
Calculation of Return on Average Tangible Assets:   
Net income$43,465   $40,824  
    
Total average assets$3,648,021   $3,321,278  
Less:   
Average goodwill 60,657    58,114  
Average identifiable intangible assets, net 7,625    5,164  
Total average tangible assets$3,579,739   $3,258,000  
    
Return on average assets - GAAP 1.19%  1.23%
Return on average tangible assets - Non-GAAP 1.21%  1.25%
    
    
Calculation of Return on Average Tangible Equity:   
Net income$43,465   $40,824  
    
Total average shareholders' equity$362,198   $343,811  
Less:   
Average goodwill 60,657    58,114  
Average identifiable intangible assets, net 7,625    5,164  
Total average tangible shareholders' equity$293,916   $280,533  
    
Return on average shareholders' equity - GAAP 12.00%  11.87%
Return on average tangible shareholders' equity - Non-GAAP 14.79%  14.55%



            








        

            

                

                    
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                                EARNINGS
                            
                            
                                BANKING
                            

                



        




    

        

        
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