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Washington Trust Reports First Quarter 2015 Earnings

WESTERLY, R.I., April 21, 2015 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced net income of $11.0 million, or 65 cents per diluted share, for the first quarter of 2015, compared to net income of $11.2 million, or 66 cents per diluted share, reported for the fourth quarter of 2014.

"Washington Trust posted solid first quarter results, continuing our recent earnings momentum into the new year," stated Joseph J. MarcAurele, Chairman and Chief Executive Officer. "These results reflect growth across all business lines. Our performance is a reflection of a commitment to our core values and strategic vision, which have guided our institution for 215+ years."

Selected highlights for the first quarter of 2015 include:

  • Returns on average equity and average assets continued at very solid levels of 12.54% and 1.23%, respectively. Comparable amounts for the fourth quarter of 2014 were 12.68% and 1.27%, respectively.
  • Mortgage banking revenues amounted to $2.6 million for the first quarter of 2015, up by $471 thousand, or 22%, from the fourth quarter of 2014, due to higher levels of loan origination and sales.
  • Total loans amounted to $2.9 billion at March 31, 2015, up by $21.3 million in the quarter. Total loans have increased by 16% in the last 12 months.
  • Total deposits rose by $28.3 million in the quarter, including a 3% increase in DDA and NOW accounts. Total deposits increased by 7% in the last 12 months.
  • In March, Washington Trust declared a quarterly dividend of 34 cents per share, representing a 2 cent per share increase over the previous quarter and the fifth consecutive year of dividend increases.

Net Interest Income

Net interest income totaled $25.7 million for the first quarter of 2015, down by $561 thousand, or 2%, from the $26.3 million reported for the fourth quarter of 2014. The net interest margin was 3.18% for the first quarter of 2015, compared to 3.23% for the fourth quarter of 2014. Included in net interest income was commercial loan prepayment fee income of $266 thousand in the first quarter of 2015, compared to $445 thousand of such fee income in the previous quarter. Excluding the loan prepayment fee income, the net interest margin was 3.14% for the first quarter, down by 4 basis points on a linked quarter basis. Other significant linked quarter changes included:

  • Average interest-earning assets increased by $60.7 million, reflecting growth in average commercial and residential loan balances. The yield on interest-earning assets, excluding the contribution from the loan prepayment fee income, was 3.81% for the first quarter of 2015, compared to 3.85% for the fourth quarter of 2014. The 4 basis point decline from the previous quarter was primarily due to lower rates on recent commercial loan originations.
  • Average interest-bearing liabilities increased by $82.3 million, with growth in average wholesale funding balances and average interest-bearing deposits. The cost of interest-bearing funds declined by 2 basis points on a linked quarter basis.

Noninterest Income

Noninterest income totaled $14.0 million for the first quarter of 2015, up by $314 thousand, or 2%, from $13.7 million for the fourth quarter of 2014. Included in noninterest income were the following:

  • Wealth management revenues totaled $8.4 million for the first quarter of 2015, consistent with the previous quarter and up by 5% over the first quarter of 2014. Wealth management assets under administration amounted to $5.2 billion at March 31, 2015, up by $90 million, or 2%, from December 31, 2014, and up $353 million, or 7%, in the last 12 months.
  • Net gains on loan sales and commissions on loans originated for others totaled $2.6 million for the first quarter of 2015, up by $471 thousand, or 22%, on a linked quarter basis. Residential mortgage loans sold to the secondary market amounted to $127.9 million in the first quarter, up by $28.5 million from the previous quarter.
  • Net gains on interest rate swap contracts amounted to $645 thousand for the first quarter of 2015, up by $71 thousand, or 12%, from the previous quarter, continuing a trend of relatively high customer-related interest rate swap transactions.

Noninterest Expenses

Noninterest expenses totaled $23.5 million for the first quarter of 2015, up by $471 thousand, or 2%, from $23.1 million for the fourth quarter of 2014. Significant linked quarter changes including the following:

  • Salaries and employee benefits expense increased by $809 thousand from the previous quarter, partially due to an increase in payroll taxes associated with the start of the new calendar year.
  • Net occupancy costs increased by $246 thousand, due to an increase in weather-related utilities and operating costs.
  • Other expenses decreased by $636 thousand from the prior quarter. Included in the fourth quarter of 2014 was a charitable contribution expense of $400 thousand; there was no such expense in the first quarter of 2015.

Income tax expense amounted to $5.2 million for the first quarter of 2015, down by $37 thousand, or 1%, from the amount recognized in the previous quarter. The effective tax rate for the first quarter of 2015 was 32.0%, compared to 31.8% for the fourth quarter of 2014.

Asset Quality

The Corporation's sound asset quality metrics continued in the first quarter of 2015. Total nonaccrual loans amounted to $15.9 million, or 0.55% of total loans, at March 31, 2015, down from $15.9 million, or 0.56%, at December 31, 2014. Total past due loans amounted to $19.1 million, or 0.66% of total loans, at March 31, 2015, up from $18.1 million, or 0.63% of total loans, at December 31, 2014. Loans classified as troubled debt restructurings amounted to $17.7 million at March 31, 2015, compared to $18.4 million at the end of the previous quarter.

Based on the assessment of the stable asset quality metrics, the relatively modest loan growth and other favorable changes in loss exposure allocation, management concluded that no loan loss provision charged to earnings was necessary in the first quarter of 2015. A loan loss provision of $500 thousand was recognized in the fourth quarter of 2014. Net charge-offs amounted to $213 thousand in the first quarter of 2015, compared to $245 thousand in the fourth quarter of 2014. The allowance for loan losses was $27.8 million, or 0.97% of total loans, at March 31, 2015, compared to $28.0 million, or 0.98% of total loans, at December 31, 2014.

Loans

Total loans amounted to $2.9 billion at March 31, 2015, up by $21.3 million from the balance at December 31, 2014.

  • Total commercial loans increased by $24.0 million, or 2%, in the first quarter of 2015. The commercial real estate portfolio grew by $31.3 million, or 3%, while the commercial and industrial portfolio declined by $7.3 million, or 1%. In the last 12 months, the total commercial loan portfolio grew by 17%.
  • The residential real estate loan portfolio grew by $2.1 million, or 0.2%, from the end of 2014. Total residential loans are up 22% in the last 12 months.
  • Consumer loans decreased by $4.9 million, or 1%.

Investment Securities

The securities portfolio amounted to $365.0 million, or 10% of total assets, at March 31, 2015, down from $382.9 million, or 11%, at December 31, 2014. The decline was primarily due to principal payments received on mortgage-backed securities and calls of state and political subdivision debt securities.

Deposits and Borrowings

Deposits totaled $2.8 billion at March 31, 2015, up by $28.3 million, or 1%, from the balance at December 31, 2014. Wholesale brokered time deposits decreased by $8.3 million from the previous quarter. Excluding wholesale brokered time deposits, in-market deposits increased by $36.6 million, or 1%.

  • Demand deposits increased by $17.2 million, or 4%.
  • NOW account balances increased by $6.9 million, or 2%.
  • Money market and savings account balances increased by $25.7 million, or 2%.
  • In-market time deposits decreased by $13.2 million, or 2%.

Federal Home Loan Bank of Boston ("FHLBB") advances amounted to $386.0 million at March 31, 2015, down by $20.3 million, or 5% from December 31, 2014, primarily due to paydowns of outstanding advances with excess liquidity. In the first quarter of 2015, FHLBB advances totaling $69.2 million were modified to lower interest rates and the maturities of these advances were extended. The original maturity dates ranged from 2016 to 2018 and were modified to 2018 to 2022. The original weighted average interest rate was 4.06% and was modified to 3.50%.

Capital Management and Dividends

Capital levels at March 31, 2015 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.87% at March 31, 2015, compared to 12.56% at December 31, 2014. Total shareholder's equity was $353.9 million at March 31, 2015, up by $7.6 million from December 31, 2014.

The Board of Directors declared a quarterly dividend of 34 cents per share for the quarter ended March 31, 2015, representing an increase of 2 cents from the prior quarterly dividend per share. The dividend was paid on April 15, 2015 to shareholders of record on April 1, 2015.

Conference Call

Washington Trust will host a conference call to discuss first quarter results, business highlights and outlook on Wednesday, April 22, 2015 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 13605131; the audio replay will be available through May 2, 2015. 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 June 30, 2015.

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 written or oral 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 local economies; reductions in net interest income resulting from a sustained low interest rate environment 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 Washington Trust's competition; changes in legislation or regulation and accounting principles, policies and guidelines; 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, as filed with the SEC and as updated by our Quarterly Reports on Form 10-Q and other SEC filings, 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 press release, 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)
Mar 31, Dec 31,
(Dollars in thousands, except par value) 2015 2014
Assets:
Cash and due from banks $84,842 $76,386
Short-term investments 4,191 3,964
Mortgage loans held for sale (including $36,672 at March 31, 2015 and $30,321 at December 31, 2014 measured at fair value) 47,117 45,693
Securities:
Available for sale, at fair value 340,942 357,662
Held to maturity, at amortized cost (fair value $24,834 at March 31, 2015 and $26,008 at December 31, 2014) 24,025 25,222
Total securities 364,967 382,884
Federal Home Loan Bank stock, at cost 37,730 37,730
Loans:
Commercial 1,559,523 1,535,488
Residential real estate 987,564 985,415
Consumer 333,505 338,373
Total loans 2,880,592 2,859,276
Less allowance for loan losses 27,810 28,023
Net loans 2,852,782 2,831,253
Premises and equipment, net 27,839 27,495
Investment in bank-owned life insurance 64,009 63,519
Goodwill 58,114 58,114
Identifiable intangible assets, net 4,694 4,849
Other assets 56,229 54,987
Total assets $3,602,514 $3,586,874
Liabilities:
Deposits:
Demand deposits $477,046 $459,852
NOW accounts 333,321 326,375
Money market accounts 821,353 802,764
Savings accounts 298,802 291,725
Time deposits 852,621 874,102
Total deposits 2,783,143 2,754,818
Federal Home Loan Bank advances 385,992 406,297
Junior subordinated debentures 22,681 22,681
Other liabilities 56,819 56,799
Total liabilities 3,248,635 3,240,595
Shareholders' Equity:
Common stock of $.0625 par value; authorized 30,000,000 shares; issued and outstanding 16,772,956 shares at March 31, 2015 and 16,746,363 shares at December 31, 2014 1,048 1,047
Paid-in capital 102,587 101,204
Retained earnings 258,069 252,837
Accumulated other comprehensive loss (7,825) (8,809)
Total shareholders' equity 353,879 346,279
Total liabilities and shareholders' equity $3,602,514 $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 ended March 31, 2015 2014
Interest income:
Interest and fees on loans $28,353 $25,589
Interest on securities: Taxable 2,259 2,942
Nontaxable 435 582
Dividends on Federal Home Loan Bank stock 165 142
Other interest income 25 35
Total interest and dividend income 31,237 29,290
Interest expense:
Deposits 3,389 2,969
Federal Home Loan Bank advances 1,902 2,241
Junior subordinated debentures 241 241
Other interest expense 3 3
Total interest expense 5,535 5,454
Net interest income 25,702 23,836
Provision for loan losses 300
Net interest income after provision for loan losses 25,702 23,536
Noninterest income:
Wealth management revenues 8,435 8,065
Merchant processing fees 1,291
Net gains on loan sales and commissions on loans originated for others 2,585 1,239
Service charges on deposit accounts 935 754
Card interchange fees 714 681
Income from bank-owned life insurance 490 445
Net gains on interest rate swap contracts 645 260
Equity in earnings (losses) of unconsolidated subsidiaries (86) (43)
Gain on sale of business line 6,265
Other income 302 413
Noninterest income, excluding other-than-temporary impairment losses 14,020 19,370
Total other-than-temporary impairment losses on securities
Portion of loss recognized in other comprehensive income (before tax)
Net impairment losses recognized in earnings
Total noninterest income 14,020 19,370
Noninterest expense:
Salaries and employee benefits 15,494 14,558
Net occupancy 1,886 1,640
Equipment 1,340 1,236
Merchant processing costs 1,050
Outsourced services 1,247 1,044
Legal, audit and professional fees 676 618
FDIC deposit insurance costs 473 440
Advertising and promotion 267 232
Amortization of intangibles 155 164
Foreclosed property costs 50 (22)
Debt prepayment penalties 6,294
Other expenses 1,943 2,038
Total noninterest expense 23,531 29,292
Income before income taxes 16,191 13,614
Income tax expense 5,181 4,316
Net income $11,010 $9,298
Weighted average common shares outstanding - basic 16,759 16,626
Weighted average common shares outstanding - diluted 16,939 16,800
Per share information: Basic earnings per common share $0.65 $0.56
Diluted earnings per common share $0.65 $0.55
Cash dividends declared per share $0.34 $0.29
Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
At or for the Quarters Ended
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
(Dollars and shares in thousands, except per share amounts) 2015 2014 2014 2014 2014
Financial Data:
Total assets $3,602,514 $3,586,874 $3,415,882 $3,317,022 $3,194,146
Total loans 2,880,592 2,859,276 2,674,047 2,581,124 2,478,603
Total securities 364,967 382,884 402,553 355,392 389,889
Total deposits 2,783,143 2,754,818 2,738,888 2,586,097 2,591,654
Total shareholders' equity 353,879 346,279 348,562 343,450 335,858
Net interest income 25,702 26,263 24,938 24,468 23,836
Provision for loan losses 500 600 450 300
Noninterest income, excluding OTTI losses 14,020 13,706 13,125 12,814 19,370
Net OTTI losses recognized in earnings
Noninterest expense 23,531 23,060 22,047 22,448 29,292
Income tax expense 5,181 5,218 4,878 4,587 4,316
Net income 11,010 11,191 10,538 9,797 9,298
Share Data:
Basic earnings per common share $0.65 $0.67 $0.63 $0.59 $0.56
Diluted earnings per common share $0.65 $0.66 $0.62 $0.58 $0.55
Dividends declared per share $0.34 $0.32 $0.32 $0.29 $0.29
Book value per share $21.10 $20.68 $20.85 $20.56 $20.19
Tangible book value per share - Non-GAAP (1) $17.35 $16.92 $17.07 $16.77 $16.38
Market value per share $38.19 $40.18 $32.99 $36.77 $37.47
Shares outstanding at end of period 16,773 16,746 16,721 16,705 16,635
Weighted average common shares outstanding - basic 16,759 16,735 16,714 16,678 16,626
Weighted average common shares outstanding - diluted 16,939 16,911 16,855 16,831 16,800
Key Ratios:
Return on average assets 1.23% 1.27% 1.25% 1.22% 1.17%
Return on average tangible assets - Non-GAAP (1) 1.25% 1.29% 1.27% 1.24% 1.20%
Return on average equity 12.54% 12.68% 12.15% 11.52% 11.10%
Return on average tangible equity - Non-GAAP (1) 15.27% 15.44% 14.86% 14.15% 13.70%
Tier 1 risk-based capital 11.84% (i) 11.52% 12.15% 12.24% 12.42%
Total risk-based capital 12.87% (i) 12.56% 13.26% 13.36% 13.56%
Tier 1 leverage ratio 9.21% (i) 9.14% 9.35% 9.62% 9.56%
Tier 1 common equity (2) 11.04% (i) N/A N/A N/A N/A
Equity to assets 9.82% 9.65% 10.20% 10.35% 10.51%
Tangible equity to tangible assets - Non-GAAP (1) 8.22% 8.04% 8.51% 8.61% 8.70%
(i) - estimated
Wealth Management Revenues:
Trust and investment management fees $7,142 $7,059 $6,982 $6,828 $6,685
Mutual fund fees 1,036 1,068 1,100 1,086 1,081
Asset-based revenues 8,178 8,127 8,082 7,914 7,766
Transaction-based revenues 257 282 292 616 299
Total wealth management revenues $8,435 $8,409 $8,374 $8,530 $8,065
Wealth Management Assets Under Administration:
Balance at beginning of period $5,069,966 $4,983,464 $5,010,588 $4,806,381 $4,781,958
Net investment appreciation (depreciation) & income 80,872 111,715 (29,199) 131,269 44,335
Net client cash flows 8,825 (25,213) 2,075 72,938 (19,912)
Balance at end of period $5,159,663 $5,069,966 $4,983,464 $5,010,588 $4,806,381
(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)
For the Quarters Ended
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2015 2014 2014 2014 2014
Average Yield / Rate (taxable equivalent basis):
Assets:
Commercial loans 4.02% 4.23% 4.20% 4.35% 4.43%
Residential real estate loans, including mortgage loans held for sale 4.06% 4.06% 4.06% 4.12% 4.15%
Consumer loans 3.82% 3.79% 3.83% 3.81% 3.83%
Total loans 4.01% 4.12% 4.10% 4.20% 4.26%
Cash, federal funds sold and other short-term investments 0.20% 0.18% 0.19% 0.19% 0.23%
FHLBB stock 1.77% 1.48% 1.47% 1.47% 1.53%
Taxable debt securities 2.84% 2.83% 2.94% 3.36% 3.47%
Nontaxable debt securities 6.03% 5.87% 5.86% 5.92% 5.98%
Total securities 3.23% 3.22% 3.36% 3.74% 3.84%
Total interest-earning assets 3.84% 3.91% 3.89% 4.03% 4.08%
Liabilities:
Interest-bearing demand deposits 0.09% —% —% —% —%
NOW accounts 0.06% 0.06% 0.06% 0.06% 0.06%
Money market accounts 0.45% 0.43% 0.41% 0.38% 0.36%
Savings accounts 0.06% 0.06% 0.06% 0.06% 0.06%
Time deposits (in-market) 1.05% 1.14% 1.17% 1.16% 1.16%
Wholesale brokered time deposits 1.29% 1.23% 1.09% 1.05% 1.12%
FHLBB advances 1.91% 2.28% 2.57% 3.20% 3.37%
Junior subordinated debentures 4.31% 4.22% 4.22% 4.26% 4.31%
Other 9.51% 8.50% 7.88% 9.90% 7.03%
Total interest-bearing liabilities 0.82% 0.84% 0.84% 0.85% 0.93%
Interest rate spread (taxable equivalent basis) 3.02% 3.07% 3.05% 3.18% 3.15%
Net interest margin (taxable equivalent basis) 3.18% 3.23% 3.21% 3.35% 3.34%
At March 31, 2015
Amortized Unrealized Unrealized Fair
(Dollars in thousands) Cost Gains Losses Value
Securities Available for Sale:
Obligations of U.S. government-sponsored enterprises $31,203 $98 $— $31,301
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 222,547 10,498 233,045
Obligations of states and political subdivisions 42,664 1,515 44,179
Individual name issuer trust preferred debt securities 30,762 (4,475) 26,287
Corporate bonds 6,119 36 (25) 6,130
Total securities available for sale 333,295 12,147 (4,500) 340,942
Held to Maturity:
Mortgage-backed securities issued by U.S. government agencies and U.S. government-sponsored enterprises 24,025 809 24,834
Total securities held to maturity 24,025 809 24,834
Total securities $357,320 $12,956 ($4,500) $365,776
Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
Period End Balances At
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
(Dollars in thousands) 2015 2014 2014 2014 2014
Loans:
Commercial: Mortgages $865,042 $843,978 $766,703 $772,772 $788,836
Construction & development 89,851 79,592 58,750 38,574 24,696
Commercial & industrial 604,630 611,918 564,920 554,824 523,751
Total commercial 1,559,523 1,535,488 1,390,373 1,366,170 1,337,283
Residential real estate: Mortgages 954,905 948,731 912,956 846,187 784,623
Homeowner construction 32,659 36,684 32,624 30,452 25,770
Total residential real estate 987,564 985,415 945,580 876,639 810,393
Consumer: Home equity lines 239,537 242,480 240,567 237,390 233,728
Home equity loans 46,727 46,967 46,455 45,632 41,991
Other 47,241 48,926 51,072 55,293 55,208
Total consumer 333,505 338,373 338,094 338,315 330,927
Total loans $2,880,592 $2,859,276 $2,674,047 $2,581,124 $2,478,603
At March 31, 2015
(Dollars in thousands) Balance % of Total
Commercial Real Estate Loans by Property Location:
Rhode Island, Connecticut, Massachusetts $882,400 92.4%
New York, New Jersey, Pennsylvania 58,832 6.2%
New Hampshire 13,661 1.4%
Total commercial real estate loans (1) $954,893 100.0%
(1) Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property.
At March 31, 2015
(Dollars in thousands) Balance % of Total
Residential Mortgages by Property Location:
Rhode Island, Connecticut, Massachusetts $966,809 97.9%
New Hampshire 11,509 1.2%
New York, Virginia, New Jersey, Maryland, Pennsylvania 4,659 0.5%
Ohio 1,749 0.2%
Washington, Oregon 1,325 0.1%
Georgia 1,057 0.1%
Other 456
Total residential mortgages $987,564 100.0%
Period End Balances At
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
(Dollars in thousands) 2015 2014 2014 2014 2014
Deposits:
Demand deposits $477,046 $459,852 $476,808 $411,586 $445,570
NOW accounts 333,321 326,375 313,391 314,060 311,461
Money market accounts 821,353 802,764 833,318 772,084 704,434
Savings accounts 298,802 291,725 290,561 292,112 293,322
Time deposits 852,621 874,102 824,810 796,255 836,867
Total deposits $2,783,143 $2,754,818 $2,738,888 $2,586,097 $2,591,654
Out-of-market brokered certificates of deposits included in time deposits $290,863 $299,129 $211,222 $171,216 $171,275
In-market deposits, excluding out-of-market brokered certificates of deposit $2,492,280 $2,455,689 $2,527,666 $2,414,881 $2,420,379
Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
Period End Balances At
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
(Dollars in thousands) 2015 2014 2014 2014 2014
Asset Quality Ratios:
Total past due loans to total loans 0.66% 0.63% 0.75% 0.82% 0.73%
Nonperforming assets to total assets 0.48% 0.48% 0.53% 0.42% 0.45%
Nonaccrual loans to total loans 0.55% 0.56% 0.63% 0.49% 0.55%
Allowance for loan losses to nonaccrual loans 175.29% 175.75% 163.68% 217.54% 199.23%
Allowance for loan losses to total loans 0.97% 0.98% 1.04% 1.06% 1.09%
Nonperforming Assets:
Commercial mortgages $5,115 $5,315 $6,022 $2,290 $2,293
Commercial construction & development
Commercial & industrial 2,193 1,969 1,326 1,615 1,198
Residential real estate mortgages 6,956 7,124 7,890 7,417 8,975
Consumer 1,601 1,537 1,727 1,213 1,108
Total nonaccrual loans 15,865 15,945 16,965 12,535 13,574
Nonaccrual investment securities
Property acquired through foreclosure or repossession 1,398 1,176 988 1,309 750
Total nonperforming assets $17,263 $17,121 $17,953 $13,844 $14,324
Troubled Debt Restructured Loans:
Accruing troubled debt restructured loans:
Commercial mortgages $9,448 $9,676 $9,677 $22,603 $22,796
Commercial & industrial 881 954 1,036 969 989
Residential real estate mortgages 684 1,252 1,258 1,459 1,467
Consumer 134 135 164 167 233
Accruing troubled debt restructured loans 11,147 12,017 12,135 25,198 25,485
Nonaccrual troubled debt restructured loans:
Commercial mortgages 4,698 4,898 4,898
Commercial & industrial 1,442 1,193 854 872 369
Residential real estate mortgages 338 248 441 448 447
Consumer 34 29
Nonaccrual troubled debt restructured loans 6,512 6,339 6,193 1,320 845
Total troubled debt restructured loans $17,659 $18,356 $18,328 $26,518 $26,330
Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS (unaudited)
Period End Balances At
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
(Dollars in thousands) 2015 2014 2014 2014 2014
Past Due Loans:
Loans 30-59 Days Past Due:
Commercial mortgages $497 $— $— $311 $—
Commercial & industrial 229 2,136 1,129 1,785 3,351
Residential real estate mortgages 4,470 2,943 2,582 5,249 2,232
Consumer loans 1,512 954 1,677 1,889 1,365
Loans 30-59 days past due $6,708 $6,033 $5,388 $9,234 $6,948
Loans 60-89 Days Past Due:
Commercial mortgages $61 $— $— $1,583 $15
Commercial & industrial 229 1,202 314 773 127
Residential real estate mortgages 1,352 821 2,001 855 1,265
Consumer loans 565 345 356 1,102 658
Loans 60-89 days past due $2,207 $2,368 $2,671 $4,313 $2,065
Loans 90 Days or more Past Due:
Commercial mortgages $5,115 $5,315 $5,995 $2,250 $2,238
Commercial & industrial 721 181 970 417 428
Residential real estate mortgages 3,607 3,284 3,922 4,335 5,634
Consumer loans 723 897 989 512 701
Loans 90 days or more past due $10,166 $9,677 $11,876 $7,514 $9,001
Total Past Due Loans:
Commercial mortgages $5,673 $5,315 $5,995 $4,144 $2,253
Commercial & industrial 1,179 3,519 2,413 2,975 3,906
Residential real estate mortgages 9,429 7,048 8,505 10,439 9,131
Consumer loans 2,800 2,196 3,022 3,503 2,724
Total past due loans $19,081 $18,078 $19,935 $21,061 $18,014
Accruing loans 90 days or more past due $— $— $— $— $—
Nonaccrual loans included in past due loans $12,314 $12,721 $14,364 $10,432 $11,487
For the Quarters Ended
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
(Dollars in thousands) 2015 2014 2014 2014 2014
Allowance for Loan Losses:
Balance at beginning of period $28,023 $27,768 $27,269 $27,043 $27,886
Provision charged to earnings 500 600 450 300
Charge-offs (321) (311) (148) (267) (1,223)
Recoveries 108 66 47 43 80
Balance at end of period $27,810 $28,023 $27,768 $27,269 $27,043
Net Loan Charge-Offs (Recoveries):
Commercial mortgages $120 ($5) ($7) $26 $939
Commercial & industrial (7) 144 63 95 170
Residential real estate mortgages 46 45 (1) 30 7
Consumer 54 61 46 73 27
Total $213 $245 $101 $224 $1,143

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
March 31, 2015 December 31, 2014 March 31, 2014
Average Yield/ Average Yield/ Average Yield/
(Dollars in thousands) Balance Interest Rate Balance Interest Rate Balance Interest Rate
Assets:
Commercial loans $1,544,720 $15,313 4.02% $1,470,360 $15,688 4.23% $1,336,798 $14,601 4.43%
Residential real estate loans, including loans held for sale 1,030,016 10,314 4.06% 1,009,382 10,329 4.06% 802,412 8,208 4.15%
Consumer loans 336,333 3,168 3.82% 338,050 3,231 3.79% 327,793 3,097 3.83%
Total loans 2,911,069 28,795 4.01% 2,817,792 29,248 4.12% 2,467,003 25,906 4.26%
Cash, federal funds sold and short-term investments 51,058 25 0.20% 63,736 29 0.18% 62,246 35 0.23%
FHLBB stock 37,730 165 1.77% 37,730 141 1.48% 37,730 142 1.53%
Taxable debt securities 322,570 2,259 2.84% 336,661 2,399 2.83% 344,009 2,942 3.47%
Nontaxable debt securities 44,659 664 6.03% 50,505 747 5.87% 59,958 884 5.98%
Total securities 367,229 2,923 3.23% 387,166 3,146 3.22% 403,967 3,826 3.84%
Total interest-earning assets 3,367,086 31,908 3.84% 3,306,424 32,564 3.91% 2,970,946 29,909 4.08%
Noninterest-earning assets 221,795 215,079 203,335
Total assets $3,588,881 $3,521,503 $3,174,281
Liabilities and Shareholders' Equity:
Interest-bearing demand deposits $37,851 $8 0.09% $19,163 $— —% $10,767 $— —%
NOW accounts 329,588 48 0.06% 320,313 49 0.06% 304,201 47 0.06%
Money market accounts 800,036 883 0.45% 829,472 903 0.43% 685,142 609 0.36%
Savings accounts 293,926 46 0.06% 291,683 45 0.06% 292,809 45 0.06%
Time deposits (in-market) 567,063 1,469 1.05% 602,005 1,735 1.14% 675,836 1,931 1.16%
Wholesale brokered time deposits 294,664 935 1.29% 257,415 799 1.23% 121,622 337 1.12%
FHLBB advances 404,773 1,902 1.91% 325,518 1,867 2.28% 269,989 2,241 3.37%
Junior subordinated debentures 22,681 241 4.31% 22,681 241 4.22% 22,681 241 4.31%
Other 128 3 9.51% 140 3 8.50% 173 3 7.03%
Total interest-bearing liabilities 2,750,710 5,535 0.82% 2,668,390 5,642 0.84% 2,383,220 5,454 0.93%
Demand deposits 438,904 458,782 422,975
Other liabilities 48,052 41,415 33,057
Shareholders' equity 351,215 352,916 335,029
Total liabilities and shareholders' equity $3,588,881 $3,521,503 $3,174,281
Net interest income (FTE) $26,373 $26,922 $24,455
Interest rate spread 3.02% 3.07% 3.15%
Net interest margin 3.18% 3.23% 3.34%
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
Three Months Ended
(Dollars in thousands) March 31, 2015 December 31, 2014 March 31, 2014
Commercial loans $442 $403 $317
Nontaxable debt securities 229 256 302
Total $671 $659 $619
Washington Trust Bancorp, Inc. and Subsidiaries
SUPPLEMENTAL INFORMATION - Non-GAAP Financial Measures (unaudited)
At or for the Quarters Ended
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
(Dollars in thousands, except per share amounts) 2015 2014 2014 2014 2014
Calculation of Tangible Book Value per Share:
Total shareholders' equity at end of period $353,879 $346,279 $348,562 $343,450 $335,858
Less:
Goodwill 58,114 58,114 58,114 58,114 58,114
Identifiable intangible assets, net 4,694 4,849 5,004 5,165 5,329
Total tangible shareholders' equity at end of period $291,071 $283,316 $285,444 $280,171 $272,415
Shares outstanding at end of period 16,773 16,746 16,721 16,705 16,635
Book value per share - GAAP $21.10 $20.68 $20.85 $20.56 $20.19
Tangible book value per share - Non-GAAP $17.35 $16.92 $17.07 $16.77 $16.38
Calculation of Tangible Equity to Tangible Assets:
Total tangible shareholders' equity at end of period $291,071 $283,316 $285,444 $280,171 $272,415
Total assets at end of period $3,602,514 $3,586,874 $3,415,882 $3,317,022 $3,194,146
Less:
Goodwill 58,114 58,114 58,114 58,114 58,114
Identifiable intangible assets, net 4,694 4,849 5,004 5,165 5,329
Total tangible assets at end of period $3,539,706 $3,523,911 $3,352,764 $3,253,743 $3,130,703
Equity to assets - GAAP 9.82% 9.65% 10.20% 10.35% 10.51%
Tangible equity to tangible assets - Non-GAAP 8.22% 8.04% 8.51% 8.61% 8.70%
Calculation of Return on Average Tangible Assets:
Net income $11,010 $11,191 $10,538 $9,797 $9,298
Total average assets $3,588,881 $3,521,503 $3,370,323 $3,214,649 $3,174,281
Less:
Average goodwill 58,114 58,114 58,114 58,114 58,114
Average identifiable intangible assets, net 4,770 4,924 5,082 5,245 5,410
Total average tangible assets $3,525,997 $3,458,465 $3,307,127 $3,151,290 $3,110,757
Return on average assets - GAAP 1.23% 1.27% 1.25% 1.22% 1.17%
Return on average tangible assets - Non-GAAP 1.25% 1.29% 1.27% 1.24% 1.20%
Calculation of Return on Average Tangible Equity:
Net income $11,010 $11,191 $10,538 $9,797 $9,298
Total average shareholders' equity $351,215 $352,916 $346,837 $340,235 $335,029
Less:
Average goodwill 58,114 58,114 58,114 58,114 58,114
Average identifiable intangible assets, net 4,770 4,924 5,082 5,245 5,410
Total average tangible shareholders' equity $288,331 $289,878 $283,641 $276,876 $271,505
Return on average shareholders' equity - GAAP 12.54% 12.68% 12.15% 11.52% 11.10%
Return on average tangible shareholders' equity - Non-GAAP 15.27% 15.44% 14.86% 14.15% 13.70%

CONTACT: Elizabeth B. Eckel Senior Vice President, Marketing Telephone: (401) 348-1309 E-mail: ebeckel@washtrust.com

Source:Washington Trust Bancorp, Inc.