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Washington Trust Reports Record 2015 Earnings

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%


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

Source:Washington Trust Bancorp, Inc.