Exhibit 99.1
Washington Trust Third Quarter Earnings Up 13%; Strong Loan and Deposit Growth
WESTERLY, R.I.--(BUSINESS WIRE)--Oct. 21, 2004--Washington Trust Bancorp,
Inc. (Nasdaq National Market; symbol: WASH), parent company of The Washington
Trust Company, today announced net income of $5.3 million for the third quarter
ended September 30, 2004, an increase of 13 percent from the $4.7 million
reported for the third quarter of 2003. On a diluted earnings per share basis,
the Corporation earned 39 cents for the third quarter of 2004, an 11 percent
increase from the 35 cents earned for the same quarter a year ago. The returns
on average assets and average equity for the three months ended September 30,
2004 were 0.96% and 14.70%, respectively, compared to 1.02% and 14.30%,
respectively, for the three months ended September 30, 2003.
"We had an outstanding quarter with earnings up 13 percent," said John C.
Warren, Chairman and Chief Executive Officer of Washington Trust. "We've had
excellent growth throughout the company; total loans are up 25 percent since
December 31, 2003, while total deposits have risen by 22 percent since year-end.
Trust and investment management revenues also showed significant gains, up 20
percent in the nine months ended 2004, compared to the same period in 2003."
Net income for the nine months ended September 30, 2004 amounted to $15.3
million, an increase of 9 percent from the $14.1 million reported for the same
period a year ago. On a diluted earnings per share basis, the Corporation earned
$1.13 for the nine months ended September 30, 2004, an increase of 8 percent
from $1.05 earned for the same period a year ago. The returns on average assets
and average equity for the nine months ended September 30, 2004 were 0.97% and
14.35%, respectively, compared to 1.03% and 14.14%, respectively, for the nine
months ended September 30, 2003.
Balance sheet growth has been strong during 2004. Total assets amounted to
$2.280 billion at September 30, 2004, an increase of 16 percent from December
31, 2003. Total loans amounted to $1.197 billion at September 30, 2004, up 25
percent since December 31, 2003. Commercial and commercial real estate loans
amounted to $482.4 million at September 30, 2004, up $73.9 million, or 18
percent since December 31, 2003. Growth in consumer loans also continued
increasing 34 percent to $217.2 million for the nine months ended September 30,
2004. Residential real estate loans grew to $497.9 million at September 30,
2004, an increase of $108.0 million or 28 percent from December 31, 2003,
including an increase of $64.4 million in residential mortgages purchased from
other financial institutions. At September 30, 2004, total securities amounted
to $899.7 million, an increase of $60.3 million from the balance at December 31,
2003.
Total deposits amounted to $1.469 billion at September 30, 2004 rising 22
percent since December 31, 2003. Savings deposits, including money market
deposits, amounted to $640.3 million, up $146.4 million, or 30 percent, for the
nine months ended September 30, 2004. Time deposits increased $94.9 million to
$613.0 million, or 18 percent, from the December 31, 2003 balance, primarily due
to increases in consumer certificates of deposit and brokered certificates of
deposit. Demand deposits totaled $215.7 million at September 30, 2004, up 11
percent over the December 31, 2003 level. FHLB advances totaled $639.8 million
at September 30, 2004, resulting in a $32.7 million increase from December 31,
2003 balance.
Net interest income for the third quarter of 2004 amounted to $13.9
million, an increase of 18 percent from the $11.7 million amount reported for
the same quarter a year ago. The net interest margin for the third quarter of
2004 was 2.69%, down 3 basis points from 2.72% reported in the second quarter of
2004 and down 6 basis points from 2.75% reported in the third quarter of 2003.
The decrease in the net interest margin from the second quarter of 2004 is
largely attributable to increased funding costs for deposits and borrowed funds,
partially offset by higher yields on investment securities and loans. For the
nine months ended September 30, 2004, net interest income amounted to $40.1
million, an increase of 11 percent from the amount reported for the
corresponding 2003 period. The net interest margin for the nine months ended
September 30, 2004 amounted to 2.76%, down 13 basis points from the 2.89%
reported for the same period a year ago.
Noninterest income (excluding net realized gains and losses on securities)
totaled $7.0 million for the third quarter of 2004, compared to $7.4 million for
the same quarter a year ago. For the nine months ended September 30, 2004,
noninterest income amounted to $20.1 million, down $135 thousand, or 1 percent,
from the comparable 2003 amount. Trust and investment management revenues
increased $1.6 million, or 20 percent, in the nine months ended September 30,
2004 compared to the same period in 2003. Trust assets under administration
amounted to $1.837 billion at September 30, 2004, compared to $1.742 billion at
December 31, 2003 and $1.618 billion at September 30, 2003. Net gains on loan
sales for the nine months ended September 30, 2004 amounted to $1.3 million,
down from $4.1 million for the same period in 2003. Total third quarter 2004 net
gains on loan sales were $348 thousand, down from $1.4 million for the same
quarter a year ago. Loan sale gains have declined due to a drop off in fixed
rate mortgage origination and sales activity. Also included in loan sale gains
are gains resulting from the sale of the guaranteed portion of SBA loans. Total
of such gains for the nine months ended 2004 were $575 thousand, up from $260
thousand for the same period in 2003.
During the quarter ended September 30, 2004 the Corporation recognized net
realized gains on securities of $101 thousand, which represents the disposal of
certain equity securities for portfolio restructuring purposes. For the nine
months ended September 30, 2004, the Corporation recognized net realized losses
on securities amounting to $139 thousand. For the nine months ended September
30, 2003, net realized gains on securities totaled $630 thousand, including
approximately $400 thousand in gains resulting from the Corporation's
contribution of appreciated equity securities to the Corporation's charitable
foundation. The cost of this 2003 contribution amounted to approximately $433
thousand and was included in other noninterest expense for the nine months ended
September 30, 2003. The Corporation expects to make an annual contribution to
its charitable foundation in the fourth quarter of 2004.
Noninterest expenses totaled $13.1 million for the third quarter of 2004,
an increase of 7 percent from the same period a year ago. Exclusive of the
pre-tax debt prepayment penalty charge of $941 thousand in 2003, noninterest
expenses for the nine months ended September 30, 2004 increased 6 percent to
$37.3 million, with the largest increase in personnel related costs. In
addition, included in noninterest expenses for the nine months ended September
30, 2004, were costs associated with the conversion of certain technology
systems amounting to $318 thousand.
Nonaccrual loans as a percentage of total loans at September 30, 2004 were
..43%, up from .29% at December 31, 2003. Nonperforming assets (nonaccrual loans
and property acquired through foreclosure) amounted to $5.2 million, or .23% of
total assets, at September 30, 2004, up from $2.7 million, or .14%, at December
31, 2003. The increase was largely due to a single $2.1 million commercial
lending relationship classified as nonaccrual during the second quarter of 2004.
The Corporation continued to benefit from favorable loan loss experience during
the nine months ended September 30, 2004 as indicated by a $353 thousand excess
of loan loss recoveries over charge-offs. For the nine months ended September
30, 2003, charge-offs, net of recoveries, amounted to $34 thousand.
Total shareholders' equity amounted to $148.4 million at September 30,
2004, compared to $138.1 million at December 31, 2003. Book value per share as
of September 30, 2004 and December 31, 2003 amounted to $11.20 and $10.46,
respectively.
Washington Trust Chairman and Chief Executive Officer, John C. Warren, and
David V. Devault, Executive Vice President, Treasurer, and Chief Financial
Officer, will host a conference call on Thursday, October 21, at 4:30 p.m.
(Eastern Daylight Time) to discuss the Corporation's third quarter results.
Access to the call is available in a listen-only mode on Washington Trust's web
site, http://investorrelations.washtrust.com. A replay of the call will be
posted in this same section of the web site shortly after the conclusion of the
call.
Washington Trust Bancorp, Inc. is the parent of The Washington Trust
Company, a Rhode Island state-chartered bank founded in 1800. The Bank offers a
full range of financial services, including trust and investment management,
through its offices in Rhode Island and southeastern Connecticut. Washington
Trust Bancorp, Inc.'s common stock trades on The Nasdaq Stock Market(R) under
the symbol WASH. Investor information is available on the Corporation's web
site: www.washtrust.com.
Note: This press release contains financial information determined by
methods other than in accordance with accounting principles generally accepted
in the United States of America ("GAAP"). The Corporation's management uses
these non-GAAP measures in its analysis of the Corporation's performance. These
measures adjust GAAP performance measures to exclude the effect of significant
gains or losses that are unusual in nature such as debt prepayment penalty
charges. Because these items and their impact on the Corporation's performance
are difficult to predict, management believes that presentations of financial
measures excluding the impact of these items provide useful supplemental
information that is essential to a proper understanding of the operating results
of the Corporation's core businesses. These disclosures should not be viewed as
a substitute for operating results determined in accordance with GAAP, nor are
they necessarily comparable to non-GAAP performance measures that may be
presented by other Corporations. A quantitative reconciliation of the
differences between the non-GAAP financial information discussed herein and the
most directly comparable financial information calculated and presented in
accordance with GAAP is contained in the Financial Summary statements attached
to this press release.
This report contains certain statements that may be considered
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. The Corporation's actual results, performance or achievements could
differ materially from those projected in the forward-looking statements as a
result, among other factors, of changes in general national or regional economic
conditions, changes in interest rates, reductions in the market value of trust
and investment assets under management, reductions in loan demand, reductions in
deposit levels necessitating increased borrowing to fund loans and investments,
changes in loan default and charge-off rates, changes in the size and nature of
the Corporation'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.
Washington Trust Bancorp, Inc. and Subsidiary
FINANCIAL SUMMARY
THREE MONTHS ENDED
--------------------------------
(Dollars and shares in thousands, SEP. 30, SEP. 30, JUN. 30,
except per share amounts) 2004 2003 2004
---------- ---------- ----------
OPERATING RESULTS
- ------------------
Net interest income $13,882 $11,727 $13,092
Provision for loan losses 120 100 120
Net realized gains (losses) on
securities 101 - (240)
Other noninterest income 6,966 7,447 7,164
Noninterest expenses 13,054 12,190 12,545
Income tax expense 2,442 2,144 2,308
Net income 5,333 4,740 5,043
PER SHARE
- ---------
Basic earnings $0.40 $0.36 $0.38
Diluted earnings $0.39 $0.35 $0.37
Dividends declared $0.17 $0.16 $0.17
SHARES OUTSTANDING
- -------------------
Weighted Average: Basic 13,235.7 13,133.8 13,216.1
Diluted 13,514.0 13,486.8 13,517.0
AVERAGE BALANCE SHEET
- ---------------------
Federal funds sold and other short-
term investments $16,206 $18,451 $11,072
Taxable debt securities 855,908 787,056 829,306
Nontaxable debt securities 16,402 15,964 16,118
Corporate stocks and Federal Home
Loan Bank stock 55,566 51,859 56,358
Loans: Commercial 471,164 393,224 434,292
Residential 468,212 315,193 430,539
Consumer 209,615 146,834 192,529
---------- ---------- ----------
Total loans 1,148,991 855,251 1,057,360
Earning assets 2,093,073 1,728,581 1,970,214
Total assets 2,221,439 1,850,939 2,091,943
Deposits: Demand 210,974 193,908 190,906
Savings 611,911 491,690 543,870
Time 601,822 477,485 545,266
---------- ---------- ----------
Total deposits 1,424,707 1,163,083 1,280,042
Federal Home Loan Bank advances 634,346 537,486 656,802
Shareholders' equity 145,151 132,559 139,525
KEY RATIOS
- -----------
Return on average assets 0.96% 1.02% 0.96%
Return on average equity 14.70% 14.30% 14.46%
Interest rate spread (taxable
equivalent basis) 2.40% 2.45% 2.47%
Net interest margin (taxable
equivalent basis) 2.69% 2.75% 2.72%
ALLOWANCE FOR LOAN LOSSES
- --------------------------
Balance at beginning of period $16,208 $15,742 $16,174
Provision charged to earnings 120 100 120
Net (charge-offs) recoveries 299 (29) (86)
---------- ---------- ----------
Balance at end of period $16,627 $15,813 $16,208
---------- ---------- ----------
Washington Trust Bancorp, Inc. and Subsidiary
FINANCIAL SUMMARY
NINE MONTHS ENDED
---------------------
(Dollars and shares in thousands, SEP. 30, SEP. 30,
except per share amounts) 2004 2003
---------- ----------
OPERATING RESULTS
- -----------------
Net interest income $40,057 $35,938
Provision for loan losses 360 360
Net realized (losses) gains on securities (139) 630
Other noninterest income 20,070 20,205
Noninterest expenses 37,279 36,016
Income tax expense 7,018 6,333
Net income 15,331 14,064
PER SHARE
- ---------
Basic earnings $1.16 $1.07
Diluted earnings $1.13 $1.05
Dividends declared $0.51 $0.46
SHARES OUTSTANDING
- ------------------
Weighted Average: Basic 13,217.1 13,094.5
Diluted 13,520.1 13,341.8
AVERAGE BALANCE SHEET
- ---------------------
Federal funds sold and other short-term
investments $12,824 $16,293
Taxable debt securities 831,661 778,815
Nontaxable debt securities 15,588 16,515
Corporate stocks and Federal Home Loan
Bank stock 55,481 50,573
Loans: Commercial 439,482 392,926
Residential 430,002 301,402
Consumer 190,979 139,321
---------- ----------
Total loans 1,060,463 833,649
Earning assets 1,976,017 1,695,845
Total assets 2,100,949 1,816,512
Deposits: Demand 190,797 172,141
Savings 551,160 474,725
Time 558,365 479,490
---------- ----------
Total deposits 1,300,322 1,126,356
Federal Home Loan Bank advances 641,422 539,799
Shareholders' equity 142,429 132,634
KEY RATIOS
- ----------
Return on average assets 0.97% 1.03%
Return on average equity 14.35% 14.14%
Interest rate spread (taxable equivalent basis) 2.50% 2.59%
Net interest margin (taxable equivalent basis) 2.76% 2.89%
ALLOWANCE FOR LOAN LOSSES
- -------------------------
Balance at beginning of period $15,914 $15,487
Provision charged to earnings 360 360
Net (charge-offs) recoveries 353 (34)
---------- ----------
Balance at end of period $16,627 $15,813
---------- ----------
Washington Trust Bancorp, Inc. and Subsidiary
FINANCIAL SUMMARY
NINE MONTHS ENDED
-----------------
(Dollars and shares in thousands, SEP. 30, SEP. 30,
except per share amounts) 2004 2003
-------- --------
EARNINGS AND RATIOS EXCLUDING SPECIAL ITEMS
- -------------------------------------------
(Non GAAP Financial Information):
Noninterest expenses (1) $37,279 $35,075
Return on average assets (2) 0.97% 1.08%
Return on average equity (2) 14.35% 14.79%
Reconciliation Table - Non GAAP Financial Information
- -----------------------------------------------------
Net income, including special items $15,331 $14,064
Add back special items, net of tax:
Debt prepayment penalties - 649
Net income, excluding special items $15,331 $14,713
Basic earnings per share $1.16 $1.07
Effects of special items, net of tax - 0.05
Basic earnings per share, excluding special items $1.16 $1.12
Diluted earnings per share $1.13 $1.05
Effects of special items, net of tax - 0.05
Diluted earnings per share, excluding special items $1.13 $1.10
Return on average assets 0.97% 1.03%
Effects of special items, net of tax - 0.05%
Return on average assets, excluding special items 0.97% 1.08%
Return on average equity 14.35% 14.14%
Effects of special items, net of tax - 0.65%
Return on average equity, excluding special items 14.35% 14.79%
(1) Excludes second quarter 2003 Federal Home Loan Bank debt
prepayment penalties of $941 thousand (pretax).
(2) Excludes second quarter 2003 Federal Home Loan Bank debt
prepayment penalties of $649 thousand after income taxes.
Washington Trust Bancorp, Inc. and Subsidiary
FINANCIAL SUMMARY
(Dollars and shares in
thousands, except per SEP. 30, JUN. 30, DEC. 31, SEP. 30,
share amounts) 2004 2004 2003 2003
----------- ----------- ----------- -----------
PERIOD END BALANCE SHEET
- ------------------------
Assets $2,280,115 $2,178,990 $1,973,807 $1,931,190
Total securities 899,678 902,998 839,421 844,490
Loans:
Commercial:
Mortgages 253,327 239,651 227,334 214,412
Construction
and
development 22,504 20,376 12,486 13,352
Other 206,559 188,314 168,657 167,747
----------- ----------- ----------- -----------
Total
Commercial: 482,390 448,341 408,477 395,511
Residential:
Mortgages 476,705 433,976 375,706 358,489
Homeowner
construction 21,154 17,079 14,149 13,616
----------- ----------- ----------- -----------
Total
Residential: 497,859 451,055 389,855 372,105
Consumer:
Home equity
lines 146,291 134,299 116,458 106,075
Other 70,932 67,344 46,191 44,664
----------- ----------- ----------- -----------
Total
Consumer: 217,223 201,643 162,649 150,739
Total loans 1,197,472 1,101,039 960,981 918,355
Deposits:
Demand 215,685 200,923 194,144 196,952
Savings 640,277 566,976 493,878 492,322
Time 613,036 574,004 518,119 495,594
----------- ----------- ----------- -----------
Total
deposits 1,468,998 1,341,903 1,206,141 1,184,868
Brokered deposits included
in time deposits 169,795 153,373 118,234 106,724
Federal Home Loan Bank
advances 639,835 676,336 607,104 590,675
Shareholders' equity 148,402 138,542 138,055 136,006
CAPITAL RATIOS
- --------------
Tier 1 risk-based capital 9.09% 9.41% 10.00% 10.00%
Total risk-based capital 10.63% 10.95% 11.57% 11.49%
Tier 1 leverage ratio 5.34% 5.51% 5.65% 5.72%
SHARE INFORMATION
- -----------------
Shares outstanding at end
of period 13,247.7 13,227.9 13,194.6 13,153.7
Book value per share $11.20 $10.47 $10.46 $10.34
Tangible book value per
share $9.39 $8.64 $8.60 $8.46
Market value per share $26.15 $25.99 $26.20 $24.01
CREDIT QUALITY
- --------------
Nonaccrual loans $5,163 $4,987 $2,743 $3,345
Other real estate owned,
net - 8 11 23
Nonperforming assets to
total assets 0.23% 0.23% 0.14% 0.17%
Nonaccrual loans to total
loans 0.43% 0.45% 0.29% 0.36%
Allowance for loan losses
to nonaccrual loans 322.04% 325.01% 580.17% 472.74%
Allowance for loan losses
to total loans 1.39% 1.47% 1.66% 1.72%
ASSETS UNDER ADMINISTRATION
- ---------------------------
Market value $1,837,302 $1,783,747 $1,741,948 $1,618,239
Washington Trust Bancorp, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
September 30, December 31,
2004 2003
-------------- --------------
Assets:
Cash and due from banks $45,316 $40,710
Federal funds sold and other short-term
investments 11,560 20,400
Mortgage loans held for sale 11,702 2,486
Securities:
Available for sale, at fair value;
amortized cost $739,516 in 2004
and $663,529 in 2003 751,240 673,845
Held to maturity, at cost; fair value
$150,918 in 2004 and $169,401 in 2003 148,438 165,576
-------------- --------------
Total securities 899,678 839,421
Federal Home Loan Bank stock, at cost 34,373 31,464
Loans 1,197,472 960,981
Less allowance for loan losses 16,627 15,914
-------------- --------------
Net loans 1,180,845 945,067
Premises and equipment, net 24,620 24,941
Accrued interest receivable 9,206 7,911
Goodwill 22,591 22,591
Identifiable intangible assets 1,470 1,953
Other assets 38,754 36,863
-------------- --------------
Total assets $2,280,115 $1,973,807
============== ==============
Liabilities:
Deposits:
Demand $215,685 $194,144
Savings 640,277 493,878
Time 613,036 518,119
-------------- --------------
Total deposits 1,468,998 1,206,141
Dividends payable 2,254 2,113
Federal Home Loan Bank advances 639,835 607,104
Other borrowings 2,637 2,311
Accrued expenses and other liabilities 17,989 18,083
-------------- --------------
Total liabilities 2,131,713 1,835,752
-------------- --------------
Shareholders' Equity:
Common stock of $.0625 par value;
authorized 30 million shares;
issued 13,256,668 shares in 2004 and
13,204,024 shares in 2003 828 825
Paid-in capital 31,363 29,868
Retained earnings 110,073 101,492
Unearned stock-based compensation (811) (22)
Accumulated other comprehensive income 7,150 6,101
Treasury stock, at cost; 8,993 shares
in 2004 and 9,463 in 2003 (201) (209)
-------------- --------------
Total shareholders' equity 148,402 138,055
-------------- --------------
Total liabilities and shareholders'
equity $2,280,115 $1,973,807
============== ==============
Washington Trust Bancorp, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME
(Dollars and shares in thousands,
except per share amounts)
(Unaudited)
Three Months Nine Months
Periods ended September 30, 2004 2003 2004 2003
--------- --------- --------- ---------
Interest income:
Interest and fees on loans $15,762 $12,568 $43,690 $38,067
Interest on securities 8,742 7,592 25,104 24,480
Dividends on corporate stock
and Federal Home Loan Bank
stock 562 528 1,542 1,546
Interest on federal funds
sold and other short-term
investments 47 35 87 111
--------- --------- --------- ---------
Total interest income 25,113 20,723 70,423 64,204
--------- --------- --------- ---------
Interest expense:
Savings deposits 1,180 724 2,803 2,554
Time deposits 4,756 3,740 12,904 11,473
Federal Home Loan Bank
advances 5,281 4,514 14,615 14,184
Other 14 18 44 55
--------- --------- --------- ---------
Total interest expense 11,231 8,996 30,366 28,266
--------- --------- --------- ---------
Net interest income 13,882 11,727 40,057 35,938
Provision for loan losses 120 100 360 360
--------- --------- --------- ---------
Net interest income after
provision for loan losses 13,762 11,627 39,697 35,578
--------- --------- --------- ---------
Noninterest income:
Trust and investment
management 3,218 2,692 9,593 7,969
Service charges on deposit
accounts 1,066 1,242 3,428 3,690
Merchant processing fees 1,643 1,412 3,335 2,731
Net gains on loan sales 348 1,383 1,257 4,062
Income from bank-owned life
insurance 293 298 887 845
Net realized gains (losses)
on securities 101 - (139) 630
Other income 398 420 1,570 908
--------- --------- --------- ---------
Total noninterest income 7,067 7,447 19,931 20,835
--------- --------- --------- ---------
Noninterest expense:
Salaries and employee
benefits 7,439 6,974 21,634 20,127
Net occupancy 770 671 2,382 2,169
Equipment 837 830 2,395 2,504
Merchant processing costs 1,398 1,139 2,746 2,184
Advertising and promotion 429 261 1,433 1,073
Outsourced services 357 328 1,200 1,024
Legal, audit and
professional fees 379 394 882 990
Amortization of intangibles 161 180 483 539
Debt prepayment penalties - - - 941
Other 1,284 1,413 4,124 4,465
--------- --------- --------- ---------
Total noninterest expense 13,054 12,190 37,279 36,016
--------- --------- --------- ---------
Income before income taxes 7,775 6,884 22,349 20,397
Income tax expense 2,442 2,144 7,018 6,333
--------- --------- --------- ---------
Net income $5,333 $4,740 $15,331 $14,064
--------- --------- --------- ---------
Weighted average shares
outstanding - basic 13,235.7 13,133.8 13,217.1 13,094.5
Weighted average shares
outstanding - diluted 13,514.0 13,486.8 13,520.1 13,341.8
Per share information:
Basic earnings per share $.40 $.36 $1.16 $1.07
Diluted earnings per share $.39 $.35 $1.13 $1.05
Cash dividends declared per
share $.17 $.16 $.51 $.46
CONTACT: Washington Trust Bancorp, Inc.
Elizabeth B. Eckel, 401-348-1309
ebeckel@washtrust.com