By Rhonda Miller
PBN Staff Writer
(Updated, 1:05 p.m.)
WESTERLY – Washington Trust Bancorp Inc., parent company of The Washington Trust Co., reported first-quarter net income of $7.4 million, or 45 cents per diluted share, on Monday, a decline of 12.1 percent from the first three months of 2012.
The bank noted that it took a $2.8 million impairment charge on a collateralized debt obligation that was liquidated, resulting in an after-tax hit of $1.9 million, or 11 cents for diluted share.
“The local economy has shown some signs of improvement. We continue, though, to be under some level of competitive pressure,” Washington Trust Chairman, President and CEO Joseph J. MarcAurele said Monday in a telephone press conference.
“Despite some economic challenges, Washington Trust posted solid loan growth and strong mortgage production in the first quarter of 2013,” MarcAurele said.
The bank had an increase of $25.5 million in its commercial real estate loan portfolio, which helped offset a decline in interest-earning assets from a year earlier. As a result, however, total interest and non-interest income amounted to $44.7 million, a decline of 0.5 percent.
In February, the bank restructured $72.5 million of federal home loan bank advances with maturities in 2015 into new terms in the 2017 to 2019 period at a lower cost.
“The benefit of this in the first quarter was approximately $70,000, with an expected benefit of $326,000 in the remaining quarters of this year,” said Washington Trust Senior Vice President, Secretary and CFO David Devault.
Thanks to a reduction in the cost of funds, the bank’s net interest margin was 3.32 percent in the first quarter, compared with 3.33 percent in the 2012 fourth quarter and 3.27 percent in the same period a year earlier.