Rhode Island’s weak economy and sluggish housing market are not keeping Westerly-based Washington Trust Bancorp Inc. from continuing its momentum of increased earnings, as the parent of The Washington Trust Co. reaped the benefits of its strategic expansion into healthier markets in Massachusetts and Connecticut.
Washington Trust posted record earnings of $35.1 million for 2012, an 18 percent increase in net income compared with 2011, according to the bank’s earnings release on Jan. 30. Diluted earnings per share totaled $2.13 in 2012, an increase of 17 percent over the 2011 total.
“Virtually every line of business performed better in 2012 than in 2011,” Washington Trust Chairman, President and CEO Joseph J. MarcAurele said in a telephone interview with Providence Business News.
The company’s total interest and noninterest revenue of $186.3 million in 2012 represented a 7 percent increase over the corresponding 2011 total. That growth was driven entirely by non-interest income, which increased 23.6 percent to $65.2 million even as interest income declined by little more than one-tenth of a percent.
A key to the growth of noninterest income was the expansion of mortgage-origination offices out-of-state.
“We opened residential mortgage-origination offices in Massachusetts – one in Burlington and one in Sharon. We also opened one in Glastonbury, Conn.,” MarcAurele said. “In addition, we have very aggressively added to our Rhode Island mortgage-origination staff.”
The physical expansion resulted in growth of residential mortgage originations as well as the sale of the mortgages into the secondary market, said MarcAurele, resulting in greater fee revenue.
Rhode Island’s largest independent bank, with $3.1 billion in assets, Washington Trust grew commercial lending by 11 percent over the past year as well.