Maintaining its conservative approach to credit helped Washington Trust Bancorp Inc. increase its profit 19 percent, to $7.6 million, in the third quarter, compared to the previous year, and maintain a positive yet cautious outlook for the future.
Earnings per diluted share for the parent of Westerly-based The Washington Trust Co. were 46 cents, up 7 cents from the same period in 2010, when the company posted $6.4 million in profit. The third quarter also saw the opening of new offices in East Providence and Cranston and plans announced for the company’s first mortgage-service center in Connecticut.
The uncertain economy makes it important to maintain a conservative approach to business, said Joseph J. MarcAurele, Washington Trust chairman, president and CEO. He pointed to a 10 percent, or $719,000, decline in income from wealth management – the bank’s largest noninterest income – compared to the second quarter.
Compared to the same period last year, however, the bank still saw a 5 percent increase in wealth-management income.
The $719,000 decline from the second quarter is due to drops in the financial markets. The bank gets paid based on the value of the accounts so as values decrease when the market goes down, the bank’s fees go down.
But that’s just temporary, MarcAurele said, and the bank’s wealth-management customers will get returns on their accounts.
“Over the last week or so the markets have gone back up and we believe this is a very good business for us and a good source of fee income,” he told Providence Business News.
MarcAurele also announced the opening of a new branch on Taunton Avenue in East Providence, the third opening of a Cranston branch on Plainfield Pike and plans to open its first mortgage-production office in Glastonbury, Conn.
The long-planned office openings haven’t changed MarcAurele’s short-term outlook on the economy.
“I think that it will be a protracted amount of time before we right the ship from an economic perspective,” he said.
The bank did, however, cut its loan-loss provision to $1 million in the third quarter, down by $200,000 from a quarter earlier and by $500,000 when compared with a year earlier.
The company wants to further expand in the region.
“We think it’s important to try to establish that and also it’s very important for us to get into new markets,” he said. “I feel very strongly that East Providence and Cranston, in the area that we are going to, represents that for us. We have a very dominant market share in southern Rhode Island. But what we really need to do is get in markets that we are not in currently.”