WashTrust posts 25 percent earnings gain in 2014 1Q

WASHINGTON TRUST BANCORP posted a 25.3 percent year-over-year increase in net income in the first quarter and increased its dividend for the third consecutive quarter.
WASHINGTON TRUST BANCORP posted a 25.3 percent year-over-year increase in net income in the first quarter and increased its dividend for the third consecutive quarter.

WESTERLY – Washington Trust Bancorp, parent of The Washington Trust Co., posted earnings of $9.3 million for the first quarter of 2014, an increase of 25.3 percent over earnings of $7.4 million in the first quarter of 2013.

Diluted earnings per share were 55 cents for the period, an increase on the 45 cents per diluted share a year ago.

“Washington Trust posted another quarter of solid earnings,” Chairman and CEO Joseph J. MarcAurele said in a conference call reporting the first quarter earnings on Monday. “We continue to build relationships in key market areas, and we are excited about entering a new market with the opening of our new branch Johnston next month.”

Washington Trust’s total interest and noninterest income for first quarter 2014 was $48.7 million, up 16 percent from $42 million for first quarter 2013.

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Much of the increase was the result of a net gain of $6.3 million from the sale of the bank’s merchant processing services to Vantiv on during the first quarter of 2014. The bank has used Vantiv to process debit card transactions for many years. The expanded agreement included credit card services for merchants who accept credit card transactions through American Express, Discover, Mastercard or Visa.

The bank paid quarterly dividend of 29 cents per share for first quarter 2014, a 2 cent increase over the previous quarter and the third consecutive quarterly dividend increase.

Asset quality continued to improve in the first quarter of 2014, with nonperforming assets declining 50.1 percent year over year to $14.3 million, as total past-due loans fell 31.2 percent to $18 million over the same time period.

Net interest margin for the first quarter of 2014 was 3.34 percent, an increase on the 3.32 percent recorded in the first quarter of 2013.

The bank’s total assets were $3.2 billion at the end of the 2014 first quarter, an increase of 0.2 percent over the course of the year.

In connection with the sale of merchant processing services, the bank incurred divestiture costs of $355,000 or 1 cent per diluted share, in the first quarter of 2014. The bank also prepaid $99.3 million of Federal Home Loan Bank of Boston advances in March 2014, resulting in a debt prepayment penalty expense of $6.3 million.

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