EX-99.1 3 a4616268ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Washington Trust's Assets Top $2 Billion; First Quarter Earnings Increase 4% WESTERLY, R.I.--(BUSINESS WIRE)--April 15, 2004--Washington Trust Bancorp, Inc. (Nasdaq National Market; symbol: WASH), parent company of The Washington Trust Company, today reported first quarter 2004 net income of $5.0 million, or 37 cents per diluted share, up 4 percent from $4.7 million, or 36 cents per diluted share, for the first quarter of 2003. The returns on average assets and average equity for the three months ended March 31, 2004 were 1.00% and 13.90%, respectively, compared to 1.07% and 14.56%, respectively, for the three months ended March 31, 2003. "Washington Trust had a very strong first quarter and surpassed $2 billion in assets for the first time in the Corporation's 204-year history," stated John C. Warren, Washington Trust Chairman and CEO. He continued, "We had good growth in both commercial and consumer loans. In addition, our trust and asset management revenues were up by 21% over the same quarter last year." Net interest income for the first quarter of 2004 amounted to $13.1 million, up 10 percent from $11.9 million for the same quarter a year ago. The increase in net interest income was due to a 12% increase in average interest-earning assets. The net interest margin for the first quarter of 2004 was 2.87%, unchanged from the fourth quarter of 2003, but lower than the 2.97% level reported for the first quarter of 2003. The year-to-year decrease in the net interest margin reflects a decline in yields on loans and securities offset somewhat by lower funding costs of interest-bearing deposits and Federal Home Loan Bank ("FHLB") advances. Noninterest income (excluding net realized gains on securities) amounted to $5.9 million for the quarter ended March 31, 2004, up from $5.8 million for the same quarter a year ago. Increases were recognized in trust and investment management income, service charges on deposits, merchant processing fees and other income. Revenue from trust and investment management income, the largest component of noninterest income, totaled $3.1 million for the quarter ended March 31, 2004, up 21 percent from the comparable quarter in 2003. Trust assets under administration amounted to $1.782 billion at March 31, 2004, compared to $1.742 billion at December 31, 2003. Meanwhile, gains on loan sales declined from $1.2 million in the first quarter of 2003 to $349 thousand in the first quarter of 2004, primarily due to a drop off in mortgage origination activity. For the first quarter of 2004, noninterest expenses totaled $11.7 million, up 6 percent from the first quarter of 2003. The increase in noninterest expenses occurred primarily in the category of salaries and benefits, the largest component of total noninterest expense. Total assets amounted to $2.054 billion at March 31, 2004, up by $80.4 million, or 4 percent, from the December 31, 2003 balance of $1.974 billion. In the first quarter of 2004, total loans increased $43.4 million to $1.0 billion, with the largest increase in consumer loans. Consumer loans increased $19.7 million, or 12 percent, from the balance at December 31, 2003 primarily due to growth in home equity lines and loans. Commercial loans increased $13.0 million, or 3 percent, to $421.4 million at March 31, 2004. Residential real estate loans amounted to $400.6 million, up $10.7 million from the balance at December 31, 2003. The Corporation purchased a total of $13.2 million of adjustable rate residential mortgages from other financial institutions in the first quarter of 2004. Total securities were $884.6 million at March 31, 2004, up $45.2 million from the balance at December 31, 2003. The increase was mainly due to purchases of mortgage-backed securities. Total deposits at March 31, 2004 amounted to $1.245 billion, up $38.6 million, or 3 percent, from the December 31, 2003 balance of $1.206 billion. Savings deposits, including money market deposits, amounted to $522.5 million at March 31, 2004, up $28.6 million from the December 31, 2003 balance. Time deposits amounted to $542.8 million at March 31, 2004, up $24.7 million from the December 31, 2003 balance, primarily due to increases in consumer accounts as well as brokered certificates of deposit. Total consumer certificates of deposit amounted to $402.1 million at March 31, 2004, up $16.9 million from the balance at December 31, 2003. Brokered certificates of deposit increased $8.0 million during the first quarter of 2004 and totaled $126.2 million at March 31, 2004. Demand deposits decreased $14.7 million in the first three months of 2004 and totaled $179.5 million at March 31, 2004, however, demand deposits at December 31, 2003 included a temporary placement of approximately $18.6 million in funds on deposit that were withdrawn in January 2004. In the first quarter of 2004, FHLB advances increased $37.1 million to $644.2 million at March 31, 2004. Asset quality, as measured by the level of nonperforming assets, continues to be strong in 2004. Nonaccrual loans as a percentage of total loans at March 31, 2004 were .29%, unchanged from December 31, 2003. Similarly, nonperforming assets (nonaccrual loans and property acquired through foreclosure) as a percent of total assets at March 31, 2004 and December 31, 2003 amounted to .14%. The Corporation benefited from favorable loan loss experience in the first quarter of 2004 as indicated by a $140 thousand excess of loan loss recoveries over charge-offs. In the first quarter of 2003, charge-offs, net of recoveries, amounted to $92 thousand. Total shareholders' equity amounted to $144.6 million at March 31, 2004, up from $138.1 million at December 31, 2003. Book value per share as of March 31, 2004 and December 31, 2003 amounted to $10.95 and $10.46, respectively. Washington Trust Bancorp, Inc. 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, April 15, at 4:15 p.m. (Eastern Daylight Time) to discuss the Corporation's first 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. 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, MAR. 31, MAR. 31, DEC. 31, except per share amounts) 2004 2003 2003 OPERATING RESULTS Net interest income $13,083 $11,929 $12,861 Provision for loan losses 120 100 100 Net realized gains on securities - 230 - Other noninterest income 5,940 5,803 5,900 Noninterest expenses 11,680 10,978 11,616 Income tax expense 2,268 2,134 2,186 Net income 4,955 4,750 4,859 PER SHARE Basic earnings $0.38 $0.36 $0.37 Diluted earnings $0.37 $0.36 $0.36 Dividends declared $0.17 $0.15 $0.16 SHARES OUTSTANDING Weighted Average: Basic 13,202.6 13,059.3 13,172.3 Diluted 13,513.3 13,230.2 13,538.9 AVERAGE BALANCE SHEET Federal funds sold and other short-term investments $11,155 $14,946 $10,804 Taxable debt securities 809,505 764,975 789,173 Nontaxable debt securities 14,235 17,462 14,783 Corporate stocks and Federal Home Loan Bank stock 54,518 48,025 53,743 Loans: Commercial 412,642 389,545 405,710 Residential 390,834 292,276 380,913 Consumer 170,589 133,050 155,382 Total loans 974,065 814,871 942,005 Earning assets 1,863,478 1,660,279 1,810,508 Total assets 1,988,142 1,778,338 1,933,259 Deposits: Demand 170,289 155,944 180,858 Savings 497,033 459,777 490,866 Time 527,531 481,766 501,852 Total deposits 1,194,853 1,097,487 1,173,576 Federal Home Loan Bank advances 633,195 532,698 606,806 Shareholders' equity 142,582 130,506 136,964 KEY RATIOS Return on average assets 1.00% 1.07% 1.01% Return on average equity 13.90% 14.56% 14.19% Interest rate spread (taxable equivalent basis) 2.62% 2.68% 2.61% Net interest margin (taxable equivalent basis) 2.87% 2.97% 2.87% ALLOWANCE FOR LOAN LOSSES Balance at beginning of period $15,914 $15,487 $15,813 Provision charged to earnings 120 100 100 Net (charge-offs) recoveries 140 (92) 1 Balance at end of period $16,174 $15,495 $15,914 Washington Trust Bancorp, Inc. and Subsidiary FINANCIAL SUMMARY (Dollars and shares in thousands, MAR. 31, MAR. 31, DEC. 31, except per share amounts) 2004 2003 2003 PERIOD END BALANCE SHEET Assets $2,054,232 $1,815,627 $1,973,807 Total securities 884,592 842,307 839,421 Loans: Commercial 421,440 391,158 408,477 Residential 400,564 285,689 389,855 Consumer 182,344 134,285 162,649 Total loans 1,004,348 811,132 960,981 Deposits: Demand 179,468 169,636 194,144 Savings 522,477 467,027 493,878 Time 542,814 484,183 518,119 Total deposits 1,244,759 1,120,846 1,206,141 Federal Home Loan Bank advances 644,203 544,387 607,104 Shareholders' equity 144,571 131,010 138,055 CAPITAL RATIOS Tier 1 risk-based capital 9.84% 10.00% 10.00% Total risk-based capital 11.42% 11.41% 11.57% Tier 1 leverage ratio 5.66% 5.59% 5.65% SHARE INFORMATION Shares outstanding at end of period 13,206.9 13,071.0 13,194.6 Book value per share $10.95 $10.02 $10.46 Tangible book value per share $9.10 $8.10 $8.60 Market value per share $26.40 $20.21 $26.20 CREDIT QUALITY Nonaccrual loans $2,920 $4,034 $2,743 Other real estate owned, net 11 4 11 Nonperforming assets to total assets 0.14% 0.22% 0.14% Nonaccrual loans to total loans 0.29% 0.50% 0.29% Allowance for loan losses to nonaccrual loans 553.90% 384.11% 580.17% Allowance for loan losses to total loans 1.61% 1.91% 1.66% ASSETS UNDER MANAGEMENT Market value $1,782,153 $1,478,748 $1,741,948 Washington Trust Bancorp, Inc. and Subsidiary CONSOLIDATED BALANCE SHEETS (Dollars in thousands) (Unaudited) March 31, December 31, 2004 2003 Assets: Cash and due from banks $35,303 $40,710 Federal funds sold and other short-term investments 17,630 20,400 Mortgage loans held for sale 2,405 2,486 Securities: Available for sale, at fair value; amortized cost $722,247 in 2004 and $663,529 in 2003 737,985 673,845 Held to maturity, at cost; fair value $150,834 in 2004 and $169,401 in 2003 146,607 165,576 Total securities 884,592 839,421 Federal Home Loan Bank stock, at cost 32,789 31,464 Loans 1,004,348 960,981 Less allowance for loan losses 16,174 15,914 Net loans 988,174 945,067 Premises and equipment, net 25,014 24,941 Accrued interest receivable 8,282 7,911 Goodwill 22,591 22,591 Identifiable intangible assets 1,792 1,953 Other assets 35,660 36,863 Total assets $2,054,232 $1,973,807 Liabilities: Deposits: Demand $179,468 $194,144 Savings 522,477 493,878 Time 542,814 518,119 Total deposits 1,244,759 1,206,141 Dividends payable 2,247 2,113 Federal Home Loan Bank advances 644,203 607,104 Other borrowings 1,625 2,311 Accrued expenses and other liabilities 16,827 18,083 Total liabilities 1,909,661 1,835,752 Shareholders' Equity: Common stock of $.0625 par value; authorized 30 million shares; issued 13,219,949 shares in 2004 and 13,204,024 shares in 2003 826 825 Paid-in capital 30,090 29,868 Retained earnings 104,200 101,492 Unamortized employee restricted stock (16) (22) Accumulated other comprehensive income 9,773 6,101 Treasury stock, at cost; 13,052 shares in 2004 and 9,463 in 2003 (302) (209) Total shareholders' equity 144,571 138,055 Total liabilities and shareholders' equity $2,054,232 $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 ended March 31, 2004 2003 Interest income: Interest and fees on loans $13,641 $12,646 Interest on securities 8,255 8,555 Dividends on corporate stock and Federal Home Loan Bank stock 474 487 Interest on federal funds sold and other short-term investments 20 37 Total interest income 22,390 21,725 Interest expense: Savings deposits 729 950 Time deposits 4,018 3,934 Federal Home Loan Bank advances 4,545 4,893 Other 15 19 Total interest expense 9,307 9,796 Net interest income 13,083 11,929 Provision for loan losses 120 100 Net interest income after provision for loan losses 12,963 11,829 Noninterest income: Trust and investment management 3,055 2,533 Service charges on deposit accounts 1,170 1,100 Net gains on loan sales 349 1,238 Merchant processing fees 597 457 Income from bank-owned life insurance 299 284 Net realized gains on securities - 230 Other income 470 191 Total noninterest income 5,940 6,033 Noninterest expense: Salaries and employee benefits 6,977 6,534 Net occupancy 816 762 Equipment 770 837 Merchant processing costs 466 362 Legal, audit and professional fees 258 305 Advertising and promotion 466 270 Outsourced services 376 371 Amortization of intangibles 161 180 Other 1,390 1,357 Total noninterest expense 11,680 10,978 Income before income taxes 7,223 6,884 Income tax expense 2,268 2,134 Net income $4,955 $4,750 Weighted average shares outstanding - basic 13,202.6 13,059.3 Weighted average shares outstanding - diluted 13,513.3 13,230.2 Per share information: Basic earnings per share $.38 $.36 Diluted earnings per share $.37 $.36 Cash dividends declared per share $.17 $.15 CONTACT: Washington Trust Bancorp, Inc. Elizabeth B. Eckel, 401-348-1309 ebeckel@washtrust.com