Exhibit 99.1

bancorpflatbluehorizontala08.jpg
NASDAQ: WASH
Contact: Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone: (401) 348-1309
E-mail: ebeckel@washtrust.com
Date: October 23, 2017
FOR IMMEDIATE RELEASE

Washington Trust Reports Third Quarter 2017 Earnings
WESTERLY, R.I., October 23, 2017 (GLOBE NEWSWIRE)…Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced third quarter 2017 net income of $13.0 million, or $0.75 per diluted share, compared to $13.2 million, or $0.76 per diluted share, reported for the second quarter of 2017.

“Washington Trust’s third quarter performance reflects our continued success at growing our key business lines,” stated Joseph J. MarcAurele, Washington Trust Chairman and Chief Executive Officer. “Our diversified revenue streams were integral to our solid quarterly results, allowing us to maintain our strong profitability metrics.”

Selected highlights for the third quarter of 2017 include:
Returns on average equity and average assets were 12.56% and 1.18%, respectively. Comparable amounts for the second quarter of 2017 were 13.06% and 1.21%, respectively.
Third quarter 2017 total revenues (net interest income and noninterest income) amounted to $47.3 million, a record level for the Company.
Wealth management assets stood at an all-time high of $6.6 billion at September 30, 2017 and third quarter 2017 wealth management revenues exceeded $10.0 million for the first time in the Company's history.
Total loans surpassed $3.3 billion at September 30, 2017 and were up by 4% in the third quarter.
Total deposits grew by 4% in the third quarter and amounted to $3.2 billion at September 30, 2017.
In September 2017, Washington Trust declared a quarterly dividend of 39 cents per share, representing a 1 cent per share increase over the preceding quarter.
Net Interest Income
Net interest income totaled $30.1 million for the third quarter of 2017, up by $155 thousand, or 1%, from the second quarter. Included in net interest income in the third quarter was loan prepayment fee income of $131 thousand, compared to $549 thousand in the second quarter. Excluding the impact of loan prepayment fee income in each period, net interest income was up by $566 thousand, or 2%, on a linked quarter basis. The net interest margin was 2.93% for the third quarter of 2017, down by 4 basis points from the preceding quarter. Excluding the impact of the loan prepayment fee income in each period, the net interest margin was 2.91%, down by 1 basis point from the second quarter of 2017. Significant linked quarter changes included:




Washington Trust
Page 2, October 23, 2017


Average interest-earning assets increased by $35 million, with an increase of $59 million in average loan balances, partially offset by a $24 million decrease in the average balance of securities. The yield on interest-earning assets for the third quarter was 3.67%, down by 1 basis point from the preceding quarter. Excluding the impact of loan prepayment fee income in each period, the yield on interest-earning assets was 3.66%, up by 4 basis points from the preceding quarter.
Average interest-bearing liabilities increased by $8 million, reflecting an increase of $32 million in average wholesale funding balances (Federal Home Loan Bank advances and wholesale brokered time deposits), partially offset by a seasonal $24 million decrease in average in-market interest-bearing deposits. The cost of interest-bearing funds was 0.92%, up by 5 basis points from the preceding quarter.

Loans
Total loans amounted to $3.3 billion at September 30, 2017, up by $123 million, or 4%, from the end of the preceding quarter. Commercial loans increased by $102 million, or 6%, on a linked quarter basis, with growth of $91 million in the commercial real estate portfolio and $11 million in the commercial and industrial portfolio. Residential loan portfolio balances increased by $27 million, or 2%, from the balance at June 30, 2017. The consumer loan portfolio was down by $6 million, or 2%, from the end of the preceding quarter.

Investment Securities
The investment securities portfolio amounted to $728 million at September 30, 2017, down by $36 million, or 5%, from the balance at June 30, 2017, due to routine principal pay-downs on mortgage-backed securities and calls of debt securities. Investment securities represented 16% of total assets as at September 30, 2017.

Deposits and Borrowings
Total deposits amounted to $3.2 billion at September 30, 2017, up by $136 million, or 4%, from the balance at June 30, 2017. Included in total deposits were wholesale brokered time deposit balances of $416 million, which increased by $15 million from the end of preceding quarter. Excluding wholesale brokered time deposits, in-market deposits increased by $121 million, or 5%, in the quarter, reflecting seasonal inflows of various institutional and governmental depositors based on their underlying business cycles, as well as growth in promotional time certificates of deposit.

Federal Home Loan Bank advances amounted to $814 million at September 30, 2017, down by $56 million from the balance at June 30, 2017.

Noninterest Income
Noninterest income totaled $17.3 million for the third quarter of 2017, up by $477 thousand, or 3%, from the preceding quarter. Linked quarter changes included:
Wealth management revenues increased by $71 thousand, or 1%. This included an increase of $390 thousand in asset-based revenues and a decrease of $319 thousand in transaction-based revenues. The linked quarter change in transaction-based revenues was affected by the second quarter recognition of tax preparation fee income, which is typically concentrated in that quarter.



Washington Trust
Page 3, October 23, 2017


Wealth management assets under administration amounted to $6.6 billion at September 30, 2017, up by $184 million from the second quarter, reflecting financial market appreciation. Managed assets represented 92% of total wealth management assets at September 30, 2017.
Mortgage banking revenues increased by $117 thousand, or 4%, due to a higher volume of loans sold in the secondary market. Residential mortgage loans sold to the secondary market amounted to $147 million in the third quarter, compared to $137 million in the preceding quarter.
Loan related derivative income increased by $308 thousand, or 27%, reflecting a higher volume of commercial borrower loan related derivative transactions.

Noninterest Expenses
Noninterest expenses totaled $26.8 million for the third quarter of 2017, up by $448 thousand, or 2%, from the second quarter. Included in other noninterest expenses in the third quarter was a charge of approximately $570 thousand associated with an isolated external fraud matter. Excluding this charge, total noninterest expenses were down by 0.5% on a linked quarter basis.

Income tax expense totaled $6.3 million for the third quarter of 2017, down by $179 thousand from the preceding quarter. The effective tax rate for the third quarter of 2017 was 32.8%, compared to 33.0% for the preceding quarter.

Asset Quality
Total past due loans amounted to $16.4 million, or 0.49% of total loans, at September 30, 2017, compared to $21.1 million, or 0.66% of total loans, at June 30, 2017. Total nonaccrual loans amounted to $18.5 million, or 0.56% of total loans, at September 30, 2017, down from $20.2 million, or 0.63% of total loans, at June 30, 2017.
A loan loss provision totaling $1.3 million was charged to earnings in the third quarter of 2017, compared to a loan loss provision of $700 thousand in the preceding quarter. The increase in the loan loss provision reflected loan loss allocations commensurate with growth and other changes in the loan portfolio during the quarter as well as an increase in specific reserves on impaired loans. Net charge-offs amounted to $654 thousand in the third quarter of 2017, compared to $484 thousand in the preceding quarter. The allowance for loan losses was $27.3 million, or 0.82% of total loans, at September 30, 2017, compared to $26.7 million, or 0.83% of total loans, at June 30, 2017.

Capital and Dividends
Total shareholders' equity was $414 million at September 30, 2017, up by $8 million from June 30, 2017. Capital levels at September 30, 2017 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.53% at September 30, 2017, compared to 12.78% at June 30, 2017. Book value per share amounted to $24.06 at September 30, 2017, up from $23.59 at June 30, 2017.

The Board of Directors declared a quarterly dividend of 39 cents per share for the quarter ended September 30, 2017, an increase of 1 cent compared to the second quarter. The dividend was paid on October 13, 2017 to shareholders of record on October 2, 2017.




Washington Trust
Page 4, October 23, 2017


Conference Call
Washington Trust will host a conference call to discuss its third quarter results, business highlights and outlook on Tuesday, October 24, 2017 at 8:30 a.m. (Eastern Time). Individuals may dial in to the call at 1-877-407-9208. An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-844-512-2921 and entering the Replay PIN Number 13671590; the audio replay will be available through November 3, 2017. Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, www.washtrustbancorp.com, and will be available through December 31, 2017.

Background
Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company. Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies. Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking and wealth management and trust services through its offices located in Rhode Island, Connecticut and Massachusetts. The Corporation’s common stock trades on NASDAQ under the symbol WASH. Investor information is available on the Corporation’s web site at www.washtrustbancorp.com.

Forward-Looking Statements
This press release contains statements that are “forward-looking statements”. We may also make forward-looking statements in other documents we file with the SEC, in press releases and other written materials, and in oral statements made by our officers, directors or employees. You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “assume,” “outlook,” “will,” “should,” and other expressions that predict or indicate future events and trends and which do not relate to historical matters. You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of Washington Trust. These risks, uncertainties and other factors may cause the actual results, performance or achievements of Washington Trust to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

Some of the factors that might cause these differences include the following: weakness in national, regional or international economic conditions or conditions affecting the banking or financial services industries or financial capital markets; volatility in national and international financial markets; reductions in net interest income resulting from interest rate volatility as well as changes in the balance and mix of loans and deposits; reductions in the market value of wealth management assets under administration; changes in the value of securities and other assets; reductions in loan demand; changes in loan collectibility, default and charge-off rates; changes in the size and nature of the our competition; changes in legislation or regulation and accounting principles, policies and guidelines; occurrences of cyberattacks, hacking and identity theft; natural disasters; and changes in the assumptions used in making such forward-looking statements. In addition, the factors described under “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors and you should be aware that there may be other factors that could cause these differences. These forward-looking statements were based on information, plans and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

Supplemental Information - Explanation of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures. Washington Trust's management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.






Washington Trust Bancorp, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)
 
 
 
 
 
 
 
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Assets:
 
 
 
 
 
Cash and due from banks

$128,580


$117,608


$111,941


$106,185


$126,752

Short-term investments
2,600

2,324

2,039

1,612

2,420

Mortgage loans held for sale
28,484

32,784

25,414

29,434

45,162

Securities:
 
 
 
 
 
Available for sale, at fair value
714,355

749,486

754,720

739,912

564,256

Held to maturity, at amortized cost
13,241

13,942

14,721

15,633

16,848

Total securities
727,596

763,428

769,441

755,545

581,104

Federal Home Loan Bank stock, at cost
42,173

44,640

43,714

43,129

37,249

Loans:
 
 
 
 
 
Commercial
1,800,116

1,698,389

1,762,499

1,771,666

1,757,215

Residential real estate
1,195,537

1,168,105

1,131,210

1,122,748

1,079,887

Consumer
327,425

333,606

331,151

339,957

344,253

Total loans
3,323,078

3,200,100

3,224,860

3,234,371

3,181,355

Less allowance for loan losses
27,308

26,662

26,446

26,004

25,649

Net loans
3,295,770

3,173,438

3,198,414

3,208,367

3,155,706

Premises and equipment, net
28,591

28,508

28,853

29,020

29,433

Investment in bank-owned life insurance
72,729

72,183

71,642

71,105

70,557

Goodwill
63,909

63,909

64,059

64,059

64,059

Identifiable intangible assets, net
9,388

9,642

9,898

10,175

10,493

Other assets
69,410

67,065

63,348

62,484

81,099

Total assets

$4,469,230


$4,375,529


$4,388,763


$4,381,115


$4,204,034

Liabilities:
 
 
 
 
 
Deposits:
 
 
 
 
 
Demand deposits

$621,273


$587,813


$596,974


$585,960


$566,027

NOW accounts
448,128

448,617

454,344

427,707

404,827

Money market accounts
716,827

666,047

762,233

730,075

794,905

Savings accounts
367,912

364,002

362,281

358,397

357,966

Time deposits
1,002,941

954,710

939,739

961,613

913,649

Total deposits
3,157,081

3,021,189

3,115,571

3,063,752

3,037,374

Federal Home Loan Bank advances
814,045

869,733

798,741

848,930

671,615

Junior subordinated debentures
22,681

22,681

22,681

22,681

22,681

Other liabilities
61,195

55,884

53,985

54,948

77,037

Total liabilities
4,055,002

3,969,487

3,990,978

3,990,311

3,808,707

Shareholders’ Equity:
 
 
 
 
 
Common stock
1,076

1,076

1,075

1,073

1,069

Paid-in capital
117,189

116,484

116,200

115,123

113,290

Retained earnings
312,334

306,151

299,555

294,365

288,613

Accumulated other comprehensive loss
(16,371
)
(17,669
)
(19,045
)
(19,757
)
(7,645
)
Total shareholders’ equity
414,228

406,042

397,785

390,804

395,327

Total liabilities and shareholders’ equity

$4,469,230


$4,375,529


$4,388,763


$4,381,115


$4,204,034


-5-



CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; Dollars in thousands, except per share amounts)
 
 
 
 
 
 
 
For the Nine Months Ended
 
For the Three Months Ended
 
 
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
 
Sep 30,
2017
Sep 30,
2016
Interest income:
 
 
 
 
 
 
 
 
Interest and fees on loans

$32,509


$31,642


$30,352


$30,738


$29,633

 

$94,503


$88,753

Taxable interest on securities
4,655

4,844

4,709

3,703

3,024

 
14,208

7,881

Nontaxable interest on securities
41

72

112

157

218

 
225

825

Dividends on Federal Home Loan Bank stock
467

439

387

362

288

 
1,293

729

Other interest income
197

156

104

95

93

 
457

227

Total interest and dividend income
37,869

37,153

35,664

35,055

33,256

 
110,686

98,415

Interest expense:


 
 
 
 
 
 
 
Deposits
3,835

3,591

3,502

3,445

3,110

 
10,928

9,059

Federal Home Loan Bank advances
3,816

3,509

3,344

2,886

2,641

 
10,669

7,106

Junior subordinated debentures
159

149

138

135

125

 
446

356

Other interest expense


1

1

1

 
1

4

Total interest expense
7,810

7,249

6,985

6,467

5,877

 
22,044

16,525

Net interest income
30,059

29,904

28,679

28,588

27,379

 
88,642

81,890

Provision for loan losses
1,300

700

400

2,900

1,800

 
2,400

2,750

Net interest income after provision for loan losses
28,759

29,204

28,279

25,688

25,579

 
86,242

79,140

Noninterest income:


 






 
 
 
Wealth management revenues
10,013

9,942

9,477

9,291

9,623

 
29,432

28,278

Mortgage banking revenues
3,036

2,919

2,340

4,541

3,734

 
8,295

8,642

Service charges on deposit accounts
942

901

883

945

915

 
2,726

2,757

Card interchange fees
894

902

802

858

870

 
2,598

2,527

Income from bank-owned life insurance
546

542

536

549

521

 
1,624

2,110

Loan related derivative income
1,452

1,144

148

912

1,178

 
2,744

2,331

Equity in losses of unconsolidated subsidiaries
(89
)
(89
)
(88
)
(89
)
(88
)
 
(266
)
(265
)
Other income
489

545

412

313

508

 
1,446

1,429

Total noninterest income
17,283

16,806

14,510

17,320

17,261

 
48,599

47,809

Noninterest expense:


 






 
 
 
Salaries and employee benefits
17,251

17,358

16,795

16,528

16,908

 
51,404

50,693

Net occupancy
1,928

1,767

1,967

1,775

1,766

 
5,662

5,376

Equipment
1,380

1,313

1,467

1,556

1,648

 
4,160

4,652

Outsourced services
1,793

1,710

1,457

1,311

1,254

 
4,960

3,911

Legal, audit and professional fees
534

582

616

597

691

 
1,732

1,982

FDIC deposit insurance costs
308

469

481

390

504

 
1,258

1,488

Advertising and promotion
416

362

237

403

370

 
1,015

1,055

Amortization of intangibles
253

257

277

318

321

 
787

966

Debt prepayment penalties





 

431

Change in fair value of contingent consideration


(310
)

(939
)
 
(310
)
(898
)
Other expenses
2,891

2,488

2,299

2,095

2,127

 
7,678

6,474

Total noninterest expense
26,754

26,306

25,286

24,973

24,650

 
78,346

76,130

Income before income taxes
19,288

19,704

17,503

18,035

18,190

 
56,495

50,819

Income tax expense
6,326

6,505

5,721

5,873

5,863

 
18,552

16,500

Net income

$12,962


$13,199


$11,782


$12,162


$12,327

 

$37,943


$34,319

 
 
 
 
 
 
 
 
 
Net income available to common shareholders:
 
 
 
 
 
 
 
 
  Basic

$12,934


$13,170


$11,755


$12,137


$12,302

 

$37,859


$34,247

  Diluted

$12,934


$13,170


$11,755


$12,137


$12,302

 

$37,859


$34,247

Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
  Basic
17,212

17,206

17,186

17,142

17,090

 
17,201

17,060

  Diluted
17,318

17,316

17,293

17,245

17,203

 
17,320

17,198

Earnings per common share:
 
 
 
 
 
 
 
 
  Basic

$0.75


$0.77


$0.68


$0.71


$0.72

 

$2.20


$2.01

  Diluted

$0.75


$0.76


$0.68


$0.70


$0.72

 

$2.19


$1.99

 
 
 
 
 
 
 
 
 
Cash dividends declared per share

$0.39


$0.38


$0.38


$0.37


$0.37

 

$1.15


$1.09


-6-



SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands, except per share amounts)
 
 

Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Share and Equity Related Data:
 
 
 
 
 
Book value per share

$24.06


$23.59


$23.14


$22.76


$23.11

Tangible book value per share - Non-GAAP (1)

$19.81


$19.32


$18.83


$18.44


$18.75

Market value per share

$57.25


$51.55


$49.30


$56.05


$40.22

Shares issued and outstanding at end of period
17,214

17,210

17,193

17,171

17,107

 
 
 
 
 
 
Capital Ratios:
 
 
 
 
 
Tier 1 risk-based capital
11.69% (i)

11.92
%
11.54
%
11.44
%
11.48
%
Total risk-based capital
12.53% (i)

12.78
%
12.38
%
12.26
%
12.31
%
Tier 1 leverage ratio
8.83% (i)

8.78
%
8.58
%
8.67
%
8.95
%
Common equity tier 1
11.02% (i)

11.23
%
10.86
%
10.75
%
10.77
%
Equity to assets
9.27
%
9.28
%
9.06
%
8.92
%
9.40
%
Tangible equity to tangible assets - Non-GAAP (1)
7.76
%
7.73
%
7.51
%
7.35
%
7.77
%
(i) - estimated
 
 
 
 
 

 
 
 
For the Nine Months Ended
 
For the Three Months Ended
 
 
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
 
Sep 30,
2017
Sep 30,
2016
Performance Ratios:
 
 
 
 
 
 
 
 
Net interest margin (FTE)
2.93
%
2.97
%
2.87
%
2.89
%
2.94
%
 
2.92
%
3.07
%
Return on average assets
1.18
%
1.21
%
1.08
%
1.14
%
1.21
%
 
1.16
%
1.17
%
Return on average tangible assets - Non-GAAP (1)
1.20
%
1.23
%
1.10
%
1.16
%
1.24
%
 
1.18
%
1.20
%
Return on average equity
12.56
%
13.06
%
11.87
%
12.26
%
12.57
%
 
12.50
%
11.86
%
Return on average tangible equity - Non-GAAP (1)
15.27
%
15.98
%
14.59
%
15.09
%
15.53
%
 
15.28
%
14.72
%
(1)
See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.


-7-



SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands)
 
 
 
For the Nine Months Ended
 
For the Three Months Ended
 
 
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
 
Sep 30,
2017
Sep 30,
2016
Wealth Management Results
 
 
 
 
 
 
 
 
Wealth Management Revenues:
 
 
 
 
 
 
 
 
Trust and investment management fees

$9,101


$8,781


$8,518


$8,283


$8,358

 

$26,400


$24,618

Mutual fund fees
690

620

729

771

812

 
2,039

2,467

   Asset-based revenues
9,791

9,401

9,247

9,054

9,170

 
28,439

27,085

Transaction-based revenues
222

541

230

237

453

 
993

1,193

Total wealth management revenues

$10,013


$9,942


$9,477


$9,291


$9,623

 

$29,432


$28,278

 
 
 
 
 
 
 
 
 
Assets Under Administration:
 
 
 
 
 
 
 
 
Balance at beginning of period

$6,403,501


$6,243,301


$6,063,293


$6,056,859


$5,905,019

 

$6,063,293


$5,844,636

Net investment appreciation (depreciation) & income
270,549

162,924

220,423

(8,506
)
192,518

 
653,896

286,354

Net client asset flows
(86,151
)
(2,724
)
(40,415
)
14,940

(40,678
)
 
(129,290
)
(74,131
)
Balance at end of period

$6,587,899


$6,403,501


$6,243,301


$6,063,293


$6,056,859

 

$6,587,899


$6,056,859

 
 
 
 
 
 
 
 
 
Mortgage Banking Results
 
 
 
 
 
 
 
 
Mortgage Banking Revenues:
 
 
 
 
 
 
 
 
Gains & commissions on loan sales, net

$2,952


$2,784


$2,268


$4,455


$3,744

 

$8,004


$8,682

Residential mortgage servicing fee income, net
84

135

72

86

(10
)
 
291

(40
)
Total mortgage banking revenues

$3,036


$2,919


$2,340


$4,541


$3,734

 

$8,295


$8,642

 
 
 
 
 
 
 
 
 
Residential Mortgage Loan Originations:
 
 
 
 
 
 
 
 
Originations for retention in portfolio

$90,378


$94,794


$57,907


$72,533


$90,308

 

$243,079


$191,934

Originations for sale to secondary market (1)
143,112

144,491

102,441

185,626

170,673

 
390,044

415,174

Total mortgage loan originations

$233,490


$239,285


$160,348


$258,159


$260,981

 

$633,123


$607,108

 
 
 
 
 
 
 
 
 
Residential Mortgage Loans Sold:
 
 
 
 
 
 
 
 
Sold with servicing rights retained

$37,823


$29,199


$22,567


$48,545


$44,611

 

$89,589


$116,869

Sold with servicing rights released (1)
109,508

108,245

84,345

151,506

119,572

 
302,098

292,318

Total mortgage loans sold

$147,331


$137,444


$106,912


$200,051


$164,183

 

$391,687


$409,187

(1)
Also includes loans originated in a broker capacity.


-8-



END OF PERIOD LOAN AND DEPOSIT COMPOSITION
(Unaudited; Dollars in thousands)
 
 
 
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Commercial:
 
 
 
 
 
Mortgages

$1,085,535


$1,009,096


$1,076,648


$1,074,186


$1,086,175

Construction & development
126,257

112,177

123,841

121,371

98,735

Commercial & industrial
588,324

577,116

562,010

576,109

572,305

Total commercial
1,800,116

1,698,389

1,762,499

1,771,666

1,757,215

Residential Real Estate:
 
 
 
 
 
Mortgages
1,171,161

1,143,416

1,100,435

1,094,824

1,052,829

Homeowner construction
24,376

24,689

30,775

27,924

27,058

Total residential real estate
1,195,537

1,168,105

1,131,210

1,122,748

1,079,887

Consumer:
 
 
 
 
 
Home equity lines
259,880

263,934

258,695

264,200

265,238

Home equity loans
34,777

35,173

36,050

37,272

38,264

Other
32,768

34,499

36,406

38,485

40,751

Total consumer
327,425

333,606

331,151

339,957

344,253

Total loans

$3,323,078


$3,200,100


$3,224,860


$3,234,371


$3,181,355


 
September 30, 2017
 
December 31, 2016
 
Balance

% of Total
 
Balance
% of Total
Commercial Real Estate Loans by Property Location:
 
 
 
 
 
Rhode Island, Connecticut, Massachusetts

$1,136,168

93.8
%
 

$1,105,539

92.5
%
New York, New Jersey, Pennsylvania
62,956

5.2
%
 
77,038

6.4
%
New Hampshire
12,668

1.0
%
 
12,980

1.1
%
Total commercial real estate loans (1)

$1,211,792

100.0
%
 

$1,195,557

100.0
%
 
 
 
 
 
 
Residential Mortgages by Property Location:
 
 
 
 
 
Rhode Island, Connecticut, Massachusetts

$1,179,112

98.6
%
 

$1,106,366

98.6
%
New Hampshire, Vermont, Maine
12,085

1.0
%
 
11,445

1.0
%
New York, Virginia, New Jersey, Maryland, Pennsylvania
2,187

0.2
%
 
2,648

0.2
%
Ohio
884

0.1
%
 
997

0.1
%
Other
1,269

0.1
%
 
1,292

0.1
%
Total residential mortgages

$1,195,537

100.0
%
 

$1,122,748

100.0
%
(1)
Commercial real estate loans consist of commercial mortgages and construction and development loans. Commercial mortgages are loans secured by income producing property.

 
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Deposits:
 
 
 
 
 
Non-interest bearing demand deposits

$575,866


$533,147


$534,792


$521,165


$520,860

Interest-bearing demand deposits
45,407

54,666

62,182

64,795

45,167

NOW accounts
448,128

448,617

454,344

427,707

404,827

Money market accounts
716,827

666,047

762,233

730,075

794,905

Savings accounts
367,912

364,002

362,281

358,397

357,966

Time deposits (in-market)
587,166

553,783

557,312

549,376

554,669

Wholesale brokered time deposits
415,775

400,927

382,427

412,237

358,980

Total deposits

$3,157,081


$3,021,189


$3,115,571


$3,063,752


$3,037,374




-9-



CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
 
 
 
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
Asset Quality Ratios:
 
 
 
 
 
Nonperforming assets to total assets
0.44
%
0.49
%
0.54
%
0.53
%
0.59
%
Nonaccrual loans to total loans
0.56
%
0.63
%
0.69
%
0.68
%
0.75
%
Total past due loans to total loans
0.49
%
0.66
%
0.65
%
0.76
%
0.67
%
Allowance for loan losses to nonaccrual loans
147.52
%
132.00
%
119.52
%
117.89
%
107.09
%
Allowance for loan losses to total loans
0.82
%
0.83
%
0.82
%
0.80
%
0.81
%
 
 
 
 
 
 
Nonperforming Assets:
 
 
 
 
 
Commercial mortgages

$5,887


$6,422


$7,809


$7,811


$10,357

Commercial construction & development





Commercial & industrial
429

1,232

1,129

1,337

1,744

Residential real estate mortgages
11,699

11,815

12,253

11,736

10,140

Consumer
496

729

936

1,174

1,709

Total nonaccrual loans
18,511

20,198

22,127

22,058

23,950

Other real estate owned
1,038

1,342

1,410

1,075

1,045

Total nonperforming assets

$19,549


$21,540


$23,537


$23,133


$24,995

 
 
 
 
 
 
Past Due Loans (30 days or more past due):
 
 
 
 
 
Commercial mortgages

$5,887


$6,422


$7,806


$8,708


$10,352

Commercial & industrial
455

4,009

1,046

1,154

1,047

Residential real estate mortgages
7,802

8,857

10,533

12,226

8,291

Consumer loans
2,303

1,832

1,547

2,334

1,565

Total past due loans

$16,447


$21,120


$20,932


$24,422


$21,255

 
 
 
 
 
 
Accruing loans 90 days or more past due

$—


$—


$—


$—


$—

Nonaccrual loans included in past due loans

$13,216


$14,490


$18,081


$18,602


$18,796

 
 
 
For the Nine Months Ended
 
For the Three Months Ended
 
 
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Sep 30,
2016
 
Sep 30,
2017
Sep 30,
2016
Nonaccrual Loan Activity:
 
 
 
 
 
 
 
 
Balance at beginning of period

$20,198


$22,127


$22,058


$23,950


$17,248

 

$22,058


$21,047

Additions to nonaccrual status
1,969

1,946

2,138

2,105

9,750

 
6,053

13,174

Loans returned to accruing status
(1,411
)
(778
)
(547
)
(718
)
(592
)
 
(2,736
)
(798
)
Loans charged-off
(694
)
(642
)
(79
)
(2,622
)
(2,055
)
 
(1,415
)
(4,390
)
Loans transferred to other real estate owned

(98
)
(478
)
(30
)

 
(576
)
(1,045
)
Payments, payoffs and other changes
(1,551
)
(2,357
)
(965
)
(627
)
(401
)
 
(4,873
)
(4,038
)
Balance at end of period

$18,511


$20,198


$22,127


$22,058


$23,950

 

$18,511


$23,950

 
 
 
 
 
 
 
 
 
Allowance for Loan Losses:
 
 
 
 
 
 
 
 
Balance at beginning of period

$26,662


$26,446


$26,004


$25,649


$25,826

 

$26,004


$27,069

Provision charged to earnings
1,300

700

400

2,900

1,800

 
2,400

2,750

Charge-offs
(694
)
(642
)
(79
)
(2,622
)
(2,055
)
 
(1,415
)
(4,390
)
Recoveries
40

158

121

77

78

 
319

220

Balance at end of period

$27,308


$26,662


$26,446


$26,004


$25,649

 

$27,308


$25,649

 
 
 
 
 
 
 
 
 
Net Loan Charge-Offs (Recoveries):
 
 
 
 
 
 
 
 
Commercial mortgages

$535


$318


$—


$2,510


$1,936

 

$853


$3,250

Commercial & industrial
114

115

(105
)
(20
)
(43
)
 
124

623

Residential real estate mortgages
(1
)
8

(4
)
6

47

 
3

183

Consumer
6

43

67

49

37

 
116

114

Total

$654


$484


($42
)

$2,545


$1,977

 

$1,096


$4,170

 
 
 
 
 
 
 
 
 
Net charge-offs to average loans (annualized)
0.08
%
0.06
%
(0.01
%)
0.31
%
0.25
%
 
0.04
%
0.18
%


-10-



The following table presents average balance and interest rate information. Tax-exempt income is converted to a fully taxable equivalent (FTE) basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit. Unrealized gains (losses) on available for sale securities and fair value adjustments on mortgage loans held for sale are excluded from the average balance and yield calculations. Nonaccrual and renegotiated loans, as well as interest recognized on these loans are included in amounts presented for loans.

CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)
(Unaudited; Dollars in thousands)
 
 
For the Three Months Ended
September 30, 2017
 
June 30, 2017
 
September 30, 2016
 
Average Balance
Interest
Yield/
Rate
 
Average Balance
Interest
Yield/
Rate
 
Average Balance
Interest
Yield/
 Rate
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
Commercial mortgages

$1,027,517


$9,909

3.83
 

$1,037,327


$9,821

3.80

 

$1,079,917


$9,362

3.45
Construction & development
133,190

1,326

3.95
 
126,212

1,211

3.85

 
86,623

712

3.27
Commercial & industrial
590,915

6,684

4.49
 
574,775

6,607

4.61

 
565,170

6,382

4.49
Total commercial loans
1,751,622


$17,919

4.06
 
1,738,314


$17,639

4.07

 
1,731,710


$16,456

3.78
Residential real estate loans, including loans held for sale
1,210,686

11,541

3.78
 
1,162,895

11,088

3.82

 
1,080,302

10,386

3.82
Consumer loans
329,689

3,604

4.34
 
332,053

3,464

4.18

 
341,829

3,340

3.89
Total loans
3,291,997

33,064

3.98
 
3,233,262

32,191

3.99

 
3,153,841

30,182

3.81
Cash, federal funds sold and short-term investments
61,390

197

1.27
 
60,428

156

1.04

 
88,414

93

0.42
FHLBB stock
44,057

467

4.21
 
44,362

439

3.97

 
37,933

288

3.02
Taxable debt securities
751,735

4,655

2.46
 
773,280

4,844

2.51

 
497,738

3,024

2.42
Nontaxable debt securities
4,287

65

6.02
 
7,076

109

6.18

 
22,038

336

6.07
Total securities
756,022

4,720

2.48
 
780,356

4,953

2.55

 
519,776

3,360

2.57
Total interest-earning assets
4,153,466

38,448

3.67
 
4,118,408

37,739

3.68

 
3,799,964

33,923

3.55
Noninterest-earning assets
248,070

 
 
 
236,056

 
 
 
262,724

 
 
Total assets

$4,401,536

 
 
 

$4,354,464

 
 
 

$4,062,688

 
 
Liabilities and Shareholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits

$46,352


$30

0.26
 

$54,675


($8
)
(0.06
)
 

$39,865


$13

0.13
NOW accounts
442,166

68

0.06
 
437,282

57

0.05

 
402,307

51

0.05
Money market accounts
680,755

642

0.37
 
711,711

640

0.36

 
709,549

487

0.27
Savings accounts
366,177

56

0.06
 
361,545

52

0.06

 
352,032

52

0.06
Time deposits (in-market)
565,402

1,566

1.10
 
559,442

1,460

1.05

 
552,576

1,408

1.01
Wholesale brokered time deposits
404,953

1,473

1.44
 
392,734

1,390

1.42

 
310,740

1,099

1.41
FHLBB advances
837,300

3,816

1.81
 
817,349

3,509

1.72

 
690,843

2,641

1.52
Junior subordinated debentures
22,681

159

2.78
 
22,681

149

2.63

 
22,681

125

2.19
Other
1


 
13



 
53

1

7.51
Total interest-bearing liabilities
3,365,787

7,810

0.92
 
3,357,432

7,249

0.87

 
3,080,646

5,877

0.76
Demand deposits
567,737

 
 
 
543,781

 
 
 
520,439

 
 
Other liabilities
55,150

 
 
 
49,013

 
 
 
69,370

 
 
Shareholders' equity
412,862

 
 
 
404,238

 
 
 
392,233

 
 
Total liabilities and shareholders' equity

$4,401,536

 
 
 

$4,354,464

 
 
 

$4,062,688

 
 
Net interest income (FTE)
 

$30,638

 
 
 

$30,490

 
 
 

$28,046

 
Interest rate spread
 
 
2.75
 
 
 
2.81

 
 
 
2.79
Net interest margin
 
 
2.93
 
 
 
2.97

 
 
 
2.94

Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
For the Three Months Ended
Sep 30, 2017
Jun 30, 2017
Sep 30, 2016
Commercial loans

$555


$549


$549

Nontaxable debt securities
24

37

118

Total

$579


$586


$667


-11-



 
 
 
 
 
 
 
 
CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)
(Unaudited; Dollars in thousands)
 
 
For the Nine Months Ended
September 30, 2017
 
September 30, 2016
 
Average Balance
Interest
Yield/
Rate
 
Average Balance
Interest
Yield/
 Rate
 
Assets:
 
 
 
 
 
 
 
Commercial mortgages

$1,047,831


$29,174

3.72
 

$1,011,327


$26,569

3.51
Construction & development
129,104

3,650

3.78
 
110,914

2,806

3.38
Commercial & industrial
579,881

19,448

4.48
 
587,098

20,470

4.66
Total commercial loans
1,756,816

52,272

3.98
 
1,709,339

49,845

3.90
Residential real estate loans, including loans held for sale
1,175,563

33,497

3.81
 
1,045,532

30,521

3.90
Consumer loans
332,245

10,391

4.18
 
342,735

10,044

3.91
Total loans
3,264,624

96,160

3.94
 
3,097,606

90,410

3.90
Cash, federal funds sold and short-term investments
59,357

457

1.03
 
75,627

227

0.40
FHLBB stock
44,015

1,293

3.93
 
31,774

729

3.06
Taxable debt securities
760,308

14,208

2.50
 
418,034

7,881

2.52
Nontaxable debt securities
7,602

347

6.10
 
27,939

1,276

6.10
Total securities
767,910

14,555

2.53
 
445,973

9,157

2.74
Total interest-earning assets
4,135,906

112,465

3.64
 
3,650,980

100,523

3.68
Noninterest-earning assets
238,050

 
 
 
250,019

 
 
Total assets

$4,373,956

 
 
 

$3,900,999

 
 
Liabilities and Shareholders' Equity:
 
 
 
 
 
 
 
Interest-bearing demand deposits

$52,564


$37

0.09
 

$44,490


$34

0.10
NOW accounts
433,435

176

0.05
 
397,329

161

0.05
Money market accounts
715,386

1,881

0.35
 
735,324

1,461

0.27
Savings accounts
361,904

158

0.06
 
339,616

148

0.06
Time deposits (in-market)
559,938

4,443

1.06
 
544,441

4,067

1.00
Wholesale brokered time deposits
398,349

4,233

1.42
 
303,442

3,188

1.40
FHLBB advances
828,775

10,669

1.72
 
577,501

7,106

1.64
Junior subordinated debentures
22,681

446

2.63
 
22,681

356

2.10
Other