Exhibit 99.1

bancorpflatbluehorizontala09.jpg
NASDAQ: WASH
Contact: Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone: (401) 348-1309
E-mail: ebeckel@washtrust.com
Date: January 30, 2018
FOR IMMEDIATE RELEASE

Washington Trust Reports Fourth Quarter 2017 Earnings
WESTERLY, R.I., January 30, 2018 (GLOBE NEWSWIRE)…Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced fourth quarter 2017 net income of $8.0 million, or $0.46 per diluted share, compared to net income of $13.0 million, or $0.75 per diluted share, reported for the third quarter of 2017. Net income for the year ended December 31, 2017 totaled $45.9 million, or $2.64 per diluted share, compared to $46.5 million, or $2.70 per diluted share, reported for the prior year.

On December 22, 2017, the Tax Cuts and Jobs Act ("the Tax Act") was signed into law, permanently lowering the corporate federal income tax rate from 35% to 21%, effective January 1, 2018. The enactment of the Tax Act in 2017 required companies to revalue and reassess deferred tax assets and liabilities reflecting the new federal income tax rate. As a result, in the fourth quarter of 2017, Washington Trust's net deferred tax assets were written down by a non-cash charge of $6.2 million, with a corresponding increase to income tax expense. This write-down adjustment reduced fourth quarter and full-year 2017 earnings per diluted share by $0.36.

“Our fourth quarter earnings, excluding the non-cash charge associated with the enactment of the Tax Act, were very solid. We are pleased to report record levels of total loans, total deposits, and wealth management assets under administration,” stated Joseph J. MarcAurele, Washington Trust Chairman and Chief Executive Officer. “Washington Trust’s strong financial foundation, diversified revenue stream, and market footprint positions us for future growth and success in the year ahead.”

Selected highlights for fourth quarter and full-year 2017 include:
Full-year 2017 net interest income increased by 8% over the prior year and amounted to $120 million, a record level for Washington Trust.
Total loans were $3.4 billion at December 31, 2017, up by 2% in the fourth quarter and up by 4% from a year ago.
Deposits totaled $3.2 billion at December 31, 2017, up by 3% in the fourth quarter and up by 6% from a year ago.
Wealth management assets grew to a record $6.7 billion at December 31, 2017. Full-year 2017 wealth management revenues amounted to an all-time high of $39.3 million, up by 5% from the prior year.




Washington Trust
Page 2, January 30, 2018


Net Interest Income
Net interest income totaled $30.9 million for the fourth quarter of 2017, up by $830 thousand, or 3%, from the third quarter. The net interest margin was 2.95% for the fourth quarter, up by 2 basis points from the preceding quarter. Significant linked quarter changes included:
Average interest-earning assets were up by $79 million, reflecting growth in average loan balances. The yield on interest-earning assets for the fourth quarter was 3.70%, up by 3 basis points from the preceding quarter.
Average interest-bearing liabilities increased by $54 million, with growth in average in-market deposits, partially offset by declines in average wholesale funding balances (Federal Home Loan Bank advances and wholesale brokered time deposits). The cost of interest-bearing funds was 0.93%, up by 1 basis point from the preceding quarter.

Noninterest Income
Noninterest income amounted to $16.2 million for the fourth quarter of 2017, down by $1.1 million, or 6%, from the third quarter. Significant linked quarter changes included:
Wealth management revenues totaled $9.9 million in the fourth quarter of 2017, compared to $10.0 million in the preceding quarter. Full-year 2017 wealth management revenues amounted to $39.3 million, up by $1.8 million, or 5%, from the prior year, due to growth in asset-based revenues.
Wealth management assets under administration totaled $6.7 billion at December 31, 2017, up by $127 million, or 2%, from the balance at September 30, 2017. Wealth management assets were up by $651 million, or 11%, from the balance at the end of 2016, reflecting financial market appreciation. Managed assets represented 93% of total wealth management assets at December 31, 2017.
Mortgage banking revenues totaled $3.1 million in the fourth quarter of 2017, up modestly from the preceding quarter. Residential mortgage loans sold to the secondary market amounted to $145 million in the fourth quarter, compared to $147 million in the preceding quarter.
Loan related derivative income totaled $470 thousand in the fourth quarter of 2017, down by $982 thousand, or 68%, from the preceding quarter, due to a lower volume of commercial borrower loan related derivative transactions. Full-year 2017 loan related derivative income amounted to $3.2 million, essentially unchanged from the full-year amount recognized in 2016.

Noninterest Expenses
Noninterest expenses amounted to $25.8 million for the fourth quarter of 2017, down by $1.0 million, or 4%, from the third quarter. The linked quarter decline in noninterest expenses was primarily due to the following:
A reduction to noninterest expenses of $333 thousand ($0.02 per diluted share) was recognized in the fourth quarter resulting from a nontaxable downward adjustment in the fair value of a contingent consideration liability that was initially recorded upon the completion of a 2015 acquisition.
During the fourth quarter, Washington Trust received $325 thousand (after-tax $205 thousand, or $0.01 per diluted share) in settlement of a claim against another bank related to a previously disclosed dispute. This matter was the subject of a $570 thousand expense charge recognized in the third quarter. The settlement was recorded as a reduction to other



Washington Trust
Page 3, January 30, 2018


noninterest expenses in the fourth quarter.
Excluding the aforementioned items from the third and fourth quarters, noninterest expenses were up by $228 thousand, or 1%, on a linked quarter basis, primarily due to an increase in foreclosed property costs in the fourth quarter.

Income tax expense totaled $13.2 million for the fourth quarter of 2017, reflecting an effective tax rate of 62.3%. As previously mentioned, income tax expense included the $6.2 million write-down associated with the revaluation of the Corporation's net deferred tax assets due to the Tax Act. The revaluation of our net deferred tax assets is subject to further guidance and interpretation of the Tax Act that may be issued. Excluding the non-cash write-down adjustment, the effective tax rate for the fourth quarter of 2017 would have been 33.1%, compared to 32.8% for the preceding quarter. Based on current federal and applicable state income tax statutes, the Corporation currently expects its 2018 effective tax rate to be approximately 21.5%.

Loans
Total loans amounted to $3.4 billion at December 31, 2017, up by $51 million, or 2%, from the end of the preceding quarter. Residential loan portfolio balances increased by $32 million, or 3%, from the balance at September 30, 2017. In late December 2017, $19 million of residential mortgage loans were purchased with a weighted average rate of 3.24%. These purchased loans were individually evaluated to our underwriting standards and are predominantly secured by properties in Massachusetts. The commercial loan portfolio increased by $23 million, or 1%, from the end of the preceding quarter, with growth in commercial and industrial loans and in commercial construction and development loans, partially offset by a decrease in commercial mortgage loans. The consumer loan portfolio was down by $3 million, or 1%, from the end of the third quarter.

For full-year 2017, total loans rose by $140 million, or 4%, including a 9% increase in the residential loan portfolio and a 3% increase in the commercial loan portfolio.

Investment Securities
The investment securities portfolio totaled $793 million at December 31, 2017, up by $66 million, or 9%, from the balance at September 30, 2017. During the quarter, government agency mortgage-backed debt securities and agency debt securities totaling $94 million and with a weighted average yield of 2.68% were purchased. The purchases were partially offset by routine principal pay-downs on mortgage-backed securities and a maturity of a municipal bond. Investment securities represented 18% of total assets at December 31, 2017.

Deposits and Borrowings
Total deposits amounted to $3.2 billion at December 31, 2017, up by $86 million, or 3%, from the end of the preceding quarter. Included in total deposits were wholesale brokered time deposit balances of $398 million, which decreased by $18 million from the balance at September 30, 2017. Excluding wholesale brokered time deposits, in-market deposits increased by $104 million, or 4%, from the end of the preceding quarter, with growth across all deposit categories.

Total deposits were up by $179 million, or 6%, from the balance at the end of 2016. Excluding balances of wholesale brokered time deposits, total in-market deposits were up by $193 million, or 7%, in 2017. The balances of demand deposits and NOW accounts grew by $114 million, or 11%, in 2017.



Washington Trust
Page 4, January 30, 2018



Federal Home Loan Bank advances stood at $791 million at December 31, 2017, down by $23 million, or 3%, from the balance at September 30, 2017 and down by $58 million, or 7%, from a year ago.

Asset Quality
Past due loans amounted to $20.1 million, or 0.59% of total loans, at December 31, 2017, compared to $16.4 million, or 0.49% of total loans, at September 30, 2017. The increase in past due loans was primarily due to one well-secured commercial and industrial loan becoming delinquent in the latter portion of the quarter. Total nonaccrual loans amounted to $15.2 million, or 0.45% of total loans, at December 31, 2017, down from $18.5 million, or 0.56% of total loans, at September 30, 2017.
A loan loss provision of $200 thousand was charged to earnings in the fourth quarter of 2017, compared to a loan loss provision of $1.3 million in the preceding quarter. These provisions were based on management's assessment of loss exposure, as well as loan loss allocations commensurate with changes in the loan portfolio. Net charge-offs totaled $1.0 million in the fourth quarter of 2017, compared to $654 thousand in the preceding quarter. The charge-offs recognized in the fourth quarter were largely attributable to two nonaccrual commercial mortgage relationships. The allowance for loan losses was $26.5 million, or 0.79% of total loans, at December 31, 2017, compared to $27.3 million, or 0.82% of total loans, at September 30, 2017.

Capital and Dividends
Total shareholders' equity was $413 million at December 31, 2017, compared to $414 million at September 30, 2017. Book value per share amounted to $23.99 at December 31, 2017, compared to $24.06 at September 30, 2017. The decline in shareholders' equity and book value per share reflects the impact of the $6.2 million net deferred tax asset write-down adjustment recognized in earnings due to the enactment of the Tax Act in December 2017.

Capital levels at December 31, 2017 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.45% at December 31, 2017, compared to 12.53% at September 30, 2017. The reduction in the total risk-based capital ratio in the fourth quarter reflects a charge of $1.9 million related to the net deferred tax asset write-down adjustment, as determined in accordance with the regulatory guidance issued on January 18, 2018.

The Board of Directors declared a quarterly dividend of 39 cents per share for the quarter ended December 31, 2017. The dividend was paid on January 12, 2018 to shareholders of record on January 2, 2018.

Conference Call
Washington Trust will host a conference call to discuss its fourth quarter results, business highlights and outlook on Wednesday, January 31, 2018 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 13675605; the audio replay will be available through February 10, 2018. 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 March 31, 2018.




Washington Trust
Page 5, January 30, 2018


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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)
 
 
 
 
 
 
 
Dec 31,
2017
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Assets:
 
 
 
 
 
Cash and due from banks

$79,853


$128,580


$117,608


$111,941


$106,185

Short-term investments
3,070

2,600

2,324

2,039

1,612

Mortgage loans held for sale
26,943

28,484

32,784

25,414

29,434

Securities:
 
 
 
 
 
Available for sale, at fair value
780,954

714,355

749,486

754,720

739,912

Held to maturity, at amortized cost
12,541

13,241

13,942

14,721

15,633

Total securities
793,495

727,596

763,428

769,441

755,545

Federal Home Loan Bank stock, at cost
40,517

42,173

44,640

43,714

43,129

Loans:
 
 
 
 
 
Commercial mortgages
1,072,487

1,085,535

1,009,096

1,076,648

1,074,186

Commercial construction & development
138,008

126,257

112,177

123,841

121,371

Commercial & industrial
612,334

588,324

577,116

562,010

576,109

Residential real estate
1,227,248

1,195,537

1,168,105

1,131,210

1,122,748

Consumer
323,994

327,425

333,606

331,151

339,957

Total loans
3,374,071

3,323,078

3,200,100

3,224,860

3,234,371

Less allowance for loan losses
26,488

27,308

26,662

26,446

26,004

Net loans
3,347,583

3,295,770

3,173,438

3,198,414

3,208,367

Premises and equipment, net
28,333

28,591

28,508

28,853

29,020

Investment in bank-owned life insurance
73,267

72,729

72,183

71,642

71,105

Goodwill
63,909

63,909

63,909

64,059

64,059

Identifiable intangible assets, net
9,140

9,388

9,642

9,898

10,175

Other assets
63,740

69,410

67,065

63,348

62,484

Total assets

$4,529,850


$4,469,230


$4,375,529


$4,388,763


$4,381,115

Liabilities:
 
 
 
 
 
Deposits:
 
 
 
 
 
Demand deposits

$661,138


$621,273


$587,813


$596,974


$585,960

NOW accounts
466,605

448,128

448,617

454,344

427,707

Money market accounts
731,345

716,827

666,047

762,233

730,075

Savings accounts
368,524

367,912

364,002

362,281

358,397

Time deposits
1,015,095

1,002,941

954,710

939,739

961,613

Total deposits
3,242,707

3,157,081

3,021,189

3,115,571

3,063,752

Federal Home Loan Bank advances
791,356

814,045

869,733

798,741

848,930

Junior subordinated debentures
22,681

22,681

22,681

22,681

22,681

Other liabilities
59,822

61,195

55,884

53,985

54,948

Total liabilities
4,116,566

4,055,002

3,969,487

3,990,978

3,990,311

Shareholders’ Equity:
 
 
 
 
 
Total shareholders’ equity
413,284

414,228

406,042

397,785

390,804

Total liabilities and shareholders’ equity

$4,529,850


$4,469,230


$4,375,529


$4,388,763


$4,381,115


-6-



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

$33,459


$32,509


$31,642


$30,352


$30,738

 

$127,962


$119,491

Taxable interest on securities
4,719

4,655

4,844

4,709

3,703

 
18,927

11,584

Nontaxable interest on securities
24

41

72

112

157

 
249

982

Dividends on Federal Home Loan Bank stock
481

467

439

387

362

 
1,774

1,091

Other interest income
217

197

156

104

95

 
674

322

Total interest and dividend income
38,900

37,869

37,153

35,664

35,055

 
149,586

133,470

Interest expense:


 
 
 
 
 
 
 
Deposits
4,136

3,835

3,591

3,502

3,445

 
15,064

12,504

Federal Home Loan Bank advances
3,708

3,816

3,509

3,344

2,886

 
14,377

9,992

Junior subordinated debentures
167

159

149

138

135

 
613

491

Other interest expense



1

1

 
1

5

Total interest expense
8,011

7,810

7,249

6,985

6,467

 
30,055

22,992

Net interest income
30,889

30,059

29,904

28,679

28,588

 
119,531

110,478

Provision for loan losses
200

1,300

700

400

2,900

 
2,600

5,650

Net interest income after provision for loan losses
30,689

28,759

29,204

28,279

25,688

 
116,931

104,828

Noninterest income:


 






 
 
 
Wealth management revenues
9,914

10,013

9,942

9,477

9,291

 
39,346

37,569

Mortgage banking revenues
3,097

3,036

2,919

2,340

4,541

 
11,392

13,183

Service charges on deposit accounts
946

942

901

883

945

 
3,672

3,702

Card interchange fees
904

894

902

802

858

 
3,502

3,385

Income from bank-owned life insurance
537

546

542

536

549

 
2,161

2,659

Loan related derivative income
470

1,452

1,144

148

912

 
3,214

3,243

Other income
342

400

456

324

224

 
1,522

1,388

Total noninterest income
16,210

17,283

16,806

14,510

17,320

 
64,809

65,129

Noninterest expense:


 






 
 
 
Salaries and employee benefits
17,083

17,251

17,358

16,795

16,528

 
68,487

67,221

Net occupancy
1,859

1,928

1,767

1,967

1,775

 
7,521

7,151

Equipment
1,198

1,380

1,313

1,467

1,556

 
5,358

6,208

Outsourced services
1,960

1,793

1,710

1,457

1,311

 
6,920

5,222

Legal, audit and professional fees
562

534

582

616

597

 
2,294

2,579

FDIC deposit insurance costs
389

308

469

481

390

 
1,647

1,878

Advertising and promotion
466

416

362

237

403

 
1,481

1,458

Amortization of intangibles
248

253

257

277

318

 
1,035

1,284

Debt prepayment penalties





 

431

Change in fair value of contingent consideration
(333
)


(310
)

 
(643
)
(898
)
Other expenses
2,322

2,891

2,488

2,299

2,095

 
10,000

8,569

Total noninterest expense
25,754

26,754

26,306

25,286

24,973

 
104,100

101,103

Income before income taxes
21,145

19,288

19,704

17,503

18,035

 
77,640

68,854

Income tax expense
13,163

6,326

6,505

5,721

5,873

 
31,715

22,373

Net income

$7,982


$12,962


$13,199


$11,782


$12,162

 

$45,925


$46,481

 
 
 
 
 
 
 
 
 
Net income available to common shareholders:
 
 
 
 
 
 
 
 
  Basic

$7,958


$12,934


$13,170


$11,755


$12,137

 

$45,817


$46,384

  Diluted

$7,958


$12,934


$13,170


$11,755


$12,137

 

$45,817


$46,384

Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
  Basic
17,223

17,212

17,206

17,186

17,142

 
17,207

17,081

  Diluted
17,349

17,318

17,316

17,293

17,245

 
17,338

17,208

Earnings per common share:
 
 
 
 
 
 
 
 
  Basic

$0.46


$0.75


$0.77


$0.68


$0.71

 

$2.66


$2.72

  Diluted

$0.46


$0.75


$0.76


$0.68


$0.70

 

$2.64


$2.70

 
 
 
 
 
 
 
 
 
Cash dividends declared per share

$0.39


$0.39


$0.38


$0.38


$0.37

 

$1.54


$1.46


-7-



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

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

$23.99


$24.06


$23.59


$23.14


$22.76

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

$19.75


$19.81


$19.32


$18.83


$18.44

Market value per share

$53.25


$57.25


$51.55


$49.30


$56.05

Shares issued and outstanding at end of period
17,227

17,214

17,210

17,193

17,171

 
 
 
 
 
 
Capital Ratios:
 
 
 
 
 
Tier 1 risk-based capital
11.65% (i)

11.69
%
11.92
%
11.54
%
11.44
%
Total risk-based capital
12.45% (i)

12.53
%
12.78
%
12.38
%
12.26
%
Tier 1 leverage ratio
8.79% (i)

8.83
%
8.78
%
8.58
%
8.67
%
Common equity tier 1
10.99% (i)

11.02
%
11.23
%
10.86
%
10.75
%
Equity to assets
9.12
%
9.27
%
9.28
%
9.06
%
8.92
%
Tangible equity to tangible assets - Non-GAAP (1)
7.63
%
7.76
%
7.73
%
7.51
%
7.35
%
(i) - estimated
 
 
 
 
 

 
 
 
For the Twelve Months Ended
 
For the Three Months Ended
 
 
Dec 31,
2017
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
 
Dec 31,
2017
Dec 31,
2016
Performance Ratios:
 
 
 
 
 
 
 
 
Net interest margin (FTE)
2.95
%
2.93
%
2.97
%
2.87
%
2.89
%
 
2.93
%
3.02
%
Return on average assets
0.71
%
1.18
%
1.21
%
1.08
%
1.14
%
 
1.04
%
1.16
%
Return on average tangible assets - Non-GAAP (1)
0.73
%
1.20
%
1.23
%
1.10
%
1.16
%
 
1.06
%
1.19
%
Return on average equity
7.65
%
12.56
%
13.06
%
11.87
%
12.26
%
 
11.26
%
11.96
%
Return on average tangible equity - Non-GAAP (1)
9.27
%
15.27
%
15.98
%
14.59
%
15.09
%
 
13.73
%
14.82
%
(1)
See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.


-8-



SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands)
 
 
 
For the Twelve Months Ended
 
For the Three Months Ended
 
 
Dec 31,
2017
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
 
Dec 31,
2017
Dec 31,
2016
Wealth Management Results
 
 
 
 
 
 
 
 
Wealth Management Revenues:
 
 
 
 
 
 
 
 
Asset-based revenues
9,686

9,791

9,401

9,247

9,054

 
38,125

36,139

Transaction-based revenues
228

222

541

230

237

 
1,221

1,430

Total wealth management revenues

$9,914


$10,013


$9,942


$9,477


$9,291

 

$39,346


$37,569

 
 
 
 
 
 
 
 
 
Assets Under Administration:
 
 
 
 
 
 
 
 
Balance at beginning of period

$6,587,899


$6,403,501


$6,243,301


$6,063,293


$6,056,859

 

$6,063,293


$5,844,636

Net investment appreciation (depreciation) & income
163,681

270,549

162,924

220,423

(8,506
)
 
817,577

277,848

Net client asset flows
(36,943
)
(86,151
)
(2,724
)
(40,415
)
14,940

 
(166,233
)
(59,191
)
Balance at end of period

$6,714,637


$6,587,899


$6,403,501


$6,243,301


$6,063,293

 

$6,714,637


$6,063,293

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

$2,987


$2,952


$2,784


$2,268


$4,455

 

$10,991


$13,137

Residential mortgage servicing fee income, net
110

84

135

72

86

 
401

46

Total mortgage banking revenues

$3,097


$3,036


$2,919


$2,340


$4,541

 

$11,392


$13,183

 
 
 
 
 
 
 
 
 
Residential Mortgage Loan Originations:
 
 
 
 
 
 
 
 
Originations for retention in portfolio

$75,595


$90,378


$94,794


$57,907


$72,533

 

$318,674


$264,466

Originations for sale to secondary market (1)
143,834

143,112

144,491

102,441

185,626

 
533,878

600,800

Total mortgage loan originations

$219,429


$233,490


$239,285


$160,348


$258,159

 

$852,552


$865,266

 
 
 
 
 
 
 
 
 
Residential Mortgage Loans Sold:
 
 
 
 
 
 
 
 
Sold with servicing rights retained

$39,769


$37,823


$29,199


$22,567


$48,545

 

$129,358


$165,414

Sold with servicing rights released (1)
105,416

109,508

108,245

84,345

151,506

 
407,514

443,824

Total mortgage loans sold

$145,185


$147,331


$137,444


$106,912


$200,051

 

$536,872


$609,238

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


-9-



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

$1,072,487


$1,085,535


$1,009,096


$1,076,648


$1,074,186

Construction & development
138,008

126,257

112,177

123,841

121,371

Commercial & industrial
612,334

588,324

577,116

562,010

576,109

Total commercial
1,822,829

1,800,116

1,698,389

1,762,499

1,771,666

Residential Real Estate:
 
 
 
 
 
Mortgages
1,206,458

1,171,161

1,143,416

1,100,435

1,094,824

Homeowner construction
20,790

24,376

24,689

30,775

27,924

Total residential real estate
1,227,248

1,195,537

1,168,105

1,131,210

1,122,748

Consumer:
 
 
 
 
 
Home equity lines
258,114

259,880

263,934

258,695

264,200

Home equity loans
34,353

34,777

35,173

36,050

37,272

Other
31,527

32,768

34,499

36,406

38,485

Total consumer
323,994

327,425

333,606

331,151

339,957

Total loans

$3,374,071


$3,323,078


$3,200,100


$3,224,860


$3,234,371


 
December 31, 2017
 
December 31, 2016
 
Balance

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

$1,131,077

93.5
%
 

$1,105,539

92.5
%
New York, New Jersey, Pennsylvania
66,857

5.5
%
 
77,038

6.4
%
New Hampshire
12,561

1.0
%
 
12,980

1.1
%
Total commercial real estate loans (1)

$1,210,495

100.0
%
 

$1,195,557

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

$1,210,895

98.6
%
 

$1,106,366

98.6
%
New Hampshire, Vermont, Maine
12,061

1.0
%
 
11,445

1.0
%
New York, Virginia, New Jersey, Maryland, Pennsylvania
2,168

0.2
%
 
2,648

0.2
%
Ohio
862

0.1
%
 
997

0.1
%
Other
1,262

0.1
%
 
1,292

0.1
%
Total residential mortgages

$1,227,248

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.

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

$578,410


$575,866


$533,147


$534,792


$521,165

Interest-bearing demand deposits
82,728

45,407

54,666

62,182

64,795

NOW accounts
466,605

448,128

448,617

454,344

427,707

Money market accounts
731,345

716,827

666,047

762,233

730,075

Savings accounts
368,524

367,912

364,002

362,281

358,397

Time deposits (in-market)
617,368

587,166

553,783

557,312

549,376

Wholesale brokered time deposits
397,727

415,775

400,927

382,427

412,237

Total deposits

$3,242,707


$3,157,081


$3,021,189


$3,115,571


$3,063,752




-10-



CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
 
 
 
Dec 31,
2017
Sep 30,
2017
Jun 30,
2017
Mar 31,
2017
Dec 31,
2016
Asset Quality Ratios:
 
 
 
 
 
Nonperforming assets to total assets
0.34
%
0.44
%
0.49
%
0.54
%
0.53
%
Nonaccrual loans to total loans
0.45
%
0.56
%
0.63
%
0.69
%
0.68
%
Total past due loans to total loans
0.59
%
0.49
%
0.66
%
0.65
%
0.76
%
Allowance for loan losses to nonaccrual loans
174.14
%
147.52
%
132.00
%
119.52
%
117.89
%
Allowance for loan losses to total loans
0.79
%
0.82
%
0.83
%
0.82
%
0.80
%
 
 
 
 
 
 
Nonperforming Assets:
 
 
 
 
 
Commercial mortgages

$4,954


$5,887


$6,422


$7,809


$7,811

Commercial & industrial
283

429

1,232

1,129

1,337

Residential real estate mortgages
9,414

11,699

11,815

12,253

11,736

Consumer
560

496

729

936

1,174

Total nonaccrual loans
15,211

18,511

20,198

22,127

22,058

Other real estate owned
131

1,038

1,342

1,410

1,075

Total nonperforming assets

$15,342


$19,549


$21,540


$23,537


$23,133

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

$4,960


$5,887


$6,422


$7,806


$8,708

Commercial & industrial
4,076

455

4,009

1,046

1,154

Residential real estate mortgages
7,855

7,802

8,857

10,533

12,226

Consumer loans
3,184

2,303

1,832

1,547

2,334

Total past due loans

$20,075


$16,447


$21,120


$20,932


$24,422

 
 
 
 
 
 
Accruing loans 90 days or more past due

$—


$—


$—


$—


$—

Nonaccrual loans included in past due loans

$11,788


$13,216


$14,490


$18,081


$18,602

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

$18,511


$20,198


$22,127


$22,058


$23,950

 

$22,058


$21,047

Additions to nonaccrual status
462

1,969

1,946

2,138

2,105

 
6,515

15,278

Loans returned to accruing status
(1,316
)
(1,411
)
(778
)
(547
)
(718
)
 
(4,052
)
(1,516
)
Loans charged-off
(1,047
)
(694
)
(642
)
(79
)
(2,622
)
 
(2,462
)
(7,012
)
Loans transferred to other real estate owned


(98
)
(478
)
(30
)
 
(576
)
(1,075
)
Payments, payoffs and other changes
(1,399
)
(1,551
)
(2,357
)
(965
)
(627
)
 
(6,272
)
(4,664
)
Balance at end of period

$15,211


$18,511


$20,198


$22,127


$22,058

 

$15,211


$22,058

 
 
 
 
 
 
 
 
 
Allowance for Loan Losses:
 
 
 
 
 
 
 
 
Balance at beginning of period

$27,308


$26,662


$26,446


$26,004


$25,649

 

$26,004


$27,069

Provision charged to earnings
200

1,300

700

400

2,900

 
2,600

5,650

Charge-offs
(1,047
)
(694
)
(642
)
(79
)
(2,622
)
 
(2,462
)
(7,012
)
Recoveries
27

40

158

121

77

 
346

297

Balance at end of period

$26,488


$27,308


$26,662


$26,446


$26,004

 

$26,488


$26,004

 
 
 
 
 
 
 
 
 
Net Loan Charge-Offs (Recoveries):
 
 
 
 
 
 
 
 
Commercial mortgages

$932


$535


$318


$—


$2,510

 

$1,785


$5,760

Commercial & industrial
43

114

115

(105
)
(20
)
 
167

603

Residential real estate mortgages
32

(1
)
8

(4
)
6

 
35

189

Consumer
13

6

43

67

49

 
129

163

Total

$1,020


$654


$484


($42
)

$2,545

 

$2,116


$6,715

 
 
 
 
 
 
 
 
 
Net charge-offs to average loans (annualized)
0.12
%
0.08
%
0.06
%
(0.01
%)
0.31
%
 
0.06
%
0.21
%


-11-



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
December 31, 2017
 
September 30, 2017
 
December 31, 2016
 
Average Balance
Interest
Yield/
Rate
 
Average Balance
Interest
Yield/
Rate
 
Average Balance
Interest
Yield/
 Rate
 
Assets:
 
 
 
 
 
 
 
 
 
 
 
Commercial mortgages

$1,076,786


$10,356

3.82
 

$1,027,517


$9,909

3.83
 

$1,086,772


$9,520

3.48
Construction & development
142,584

1,487

4.14
 
133,190

1,326

3.95
 
110,342

927

3.34
Commercial & industrial
598,790

6,897

4.57
 
590,915

6,684

4.49
 
575,983

6,927

4.78
Total commercial loans
1,818,160


$18,740

4.09
 
1,751,622


$17,919

4.06
 
1,773,097


$17,374

3.90
Residential real estate loans, including loans held for sale
1,226,369

11,727

3.79
 
1,210,686

11,541

3.78
 
1,140,492

10,652

3.72
Consumer loans
326,445

3,556

4.32
 
329,689

3,604

4.34
 
341,528

3,284

3.83
Total loans
3,370,974

34,023

4.00
 
3,291,997

33,064

3.98
 
3,255,117

31,310

3.83
Cash, federal funds sold and short-term investments
62,040

217

1.39
 
61,390

197

1.27
 
77,092

95

0.49
FHLBB stock
41,003

481

4.65
 
44,057

467

4.21
 
39,212

362

3.67
Taxable debt securities
756,322

4,719

2.48
 
751,735

4,655

2.46
 
636,277

3,703

2.32
Nontaxable debt securities
2,625

38

5.74
 
4,287

65

6.02
 
16,003

244

6.07
Total securities
758,947

4,757

2.49
 
756,022

4,720

2.48
 
652,280

3,947

2.41
Total interest-earning assets
4,232,964

39,478

3.70
 
4,153,466

38,448

3.67
 
4,023,701

35,714

3.53
Noninterest-earning assets
240,376

 
 
 
248,070

 
 
 
249,182

 
 
Total assets

$4,473,340

 
 
 

$4,401,536

 
 
 

$4,272,883

 
 
Liabilities and Shareholders' Equity:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing demand deposits

$64,344


$25

0.15
 

$46,352


$30

0.26
 

$46,668


$16

0.14
NOW accounts
448,677

42

0.04
 
442,166

68

0.06
 
408,788

51

0.05
Money market accounts
743,966

807

0.43
 
680,755

642

0.37
 
761,582

574

0.30
Savings accounts
371,236

63

0.07
 
366,177

56

0.06
 
356,837

51

0.06
Time deposits (in-market)
606,732

1,765

1.15
 
565,402

1,566

1.10
 
552,474

1,419

1.02
Wholesale brokered time deposits
376,709

1,434

1.51
 
404,953

1,473

1.44
 
382,798

1,334

1.39
FHLBB advances
785,169

3,708

1.87
 
837,300

3,816

1.81
 
732,269

2,886

1.57
Junior subordinated debentures
22,681

167

2.92
 
22,681

159

2.78
 
22,681

135

2.37
Other


 
1


 
40

1

9.95
Total interest-bearing liabilities
3,419,514

8,011

0.93
 
3,365,787

7,810

0.92
 
3,264,137

6,467

0.79
Demand deposits
582,714

 
 
 
567,737

 
 
 
548,595

 
 
Other liabilities
53,544

 
 
 
55,150

 
 
 
63,410

 
 
Shareholders' equity
417,568

 
 
 
412,862

 
 
 
396,741

 
 
Total liabilities and shareholders' equity

$4,473,340

 
 
 

$4,401,536

 
 
 

$4,272,883

 
 
Net interest income (FTE)
 

$31,467

 
 
 

$30,638

 
 
 

$29,247

 
Interest rate spread
 
 
2.77
 
 
 
2.75
 
 
 
2.74
Net interest margin
 
 
2.95
 
 
 
2.93
 
 
 
2.89

Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
For the Three Months Ended
Dec 31, 2017
Sep 30, 2017
Dec 31, 2016
Commercial loans

$564


$555


$572

Nontaxable debt securities
14

24

87

Total

$578


$579


$659


-12-



 
 
 
 
 
 
 
 
CONSOLIDATED AVERAGE BALANCE SHEETS (FTE Basis)
(Unaudited; Dollars in thousands)
 
 
For the Twelve Months Ended
December 31, 2017
 
December 31, 2016
 
Average Balance
Interest
Yield/
Rate
 
Average Balance
Interest
Yield/
 Rate
 
Assets:
 
 
 
 
 
 
 
Commercial mortgages

$1,055,127


$39,529

3.75
 

$1,030,289


$36,089

3.50
Construction & development
132,504

5,137

3.88
 
110,770

3,732

3.37
Commercial & industrial
584,647

26,347

4.51
 
584,307

27,398

4.69
Total commercial loans
1,772,278

71,013

4.01
 
1,725,366

67,219

3.90
Residential real estate loans, including loans held for sale
1,188,369

45,224

3.81
 
1,069,402

41,173

3.85
Consumer loans
330,783

13,947

4.22
 
342,431

13,328

3.89
Total loans
3,291,430

130,184

3.96
 
3,137,199

121,720

3.88
Cash, federal funds sold and short-term investments
60,033

674

1.12
 
75,997

322

0.42
FHLBB stock
43,256

1,774

4.10
 
33,643

1,091

3.24
Taxable debt securities
759,304

18,927

2.49
 
472,892

11,584

2.45
Nontaxable debt securities
6,347

384

6.05
 
24,939

1,520

6.09
Total securities
765,651

19,311

2.52
 
497,831

13,104

2.63
Total interest-earning assets
4,160,370

151,943

3.65
 
3,744,670

136,237

3.64
Noninterest-earning assets
238,636

 
 
 
249,808

 
 
Total assets

$4,399,006

 
 
 

$3,994,478

 
 
Liabilities and Shareholders' Equity:
 
 
 
 
 
 
 
Interest-bearing demand deposits

$55,534


$62

0.11
 

$45,038


$49

0.11
NOW accounts
437,277

218

0.05
 
400,209

212

0.05
Money market accounts
722,590

2,688

0.37
 
741,925

2,035

0.27
Savings accounts
364,255

221

0.06
 
343,943

200

0.06
Time deposits (in-market)
571,733

6,208

1.09
 
546,460

5,486

1.00
Wholesale brokered time deposits
392,894

5,667

1.44
 
323,390

4,522

1.40
FHLBB advances
817,784

14,377

1.76
 
616,404

9,992

1.62
Junior subordinated debentures
22,681

613

2.70
 
22,681

491

2.16
Other
10

1

10.00
 
60

5

8.33
Total interest-bearing liabilities
3,384,758

30,055

0.89
 
3,040,110

22,992

0.76
Demand deposits
555,548

 
 
 
503,806

 
 
Other liabilities
50,684

 
 
 
62,021

 
 
Shareholders' equity
408,016

 
 
 
388,541

 
 
Total liabilities and shareholders' equity

$4,399,006