Washington Trust profits dip on mortgage slowdown
Westerly - Higher loan-loss charge-offs and slower mortgage activity cut Washington Trust Bancorp Inc.'s profits in the first quarter compared with results in the last three months of 2013, the company announced Monday.
The parent company of The Washington Trust Company cited first-quarter profits of $9.3 million, or 55 cents a share. This compares with a profit of $9.8 million, or 58 cents a share, in the fourth quarter of last year.
The quarterly report noted that a slowdown in mortgage activity occurred because of increasing interest rates. It also cited one very large commercial-loan writedown as affecting profits.
"Washington Trust posted another quarter of solid earnings," said Joseph J. MarcAurele, Westerly-based Washington Trust's chairman and chief executive, in a statement. "We continue to build relationships in key market areas and are excited about entering a new market with the opening of our new branch in Johnston, Rhode Island, next month."
The bank noted that the divestiture of its merchant processing services business resulted in an after-tax profit of $4 million, or 24 cents a share. It also paid off early $99.3 million in federal funding advances, resulting in an after-tax penalty that matched gains from the divestiture.
The company in March declared a quarterly dividend of 29 cents a share, 2 cents higher than it had paid previously and the third straight quarterly increase.
Other highlights of Washington Trust's latest financial release include:
• Troubled assets declined by $5.5 million and past-due loans declined by $3.9 million last quarter, compared with the final three months of last year.
• Total interest income reached $23.8 million in the first quarter, slightly above the $23.5 million seen in the fourth quarter.
• Lower levels of mortgage loan activity cut into sales and commissions on loans originated by others, reducing income in that category by $312,000, or 20 percent. Overall residential loans sold on the secondary market fell by $8.9 million between the fourth and first quarters.
• Total charge-offs for loan losses amounted to $1.1 million in the first quarter, including an $853,000 loss tied to one commercial mortgage. Charge-offs in the previous quarter totaled $522,000.
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