UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 17, 2003
WASHINGTON TRUST BANCORP, INC.
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(Exact Name of Registrant as Specified in Charter)
Rhode Island 0-13091 05-0404671
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
23 Broad Street, Westerly, Rhode Island 02891
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (401) 348-1200
Former name or address, if changed from last report: N/A
Item 7. Financial Statements and Exhibits
(c) Exhibit
Exhibit No. Exhibit
99.1 Press Release dated April 17, 2003
Item 9. Regulation FD Disclosure (Information Furnished in this Item 9 is
Furnished under Item 12)
In accordance with Securities and Exchange Commission Release No. 33-8126, the
following information, which is intended to be furnished under Item 12, "Results
of Operations and Financial Condition", is instead being furnished under Item 9,
"Regulation FD Disclosure." This information shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing.
On April 17, 2003, Washington Trust Bancorp, Inc. issued a press release in
which it disclosed unaudited financial information related to first quarter
consolidated earnings. A copy of the press release relating to such
announcement, dated April 17, 2003, is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
EXHIBIT INDEX
Exhibit No. Exhibit
99.1 Press Release dated April 17, 2003
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
WASHINGTON TRUST BANCORP, INC.
Date: April 17, 2003 By: John C. Warren
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John C. Warren
Chairman and Chief Executive Officer
Exhibit 99.1
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[GRAPHIC OF REGISTRANT'S LOGO OMITTED]
WASHINGTON TRUST BANCORP, INC.
NASDAQ: WASH
Contact: Elizabeth B. Eckel
Senior Vice President, Marketing
Telephone: (401) 348-1309
E-mail: ebeckel@washtrust.com
Date: April 17, 2003
For Immediate Release
Washington Trust Earnings Increase 26.9%
Westerly, Rhode Island...Washington Trust Bancorp, Inc. (NASDAQ: WASH), parent
company of The Washington Trust Company, today reported first quarter 2003 net
income of $4.7 million, an increase of 26.9 percent from the $3.7 million of net
income reported for the first quarter of 2002. This increase was due in part to
the acquisition of First Financial Corp. that occurred in the second quarter of
2002. Earnings per diluted share were $.36 for the quarter ended March 31, 2003,
up 16.1 percent from the $.31 per diluted share for the quarter ended March 31,
2002.
The return on average assets and return on average equity for the three months
ended March 31, 2003 were 1.07% and 14.56%, compared to 1.11% and 14.98%,
respectively, for the three months ended March 31, 2002.
John C. Warren, Chairman and Chief Executive Officer of Washington Trust
Bancorp, Inc., stated, "We are very pleased with our first quarter performance,
as it reflects our ability to successfully manage our core business lines in a
challenging economy." Warren also commented on the Bank's new 7,300 square foot
Warwick branch, scheduled to open at the end of this month, stating, "The
Warwick area offers tremendous market opportunities for us in the commercial
lending, trust and investment management and retail banking areas."
Net interest income for the first quarter of 2003 increased by 27.1 percent from
the first quarter of 2002 and amounted to $11.9 million. The increase in net
interest income was largely due to the April 2002 acquisition of First Financial
Corp. For the quarter, average earning assets increased $388.1 million, or
30.5%, compared to the same period last year, of which approximately $178.5
million related to acquisition of First Financial Corp. The increase in net
interest income due to earning asset growth was partially offset by a decrease
of 10 basis points in the net interest margin from the first quarter of 2002.
The net interest margin has been affected by the significant decline in market
interest rates and reflects a decline in yields on loans and securities offset
somewhat by lower funding costs of interest-bearing deposits and FHLB advances.
Noninterest income, excluding net realized gains on securities, totaled $5.8
million for the quarter ended March 31, 2003, up 17.5 percent from the $4.9
million reported for the first quarter of 2002. The growth in noninterest income
was attributable to increases in gains on loan sales and service charges on
deposits. For the first quarter of 2003, gains on loan sales amounted to $1.2
million, an increase of $722 thousand from the first quarter of 2002. As a
result of the decline in interest rates, the Corporation has experienced heavy
residential mortgage activity, predominantly refinancing, which increased the
amount of loans sold into the secondary market. The Corporation expects this
activity to remain strong through the second quarter of 2003, however this level
of activity may not be sustainable in future periods. In addition to selling
residential mortgage loans, the Corporation began selling the guaranteed portion
of SBA loan originations in 2002. Included in gains on loan sales for the first
quarter of 2003 are approximately $100 thousand in gains on sales of SBA loans.
For the three months ended March 31, 2003, service charges on deposit accounts
amounted to $1.1 million, up $273 thousand from the corresponding period in
2002. Growth in deposits and changes in the fee structure of various deposit
products were contributing factors in this increase. Revenue from trust and
investment management services continues to be the largest component of
noninterest income. Trust and investment management income totaled $2.5 million
for the three months ended March 31, 2003 down slightly from the amount reported
for the corresponding period in 2002, reflecting the financial market declines.
Trust and investment assets under administration amounted to $1.479 billion at
March 31, 2003, compared to $1.524 billion at December 31, 2002.
The Corporation recognized net realized gains on securities amounting to $230
thousand and $291 thousand in the first quarter of 2003 and 2002, respectively.
The gains resulted primarily from the sale of certain U.S. government agency and
mortgage-backed securities to take advantage of market opportunities and to
reposition the securities portfolio.
For the first quarter of 2003, noninterest expenses totaled $11.0 million, up
$1.8 million from the amount of noninterest expenses reported for first quarter
of 2002. This increase was primarily due to normal growth and higher operating
costs resulting from the April 2002 acquisition of First Financial Corp.
Salaries and benefits, the largest component of total noninterest expense,
amounted to $6.5 million for the three months ended March 31, 2003, compared to
the $5.6 million reported for the first three months of 2002.
--M O R E--
Total assets amounted to $1.816 billion at March 31, 2003, up $70.0 million from
the December 31, 2002 balance of $1.746 billion. In the first quarter of 2003,
total loans increased $16.0 million to $811.1 million at March 31, 2003, led by
a $9.0 million increase in the commercial and commercial real estate portfolio.
As of March 31, 2003, residential real estate loans totaled $285.7 million, up
$4.8 million from the balance at December 31, 2002.
Residential real estate loans were impacted by the refinancing of fixed rate
residential loans being sold into the secondary market. In the first quarter of
2003, the Corporation purchased a total of $7.7 million of residential mortgages
from other financial institutions. Total securities were $842.3 million at March
31, 2003, up $46.5 million from the December 31, 2002 balance. The increase in
securities was primarily due to purchases of mortgage-backed securities and U.S.
government agency securities. Purchases of securities were funded primarily with
Federal Home Loan Bank advances. In the first quarter of 2003, Federal Home Loan
Bank advances increased $64.3 million to $544.4 million at March 31, 2003. Total
deposits at March 31, 2003 amounted to $1.121 billion, up from the December 31,
2002 balance of $1.110 billion. Demand deposits rose $12.1 million, or 7.7
percent, in the first quarter of 2003 and totaled $169.6 million at March 31,
2003. Time deposits increased $2.6 million from December 31, 2002 and amounted
to $484.2 million at March 31, 2003. Savings deposits amounted to $467.0 million
at March 31, 2003, down slightly from the $471.3 million at December 31, 2002.
Asset quality continues to be strong, as measured by the level of nonperforming
assets. Nonaccrual loans as a percentage of total loans at March 31, 2003 were
..50%, compared to .53% at December 31, 2002. Similarly, nonperforming assets
(nonaccrual loans and property acquired through foreclosure) as a percent of
total assets at March 31, 2003 amounted to .22%, as compared to .24% at December
31, 2002. The Corporation's allowance for loan losses amounted to $15,495,000 at
March 31, 2003, compared to $15,487,000 at December 31, 2002.
Total shareholders' equity amounted to $131.0 million at March 31, 2003, up from
$128.7 million at December 31, 2002. Book value per share as of March 31, 2003
and December 31, 2002 amounted to $10.02 and $9.87, 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 today, Thursday, April 17, at 4:00
p.m. (Eastern Standard Time) to discuss the Corporation's first quarter
earnings. Access to the call is available in a listen-only mode via the investor
relations "news room" section of Washington Trust's web site at
www.washtrust.com. In addition, a webcast replay of the call will be posted via
the investor relations "news room" section of Washington Trust's web site at
www.washtrust.com, shortly after conclusion of the call.
Washington Trust Bancorp, Inc.'s Annual Meeting of Shareholders will be held at
11:00 a.m. (Eastern Standard Time), Thursday, April 29, 2003 at the Westerly
Public Library, Westerly, RI.
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 deposit levels
necessitating increased borrowing to fund loans and investments, changes in the
size and nature of the Corporation's competition, changes in loan default and
charge-off rates and changes in the assumptions used in making such
forward-looking statements.
Washington Trust Bancorp, Inc. and Subsidiary
FINANCIAL SUMMARY
(Dollars and shares in thousands, except per share amounts)
THREE MONTHS ENDED
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MAR. 31, MAR. 31, DEC. 31,
2003 2002 2002
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OPERATING RESULTS
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Net interest income $11,929 $9,384 $11,339
Provision for loan losses 100 100 100
Net realized gains on securities 230 291 58
Other noninterest income 5,803 4,937 6,158
Noninterest expenses 10,978 9,164 11,023
Income tax expense 2,134 1,604 1,954
Net income 4,750 3,744 4,478
PER SHARE
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Basic earnings $0.36 $0.31 $0.34
Diluted earnings $0.36 $0.31 $0.34
Dividends declared $0.15 $0.14 $0.14
SHARES OUTSTANDING
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Weighted average: Basic 13,059.3 12,004.9 13,038.0
Diluted 13,230.2 12,174.6 13,225.8
AVERAGE BALANCE SHEET
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Assets $1,778,338 $1,351,387 $1,709,378
Federal funds sold and other short-term investments 14,946 15,005 15,336
Taxable debt securities 764,975 590,107 733,668
Nontaxable debt securities 17,462 19,999 18,812
Corporate stocks and Federal Home Loan Bank stock 48,025 41,981 44,315
Loans: Commercial 389,545 260,320 380,085
Residential 292,276 234,395 264,888
Consumer 133,050 110,413 130,625
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Total loans 814,871 605,128 775,598
Earning assets 1,660,279 1,272,220 1,587,729
Deposits: Demand 155,944 121,530 162,490
Savings 459,777 313,578 465,080
Time 481,766 381,311 485,542
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Total deposits 1,097,487 816,419 1,113,112
Federal Home Loan Bank advances 532,698 422,769 449,317
Shareholders' equity 130,506 99,952 127,607
KEY RATIOS
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Return on average assets 1.07% 1.11% 1.05%
Return on average equity 14.56% 14.98% 14.04%
Interest rate spread (taxable equivalent basis) 2.68% 2.63% 2.54%
Net interest margin (taxable equivalent basis) 2.97% 3.07% 2.90%
ALLOWANCE FOR LOAN LOSSES
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Balance at beginning of period $15,487 $13,593 $15,660
Provision charged to earnings 100 100 100
Net (charge-offs) recoveries (92) (28) (273)
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Balance at end of period $15,495 $13,665 $15,487
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Washington Trust Bancorp, Inc. and Subsidiary
FINANCIAL SUMMARY
(Dollars and shares in thousands, except per share amounts)
MAR. 31, MAR. 31, DEC. 31,
2003 2002 2002
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PERIOD END BALANCE SHEET
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Assets $1,815,627 $1,362,650 $1,745,661
Total securities 842,307 655,595 795,833
Loans: Commercial 391,158 259,367 382,169
Residential 285,689 225,931 280,886
Consumer 134,285 111,510 132,071
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Total loans 811,132 596,808 795,126
Deposits: Demand 169,636 119,904 157,539
Savings 467,027 322,729 471,354
Time 484,183 390,353 481,600
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Total deposits 1,120,846 832,986 1,110,493
Federal Home Loan Bank advances 544,387 414,067 480,080
Shareholders' equity 131,010 99,163 128,721
SHARE INFORMATION
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Shares outstanding at end of period 13,071.0 11,998.9 13,042.4
Book value per share $10.02 $8.26 $9.87
Market value per share $20.21 $19.42 $19.53
CREDIT QUALITY
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Nonaccrual loans $4,034 $3,191 $4,177
Other real estate owned, net 4 30 86
Nonperforming assets to total assets 0.22% 0.24% 0.24%
Nonaccrual loans to total loans 0.50% 0.53% 0.53%
Allowance for loan losses to nonaccrual loans 384.11% 428.24% 370.78%
Allowance for loan losses to total loans 1.91% 2.29% 1.95%
Washington Trust Bancorp, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
March 31, December 31,
2003 2002
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Assets:
Cash and due from banks $39,084 $39,298
Federal funds sold and other short-term investments 10,550 11,750
Mortgage loans held for sale 11,583 4,566
Securities:
Available for sale, at fair value 578,260 553,556
Held to maturity, at cost; fair value $271,849
in 2003 and $250,446 in 2002 264,047 242,277
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Total securities 842,307 795,833
Federal Home Loan Bank stock, at cost 28,600 24,582
Loans 811,132 795,126
Less allowance for loan losses 15,495 15,487
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Net loans 795,637 779,639
Premises and equipment, net 25,485 24,415
Accrued interest receivable 8,459 7,773
Goodwill and other intangibles 25,083 25,260
Other assets 28,839 32,545
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Total assets $1,815,627 $1,745,661
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Liabilities:
Deposits:
Demand $169,636 $157,539
Savings 467,027 471,354
Time 484,183 481,600
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Total deposits 1,120,846 1,110,493
Dividends payable 1,962 1,825
Federal Home Loan Bank advances 544,387 480,080
Other borrowings 1,926 9,183
Accrued expenses and other liabilities 15,496 15,359
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Total liabilities 1,684,617 1,616,940
Shareholders' Equity:
Common stock of $0.625 par value; authorized 30 million shares;
issued 13,086,795 shares in 2003 and 2002 818 818
Paid-in capital 28,411 28,767
Retained earnings 93,505 90,717
Unamortized employee restricted stock (20) (24)
Accumulated other comprehensive income 8,602 9,294
Treasury stock, at cost; 15,788 shares in 2003 and 44,361 in 2002 (306) (851)
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Total shareholders' equity 131,010 128,721
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Total liabilities and shareholders' equity $1,815,627 $1,745,661
====================================================================================================================
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, 2003 2002
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Interest income:
Interest and fees on loans $12,646 $10,981
Interest on securities 8,555 8,188
Dividends on corporate stock and Federal Home Loan Bank stock 487 483
Interest on federal funds sold and other short-term investments 37 62
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Total interest income 21,725 19,714
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Interest expense:
Savings deposits 950 971
Time deposits 3,934 4,123
Federal Home Loan Bank advances 4,893 5,219
Other 19 17
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Total interest expense 9,796 10,330
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Net interest income 11,929 9,384
Provision for loan losses 100 100
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Net interest income after provision for loan losses 11,829 9,284
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Noninterest income:
Trust and investment management 2,533 2,565
Service charges on deposit accounts 1,100 827
Merchant processing fees 457 446
Net gains on loan sales 1,238 516
Income from bank-owned life insurance 284 288
Net realized gains on securities 230 291
Other income 191 295
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Total noninterest income 6,033 5,228
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Noninterest expense:
Salaries and employee benefits 6,534 5,575
Net occupancy 762 625
Equipment 837 785
Merchant processing costs 362 357
Legal, audit and professional fees 305 173
Advertising and promotion 270 240
Outsourced services 371 261
Amortization of intangibles 180 32
Other 1,357 1,116
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Total noninterest expense 10,978 9,164
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Income before income taxes 6,884 5,348
Income tax expense 2,134 1,604
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Net income $4,750 $3,744
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Weighted average shares outstanding - basic 13,059.3 12,004.9
Weighted average shares outstanding - diluted 13,230.2 12,174.6
Per share information:
Basic earnings per share $0.36 $0.31
Diluted earnings per share $0.36 $0.31
Cash dividends declared per share $0.15 $0.14