Washington Trust reports record year

Washington Trust reports record year

The Westerly Sun

WESTERLY — Washington Trust Bancorp Inc., parent company of The Washington Trust Company, has reported the highest annual earnings in its 213-year history — net income of $36,153,000 for the year ended Dec. 31, 2013. It was an increase of 9.7 percent from the year before.

Joseph J. MarcAurele, Washington Trust chairman and chief executive officer, said in his letter to shareholders that the corporation benefited from a business model that has multiple lines at its core: commercial and personal banking and trust services.

He said that the booming stock market in 2013 “boosted our wealth management business and rewarded investors who value the active portfolio managemennt that our advisers provide.” He noted, however, that “mortgage volume reflected an industrywide cool-down.” A rise in interest rates last year put a damper on refinancing activity across the country.

MarcAurele presided over the business portion of the annual shareholders’ meeting Tuesday at the Westerly Public Library. Edward O. “Ned” Handy III, president and chief operating officer, and David V. Devault, vice chairman, secretary, and chief financial officer, reviewed the corporation’s 2013 performance and commented on results for the first quarter ended March 31, 2014, which were released on April 21.

Four directors were re-elected to the corporation’s board of directors for terms ending in 2017: John J. Bowen, 62, chancellor and chief executive officer of Johnson & Wales University, a director since 2011; Robert A. DiMuccio, 56, CPA, president and chief executive officer of Amica Mutual Insurance Company, a director since 2010; H. Douglas Randall III, 66, chief executive officer of Randall, Realtors, a director since 2000; and John F. Treanor, 66, retired president and chief operating officer of Washington Trust, a director since 2001.

Shareholders also ratified the selection of KPMG to serve as the independent registered public accounting firm for the corporation for the current fiscal year ending December 31, 2014, and approved a nonbinding resolution for compensation of the corporation’s named executive officers.

The board’s compensation committee in December approved a 2014 base salary for MarcAurele of $515,000, an increase of $15,000 from the year before, according to the corporation’s proxy statement. The CEO’s base salary in 2013 represented 47.6 percent of his “target compensation mix,” which also included cash and equity incentives. MarcAurele is in his fifth year with the bank.

Devault, who received a “promotional increase” in 2013, saw his base salary rise from $269,200 to $300,000. He marked his 27th year with the company in 2013.

MarcAurele introduced Handy to the shareholders. He joined Washington Trust in last November from RBS Citizens Financial Group.

Handy said: “While I always regarded Washington Trust as a strong competitor, I didn’t truly understand just how special this company was until I came on board. What I learned was, not only does Washington Trust have a remarkable and successful history, but the company has an extraordinary internal service culture that has stood the test of time.”

Handy added that Washington Trust’s 2013 performance was “one for the history books,” marked by record earnings and all-time high levels of deposits ($2.5 billion) and loans ($2.46 billion), and wealth management assets under administration ($4.8 billion). Earnings per share were $2.16. Total mortgage origination volume amounted to $730 million, down $52 million from 2012.

Mortgage banking revenue amounted to $13.1 million in 2013, while wealth management revenue reached an all-time high of $32 million, an increase of 7.4 percent from the year before.

Handy attributed the corporation’s success to the “power of partnerships” the company has with employees, customers, community, and shareholders.

In reviewing Washington Trust’s 2013 and first quarter financial results, Devault noted the corporation’s continued profitability, capital strength, and asset quality. He noted that the corporation had raised its cash dividend to 29 cents a share, an increase of 2 cents a share and its third consecutive quarterly increase.

The total dividend in 2013 was $1.03 per chare, compared with 94 cents in 2012. The stock was trading at $36 per share early this week, down from its yearend close of $37.22 but still near the top of its 52-week range.

The corporation reported first quarter 2014 profits of $9.3 million, or 55 cents per share, compared with $9.8 million in the first quarter of 2013. The company said a large commercial loan write-down hurt profits, as did a slowdown in the mortgage business.

In his annual report, MarcAurele said that Washington Trust, the largest bank headquartered in Rhode Island, is scheduled to open a new branch in Johnston, its 19th, next month. He said the corporation would continue to focus on ways to assist its customers through market expansion, technological enhancements and service excellence.

Investor information is available on the corporation’s website: www.washtrustbancorp.com.


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