WESTERLY, R.I., Oct. 24, 2016 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (Nasdaq:WASH), parent company of The Washington Trust Company, today announced net income of $12.3 million, or $0.72 per diluted share, for the third quarter of 2016, up from net income of $11.1 million, or $0.64 per diluted share, reported for the second quarter of 2016.
"Our third quarter results reflect the strength and diversity of our business model, as we generated key revenues from our core business lines,” stated Joseph J. MarcAurele, Washington Trust Chairman and Chief Executive Officer. “We also posted record earnings and surpassed $4 billion in total assets for the first time in our 216-year history."
Selected highlights for the third quarter of 2016 include:
- Returns on average equity and average assets were strong at 12.57% and 1.21%, respectively. Comparable amounts for the second quarter of 2016 were 11.50% and 1.14%, respectively.
- The latest quarter results included a $939 thousand, or 5 cent per diluted share, benefit resulting from the reduction of a contingent consideration liability. Additional information is presented below under the heading Noninterest Expenses.
- Total loans stood at $3.2 billion at September 30, 2016, up by 3% in the quarter and up by 8% from a year ago.
- Total deposits grew by 9% in the third quarter and amounted to $3.0 billion at September 30, 2016. Deposits were up by 7% from a year ago.
- Wealth management assets at the end of quarter stood in excess of $6 billion and third quarter revenues totaled $9.6 million. These were record highs for Washington Trust.
- Mortgage banking revenues amounted to $3.7 million, up by 38% on a linked quarter basis. Mortgage loans sold to the secondary market totaled $164 million, the highest quarterly volume in our history.
- In September, Washington Trust declared a quarterly dividend of 37 cents per share, representing a 1 cent per share increase over the previous quarter and the second dividend increase in 2016.
Net Interest Income
Net interest income totaled $27.4 million for the third quarter of 2016, up by $603 thousand on a linked quarter basis. The net interest margin was 2.94% for the third quarter of 2016, down by 11 basis points from the previous quarter. The reduction in the net interest margin was primarily due to lower yields on interest-earning assets, resulting from additions to the investment securities portfolio and to a lesser extent, a reduction in the yield on the loan portfolio. Significant linked quarter changes included:
- Average interest-earning assets increased by $178 million from the prior quarter, reflecting a $95 million increase in the average balance of investment securities and a $58 million increase in the average balance of loans. The yield on interest-earning assets was 3.55%, down by 10 basis points.
- Average interest-bearing liabilities increased by $131 million from the prior quarter, reflecting an increase of $111 million in the average balance of wholesale funding balances and an increase of $19 million in average interest-bearing deposits. The cost of interest-bearing funds was 0.76%, up by 2 basis points from the prior quarter.
Noninterest Income
Noninterest income totaled $17.3 million for the third quarter of 2016, up by $1.3 million, or 8%, from the second quarter of 2016. Significant linked quarter changes included:
- Wealth management revenues, our largest source of noninterest income, totaled $9.6 million for the third quarter, up by $142 thousand, or 1%, from the prior quarter. The linked quarter change was affected by the second quarter recognition of $344 thousand in tax preparation fee income, which is typically concentrated in that quarter. Wealth management assets under administration amounted to $6.1 billion at September 30, 2016, up by $152 million on a linked quarter basis. Managed assets continue to represent over 90% of total wealth management assets at September 30, 2016.
- Mortgage banking revenues totaled $3.7 million in the third quarter, up by $1.0 million, or 38%, from the previous quarter, reflecting both a higher volume of and yield on loans sold to the secondary market. Residential mortgage loans sold to the secondary market amounted to $164 million in the third quarter, compared to $139 million in the previous quarter.
- Income from bank-owned life insurance ("BOLI") amounted to $521 thousand in the third quarter, down by $569 thousand on a linked quarter basis. This decrease was due to a $589 thousand non-taxable gain recognized in the second quarter due to the receipt of life insurance proceeds.
- Loan related derivative income amounted to $1.2 million in the third quarter, up by $670 thousand from the prior quarter.
Noninterest Expenses
Noninterest expenses totaled $24.7 million for the third quarter of 2016, down by $1.4 million, or 5%, from the prior quarter. The largest reason for the decline was a $939 thousand reduction in noninterest expenses resulting from a downward adjustment in the fair value of the contingent consideration liability previously recognized upon the completion of the acquisition of Halsey Associates, Inc. in 2015. The remaining linked quarter decrease in noninterest expenses was due to a $497 thousand decline in salaries and employee benefit costs. In the previous quarter, costs of $425 thousand were recognized for various employee severance matters.
Income tax expense amounted to $5.9 million for the third quarter of 2016, up by $710 thousand from the prior quarter. The effective tax rate for the third quarter of 2016 was 32.2%, compared to 31.8% for the second quarter of 2016. The effective tax rate in the prior quarter was lower due to the impact of the non-taxable gain related to the receipt of BOLI proceeds. Based on the current federal and applicable state income tax statutes, the Corporation currently expects the effective tax rate for the fourth quarter of 2016 will be approximately 32.5%.
Loans
Total loans amounted to $3.2 billion at September 30, 2016, up by $100 million, or 3%, from the balance at the end of the second quarter. Residential loan portfolio balances increased by $75 million, or 7%. During the quarter, $59 million of residential mortgages were purchased. These purchased loans were individually evaluated to our underwriting standards and are predominantly secured by properties in Massachusetts. The commercial loan portfolio increased by $25 million, or 1.4%, during the quarter, reflecting growth in the commercial mortgage and commercial construction portfolios.
Investment Securities
The investment securities portfolio amounted to $581 million at September 30, 2016, up by $161 million, or 38.5%, from the balance at June 30, 2016. During the quarter, government agency mortgage-backed debt securities and agency debt securities totaling $216 million and with a weighted average yield of 2.48% were purchased. The purchases were partially offset by calls of agency debt securities and obligations of state and political subdivisions, as well as routine principal pay-downs on mortgage-backed securities. Investment securities represented 14% of total assets as of September 30, 2016.
Deposits and Borrowings
Total deposits amounted to $3.0 billion at September 30, 2016, up by $248 million, or 8.9%, in the third quarter. Included in total deposits were wholesale brokered time deposit balances of $359 million, which increased by $65 million from the balance at the end of the second quarter. Excluding wholesale brokered time deposits, in-market deposits increased by $183 million, or 7.3%, in the quarter. This reflects increases in money market deposits and noninterest-bearing demand deposits, including inflows associated with the business cycles of various institutional and governmental depositors.
FHLBB advances amounted to $672 million at September 30, 2016, up by $32 million, or 4.9%, from June 30, 2016.
Asset Quality
Total past due loans amounted to $21.3 million, or 0.67% of total loans, at September 30, 2016, compared to $17.1 million, or 0.56% of total loans, at June 30, 2016. Total nonaccrual loans amounted to $24.0 million, or 0.75% of total loans, at September 30, 2016, compared to $17.2 million, or 0.56% of total loans, at June 30, 2016. The increase in both past due loans and nonaccrual loans was due to one commercial real estate relationship, previously modified in a troubled debt restructuring, with a carrying value of $6.3 million as of September 30, 2016. During the third quarter, a $1.9 million charge-off was recognized on this relationship.
A loan loss provision totaling $1.8 million was charged to earnings in the third quarter of 2016, compared to a loan loss provision of $450 thousand recognized in the second quarter of 2016. The increase in loan loss provision was primarily due to the additional loss exposure allocated to the commercial real estate relationship noted above. The allowance for loan losses was $25.6 million, or 0.81% of total loans, at September 30, 2016, compared to $25.8 million, or 0.84% of total loans, at June 30, 2016.
Capital and Dividends
Total shareholders' equity was $395 million at September 30, 2016, up by $7 million from June 30, 2016. Capital levels at September 30, 2016 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.31% at September 30, 2016, compared to 12.43% at June 30, 2016. At September 30, 2016, book value per share amounted to $23.11, up from $22.73 in the prior quarter.
The Board of Directors declared a quarterly dividend of 37 cents per share for the quarter ended September 30, 2016. The dividend was paid on October 14, 2016 to shareholders of record on October 3, 2016.
Conference Call
Washington Trust will host a conference call to discuss its third quarter results, business highlights and outlook on Tuesday, October 25, 2016 at 8:30 a.m. (Eastern Time). Individuals may dial in to the call at 1-877-407-0784. An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-877-870-5176 and entering the Replay PIN Number 13646314; the audio replay will be available through November 4, 2016. 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, 2016.
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; additional government intervention in the U.S. financial system; 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; 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, 2015, 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, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | |||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Cash and due from banks | $ | 126,752 | $ | 116,658 | $ | 89,966 | $ | 93,222 | $ | 106,445 | |||||||||||||||||||||||||
| Short-term investments | 2,420 | 3,255 | 4,931 | 4,409 | 3,629 | ||||||||||||||||||||||||||||||
| Mortgage loans held for sale | 45,162 | 38,554 | 22,895 | 38,554 | 31,805 | ||||||||||||||||||||||||||||||
| Securities: | |||||||||||||||||||||||||||||||||||
| Available for sale, at fair value | 564,256 | 401,749 | 411,352 | 375,044 | 323,795 | ||||||||||||||||||||||||||||||
| Held to maturity, at amortized cost | 16,848 | 17,917 | 19,040 | 20,023 | 21,140 | ||||||||||||||||||||||||||||||
| Total securities | 581,104 | 419,666 | 430,392 | 395,067 | 344,935 | ||||||||||||||||||||||||||||||
| Federal Home Loan Bank stock, at cost | 37,249 | 34,303 | 26,515 | 24,316 | 37,730 | ||||||||||||||||||||||||||||||
| Loans: | |||||||||||||||||||||||||||||||||||
| Commercial | 1,757,215 | 1,732,220 | 1,698,811 | 1,654,547 | 1,579,854 | ||||||||||||||||||||||||||||||
| Residential real estate | 1,079,887 | 1,005,036 | 1,004,349 | 1,013,555 | 1,024,214 | ||||||||||||||||||||||||||||||
| Consumer | 344,253 | 343,628 | 343,833 | 345,025 | 345,850 | ||||||||||||||||||||||||||||||
| Total loans | 3,181,355 | 3,080,884 | 3,046,993 | 3,013,127 | 2,949,918 | ||||||||||||||||||||||||||||||
| Less allowance for loan losses | 25,649 | 25,826 | 26,137 | 27,069 | 27,161 | ||||||||||||||||||||||||||||||
| Net loans | 3,155,706 | 3,055,058 | 3,020,856 | 2,986,058 | 2,922,757 | ||||||||||||||||||||||||||||||
| Premises and equipment, net | 29,433 | 29,590 | 29,882 | 29,593 | 28,180 | ||||||||||||||||||||||||||||||
| Investment in bank-owned life insurance | 70,557 | 65,036 | 66,000 | 65,501 | 65,000 | ||||||||||||||||||||||||||||||
| Goodwill | 64,059 | 64,059 | 64,059 | 64,059 | 64,196 | ||||||||||||||||||||||||||||||
| Identifiable intangible assets, net | 10,493 | 10,814 | 11,137 | 11,460 | 11,793 | ||||||||||||||||||||||||||||||
| Other assets | 81,099 | 80,088 | 71,577 | 59,365 | 58,366 | ||||||||||||||||||||||||||||||
| Total assets | $ | 4,204,034 | $ | 3,917,081 | $ | 3,838,210 | $ | 3,771,604 | $ | 3,674,836 | |||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||||||||
| Demand deposits | $ | 566,027 | $ | 512,307 | $ | 539,119 | $ | 537,298 | $ | 513,856 | |||||||||||||||||||||||||
| NOW accounts | 404,827 | 414,532 | 394,873 | 412,602 | 358,973 | ||||||||||||||||||||||||||||||
| Money market accounts | 794,905 | 675,896 | 763,565 | 823,490 | 855,858 | ||||||||||||||||||||||||||||||
| Savings accounts | 357,966 | 342,579 | 331,800 | 326,967 | 305,775 | ||||||||||||||||||||||||||||||
| Time deposits | 913,649 | 844,036 | 850,294 | 833,898 | 801,818 | ||||||||||||||||||||||||||||||
| Total deposits | 3,037,374 | 2,789,350 | 2,879,651 | 2,934,255 | 2,836,280 | ||||||||||||||||||||||||||||||
| Federal Home Loan Bank advances | 671,615 | 640,010 | 487,189 | 378,973 | 381,649 | ||||||||||||||||||||||||||||||
| Junior subordinated debentures | 22,681 | 22,681 | 22,681 | 22,681 | 22,681 | ||||||||||||||||||||||||||||||
| Other liabilities | 77,037 | 76,708 | 67,409 | 60,307 | 63,699 | ||||||||||||||||||||||||||||||
| Total liabilities | 3,808,707 | 3,528,749 | 3,456,930 | 3,396,216 | 3,304,309 | ||||||||||||||||||||||||||||||
| Shareholders’ Equity: | |||||||||||||||||||||||||||||||||||
| Common stock | 1,069 | 1,068 | 1,064 | 1,064 | 1,062 | ||||||||||||||||||||||||||||||
| Paid-in capital | 113,290 | 112,314 | 111,641 | 110,949 | 109,724 | ||||||||||||||||||||||||||||||
| Retained earnings | 288,613 | 282,666 | 277,810 | 273,074 | 268,166 | ||||||||||||||||||||||||||||||
| Accumulated other comprehensive loss | (7,645 | ) | (7,716 | ) | (9,235 | ) | (9,699 | ) | (8,425 | ) | |||||||||||||||||||||||||
| Total shareholders’ equity | 395,327 | 388,332 | 381,280 | 375,388 | 370,527 | ||||||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,204,034 | $ | 3,917,081 | $ | 3,838,210 | $ | 3,771,604 | $ | 3,674,836 | |||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Sep 30, 2016 | Sep 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 29,633 | $ | 29,122 | $ | 29,998 | $ | 28,511 | $ | 28,626 | $ | 88,753 | $ | 85,718 | |||||||||||||||||||||||||||||||||||||||||||||||
| Taxable interest on securities | 3,024 | 2,487 | 2,370 | 2,262 | 2,178 | 7,881 | 6,613 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nontaxable interest on securities | 218 | 280 | 327 | 352 | 366 | 825 | 1,203 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends on Federal Home Loan Bank stock | 288 | 231 | 210 | 315 | 309 | 729 | 638 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other interest income | 93 | 70 | 64 | 37 | 47 | 227 | 101 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total interest and dividend income | 33,256 | 32,190 | 32,969 | 31,477 | 31,526 | 98,415 | 94,273 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deposits | 3,110 | 2,981 | 2,968 | 3,097 | 3,308 | 9,059 | 10,045 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Federal Home Loan Bank advances | 2,641 | 2,313 | 2,152 | 1,966 | 1,987 | 7,106 | 5,780 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Junior subordinated debentures | 125 | 119 | 112 | 157 | 232 | 356 | 714 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other interest expense | 1 | 1 | 2 | 2 | 2 | 4 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total interest expense | 5,877 | 5,414 | 5,234 | 5,222 | 5,529 | 16,525 | 16,546 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income | 27,379 | 26,776 | 27,735 | 26,255 | 25,997 | 81,890 | 77,727 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for loan losses | 1,800 | 450 | 500 | 750 | 200 | 2,750 | 300 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income after provision for loan losses | 25,579 | 26,326 | 27,235 | 25,505 | 25,797 | 79,140 | 77,427 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest income: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wealth management revenues | 9,623 | 9,481 | 9,174 | 9,167 | 8,902 | 28,278 | 26,249 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage banking revenues | 3,734 | 2,710 | 2,198 | 2,582 | 1,990 | 8,642 | 7,319 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Service charges on deposit accounts | 915 | 935 | 907 | 971 | 986 | 2,757 | 2,894 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Card interchange fees | 870 | 860 | 797 | 810 | 849 | 2,527 | 2,389 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income from bank-owned life insurance | 521 | 1,090 | 499 | 502 | 498 | 2,110 | 1,480 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loan related derivative income | 1,178 | 508 | 645 | 752 | 327 | 2,331 | 1,689 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity in losses of unconsolidated subsidiaries | (88 | ) | (89 | ) | (88 | ) | (69 | ) | (69 | ) | (265 | ) | (224 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 508 | 419 | 502 | 431 | 430 | 1,429 | 1,398 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noninterest income | 17,261 | 15,914 | 14,634 | 15,146 | 13,913 | 47,809 | 43,194 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest expense: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 16,908 | 17,405 | 16,380 | 16,053 | 15,971 | 50,693 | 46,971 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net occupancy | 1,766 | 1,803 | 1,807 | 1,724 | 1,721 | 5,376 | 5,276 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equipment | 1,648 | 1,503 | 1,501 | 1,393 | 1,424 | 4,652 | 4,140 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outsourced services | 1,254 | 1,294 | 1,363 | 1,337 | 1,250 | 3,911 | 3,774 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Legal, audit and professional fees | 691 | 662 | 629 | 825 | 630 | 1,982 | 1,916 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FDIC deposit insurance costs | 504 | 491 | 493 | 470 | 467 | 1,488 | 1,376 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advertising and promotion | 370 | 420 | 265 | 325 | 356 | 1,055 | 1,201 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of intangibles | 321 | 322 | 323 | 333 | 260 | 966 | 571 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt prepayment penalties | — | — | 431 | — | — | 431 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition related expenses | — | — | — | 52 | 504 | — | 937 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | (939 | ) | — | — | — | — | (939 | ) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other expenses | 2,127 | 2,130 | 2,258 | 2,049 | 1,955 | 6,515 | 6,206 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total noninterest expense | 24,650 | 26,030 | 25,450 | 24,561 | 24,538 | 76,130 | 72,368 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes | 18,190 | 16,210 | 16,419 | 16,090 | 15,172 | 50,819 | 48,253 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | 5,863 | 5,153 | 5,484 | 5,346 | 4,964 | 16,500 | 15,532 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 12,327 | $ | 11,057 | $ | 10,935 | $ | 10,744 | $ | 10,208 | $ | 34,319 | $ | 32,721 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income available to common shareholders: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 12,302 | $ | 11,035 | $ | 10,910 | $ | 10,718 | $ | 10,181 | $ | 34,247 | $ | 32,621 | |||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | $ | 12,302 | $ | 11,035 | $ | 10,910 | $ | 10,718 | $ | 10,180 | $ | 34,247 | $ | 32,621 | |||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 17,090 | 17,067 | 17,023 | 17,004 | 16,939 | 17,060 | 16,837 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 17,203 | 17,194 | 17,157 | 17,167 | 17,102 | 17,198 | 17,027 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | 0.72 | $ | 0.65 | $ | 0.64 | $ | 0.63 | $ | 0.60 | $ | 2.01 | $ | 1.94 | |||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | $ | 0.72 | $ | 0.64 | $ | 0.64 | $ | 0.62 | $ | 0.60 | $ | 1.99 | $ | 1.92 | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends declared per share | $ | 0.37 | $ | 0.36 | $ | 0.36 | $ | 0.34 | $ | 0.34 | $ | 1.09 | $ | 1.02 | |||||||||||||||||||||||||||||||||||||||||||||||
| SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | |||||||||||||||||||||||||||||||||||||||
| Share and Equity Related Data: | |||||||||||||||||||||||||||||||||||||||||||
| Book value per share | $ | 23.11 | $ | 22.73 | $ | 22.40 | $ | 22.06 | $ | 21.82 | |||||||||||||||||||||||||||||||||
| Tangible book value per share - Non-GAAP (1) | $ | 18.75 | $ | 18.35 | $ | 17.98 | $ | 17.62 | $ | 17.36 | |||||||||||||||||||||||||||||||||
| Market value per share | $ | 40.22 | $ | 37.92 | $ | 37.32 | $ | 39.52 | $ | 38.45 | |||||||||||||||||||||||||||||||||
| Shares issued and outstanding at end of period | 17,107 | 17,081 | 17,024 | 17,020 | 16,985 | ||||||||||||||||||||||||||||||||||||||
| Capital Ratios: | |||||||||||||||||||||||||||||||||||||||||||
| Tier 1 risk-based capital | 11.48% (i) | 11.57 | % | 11.56 | % | 11.64 | % | 11.83 | % | ||||||||||||||||||||||||||||||||||
| Total risk-based capital | 12.31% (i) | 12.43 | % | 12.45 | % | 12.58 | % | 12.80 | % | ||||||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 8.95% (i) | 9.21 | % | 9.31 | % | 9.37 | % | 9.26 | % | ||||||||||||||||||||||||||||||||||
| Common equity tier 1 | 10.77% (i) | 10.84 | % | 10.82 | % | 10.89 | % | 11.05 | % | ||||||||||||||||||||||||||||||||||
| Equity to assets | 9.40 | % | 9.91 | % | 9.93 | % | 9.95 | % | 10.08 | % | |||||||||||||||||||||||||||||||||
| Tangible equity to tangible assets - Non-GAAP (1) | 7.77 | % | 8.16 | % | 8.13 | % | 8.11 | % | 8.18 | % | |||||||||||||||||||||||||||||||||
| (i) - estimated | |||||||||||||||||||||||||||||||||||||||||||
| For the Nine Months Ended | ||||||||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Sep 30, 2016 | Sep 30, 2015 | ||||||||||||||||||||||||||
| Performance Ratios: | ||||||||||||||||||||||||||||||||
| Net interest margin (FTE) | 2.94 | % | 3.05 | % | 3.24 | % | 3.08 | % | 3.07 | % | 3.07 | % | 3.13 | % | ||||||||||||||||||
| Return on average assets | 1.21 | % | 1.14 | % | 1.16 | % | 1.16 | % | 1.11 | % | 1.17 | % | 1.20 | % | ||||||||||||||||||
| Return on average tangible assets - Non-GAAP (1) | 1.24 | % | 1.17 | % | 1.18 | % | 1.19 | % | 1.13 | % | 1.20 | % | 1.22 | % | ||||||||||||||||||
| Return on average equity | 12.57 | % | 11.50 | % | 11.50 | % | 11.52 | % | 11.13 | % | 11.86 | % | 12.17 | % | ||||||||||||||||||
| Return on average tangible equity - Non-GAAP (1) | 15.53 | % | 14.28 | % | 14.34 | % | 14.45 | % | 13.82 | % | 14.72 | % | 14.90 | % | ||||||||||||||||||
(1) See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.
| SELECTED FINANCIAL HIGHLIGHTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Sep 30, 2016 | Sep 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wealth Management Results | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wealth Management Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trust and investment management fees | $ | 8,358 | $ | 8,195 | $ | 8,065 | $ | 8,001 | $ | 7,768 | $ | 24,618 | $ | 22,148 | |||||||||||||||||||||||||||||||||||||||||||||||
| Mutual fund fees | 812 | 812 | 843 | 952 | 989 | 2,467 | 3,057 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset-based revenues | 9,170 | 9,007 | 8,908 | 8,953 | 8,757 | 27,085 | 25,205 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Transaction-based revenues | 453 | 474 | 266 | 214 | 145 | 1,193 | 1,044 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total wealth management revenues | $ | 9,623 | $ | 9,481 | $ | 9,174 | $ | 9,167 | $ | 8,902 | $ | 28,278 | $ | 26,249 | |||||||||||||||||||||||||||||||||||||||||||||||
| Assets Under Administration: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 5,905,019 | $ | 5,878,967 | $ | 5,844,636 | $ | 5,714,201 | $ | 5,211,548 | $ | 5,844,636 | $ | 5,069,966 | |||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of Halsey Associates, Inc. | — | — | — | — | 839,994 | — | 839,994 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment appreciation (depreciation) & income | 192,518 | 71,447 | 22,389 | 153,953 | (316,121 | ) | 286,354 | (249,181 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net client asset flows | (40,678 | ) | (45,395 | ) | 11,942 | (23,518 | ) | (21,220 | ) | (74,131 | ) | 53,422 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | 6,056,859 | $ | 5,905,019 | $ | 5,878,967 | $ | 5,844,636 | $ | 5,714,201 | $ | 6,056,859 | $ | 5,714,201 | |||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage Banking Results | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage Banking Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gains & commissions on loan sales, net | $ | 3,744 | $ | 2,804 | $ | 2,134 | $ | 2,528 | $ | 1,964 | $ | 8,682 | $ | 7,297 | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential mortgage servicing fee income, net | (10 | ) | (94 | ) | 64 | 54 | 26 | (40 | ) | 22 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total mortgage banking revenues | $ | 3,734 | $ | 2,710 | $ | 2,198 | $ | 2,582 | $ | 1,990 | $ | 8,642 | $ | 7,319 | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential Mortgage Loan Originations: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Originations for retention in portfolio | $ | 90,308 | $ | 54,080 | $ | 47,545 | $ | 38,080 | $ | 76,963 | $ | 191,934 | $ | 196,772 | |||||||||||||||||||||||||||||||||||||||||||||||
| Originations for sale to secondary market (1) | 170,673 | 154,043 | 90,458 | 134,125 | 126,353 | $ | 415,174 | 389,709 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total mortgage loan originations | $ | 260,981 | $ | 208,123 | $ | 138,003 | $ | 172,205 | $ | 203,316 | $ | 607,108 | $ | 586,481 | |||||||||||||||||||||||||||||||||||||||||||||||
| Residential Mortgage Loans Sold: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sold with servicing rights retained | $ | 44,611 | $ | 45,804 | $ | 26,454 | $ | 44,493 | $ | 37,782 | $ | 116,869 | $ | 117,731 | |||||||||||||||||||||||||||||||||||||||||||||||
| Sold with servicing rights released (1) | 119,572 | 93,239 | 79,507 | 82,906 | 94,645 | $ | 292,318 | 285,770 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total mortgage loans sold | $ | 164,183 | $ | 139,043 | $ | 105,961 | $ | 127,399 | $ | 132,427 | $ | 409,187 | $ | 403,501 | |||||||||||||||||||||||||||||||||||||||||||||||
(1) Also includes loans originated in a broker capacity.
| END OF PERIOD LOAN AND DEPOSIT COMPOSITION | |||||||||||||||||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | |||||||||||||||||||||||||||||||||||||||
| Commercial: | |||||||||||||||||||||||||||||||||||||||||||
| Mortgages | $ | 1,086,175 | $ | 1,074,747 | $ | 976,931 | $ | 931,953 | $ | 873,767 | |||||||||||||||||||||||||||||||||
| Construction & development | 98,735 | 81,812 | 123,032 | 122,297 | 121,857 | ||||||||||||||||||||||||||||||||||||||
| Commercial & industrial | 572,305 | 575,661 | 598,848 | 600,297 | 584,230 | ||||||||||||||||||||||||||||||||||||||
| Total commercial | 1,757,215 | 1,732,220 | 1,698,811 | 1,654,547 | 1,579,854 | ||||||||||||||||||||||||||||||||||||||
| Residential real estate: | |||||||||||||||||||||||||||||||||||||||||||
| Mortgages | 1,052,829 | 978,399 | 980,274 | 984,437 | 994,808 | ||||||||||||||||||||||||||||||||||||||
| Homeowner construction | 27,058 | 26,637 | 24,075 | 29,118 | 29,406 | ||||||||||||||||||||||||||||||||||||||
| Total residential real estate | 1,079,887 | 1,005,036 | 1,004,349 | 1,013,555 | 1,024,214 | ||||||||||||||||||||||||||||||||||||||
| Consumer: | |||||||||||||||||||||||||||||||||||||||||||
| Home equity lines | 265,238 | 260,541 | 258,513 | 255,565 | 252,862 | ||||||||||||||||||||||||||||||||||||||
| Home equity loans | 38,264 | 39,572 | 45,499 | 46,649 | 47,610 | ||||||||||||||||||||||||||||||||||||||
| Other | 40,751 | 43,515 | 39,821 | 42,811 | 45,378 | ||||||||||||||||||||||||||||||||||||||
| Total consumer | 344,253 | 343,628 | 343,833 | 345,025 | 345,850 | ||||||||||||||||||||||||||||||||||||||
| Total loans | $ | 3,181,355 | $ | 3,080,884 | $ | 3,046,993 | $ | 3,013,127 | $ | 2,949,918 | |||||||||||||||||||||||||||||||||
| September 30, 2016 | December 31, 2015 | ||||||||||||||||||||
| Balance | % of Total | Balance | % of Total | ||||||||||||||||||
| Commercial Real Estate Loans by Property Location: | |||||||||||||||||||||
| Rhode Island, Connecticut, Massachusetts | $ | 1,097,935 | 92.7 | % | $ | 959,883 | 91.0 | % | |||||||||||||
| New York, New Jersey, Pennsylvania | 73,893 | 6.2 | % | 80,989 | 7.7 | % | |||||||||||||||
| New Hampshire | 13,082 | 1.1 | % | 13,377 | 1.3 | % | |||||||||||||||
| Total commercial real estate loans (1) | $ | 1,184,910 | 100.0 | % | $ | 1,054,249 | 100.0 | % | |||||||||||||
| Residential Mortgages by Property Location: | |||||||||||||||||||||
| Rhode Island, Connecticut, Massachusetts | $ | 1,062,256 | 98.3 | % | $ | 995,743 | 98.2 | % | |||||||||||||
| New Hampshire, Vermont, Maine | 11,827 | 1.1 | % | 10,186 | 1.0 | % | |||||||||||||||
| New York, Virginia, New Jersey, Maryland, Pennsylvania | 2,851 | 0.3 | % | 4,163 | 0.4 | % | |||||||||||||||
| Ohio | 1,077 | 0.1 | % | 1,557 | 0.2 | % | |||||||||||||||
| Other | 1,876 | 0.2 | % | 1,906 | 0.2 | % | |||||||||||||||
| Total residential mortgages | $ | 1,079,887 | 100.0 | % | $ | 1,013,555 | 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, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | |||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||
| Non-interest bearing demand deposits | $ | 520,860 | $ | 476,848 | $ | 474,477 | $ | 475,398 | $ | 472,349 | |||||||||||||||
| Interest-bearing demand deposits | 45,167 | 35,459 | 64,642 | 61,900 | 41,507 | ||||||||||||||||||||
| NOW accounts | 404,827 | 414,532 | 394,873 | 412,602 | 358,973 | ||||||||||||||||||||
| Money market accounts | 794,905 | 675,896 | 763,565 | 823,490 | 855,858 | ||||||||||||||||||||
| Savings accounts | 357,966 | 342,579 | 331,800 | 326,967 | 305,775 | ||||||||||||||||||||
| Time deposits (in-market) | 554,669 | 549,935 | 540,815 | 531,419 | 534,266 | ||||||||||||||||||||
| Wholesale brokered time deposits | 358,980 | 294,101 | 309,479 | 302,479 | 267,552 | ||||||||||||||||||||
| Total deposits | $ | 3,037,374 | $ | 2,789,350 | $ | 2,879,651 | $ | 2,934,255 | $ | 2,836,280 | |||||||||||||||
| CREDIT & ASSET QUALITY DATA | |||||||||||||||||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | |||||||||||||||||||||||||||||||||||||||
| Asset Quality Ratios: | |||||||||||||||||||||||||||||||||||||||||||
| Nonperforming assets to total assets | 0.59 | % | 0.48 | % | 0.49 | % | 0.58 | % | 0.48 | % | |||||||||||||||||||||||||||||||||
| Nonaccrual loans to total loans | 0.75 | % | 0.56 | % | 0.57 | % | 0.70 | % | 0.57 | % | |||||||||||||||||||||||||||||||||
| Allowance for loan losses to nonaccrual loans | 107.09 | % | 149.73 | % | 150.00 | % | 128.61 | % | 161.25 | % | |||||||||||||||||||||||||||||||||
| Allowance for loan losses to total loans | 0.81 | % | 0.84 | % | 0.86 | % | 0.90 | % | 0.92 | % | |||||||||||||||||||||||||||||||||
| Nonperforming Assets: | |||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgages | $ | 10,357 | $ | 4,054 | $ | 4,054 | $ | 5,711 | $ | 4,915 | |||||||||||||||||||||||||||||||||
| Commercial construction & development | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Commercial & industrial | 1,744 | 1,204 | 2,659 | 3,018 | 1,137 | ||||||||||||||||||||||||||||||||||||||
| Residential real estate mortgages | 10,140 | 10,409 | 9,367 | 10,666 | 9,472 | ||||||||||||||||||||||||||||||||||||||
| Consumer | 1,709 | 1,581 | 1,345 | 1,652 | 1,320 | ||||||||||||||||||||||||||||||||||||||
| Total nonaccrual loans | 23,950 | 17,248 | 17,425 | 21,047 | 16,844 | ||||||||||||||||||||||||||||||||||||||
| Other real estate owned | 1,045 | 1,515 | 1,326 | 716 | 955 | ||||||||||||||||||||||||||||||||||||||
| Total nonperforming assets | $ | 24,995 | $ | 18,763 | $ | 18,751 | $ | 21,763 | $ | 17,799 | |||||||||||||||||||||||||||||||||
| Past Due Loans: | |||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgages | $ | 10,352 | $ | 4,062 | $ | 4,564 | $ | 4,555 | $ | 5,062 | |||||||||||||||||||||||||||||||||
| Commercial & industrial | 1,047 | 1,978 | 2,906 | 462 | 4,337 | ||||||||||||||||||||||||||||||||||||||
| Residential real estate mortgages | 8,291 | 8,893 | 8,703 | 9,286 | 10,567 | ||||||||||||||||||||||||||||||||||||||
| Consumer loans | 1,565 | 2,201 | 2,122 | 3,256 | 1,845 | ||||||||||||||||||||||||||||||||||||||
| Total past due loans | $ | 21,255 | $ | 17,134 | $ | 18,295 | $ | 17,559 | $ | 21,811 | |||||||||||||||||||||||||||||||||
| Total past due loans to total loans | 0.67 | % | 0.56 | % | 0.60 | % | 0.58 | % | 0.74 | % | |||||||||||||||||||||||||||||||||
| Accruing loans 90 days or more past due | $— | $— | $— | $— | $— | ||||||||||||||||||||||||||||||||||||||
| Nonaccrual loans included in past due loans | $ | 18,796 | $ | 13,211 | $ | 14,030 | $ | 13,635 | $ | 13,964 | |||||||||||||||||||||||||||||||||
| For the Nine Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Sep 30, 2016 | Sep 30, 2015 | ||||||||||||||||||||||||||||||||||||||||
| Nonaccrual Loan Activity: | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 17,248 | $ | 17,425 | $ | 21,047 | $ | 16,844 | $ | 15,131 | $ | 21,047 | $ | 15,945 | ||||||||||||||||||||||||||||||||
| Additions to nonaccrual status | 9,750 | 2,072 | 1,352 | 7,029 | 3,319 | 13,174 | 7,494 | |||||||||||||||||||||||||||||||||||||||
| Loans returned to accruing status | (592 | ) | — | (206 | ) | (303 | ) | (156 | ) | (798 | ) | (2,278 | ) | |||||||||||||||||||||||||||||||||
| Loans charged-off | (2,055 | ) | (860 | ) | (1,475 | ) | (904 | ) | (725 | ) | (4,390 | ) | (1,401 | ) | ||||||||||||||||||||||||||||||||
| Loans transferred to other real estate owned | — | (435 | ) | (610 | ) | (716 | ) | — | (1,045 | ) | (491 | ) | ||||||||||||||||||||||||||||||||||
| Payments, payoffs and other changes | (401 | ) | (954 | ) | (2,683 | ) | (903 | ) | (725 | ) | (4,038 | ) | (2,425 | ) | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | 23,950 | $ | 17,248 | $ | 17,425 | $ | 21,047 | $ | 16,844 | $ | 23,950 | $ | 16,844 | ||||||||||||||||||||||||||||||||
| Allowance for Loan Losses: | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | 25,826 | $ | 26,137 | $ | 27,069 | $ | 27,161 | $ | 27,587 | $ | 27,069 | $ | 28,023 | ||||||||||||||||||||||||||||||||
| Provision charged to earnings | 1,800 | 450 | 500 | 750 | 200 | 2,750 | 300 | |||||||||||||||||||||||||||||||||||||||
| Charge-offs | (2,055 | ) | (860 | ) | (1,475 | ) | (904 | ) | (725 | ) | (4,390 | ) | (1,401 | ) | ||||||||||||||||||||||||||||||||
| Recoveries | 78 | 99 | 43 | 62 | 99 | 220 | 239 | |||||||||||||||||||||||||||||||||||||||
| Balance at end of period | $ | 25,649 | $ | 25,826 | $ | 26,137 | $ | 27,069 | $ | 27,161 | $ | 25,649 | $ | 27,161 | ||||||||||||||||||||||||||||||||
| Net Loan Charge-Offs (Recoveries): | ||||||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgages | $ | 1,936 | $ | 65 | $ | 1,249 | $ | 405 | $ | (4 | ) | $ | 3,250 | $ | 312 | |||||||||||||||||||||||||||||||
| Commercial & industrial | (43 | ) | 684 | (18 | ) | 217 | 348 | 623 | 367 | |||||||||||||||||||||||||||||||||||||
| Residential real estate mortgages | 47 | 2 | 134 | 117 | 12 | 183 | 62 | |||||||||||||||||||||||||||||||||||||||
| Consumer | 37 | 10 | 67 | 103 | 270 | 114 | 421 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,977 | $ | 761 | $ | 1,432 | $ | 842 | $ | 626 | $ | 4,170 | $ | 1,162 | ||||||||||||||||||||||||||||||||
| Net charge-offs to average loans (annualized) | 0.25 | % | 0.10 | % | 0.19 | % | 0.11 | % | 0.08 | % | 0.18 | % | 0.05 | % | ||||||||||||||||||||||||||||||||
The following table presents average balance and interest rate information. Tax-exempt income is converted to a fully taxable equivalent 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 | |||||||||||||||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | |||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Commercial mortgages | $ | 1,079,917 | $ | 9,362 | 3.45 | $ | 1,019,290 | $ | 8,992 | 3.55 | $ | 869,471 | $ | 7,898 | 3.60 | ||||||||||||||||||||||||||
| Construction & development | 86,623 | 712 | 3.27 | 117,204 | 985 | 3.38 | 118,243 | 897 | 3.01 | ||||||||||||||||||||||||||||||||
| Commercial & industrial | 565,170 | 6,382 | 4.49 | 591,893 | 6,408 | 4.35 | 583,931 | 6,680 | 4.54 | ||||||||||||||||||||||||||||||||
| Total commercial loans | $ | 1,731,710 | $ | 16,456 | 3.78 | $ | 1,728,387 | $ | 16,385 | 3.81 | $ | 1,571,645 | $ | 15,475 | 3.91 | ||||||||||||||||||||||||||
| Residential real estate loans, including loans held for sale | 1,080,302 | 10,386 | 3.82 | 1,024,653 | 9,980 | 3.92 | 1,050,949 | 10,329 | 3.90 | ||||||||||||||||||||||||||||||||
| Consumer loans | 341,829 | 3,340 | 3.89 | 342,866 | 3,311 | 3.88 | 343,603 | 3,283 | 3.79 | ||||||||||||||||||||||||||||||||
| Total loans | 3,153,841 | 30,182 | 3.81 | 3,095,906 | 29,676 | 3.86 | 2,966,197 | 29,087 | 3.89 | ||||||||||||||||||||||||||||||||
| Cash, federal funds sold and short-term investments | 88,414 | 93 | 0.42 | 69,839 | 70 | 0.40 | 89,280 | 47 | 0.21 | ||||||||||||||||||||||||||||||||
| FHLBB stock | 37,933 | 288 | 3.02 | 31,723 | 231 | 2.93 | 37,730 | 309 | 3.25 | ||||||||||||||||||||||||||||||||
| Taxable debt securities | 497,738 | 3,024 | 2.42 | 396,428 | 2,487 | 2.52 | 316,214 | 2,178 | 2.73 | ||||||||||||||||||||||||||||||||
| Nontaxable debt securities | 22,038 | 336 | 6.07 | 28,531 | 433 | 6.10 | 37,780 | 567 | 5.95 | ||||||||||||||||||||||||||||||||
| Total securities | 519,776 | 3,360 | 2.57 | 424,959 | 2,920 | 2.76 | 353,994 | 2,745 | 3.08 | ||||||||||||||||||||||||||||||||
| Total interest-earning assets | 3,799,964 | 33,923 | 3.55 | 3,622,427 | 32,897 | 3.65 | 3,447,201 | 32,188 | 3.70 | ||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 262,724 | 247,081 | 231,286 | ||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 4,062,688 | $ | 3,869,508 | $ | 3,678,487 | |||||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 39,865 | $ | 13 | 0.13 | $ | 42,952 | $ | 7 | 0.07 | $ | 30,392 | $ | 5 | 0.07 | ||||||||||||||||||||||||||
| NOW accounts | 402,307 | 51 | 0.05 | 403,136 | 53 | 0.05 | 357,128 | 53 | 0.06 | ||||||||||||||||||||||||||||||||
| Money market accounts | 709,549 | 487 | 0.27 | 710,075 | 459 | 0.26 | 820,597 | 951 | 0.46 | ||||||||||||||||||||||||||||||||
| Savings accounts | 352,032 | 52 | 0.06 | 338,504 | 49 | 0.06 | 303,587 | 52 | 0.07 | ||||||||||||||||||||||||||||||||
| Time deposits (in-market) | 552,576 | 1,408 | 1.01 | 542,621 | 1,345 | 1.00 | 541,486 | 1,338 | 0.98 | ||||||||||||||||||||||||||||||||
| Wholesale brokered time deposits | 310,740 | 1,099 | 1.41 | 302,707 | 1,068 | 1.42 | 279,839 | 909 | 1.29 | ||||||||||||||||||||||||||||||||
| FHLBB advances | 690,843 | 2,641 | 1.52 | 587,395 | 2,313 | 1.58 | 425,931 | 1,987 | 1.85 | ||||||||||||||||||||||||||||||||
| Junior subordinated debentures | 22,681 | 125 | 2.19 | 22,681 | 119 | 2.11 | 22,681 | 232 | 4.06 | ||||||||||||||||||||||||||||||||
| Other | 53 | 1 | 7.51 | 66 | 1 | 6.09 | 104 | 2 | 7.63 | ||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 3,080,646 | 5,877 | 0.76 | 2,950,137 | 5,414 | 0.74 | 2,781,745 | 5,529 | 0.79 | ||||||||||||||||||||||||||||||||
| Demand deposits | 520,439 | 473,731 | 477,393 | ||||||||||||||||||||||||||||||||||||||
| Other liabilities | 69,370 | 60,923 | 52,625 | ||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 392,233 | 384,717 | 366,724 | ||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 4,062,688 | $ | 3,869,508 | $ | 3,678,487 | |||||||||||||||||||||||||||||||||||
| Net interest income (FTE) | $ | 28,046 | $ | 27,483 | $ | 26,659 | |||||||||||||||||||||||||||||||||||
| Interest rate spread | 2.79 | 2.91 | 2.91 | ||||||||||||||||||||||||||||||||||||||
| Net interest margin | 2.94 | 3.05 | 3.07 | ||||||||||||||||||||||||||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Three Months Ended | Sep 30, 2016 | Jun 30, 2016 | Sep 30, 2015 | ||||||||||||
| Commercial loans | $ | 549 | $ | 554 | $ | 461 | |||||||||
| Nontaxable debt securities | 118 | 153 | 201 | ||||||||||||
| Total | $ | 667 | $ | 707 | $ | 662 | |||||||||
| CONSOLIDATED AVERAGE BALANCE SHEETS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Nine Months Ended | September 30, 2016 | September 30, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest | Yield/ Rate | Average Balance | Interest | Yield/ Rate | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial mortgages | $ | 1,011,327 | $ | 26,569 | 3.51 | $ | 864,941 | $ | 23,394 | 3.62 | |||||||||||||||||||||||||||||||||||||||||||||
| Construction & development | 110,914 | 2,806 | 3.38 | 100,787 | 2,336 | 3.10 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial & industrial | 587,098 | 20,470 | 4.66 | 597,887 | 20,987 | 4.69 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total commercial loans | 1,709,339 | 49,845 | 3.90 | 1,563,615 | 46,717 | 3.99 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Residential real estate loans, including loans held for sale | 1,045,532 | 30,521 | 3.90 | 1,035,408 | 30,745 | 3.97 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Consumer loans | 342,735 | 10,044 | 3.91 | 339,608 | 9,634 | 3.79 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total loans | 3,097,606 | 90,410 | 3.90 | 2,938,631 | 87,096 | 3.96 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash, federal funds sold and short-term investments | 75,627 | 227 | 0.40 | 68,205 | 101 | 0.20 | |||||||||||||||||||||||||||||||||||||||||||||||||
| FHLBB stock | 31,774 | 729 | 3.06 | 37,730 | 638 | 2.26 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Taxable debt securities | 418,034 | 7,881 | 2.52 | 319,786 | 6,613 | 2.76 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nontaxable debt securities | 27,939 | 1,276 | 6.10 | 41,083 | 1,858 | 6.05 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total securities | 445,973 | 9,157 | 2.74 | 360,869 | 8,471 | 3.14 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-earning assets | 3,650,980 | 100,523 | 3.68 | 3,405,435 | 96,306 | 3.78 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Noninterest-earning assets | 250,019 | 224,921 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 3,900,999 | $ | 3,630,356 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities and Shareholders' Equity: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 44,490 | $ | 34 | 0.10 | $ | 35,430 | $ | 17 | 0.06 | |||||||||||||||||||||||||||||||||||||||||||||
| NOW accounts | 397,329 | 161 | 0.05 | 350,151 | 153 | 0.06 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Money market accounts | 735,324 | 1,461 | 0.27 | 813,915 | 2,775 | 0.46 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Savings accounts | 339,616 | 148 | 0.06 | 298,635 | 148 | 0.07 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Time deposits (in-market) | 544,441 | 4,067 | 1.00 | 554,369 | 4,198 | 1.01 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale brokered time deposits | 303,442 | 3,188 | 1.40 | 286,728 | 2,754 | 1.28 | |||||||||||||||||||||||||||||||||||||||||||||||||
| FHLBB advances | 577,501 | 7,106 | 1.64 | 407,363 | 5,780 | 1.90 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Junior subordinated debentures | 22,681 | 356 | 2.10 | 22,681 | 714 | 4.21 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other | 66 | 4 | 8.10 | 116 | 7 | 8.07 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 2,964,890 | 16,525 | 0.74 | 2,769,388 | 16,546 | 0.80 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Demand deposits | 488,767 | 452,691 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other liabilities | 61,555 | 49,786 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders' equity | 385,787 | 358,491 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total liabilities and shareholders' equity | $ | 3,900,999 | $ | 3,630,356 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest income (FTE) | $ | 83,998 | $ | 79,760 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest rate spread | 2.94 | 2.98 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.07 | 3.13 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
| For the Nine Months Ended | Sep 30, 2016 | Sep 30, 2015 | ||||||||
| Commercial loans | $ | 1,657 | $ | 1,378 | ||||||
| Nontaxable debt securities | 451 | 655 | ||||||||
| Total | $ | 2,108 | $ | 2,033 | ||||||
| SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||||||||||||
| (Unaudited; Dollars in thousands, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | |||||||||||||||||||||||||||||||||||||||
| Tangible Book Value per Share: | |||||||||||||||||||||||||||||||||||||||||||
| Total shareholders' equity, as reported | $ | 395,327 | $ | 388,332 | $ | 381,280 | $ | 375,388 | $ | 370,527 | |||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||||
| Goodwill | 64,059 | 64,059 | 64,059 | 64,059 | 64,196 | ||||||||||||||||||||||||||||||||||||||
| Identifiable intangible assets, net | 10,493 | 10,814 | 11,137 | 11,460 | 11,793 | ||||||||||||||||||||||||||||||||||||||
| Total tangible shareholders' equity | $ | 320,775 | $ | 313,459 | $ | 306,084 | $ | 299,869 | $ | 294,538 | |||||||||||||||||||||||||||||||||
| Shares outstanding, as reported | 17,107 | 17,081 | 17,024 | 17,020 | 16,985 | ||||||||||||||||||||||||||||||||||||||
| Book value per share - GAAP | $ | 23.11 | $ | 22.73 | $ | 22.40 | $ | 22.06 | $ | 21.82 | |||||||||||||||||||||||||||||||||
| Tangible book value per share - Non-GAAP | $ | 18.75 | $ | 18.35 | $ | 17.98 | $ | 17.62 | $ | 17.34 | |||||||||||||||||||||||||||||||||
| Tangible Equity to Tangible Assets: | |||||||||||||||||||||||||||||||||||||||||||
| Total tangible shareholders' equity | $ | 320,775 | $ | 313,459 | $ | 306,084 | $ | 299,869 | $ | 294,538 | |||||||||||||||||||||||||||||||||
| Total assets, as reported | $ | 4,204,034 | $ | 3,917,081 | $ | 3,838,210 | $ | 3,771,604 | $ | 3,674,836 | |||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||||
| Goodwill | 64,059 | 64,059 | 64,059 | 64,059 | 64,196 | ||||||||||||||||||||||||||||||||||||||
| Identifiable intangible assets, net | 10,493 | 10,814 | 11,137 | 11,460 | 11,793 | ||||||||||||||||||||||||||||||||||||||
| Total tangible assets | $ | 4,129,482 | $ | 3,842,208 | $ | 3,763,014 | $ | 3,696,085 | $ | 3,598,847 | |||||||||||||||||||||||||||||||||
| Equity to assets - GAAP | 9.40 | % | 9.91 | % | 9.93 | % | 9.95 | % | 10.08 | % | |||||||||||||||||||||||||||||||||
| Tangible equity to tangible assets - Non-GAAP | 7.77 | % | 8.16 | % | 8.13 | % | 8.11 | % | 8.18 | % | |||||||||||||||||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
| Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Sep 30, 2016 | Sep 30, 2015 | ||||||||||||||||||||||||||||||||||||||||
| Return on Average Tangible Assets: | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income, as reported | $ | 12,327 | $ | 11,057 | $ | 10,935 | $ | 10,744 | $ | 10,208 | $ | 34,319 | $ | 32,721 | ||||||||||||||||||||||||||||||||
| Total average assets, as reported | $ | 4,062,688 | $ | 3,869,508 | $ | 3,769,025 | $ | 3,700,441 | $ | 3,678,487 | $ | 3,900,999 | $ | 3,630,356 | ||||||||||||||||||||||||||||||||
| Less average balances of: | ||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill | 64,059 | 64,059 | 64,059 | 64,194 | 62,524 | 64,059 | 59,465 | |||||||||||||||||||||||||||||||||||||||
| Identifiable intangible assets, net | 10,650 | 10,972 | 11,294 | 11,616 | 8,768 | 10,971 | 6,280 | |||||||||||||||||||||||||||||||||||||||
| Total average tangible assets | $ | 3,987,979 | $ | 3,794,477 | $ | 3,693,672 | $ | 3,624,631 | $ | 3,607,195 | $ | 3,825,969 | $ | 3,564,611 | ||||||||||||||||||||||||||||||||
| Return on average assets - GAAP | 1.21 | % | 1.14 | % | 1.16 | % | 1.16 | % | 1.11 | % | 1.17 | % | 1.20 | % | ||||||||||||||||||||||||||||||||
| Return on average tangible assets - Non-GAAP | 1.24 | % | 1.17 | % | 1.18 | % | 1.19 | % | 1.13 | % | 1.20 | % | 1.22 | % | ||||||||||||||||||||||||||||||||
| Return on Average Tangible Equity: | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income, as reported | $ | 12,327 | $ | 11,057 | $ | 10,935 | $ | 10,744 | $ | 10,208 | $ | 34,319 | $ | 32,721 | ||||||||||||||||||||||||||||||||
| Total average equity, as reported | $ | 392,233 | $ | 384,717 | $ | 380,342 | $ | 373,197 | $ | 366,724 | $ | 385,787 | $ | 358,491 | ||||||||||||||||||||||||||||||||
| Less average balances of: | ||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill | 64,059 | 64,059 | 64,059 | 64,194 | 62,524 | 64,059 | 59,465 | |||||||||||||||||||||||||||||||||||||||
| Identifiable intangible assets, net | 10,650 | 10,972 | 11,294 | 11,616 | 8,768 | 10,971 | 6,280 | |||||||||||||||||||||||||||||||||||||||
| Total average tangible equity | $ | 317,524 | $ | 309,686 | $ | 304,989 | $ | 297,387 | $ | 295,432 | $ | 310,757 | $ | 292,746 | ||||||||||||||||||||||||||||||||
| Return on average equity - GAAP | 12.57 | % | 11.50 | % | 11.50 | % | 11.52 | % | 11.13 | % | 11.86 | % | 12.17 | % | ||||||||||||||||||||||||||||||||
| Return on average tangible equity - Non-GAAP | 15.53 | % | 14.28 | % | 14.34 | % | 14.45 | % | 13.82 | % | 14.72 | % | 14.90 | % | ||||||||||||||||||||||||||||||||