Washington Trust Bancorp
Annual Report 2013

Plain-text annual report

2 0 1 3 W a s h i n g t o n T r u s t B a n c o r p , I n c . Corporate Directory – Washington Trust Bancorp, Inc. Board of Directors Senior Management John J. Bowen, Chancellor, President and Chief Executive Officer, Joseph J. MarcAurele, Chairman and Chief Executive Officer Johnson & Wales University Steven J. Crandall, Vice President, Ashaway Line & Twine Mfg. Co. Robert A. DiMuccio, CPA, Chairman, President and Chief Executive Officer, Amica Mutual Insurance Company Barry G. Hittner, Retired Attorney Katherine W. Hoxsie, CPA, Retired Vice President, Hoxsie Buick-Pontiac-GMC Truck, Inc. Joseph J. MarcAurele, Chairman and Chief Executive Officer, Washington Trust Bancorp, Inc. Kathleen E. McKeough, Retired Senior Vice President of Human Resources, GTECH Holdings Corporation Victor J. Orsinger II, Esq., Of Counsel, Orsinger Nardone Lallo & Thomsen H. Douglas Randall III, Chief Executive Officer, Randall, Realtors, Kinlin Grover Real Estate, Page Taft Real Estate, Pequot Commercial and Kinlin Grover Commercial Edwin J. Santos, Chairman, CharterCARE Health Partners Patrick J. Shanahan Jr., Former Chairman, President and Chief Executive Officer, First Financial Corp. John F. Treanor, Retired President and Chief Operating Officer, Washington Trust Bancorp, Inc. John C. Warren, Retired Chairman and Chief Executive Officer, Washington Trust Bancorp, Inc. Officers of the Corporation Joseph J. MarcAurele, Chairman and Chief Executive Officer Edward O. Handy III, President and Chief Operating Officer David V. Devault, Vice Chair, Secretary and Chief Financial Officer Mark K. W. Gim, Executive Vice President, Wealth Management, and Treasurer The Washington Trust Company Directors’ Advisory Council Alcino G. Almeida, Gary P. Bennett, Richard A. Grills, Larry J. Hirsch, Joseph J. Kirby, Jacques de Laporte, Edward M. Mazze, James W. McCormick Jr., Thomas F. Moore, Brendan P. O’Donnell, Joseph H. Potter, Joyce Olson Resnikoff, Anthony J. Rose Jr., James P. Sullivan, Neil H. Thorp, William Blunt White Edward O. Handy III, President and Chief Operating Officer David V. Devault, Vice Chair, Secretary and Chief Financial Officer Stephen M. Bessette, Executive Vice President, Retail Lending Kristen L. DiSanto, Executive Vice President, Human Resources Mark K. W. Gim, Executive Vice President, Wealth Management, and Treasurer James M. Hagerty, Executive Vice President and Chief Lending Officer Barbara J. Perino, CPA, Executive Vice President, Operations Dennis L. Algiere, Senior Vice President, Chief Compliance Officer and Director of Community Affairs Michael T. Clarkin, Senior Vice President and Corporate Sales Manager Joseph M. Confessore, Senior Vice President and Team Leader, Commercial Banking Elizabeth B. Eckel, Senior Vice President, Marketing Jeffrey J. Frenette, Senior Vice President, Director of Core Applications Philip L. Friend, Senior Vice President, Retail Lending Debra A. Gormley, Senior Vice President, Retail Banking Maria N. Janes, CPA, Senior Vice President and Controller Robert R. Kent Jr., Senior Vice President and Team Leader, Commercial Banking Rogean B. Makowski, Senior Vice President, Wealth Management Client Services Mary E. Noons, Senior Vice President, Lending Support Services C. Scott Ostrowski, Senior Vice President, Internal Audit Timothy M. Pickering, Senior Vice President, Commercial Real Estate Group Brenda H. Senak, Senior Vice President, Risk Management L. Peter Sheehan, Senior Vice President, Wealth Management Investments Julia Anne M. Slom, Senior Vice President, Commercial Real Estate Group John P. Sullivan, Senior Vice President, Technology Rick T. Tjader, Senior Vice President and Director of Project Management Weston Financial Group, Inc. John W. Filoon III, President and Chief Operating Officer Kerry P. Falco, Managing Director Maria A. Staffiere, Managing Director Ronald A. Sugameli, Managing Director and Chief Investment Officer Nicole M. Tremblay, Esq., Senior Vice President, Chief Compliance Officer As of publication date Letter to Shareholders banking, commercial banking, wealth management, and trust services – we are able to maintain our performance and growth amid ever changing market dynamics. In 2013, we gained market share in both the retail and commercial lines of our business, generating solid growth in loans and deposits. Strong equity markets boosted our wealth management business and rewarded investors who value the active portfolio management that our advisors provide. And while mortgage volume reflected an industry-wide cool-down in the refinancing market, we continued to generate a very strong level of mortgage origination volume. Our employees made the record-setting results that we delivered in 2013 possible. When we challenged our people to deliver process improvements to make our operations more efficient, they delivered – but never at the expense of providing a superior customer experience. In fact, improving the customer experience was a prerequisite for any process change. The result was a win-win situation – enhanced service for our customers and improved performance for our company. From L-R: Edward O. Handy III, President and Chief Operating Officer; Mark K.W. Gim, Executive Vice President, Wealth Management, and Treasurer; Joseph J. MarcAurele, Chairman and Chief Executive Officer; and David V. Devault, Vice Chair, Secretary and Chief Financial Officer. 2013 was an outstanding year for Washington Trust, as we generated the highest annual earnings in our company’s 213-year history. Against In 2013, we laid the foundation for future growth with the naming of the backdrop of a competitive marketplace and a slowly recovering Edward “Ned” Handy III as President and Chief Operating Officer. A economy, we delivered growth, streamlined processes, and produced seasoned executive with strong local ties, Ned adds depth and expertise to excellent results in all business lines. These achievements helped to our senior management ranks. We are thrilled that he has joined our team – place us among the leaders in stock price performance within our peers yet another affirmation of Washington Trust’s reputation as an employer of both regionally and nationally. We increased our dividend three times choice, able to attract top talent to our organization. during 2013, with total dividends of $1.03 per share for the year, up from $.94 in 2012. Market awareness of Washington Trust as one of the Branch expansion continues to be a winning growth strategy for premier financial institutions in New England continues to grow. Washington Trust. In July, we announced plans for our 19th branch, which will be located in Johnston, Rhode Island. Slated to open in the second At the heart of our success is our commitment to providing a superior quarter of 2014, the Johnston branch will strengthen our presence in the customer experience across all lines of business. Through a combination center of the state and attract new retail and business customers to our brand. of sophisticated capabilities and responsive solutions, we hold a winning position against both our larger and smaller competitors. We look to 2014 with confidence, thanks to the strength of our business model, the dedication of our employees, and the support of you, our The consistency of our financial results reflects the strength of our shareholders. It is a privilege to lead your corporation. business model. With multiple business lines at our core – personal Joseph J. MarcAurele Chairman and Chief Executive Officer 2013 Highlights Net Income Cash Dividends Declared Per Share Closing Stock Price Total Loans Total Deposits Shareholders’ Equity Total Revenues* Wealth Management Assets Under Administration Mortgage Originations Financial Highlights At or for the years ended December 31, 2013 2012 2011 (Dollars in thousands, except per share amounts) Financial Condition Total assets $3,188,867 $3,071,884 $3,064,098 Total securities 422,808 415,879 593,392 Total loans 2,462,884 2,294,003 2,147,159 Allowance for loan losses 27,886 30,873 29,802 Total deposits 2,505,321 2,312,631 2,126,315 Total shareholders’ equity 329,646 295,652 281,351 Book value per share 19.84 18.05 17.27 Total risk-based capital ratio 13.29% 13.26% 12.86% Equity to assets 10.34% 9.62% 9.18% Operating Results Net interest income $91,785 $90,696 $84,955 Provision for loan losses 2,400 2,700 4,700 Wealth management revenues 31,825 29,641 28,306 Net gains on loan sales and commissions on loans originated for others 13,085 14,092 5,074 Other noninterest income 17,170 21,481 19,384 Noninterest expense 98,785 102,338 90,373 Net income 36,153 35,074 29,724 Diluted earnings per common share 2.16 2.13 1.82 Cash dividends declared per share 1.03 0.94 0.88 Return on average assets 1.17% 1.16% 1.02% Return on average equity 11.65% 11.97% 10.61% Net interest margin (taxable equivalent basis) 3.28% 3.29% 3.20% Asset Quality Nonperforming assets to total assets 0.62% 0.83% 0.81% Allowance for loan losses to total loans 1.13% 1.35% 1.39% Net loan charge-offs to average loans 0.27% 0.07% 0.17% The information presented above is derived from the Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the Securities and Exchange Commission. Forward-Looking Statements 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. Actual results, performance or achievements of Washington Trust may differ materially from those discussed in these forward-looking statements, as a result of, among other factors, the factors described under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the Securities and Exchange Commission and updated by our Quarterly Reports on Form 10-Q. 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 Washington Trust assumes no obligation to update forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes. Washington Trust Locations NORTH KINGSTOWN, RI North Kingstown Office 7625 Post Road North Kingstown, RI 02852 401-295-4700 Commercial Lending Offices PROVIDENCE, RI 10 Weybosset Street, Suite 100 Providence, RI 02903 401-331-5090 SHARON, MA* One Merchant Street, Suite 102 Sharon, MA 02067 781-784-3089 *Operating as Washington Trust Mortgage Company PROVIDENCE, RI Providence Office 156 Westminster Street Providence, RI 02903 401-421-3600 RICHMOND, RI Richmond Office 1200 Main Street Wyoming, RI 02898 401-539-2427 SOUTH KINGSTOWN, RI Wakefield Office 730 Kingstown Road Wakefield, RI 02879 401-782-4200 WARWICK, RI Centerville Road Office 236 Centerville Road Warwick, RI 02886 401-739-2353 Governor Francis Office 1473 Warwick Avenue Warwick, RI 02888 401-921-2500 WESTERLY, RI Main Office 23 Broad Street Westerly, RI 02891 401-348-1200 Franklin Street Office 126 Franklin Street Westerly, RI 02891 401-348-1367 McQuade’s Marketplace 106 Main Street Westerly, RI 02891 401-348-1201 MYSTIC, CT McQuade’s Marketplace 14 Clara Drive Mystic, CT 06355 860-572-2058 WARWICK, RI 236 Centerville Road Warwick, RI 02886 401-739-2353 WESTERLY, RI 23 Broad Street Westerly, RI 02891 401-348-1200 Mortgage Offices WARWICK, RI 171 Service Avenue Warwick, RI 02886 401-681-4224 GLASTONBURY, CT * 180 Glastonbury Boulevard, Suite 107 Glastonbury, CT 06033 860-430-9900 STAMFORD, CT 1266 East Main Street, Suite 700R Stamford, CT 06902 203-539-6000 BRAINTREE, MA* 25 Braintree Hill Office Park, Suite 200 Braintree, MA 02184 781-930-3296 BURLINGTON, MA* 25 Mall Road, Suite 408 Burlington, MA 01803 781-229-2004 Wealth Management Offices PROVIDENCE, RI 66, 68, 70 South Main Street Providence, RI 02903 401-654-4801 NARRAGANSETT, RI 20 Point Judith Road Narragansett, RI 02882 401-782-1000 WESTERLY, RI 23 Broad Street Westerly, RI 02891 401-348-1238 WELLESLEY, MA Weston Financial Group Wellesley Office Park 100 William Street, Suite 200 Wellesley, MA 02481 781-235-7055 Customer Service Center RI: 401-348-1200 CT: 860-443-1508 Toll-free: 800-475-2265 Website www.washtrust.com Stock Transfer and Dividend Disbursing Agent American Stock Transfer & Trust Company, 6201 15th Avenue, Brooklyn, NY 11219 800-852-0354 www.amstock.com The Corporation’s 2014 Proxy Statement, Form 10-K and Annual Report for 2013 are available online by visiting the Corporation’s website www.washtrustbancorp.com under SEC Filings, or by calling the Corporation’s toll-free number 800-475-2265 extension 1566, or by email at investor.relations@washtrust.com. Auditors KPMG LLP Providence, Rhode Island Counsel Goodwin Procter LLP Boston, Massachusetts The Corporation has an Affirmative Action Plan and is an Equal Opportunity Employer. Washington Trust is also a member of the FDIC and an Equal Housing Lender. Branch Offices HEADQUARTERS 23 Broad Street Westerly, RI 02891 401-348-1200 BLOCK ISLAND, RI Block Island Office Ocean Avenue Block Island, RI 02807 401-466-7710 CHARLESTOWN, RI Charlestown Office 4137 Old Post Road Charlestown, RI 02813 401-364-4000 CRANSTON, RI Oaklawn Avenue Office 1203 Oaklawn Avenue Cranston, RI 02920 401-732-0049 Plainfield Pike Office 2174 Plainfield Pike Cranston, RI 02921 401-383-8223 Reservoir Avenue Office 645 Reservoir Avenue Cranston, RI 02910 401-946-1004 EAST PROVIDENCE, RI East Providence Office 587 Taunton Avenue East Providence, RI 02914 401-383-8800 JOHNSTON, RI Johnston Office Opening 2014 1383 Atwood Avenue Johnston, RI 02919 NARRAGANSETT, RI Bonnet Shores Office 885 Boston Neck Road Narragansett, RI 02882 401-782-4800 Sweet Meadows Office 20 Point Judith Road Narragansett, RI 02882 401-782-1000 Printed with soy-based inks.

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