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Washington Trust Reports Record Full-Year 2018 Earnings and Reaches $5 Billion in Assets

WESTERLY, R.I., Jan. 28, 2019 (GLOBE NEWSWIRE) -- Washington Trust Bancorp, Inc. (WASH), parent company of The Washington Trust Company, today announced fourth quarter 2018 net income of $17.0 million, or $0.98 per diluted share, compared to net income of $17.5 million, or $1.01 per diluted share, reported for the third quarter of 2018.  Net income for the year ended December 31, 2018 totaled $68.4 million, or $3.93 per diluted share, compared to $45.9 million, or $2.64 per diluted share, reported for the prior year.  Earnings in 2017 were reduced by a non-cash charge to write down net deferred tax assets by $6.2 million, or $0.36 per diluted share, due to the enactment of the Tax Cuts and Jobs Act, which included the reduction of the federal corporate income tax rate from 35% to 21% effective January 1, 2018.

“Washington Trust reported record full-year 2018 earnings, reached $5 billion in total assets and posted all-time high levels of total deposits and loans,” stated Edward O. Handy III, Washington Trust Chairman and Chief Executive Officer.  “These achievements are testaments to our continued success in growing our key business lines and expanding our presence throughout the region.”

Selected highlights for fourth quarter and full-year 2018 include:

  • Returns on average equity and average assets for the fourth quarter were 15.61% and 1.40%, respectively.  Full-year returns on average equity and average assets were at 16.20% and 1.46%, respectively.

  • Total loans were up by $124 million, or 3%, from the end of the prior quarter and up by $306 million, or 9%, from a year ago.

  • Total deposits were up by $110 million, or 3%, from the end of the preceding quarter and up by $281 million, or 9%, from a year ago.

  • In December, Washington Trust declared a quarterly dividend of 47 cents per share, representing a 4 cent per share, or 9%, increase over the preceding quarter.  Full-year 2018 dividends declared amounted to $1.76 per share, representing an increase of 22 cents per share, or 14%, over last year.

Net Interest Income
Net interest income was $33.9 million for the fourth quarter of 2018, up by $429 thousand, or 1%, from the third quarter of 2018.  Income associated with loan payoffs and prepayment penalties in the fourth quarter of 2018 was $144 thousand, compared to $173 thousand in the prior quarter.  The net interest margin was 2.95% for the fourth quarter, down by 4 basis points from 2.99% reported in the preceding quarter.  Excluding income associated with loan payoffs and prepayment penalties, the net interest margin was 2.94% for the fourth quarter, down by 4 basis points from 2.98% reported in the preceding quarter.

Significant linked quarter changes included:

  • Average interest-earning assets increased by $124 million, largely due to loan growth and purchases of securities that were made in the latter portion of the fourth quarter.  The yield on interest-earning assets for the fourth quarter was 4.13%, up by 10 basis points from the preceding quarter.  Excluding the impact of income associated with loan payoffs and prepayment penalties, the yield on interest-earning assets was 4.11%, up by 9 basis points from the preceding quarter.  The yield benefited from increased market interest rates.

  • Average interest-bearing liabilities increased by $103 million, including increases of $66 million in average in-market deposits and $37 million in average wholesale funding balances (wholesale brokered time deposits and Federal Home Loan Bank advances).  The cost of interest-bearing liabilities for the fourth quarter was 1.45%, up by 17 basis points from the preceding quarter, reflecting higher rates paid on wholesale funding sources and promotional time certificates of deposit.  The increase in the cost of funds also reflected competitive pricing on money market accounts and interest-bearing demand deposits.

Noninterest Income
Noninterest income totaled $15.2 million for the fourth quarter of 2018, down modestly by $52 thousand from the third quarter of 2018.  Significant linked quarter changes included:

  • Wealth management revenues were $9.0 million for the fourth quarter of 2018, down by $442 thousand, or 5%, on a linked quarter basis.  The decrease was concentrated in asset-based revenues.  Wealth management assets under administration were $5.9 billion at December 31, 2018, down by $552 million, or 9%, from the balance at September 30, 2018.  Both the decline in asset-based revenues and wealth management assets under administration were attributable to financial market declines during the quarter.

  • Mortgage banking revenues were $2.0 million for the fourth quarter of 2018, down by $646 thousand, or 25%, from the preceding quarter, largely due to a lower volume of loans sold and a lower sales yield on mortgage loans sold in the secondary market.

  • Loan related derivative income was $1.4 million for the fourth quarter of 2018, up by $1.1 million from the preceding quarter, due to a higher volume of commercial borrower loan related derivative transactions.

Noninterest Expenses
Noninterest expenses totaled $26.7 million for the fourth quarter of 2018, up by $620 thousand, or 2%, from the third quarter of 2018.  The linked quarter comparison of noninterest expenses was impacted by the following:

  • Included in other expenses were $833 thousand and $197 thousand, respectively, of write-down valuation adjustments on other real estate owned in the fourth quarter and third quarter of 2018.

  • In the fourth quarter of 2018, a reduction to noninterest expenses of $187 thousand was recognized, resulting from a nontaxable adjustment in the fair value of a contingent consideration liability that was initially recorded upon the completion of a 2015 acquisition.

  • In the third quarter of 2018, a one-time third-party vendor credit of $300 thousand was recognized as a reduction to outsourced services expense.

Excluding the impact of the aforementioned items, noninterest expenses for the fourth quarter of 2018 decreased by $129 thousand on a linked quarter basis.

Income tax expense totaled $4.5 million for the fourth quarter of 2018, down by $218 thousand from the preceding quarter.  The effective tax rate for the fourth quarter of 2018 was 21.0%, compared to 21.3% for the preceding quarter.  Based on current federal and applicable state income tax statutes, the Corporation currently expects its 2019 effective tax rate to be approximately 21.5%.

Investment Securities
The securities portfolio totaled $938 million at December 31, 2018, up by $115 million from the balance at September 30, 2018.  The increase reflected purchases of debt securities in the fourth quarter totaling $124 million, with a weighted average yield of 3.85%, as well as an increase in the fair value of available for sale securities.  These increases were partially offset by routine principal pay-downs on mortgage-backed securities and a called debt security.  Investment securities represented 19% of total assets at December 31, 2018, compared to 17% of total assets at September 30, 2018.

Loans
Total loans amounted to $3.7 billion at December 31, 2018, up by $124 million, or 3%, from the end of the third quarter.  Total commercial loans surpassed $2.0 billion at the end of 2018, increasing by $116 million, or 6%, in the fourth quarter, reflecting growth in the commercial real estate portfolio.  The residential real estate loan portfolio increased by $11 million, or 1%, from the balance at September 30, 2018, while total consumer loans declined by $3 million, or 1%, from the end of the third quarter.

Total loans rose by $306 million, or 9%, from the balance at the end of 2017, with growth of $190 million, or 10%, in the commercial loan portfolio and $133 million, or 11%, in the residential loan portfolio.

Deposits and Borrowings
Total deposits amounted to $3.5 billion at December 31, 2018, up by $110 million, or 3%, from the end of the preceding quarter.  Excluding the balances of wholesale brokered time deposits, total in-market deposits were up by $76 million, or 3%, largely due to growth in promotional time certificates of deposit.

Total deposits were up by $281 million, or 9%, from the balance at the end of 2017.  Excluding the balances of wholesale brokered time deposits, total in-market deposits were up by $202 million, or 7%, in 2018.

Federal Home Loan Bank advances amounted to $951 million at December 31, 2018, up by $122 million from the balance at September 30, 2018, to fund balance sheet growth.

Asset Quality
Total nonaccrual loans amounted to $11.7 million, or 0.32% of total loans, at December 31, 2018, compared to $10.8 million, or 0.30% of total loans, at September 30, 2018.  Total past due loans amounted to $13.6 million, or 0.37% of total loans, at December 31, 2018, compared to $13.5 million, or 0.38% of total loans, at September 30, 2018.

A loan loss provision totaling $800 thousand was recognized in the fourth quarter of 2018, compared to a loan loss provision of $350 thousand recognized in the preceding quarter.  These provisions were based on management's assessment of loss exposure, as well as loan loss allocations commensurate with growth and changes in the loan portfolio.  Net charge-offs totaled $237 thousand in the fourth quarter compared to $15 thousand in the preceding quarter.  The allowance for loan losses amounted to $27.1 million, or 0.74% of total loans, at December 31, 2018, compared to $26.5 million, or 0.75% of total loans, at September 30, 2018.

Capital and Dividends
Total shareholders' equity was $448 million at December 31, 2018, up by $20.3 million from September 30, 2018, including net income of $17.0 million, as well as an increase in the fair value of available for sale securities totaling $8.8 million and an increase of $2.4 million associated with the annual remeasurement of defined benefit pension plan obligations, both of which are net of tax and recognized in the accumulated other comprehensive income component of shareholders' equity.  These increases were partially offset by $8.2 million in dividend declarations made in the quarter.

Capital levels at December 31, 2018 exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.56% at December 31, 2018, compared to 12.77% at September 30, 2018.  Book value per share amounted to $25.90 at December 31, 2018, compared to $24.75 at September 30, 2018.

The Board of Directors declared a quarterly dividend of 47 cents per share for the quarter ended December 31, 2018, an increase of 4 cents per share, or 9%, over the preceding quarter.  The dividend was paid on January 11, 2019 to shareholders of record on January 2, 2019.

Conference Call
Washington Trust will host a conference call to discuss its fourth quarter results, business highlights and outlook on Tuesday, January 29, 2019 at 8:30 a.m. (Eastern Time).  Individuals may dial in to the call at 1-877-407-9208.  An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-844-512-2921 and entering the Replay PIN Number 13686319; the audio replay will be available through February 8, 2019.  Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's web site, http://ir.washtrust.com, and will be available through March 31, 2019.

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 http://ir.washtrust.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 our annual reports to shareholders, 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 our control.  These risks, uncertainties and other factors may cause our actual results, performance or achievements 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; 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 or outflows 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 our competition; changes in legislation or regulation and accounting principles, policies and guidelines; occurrences of cyberattacks, hacking and identity theft; natural disasters; 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, 2017, 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
CONDENSED CONSOLIDATED BALANCE SHEETS
 
(Unaudited; Dollars in thousands)
           
  Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Dec 31,
2017
Assets:          
Cash and due from banks $ 89,923   $ 72,934   $ 132,068   $ 85,680   $ 79,853  
Short-term investments   3,552     2,917     2,624     2,322     3,070  
Mortgage loans held for sale   20,996     22,571     35,207     19,269     26,943  
Securities:          
Available for sale, at fair value   927,810     812,647     776,693     787,842     780,954  
Held to maturity, at amortized cost   10,415     10,863     11,412     11,973     12,541  
Total securities   938,225     823,510     788,105     799,815     793,495  
Federal Home Loan Bank stock, at cost   46,068     44,525     46,281     41,127     40,517  
Loans:          
Total loans   3,680,360     3,556,203     3,490,230     3,387,406     3,374,071  
Less allowance for loan losses   27,072     26,509     26,174     25,864     26,488  
Net loans   3,653,288     3,529,694     3,464,056     3,361,542     3,347,583  
Premises and equipment, net   29,005     28,195     28,377     28,316     28,333  
Investment in bank-owned life insurance   80,463     79,891     79,319     73,782     73,267  
Goodwill   63,909     63,909     63,909     63,909     63,909  
Identifiable intangible assets, net   8,162     8,400     8,645     8,893     9,140  
Other assets   77,175     94,126     88,651     81,671     63,740  
Total assets $ 5,010,766   $ 4,770,672   $ 4,737,242   $ 4,566,326   $ 4,529,850  
Liabilities:          
Deposits:          
Noninterest-bearing deposits $ 603,216   $ 611,829   $ 577,656   $ 601,478   $ 578,410  
Interest-bearing deposits   2,920,832     2,802,519     2,743,955     2,654,956     2,664,297  
Total deposits   3,524,048     3,414,348     3,321,611     3,256,434     3,242,707  
Federal Home Loan Bank advances   950,722     828,392     901,053     808,677     791,356  
Junior subordinated debentures   22,681     22,681     22,681     22,681     22,681  
Other liabilities   65,131     77,342     70,326     65,453     59,822  
Total liabilities   4,562,582     4,342,763     4,315,671     4,153,245     4,116,566  
Shareholders’ Equity:          
Common stock   1,081     1,081     1,080     1,079     1,077  
Paid-in capital   119,888     119,220     118,883     118,172     117,961  
Retained earnings   355,524     346,685     336,670     326,505     317,756  
Accumulated other comprehensive loss   (28,309 )   (39,077 )   (35,062 )   (32,675 )   (23,510 )
Total shareholders’ equity   448,184     427,909     421,571     413,081     413,284  
Total liabilities and shareholders’ equity $ 5,010,766   $ 4,770,672   $ 4,737,242   $ 4,566,326   $ 4,529,850  



 
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; Dollars in thousands, except per share amounts)
                 
  For the Three Months Ended   For the Twelve Months Ended
  Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Dec 31,
2017
  Dec 31,
2018
Dec 31,
2017
Interest income:                
Interest and fees on loans $ 40,588   $ 38,877   $ 37,101   $ 34,578   $ 33,459     $ 151,144   $ 127,962  
Taxable interest on securities   5,957     5,383     5,358     5,118     4,719       21,816     18,927  
Nontaxable interest on securities   9     9     20     23     24       61     249  
Dividends on Federal Home Loan Bank stock   669     634     550     516     481       2,369     1,774  
Other interest income   294     261     257     205     217       1,017     674  
Total interest and dividend income   47,517     45,164     43,286     40,440     38,900       176,407     149,586  
Interest expense:                
Deposits   7,953     6,546     5,254     4,422     4,136       24,175     15,064  
Federal Home Loan Bank advances   5,446     4,937     4,707     3,983     3,708       19,073     14,377  
Junior subordinated debentures   240     232     214     183     167       869     613  
Other interest expense                             1  
Total interest expense   13,639     11,715     10,175     8,588     8,011       44,117     30,055  
Net interest income   33,878     33,449     33,111     31,852     30,889       132,290     119,531  
Provision for loan losses   800     350     400         200       1,550     2,600  
Net interest income after provision for loan losses   33,078     33,099     32,711     31,852     30,689       130,740     116,931  
Noninterest income:                
Wealth management revenues   9,012     9,454     9,602     10,273     9,914       38,341     39,346  
Mortgage banking revenues   1,978     2,624     2,941     2,838     3,097       10,381     11,392  
Service charges on deposit accounts   977     885     903     863     946       3,628     3,672  
Card interchange fees   977     983     961     847     904       3,768     3,502  
Income from bank-owned life insurance   572     572     537     515     537       2,196     2,161  
Loan related derivative income   1,374     278     668     141     470       2,461     3,214  
Other income   273     419     381     266     342       1,339     1,522  
Total noninterest income   15,163     15,215     15,993     15,743     16,210       62,114     64,809  
Noninterest expense:                
Salaries and employee benefits   16,918     17,283     17,304     17,772     17,194       69,277     68,891  
Outsourced services   2,510     1,951     2,350     1,873     1,960       8,684     6,920  
Net occupancy   1,946     2,013     1,930     2,002     1,859       7,891     7,521  
Equipment   983     1,080     1,069     1,180     1,198       4,312     5,358  
Legal, audit and professional fees   587     559     555     726     562       2,427     2,294  
FDIC deposit insurance costs   376     410     422     404     389       1,612     1,647  
Advertising and promotion   460     440     329     177     466       1,406     1,481  
Amortization of intangibles   239     245     247     248     248       979     1,035  
Change in fair value of contingent consideration   (187 )               (333 )     (187 )   (643 )
Other expenses   2,850     2,081     2,082     2,748     2,211       9,761     9,596  
Total noninterest expense   26,682     26,062     26,288     27,130     25,754       106,162     104,100  
Income before income taxes   21,559     22,252     22,416     20,465     21,145       86,692     77,640  
Income tax expense   4,523     4,741     4,742     4,254     13,163       18,260     31,715  
Net income $ 17,036   $ 17,511   $ 17,674   $ 16,211   $ 7,982     $ 68,432   $ 45,925  
                 
Net income available to common shareholders $ 17,004   $ 17,475   $ 17,636   $ 16,173   $ 7,958     $ 68,288   $ 45,817  
                 
Weighted average common shares outstanding:                
Basic   17,297     17,283     17,272     17,234     17,223       17,272     17,207  
Diluted   17,385     17,382     17,387     17,345     17,349       17,391     17,338  
Earnings per common share:                
Basic $ 0.98   $ 1.01   $ 1.02   $ 0.94   $ 0.46     $ 3.95   $ 2.66  
Diluted $ 0.98   $ 1.01   $ 1.01   $ 0.93   $ 0.46     $ 3.93   $ 2.64  
                 
Cash dividends declared per share $ 0.47   $ 0.43   $ 0.43   $ 0.43   $ 0.39     $ 1.76   $ 1.54  


 
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands, except per share amounts)
   
  Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Dec 31,
2017
Share and Equity Related Data:          
Book value per share $ 25.90   $ 24.75   $ 24.40   $ 23.93   $ 23.99  
Tangible book value per share - Non-GAAP (1) $ 21.74   $ 20.57   $ 20.20   $ 19.71   $ 19.75  
Market value per share $ 47.53   $ 55.30   $ 58.10   $ 53.75   $ 53.25  
Shares issued and outstanding at end of period   17,302     17,290     17,278     17,262     17,227  
           
Capital Ratios (2):          
Tier 1 risk-based capital   11.81 %   12.00 %   11.84 %   11.78 %   11.65 %
Total risk-based capital   12.56 %   12.77 %   12.61 %   12.56 %   12.45 %
Tier 1 leverage ratio   8.89 %   8.91 %   8.87 %   8.84 %   8.79 %
Common equity tier 1   11.20 %   11.37 %   11.20 %   11.13 %   10.99 %
           
Balance Sheet Ratios:          
Equity to assets   8.94 %   8.97 %   8.90 %   9.05 %   9.12 %
Tangible equity to tangible assets - Non-GAAP (1)   7.62 %   7.57 %   7.48 %   7.57 %   7.63 %
Loans to deposits (3)   104.3 %   104.0 %   105.3 %   103.8 %   104.1 %


      For the Twelve Months Ended
  For the Three Months Ended  
  Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Dec 31,
2017
  Dec 31,
2018
Dec 31,
2017
Performance Ratios (4):                
Net interest margin (5) 2.95 % 2.99 % 3.05 % 3.03 % 2.95 %   3.01 % 2.93 %
Return on average assets (net income divided by average assets) 1.40 % 1.47 % 1.53 % 1.45 % 0.71 %   1.46 % 1.04 %
Return on average tangible assets - Non-GAAP (1) 1.42 % 1.49 % 1.56 % 1.48 % 0.72 %   1.48 % 1.06 %
Return on average equity (net income available for common shareholders divided by average equity) 15.61 % 16.26 % 16.99 % 15.96 % 7.56 %   16.20 % 11.23 %
Return on average tangible equity - Non-GAAP (1) 18.75 % 19.59 % 20.58 % 19.40 % 9.17 %   19.57 % 13.70 %
Efficiency ratio (6) 54.4 % 53.6 % 53.5 % 57.0 % 54.7 %   54.6 % 56.5 %

(1) See the section labeled “SUPPLEMENTAL INFORMATION - Calculation of Non-GAAP Financial Measures” at the end of this document.
(2) Estimated for December 31, 2018 and actuals for the remaining periods.
(3) Period-end balances of net loans and mortgage loans held for sale as a percentage of total deposits.
(4) Annualized based on the actual number of days in the period.
(5) Fully taxable equivalent (FTE) net interest income as a percentage of average-earnings assets.
(6) Total noninterest expense as percentage of total revenues (net interest income and noninterest income).

 
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars in thousands)
         
  For the Three Months Ended   For the Twelve Months Ended
  Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Dec 31,
2017
  Dec 31,
2018
Dec 31,
2017
Wealth Management Results                
Wealth Management Revenues:                
Asset-based revenues $ 8,930   $ 9,322   $ 9,136   $ 9,955   $ 9,686     $ 37,343   $ 38,125  
Transaction-based revenues   82     132     466     318     228       998     1,221  
Total wealth management revenues $ 9,012   $ 9,454   $ 9,602   $ 10,273   $ 9,914     $ 38,341   $ 39,346  
                 
Assets Under Administration (AUA):                
Balance at beginning of period $ 6,462,340   $ 6,220,155   $ 6,343,720   $ 6,714,637   $ 6,587,899     $ 6,714,637   $ 6,063,293  
Net investment (depreciation) appreciation & income   (534,847 )   232,245     133,450     (32,024 )   163,681       (201,176 )   817,577  
Net client asset flows   (16,679 )   9,940     (257,015 )   (338,893 )   (36,943 )     (602,647 )   (166,233 )
Balance at end of period $ 5,910,814   $ 6,462,340   $ 6,220,155   $ 6,343,720   $ 6,714,637     $ 5,910,814   $ 6,714,637  
                 
Percentage of AUA that are managed assets   90 %   91 %   92 %   92 %   93 %     90 %   93 %
                 
Mortgage Banking Results                
Mortgage Banking Revenues:                
Gains & commissions on loan sales, net (1) $ 1,798   $ 2,485   $ 2,786   $ 2,679   $ 2,987     $ 9,748   $ 10,991  
Residential mortgage servicing fee income, net   180     139     155     159     110       633     401  
Total mortgage banking revenues $ 1,978   $ 2,624   $ 2,941   $ 2,838   $ 3,097     $ 10,381   $ 11,392  
                 
Residential Mortgage Loan Originations:                
Originations for retention in portfolio $ 58,515   $ 80,751   $ 128,479   $ 67,840   $ 75,595     $ 335,585   $ 318,674  
Originations for sale to secondary market (2)   96,792     119,832     122,693     87,720     143,834       427,037     533,878  
Total mortgage loan originations $ 155,307   $ 200,583   $ 251,172   $ 155,560   $ 219,429     $ 762,622   $ 852,552  
                 
Residential Mortgage Loans Sold:                
Sold with servicing rights retained $ 16,577   $ 24,422   $ 24,367   $ 33,575   $ 39,769     $ 98,941   $ 129,358  
Sold with servicing rights released (2)   81,985     107,694     81,054     63,265     105,416       333,998     407,514  
Total mortgage loans sold $ 98,562   $ 132,116   $ 105,421   $ 96,840   $ 145,185     $ 432,939   $ 536,872  

(1) Includes gains on loan sales, commissions on loans originated for others, servicing right gains, fair value adjustments on loans held for sale, and fair value adjustments and gains on forward loan commitments.
(2) Also includes loans originated in a broker capacity.

 
END OF PERIOD LOAN AND DEPOSIT COMPOSITION
(Unaudited; Dollars in thousands)
   
  Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Dec 31,
2017
Loans:          
Commercial real estate (1) $ 1,392,408   $ 1,240,350   $ 1,218,643   $ 1,217,278   $ 1,210,495  
Commercial & industrial   620,704     656,882     632,029     603,830     612,334  
Total commercial   2,013,112     1,897,232     1,850,672     1,821,108     1,822,829  
           
Residential real estate (2)   1,360,387     1,349,340     1,327,418     1,249,890     1,227,248  
           
Home equity   280,626     282,331     283,744     285,723     292,467  
Other   26,235     27,300     28,396     30,685     31,527  
Total consumer   306,861     309,631     312,140     316,408     323,994  
Total loans $ 3,680,360   $ 3,556,203   $ 3,490,230   $ 3,387,406   $ 3,374,071  

(1) Commercial real estate loans consist of commercial mortgages and construction and development loans.  Commercial mortgages are loans secured by income producing property.
(2) Residential real estate loans consist of mortgage and homeowner construction loans secured by one- to four- family residential properties.

       
  December 31, 2018   December 31, 2017
  Balance % of Total   Balance % of Total
Commercial Real Estate Loans by Property Location:          
Rhode Island $ 377,249   27 %   $ 360,834   30 %
Connecticut   570,116   41       461,230   38  
Massachusetts   356,615   26       309,013   26  
Subtotal   1,303,980   94       1,131,077   94  
All other states   88,428   6       79,418   6  
Total commercial real estate loans $ 1,392,408   100 %   $ 1,210,495   100 %
           
Residential Real Estate Loans by Property Location:          
Rhode Island $ 352,141   26 %   $ 343,340   28 %
Connecticut   141,775   10       140,843   12  
Massachusetts   849,435   63       726,712   59  
Subtotal   1,343,351   99       1,210,895   99  
All other states   17,036   1       16,353   1  
Total residential real estate loans $ 1,360,387   100 %   $ 1,227,248   100 %


           
  Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Dec 31,
2017
Deposits:          
Noninterest-bearing demand deposits $ 603,216   $ 611,829   $ 577,656   $ 601,478   $ 578,410  
Interest-bearing demand deposits   178,733     151,322     136,640     83,249     82,728  
NOW accounts   466,568     468,578     481,905     470,112     466,605  
Money market accounts   646,878     650,976     604,954     693,748     731,345  
Savings accounts   373,545     372,425     375,983     376,608     368,524  
Time deposits (in-market)   778,105     715,635     698,286     625,965     617,368  
In-market deposits   3,047,045     2,970,765     2,875,424     2,851,160     2,844,980  
Wholesale brokered time deposits   477,003     443,583     446,187     405,274     397,727  
Total deposits $ 3,524,048   $ 3,414,348   $ 3,321,611   $ 3,256,434   $ 3,242,707  



...
 
CREDIT & ASSET QUALITY DATA
(Unaudited; Dollars in thousands)
   
  Dec 31,
2018
Sep 30,
2018
Jun 30,
2018
Mar 31,
2018
Dec 31,
2017
Asset Quality Ratios:          
Nonperforming assets to total assets   0.28 %   0.29 %   0.32 %   0.30 %   0.34 %
Nonaccrual loans to total loans   0.32 %   0.30 %   0.34 %   0.31 %   0.45 %
Total past due loans to total loans   0.37 %   0.38 %   0.48 %   0.57 %   0.59 %
Allowance for loan losses to nonaccrual loans   231.25 %   245.25 %   222.85 %   245.83 %   174.14 %
Allowance for loan losses to total loans   0.74 %   0.75 %   0.75 %   0.76 %   0.79 %
           
Nonperforming Assets:          
Commercial real estate $ 925   $   $   $   $ 4,954  
Commercial & industrial       122     397     397     283  
Total commercial   925     122     397     397     5,237  
Residential real estate   9,346     9,063     10,206     9,340     9,414  
Home equity   1,436     1,624     1,133     771     544  
Other consumer           9     13     16  
Total consumer   1,436     1,624     1,142     784     560  
Total nonaccrual loans   11,707     10,809     11,745     10,521     15,211  
Other real estate owned   2,142     2,974     3,206     3,206     131  
Total nonperforming assets $ 13,849   $ 13,783   $ 14,951   $ 13,727   $ 15,342  
           
Past Due Loans (30 days or more past due):          
Commercial real estate $ 1,080   $ 931   $   $   $ 4,960  
Commercial & industrial       142     2,851     3,295     4,076  
Total commercial   1,080     1,073     2,851     3,295     9,036  
Residential real estate