WASH - Washington Trust Bancorp, Inc.

[woltac]

Washington Trust Bancorp, Inc. (WASH) is a conservative small bank based in southern Rhode Island.  WASH has historically maintained conservative underwriting, conservative accounting and reasonable executive compensation.  The chairman is a former Fleet Banker and the CFO is highly competent, conservative with an intimate knowledge of the bank and a long history with WASH. 

 

During the latest financial crisis, WASH remained profitable, maintained their dividend and refused to take TARP funds.  This was very similar to WASH’s performance during the prior financial crisis. 

 

Price:       $18.88

52-Wk High      24.96 

52-Wk Low      17.77 

Dividend Rate      0.88 

Yield            4.66% 

Forward P/E        9.49 

P/E          10.98 

Market Cap      307.36 Mil 

Price/Book          1.09

 

            Book Value Price/   Return on      Return on

              / Share Book   Equity         Assets

12/10 $16.63   1.32     8.9           0.82

12/09 $15.89      0.98     6.3           0.55

12/08 $14.75  1.34     9.4           0.82

12/07 $13.97  1.81     12.8           0.99

12/06 $12.89  2.16     14.5           1.04

12/05 $11.86  2.21     14.5           0.98

12/04 $11.44  2.56     13.7           0.97

12/03 $10.46  2.50     13.7           1.03 

12/02   $9.87      1.98     13.0           1.07

12/01   $8.15      2.13     13.4              1.01

 

June 2011 Earnings:

 

Washington Trust Bancorp, Inc. (WASH), parent company of The Washington Trust Company, today announced second quarter 2011 net income of $7.6 million, or 46 cents per diluted share, compared to second quarter 2010 net income of $5.3 million, or 33 cents per diluted share. The returns on average equity and average assets for the second quarter of 2011 were 10.83% and 1.04%, respectively, compared to 8.05% and 0.73%, respectively, for the same period in 2010.

 

Net interest income for the second quarter of 2011 increased by $737 thousand, or 4%, from the first quarter of 2011 and by $2.2 million, or 12%, from the second quarter a year ago.

 

Noninterest income totaled $13.3 million for the second quarter of 2011, up by $1.6 million, or 14%, on a linked quarter basis and up by $2.1 million, or 19%, over the second quarter of 2010. Second quarter 2011 noninterest income included $226 thousand of net realized gains on securities related to the previously described balance sheet management transaction and also included $203 thousand of gain recognized on the sale of a bank property, which was classified in other income. Excluding these two second quarter items, noninterest income increased by $1.2 million, or 10%, from the first quarter of 2011 and by $1.7 million, or 15%, from the same period a year earlier.

 

It appears that WASH is returning to its normal operating results with a return on assets of about 1% and a return on equity in the low teens.  If this is true, it may be a bargain with a price close to book value. 

 

Disclosure: I am long WASH and looking to add more under book value. 

 

[watsa_is_a_randian_hero]

WASH is still at 1.5x tangible book.

 

Check out FCBN.  Very similar in terms of conservative history.  Less liquidity, but much cheaper. 

 

They have expanded significantly through the crisis due to acquisitions the FDIC has "given" them, each with loss insurance on assets from the FDIC.