Fueled by record revenues from mortgage banking, Washington Trust Bancorp (WASH) in Westerly, R.I., reported a record $8.4 million profit in the first quarter, an increase of 24% over the same period in 2011.
Earnings per share climbed 21% year over year, to 51 cents, three cents better than estimates of analysts polled by Thomson Reuters. Earnings growth was driven largely by a more than 500% increase in mortgage banking revenues, to $3.1 million.
Joseph J. MarcAurele, Washington Trust's chairman, president and chief executive officer, attributed the growth in mortgage originations in part to recent opening of loan production offices in Massachusetts and Connecticut.
Overall noninterest income climbed 21% year over year, to $14.2 million, despite a 23% hike in salaries, commissions and benefits costs related to the hiring of more loan officers.
"We are pleased with our performance, as we've been able to strategically grow the corporation, despite continued economic challenges," MarcAurele said in a news release Monday.
Interest income also rose by double digits, climbing 10% year over year, due to lower funding costs and a 7% increase in average loan balances. The company's net interest margin rose 9 basis points from the prior year, to 3.27%.
Founded in 1800, Washington Trust is one of the country's oldest financial institutions. At March 31 it had $3 billion of assets and 19 branches in Rhode Island and Connecticut.