Washington Trust Bancorp in Westerly, R.I., warned that its third-quarter results will be impacted by chargeoffs tied to two commercial loans.
The company disclosed in a regulatory filing that it will record $11.3 million in chargeoffs tied to the loans, adding that it expects to have a $7 million loan-loss provision in the quarter.
The first loan is a participation in a shared national credit to a telecom infrastructure construction contractor that filed for bankruptcy protection, leading Washington Trust to place the relationship on nonaccrual status. The relationship has a $9.3 million. carrying value and a $2.3 million specific reserve.
The other loan is secured by a Class B office property. Washington Trust recently sold the loan, which had a $4.3 million carrying value on June 30.
Washington Trust said it expects to report $1 million of commercial nonaccrual loans as of Sept. 30, compared to $14 million a quarter earlier.