Washington Trust Bancorp in Westerly, R.I., reported lower quarterly profit after addressing two problematic loans.
The $6.7 billion-asset company said in a press release that its third-quarter earnings fell by 1.2% from a year earlier, to $10.8 million. The quarter included a $7 million loan-loss provision that reflected $11.3 million in chargeoffs tied to a pair of commercial loan relationships.
The first loan relationship is a participation in a shared national credit to a telecom infrastructure construction contractor that filed for Chapter 11 bankruptcy in the second quarter. As of June 30, the relationship had a $9.3 million carrying value and a $2.3 million specific reserve.
The second loan is a nonaccrual commercial real estate loan secured by a Class B office property. Washington Trust sold the property last month, resulting in a $3 million chargeoff.
“While we resolved two significant credit exposures this quarter, we are confident in our current portfolio quality and that we will continue our long track record of strong credit performance,” Ned Handy, the company’s chairman and CEO, said in the release.