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Washington Trust Bancorp, Inc. (NASDAQ:WASH)

Q2 2008 Earnings Call Transcript

July 22, 2008 8:30 am ET

Executives

Elizabeth Eckel – SVP, Marketing

John Warren – Chairman and CEO

David Devault – EVP, Secretary, Treasurer, and CFO

Analysts

Frank Schiraldi – Sandler O’Neill

Laurie Hunzinger [ph] – Stifel Nicolaus

John Stewart – Sandler O'Neill Asset Management

Alper Sungur – Sidoti & Company

Operator

Hello and welcome to the second quarter 2008 Washington Trust Bancorp, Inc. earnings conference call. All participants will be in a listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation. (Operator instructions)

Now, I would like to turn the conference over to Ms. Elizabeth Eckel. Ms. Eckel, please begin.

Elizabeth Eckel

Thank you, Camille. Good morning and welcome to the quarterly earnings conference call for Washington Trust Bancorp, Inc. NASDAQ Global Market symbol WASH.

This morning's conference call is being recorded, is being webcast live, and a webcast replay of our conference call is available shortly after the conclusion of the call through our Web site, www.washtrust.com in our Investor Relations section, under the sub head Presentations. However, the information we provide during today's call is accurate only as of this date and you should not rely on these statements after the conclusion of today's call.

Hosting this morning's discussion is John C. Warren, Chairman and Chief Executive Officer, and David V. Devault, Executive Vice President, Secretary, Treasurer, and Chief Financial Officer.

And now, I'm pleased to introduce Washington Trust's Chairman and Chief Executive Officer, John C. Warren. John?

John Warren

Thank you, Beth, and good morning everyone. Yesterday afternoon, we released our earnings for the second quarter ended June 30, 2008. This morning, David and I will discuss these results and answer any questions you may have about our company's performance.

I would like to start by saying that these are certainly challenging times for the financial services industry. While we have continued to express our concerns about the economy, no one could have predicted the fallout of the national credit crisis, or the number of financial giants who would require assistance and additional capital. Consumer confidence has declined as dramatically as gasoline and food crisis have risen.

I am pleased to report that despite all the turmoil that has taken place in the economy and the financial markets, Washington Trust's story continues to be one of strength, discipline, and focus. For the second quarter ended June 30, 2008, net income totalled $6.1 million or $0.45 per diluted share compared to $5.5 million or $0.40 per diluted share a year ago. Return on average equity was 12.88% compared to 12.57% last year, and return on average assets was 92 basis points, which is consistent with the ROA for the same quarter of 2007.

We have achieved solid results through good capital and balance sheet management, and sticking to the fundamentals. As I've mentioned before, we have an experienced leadership team who have been through difficult economic cycles before. We have a disciplined credit culture and have never offered a sub-prime or Alt-A mortgage program. By staying focused, we have avoided many of the problems other banks have experienced. In fact, we have benefited from the disruption that is occurring at the larger banks and investment management companies, and have been able to pick up new clients during this period.

Here are some of the second quarter highlights. We continue to experience strong commercial loan demand as commercial loans were up 9% or $68.7 million during the second quarter of 2008. This was our seventh straight quarter of solid commercial loan growth. Year over year, commercial loans have increased $172 million or 28%.

It is important to once again note that even as we have grown our loan portfolio, we continue to provide adequate reserves and maintain good asset quality. We have had good growth in both our C&I and commercial real estate groups. New business has come from various sources including larger banks and referrals from attorneys, accountants, developers, and existing clients. And while we can't predict what future demand will be, our double-digit growth indicates that Washington Trust is a solid choice for business banking in our area.

Let me turn now to wealth management; another key line of business for us. Wealth management revenues were up $545,000 or 4% over the same period of 2007, and continue to be a key source of non-interest income for us. As of June 30, assets under management stood at $3.9 billion, up $56 million from a year ago. Despite solid new business growth, our assets under management reflect a downturn in the financial markets.

Our wealth management area has seen good growth in new assets. Some of the new business has been generated at the expense of larger investment firms who have told their clients that their asset level isn't worthy of personal attention. We're countering with ads that state we still believe your money deserves expert investment counsel and management, including face to face service and everyday accessibility.

On the retail side demand has been slow as consumer concerns about the economy, employment and the housing market are prevalent.

Deposit gathering continues to be a challenge as more and more consumers are becoming raid shoppers, lured by the high rate offers that appear daily in newspapers and online. We continue to manage our deposit portfolio to maintain a good mix of core and time deposits, while maintaining and building key client relationships. During the quarter, we increase our dividend for the 16th consecutive year.

And with that, I will now turn the microphone over to David Devault who will provide you more detail on our second quarter financial performance. David?

David Devault

Thank you, John. Good morning everyone and thank you for joining us on our call today. I'll be reviewing the second quarter operating results and financial position as described in our press release yesterday.

Net income for the second quarter of 2008 was $6.1 million or $0.45 per diluted share, up 12.5% over the $0.40 reported for the second quarter of 2007. Return on equity for the current quarter was 12.88% compared to 12.57% for the same period last year. Net interest income for the second quarter this year was $16.2 million, 7.5% higher than the first quarter of 2008 and 8.6% higher than the second quarter a year ago.

The net interest margin for the second quarter this year was 2.71%, up 12 basis points from the first quarter but down 5 basis points from the second quarter of 2007. The increase in the margin on a linked quarter basis was largely attributable to lower deposit and funding costs. Compared to the second quarter of 2007, the margin decline of 5 basis points was for the most part attributable to the lagging impact of lower rates on deposits compared to variable rate loans.

Our loan loss provision charged to earnings in the second quarter was $1.4 million due largely to growth in the loan portfolio as well as our ongoing evaluation of credit quality and general economic conditions. I'll comment more on asset quality in a few moments.

Let's turn now to the balance sheet. Total loan growth was $107.1 million or 6.7% in the second quarter led by $68.7 million or 9.5% increase in commercial real estate balances. This represented the seventh consecutive quarter of firm growth in this category.

Residential mortgages grew $30.5 million or 5.3% in the quarter, including $30.8 million in mortgages purchased during the quarter, meanwhile consumer loans increased by $7.9 million due to higher balances of home equity lines and other consumer loans.

The investment securities portfolio totals increased by $43 million or 5.8% in the second quarter. This included an increase of $61 million in mortgage-backed securities during the second quarter of 2008.

Total deposits decreased by $25.5 million or 1.6% in the quarter. Excluding brokerage certificates of deposit, in-market deposits fell by $12.2 million reflecting decreases in money market accounts and certificate of deposit balances, while demand deposit and null balances increased. In general as John mentioned, deposit growth continues to be very challenging and competitive.

I'll now discuss non-interest income including our wealth management business. Total non-interest income was $12.2 million in the most recent quarter. There were $53,000 of net securities losses in the quarter compared to net securities losses of $700,000 in the second quarter last year. Included in the second quarter net securities losses this year were impairment charges of $1.1 million on three preferred stockholdings in realized gains of $1.1 million on the sale of equity securities. Excluding the securities transactions, non-interest income was up 3.3% over the same quarter a year ago.

Our wealth management business reported second quarter revenues of $7.7 million, up by 2.1% over the same quarter a year ago. Wealth management assets under administration totaled $3.9 billion at June 30, up $56 million or 1.4% from a year earlier and up $45 million or 1.2% in the most recent quarter. Most of that increase in the second quarter was attributable to new business and other additions to customer balances.

I will comment now on non-interest expenses. First, I'll note that included in the non-interest expense in the second quarter last year was $520,000 representing the cost of our contribution of appreciated equity securities to our charitable foundation. We expect to make our 2008 annual contribution to the foundation later this year. Excluding the 2007 charitable contribution, non-interest expenses in the second quarter of this year were up by 4.7% over last year. More than half of the increase in non-interest expenses on this basis reflects costs attributable to higher FDIC insurance premiums, costs related to our wealth management business, and the operating expenses related to the de novo branch in Cranston, Rhode Island which opened late in the second quarter last year. The effective income tax rate for the quarter was 31.6%, a little bit above last year's rate of 31.4%.

Let us now look at asset quality. Nonperforming assets remained at manageable levels with a modest increase from $5.7 million at March 31, 2008, to $6.2 million or 0.23% of total assets at the end of the second quarter of this year. Total nonperforming assets consist solely of non-accrual loans. We have no property acquired through foreclosure. The increase in nonperforming assets in the quarter was largely due to certain commercial loan relationships moving into the non-accrual classification. At June 30, our level of nonperforming assets as a percentage of total assets, 0.23%, was less than the level of 1.26% for our national peer group of bank holding companies with assets of $1 billion to $3 billion as reported by the Federal Reserve at March 31.

Total 30 day or more delinquencies for all loan types were $15 million or 0.88% of total loans at the end of the second quarter, up $4.6 million in the quarter. Commercial loans represent $12.4 million, or 83% of total delinquencies at June 30. Year-over-year total 30 day or more delinquencies are up just under $6 million. In the residential mortgage, in consumer loan categories, delinquencies amount to $2.6 million or 0.29% of these loans, up from $1.4 million at March 31.

As I indicated earlier, our loan loss provision charged to earnings for the second quarter this year was $1.4 million. This compares to a quarterly provision of $450,000 in the first quarter of this year and $300,000 in the second quarter of last year. The provision is based on management's assessment of various factors affecting the loan portfolio including growth in the portfolio, ongoing evaluation of credit quality, with particular emphasis on the commercial portfolio, and economic conditions.

Meanwhile, net charge-offs amounted to $161,000 in the latest quarter and $164,000 on a year-to-date basis, compared to $333,000 in the second quarter last year and $167,000 for the six-month period last year.

The allowance for loan losses was $22 million or 1.29% of total loans at June 30 and that was above the average of 1.24% for our peer group, again using the most recent Federal Reserve information available for March 31.

Total shareholders equity was $186.4 million compared to $186.5 million at the end of 2007. Our capital ratios at June 30 place us in the well-capitalized category according to Regulatory Capital Standards.

We had previously announced that we raised $10 million in trust preferred financing in April in a private placement through a newly created trust. The proceeds from the trust preferred financing along with the proceeds from the common stock investment in the trust were used in the issuance of $10.3 million of junior subordinated debentures of the holding company. Those debentures and the trust preferred securities bear interest at three-month LIBOR plus 350 basis points.

We also entered into a five-year interest rates swap contract with a notional amount of $10 million. Under the terms of that contract, we pay a fixed rate at 6.97%. In June, we declared a dividend of $0.21 per share, which was paid on July 11. That dividend was $0.01 higher than the dividend declared in the first quarter and this represents the 16th consecutive year with a dividend increase for Washington Trust shareholders.

And at this time, I'll turn the call back to John Warren.

John Warren

Thank you, David. I'd like to thank everyone for joining us in today's call and for your interest in Washington Trust. We're pleased with our performance, particularly in these challenging economic times. As I said earlier, Washington Trust story is one of strength and discipline. We have a focused leadership team, a disciplined credit culture and a strong balanced stream of earnings. In this environment, we will stay on course, grow our core business lines and maintain our good asset quality.

Thank you for your time this morning. And now, David and I would be happy to answer any of your questions. Thank you.

Question-and-Answer Session

Operator

Thank you. (Operator instructions) Our first question comes from Frank Schiraldi from Sandler O'Neill, please go ahead.

John Warren

Pretty morning, Frank.

Frank Schiraldi - Sandler O’Neill

Good morning. How you guys doing?

John Warren

Yes, good. Thanks.

Frank Schiraldi - Sandler O’Neill

A question on the margin going forward. CDs continue to run off, demands up nicely, it looks like you're locking into (inaudible) do you expect to continue to see some expansion in the net interest margin going forward?

David Devault

We view that as being relatively neutral with respect to interest rate changes. There was certainly some improvement in the margin in the quarter. I think that where it is for the second quarter is largely representative of where we think it would be in the second half of the year. It could be some seasonal benefit with inflow of demand deposit dollars in the summer season that would help it somewhat in the third quarter, but the second quarter is fairly representative.

Frank Schiraldi - Sandler O’Neill

Okay, thanks. And just looking at loan growth, it looks like commercial real state quarter over quarter was up 16% on annualized. Is there anymore color you can give us on what sort of stuff you are putting on the books, if it's own or occupied, where you are seeing the growth, loan to value, just any sort of more color we can get to get comfortable with that sort of growth?

John Warren

Yes, I mean I think a lot of what we've been seeing Frank is it's sort of split up in two categories. The larger institutions in New England have all – I guess created an environment and at some points helped us out by offering us some very good loans. So we've had a couple of things. We've had the ability to acquire loans that are already outstanding and very highly, high quality, highly rated loans in our review. And at the same time, we're seeing customers out there in our neighborhood that are actually looking to Washington Trust and bringing their business to Washington Trust after years being at some of these other institutions. But once again, very high quality paper.

Frank Schiraldi - Sandler O’Neill

Okay. Would you have numbers on owner-occupied or non-owner-occupied, just on the total commercial real estate portfolio, and then what the quarterly growth or no, is that something I might have to –?

David Devault

I don't have it broken down that way in absolute dollars in the portfolio. The growth, as John mentioned, was really the result of a lot of work over time to build a pipeline that in many cases, we were able to close in the second quarter and that resulted in that increase that you see. Our overall assessment, the weighted average I guess of our internal underwriting rating system was actually higher than normal. So, it was a very good quality paper and book of business that we added. They were – it's a variety, one of the strength I think of the commercial real estate portfolio that we have is that it is relatively well diversified with retail office, hotels, mixed use, multi family, I mean there is a good mix in that portfolio.

Frank Schiraldi - Sandler O’Neill

Okay. In terms of geography, southern or out in farther north or Connecticut, I mean, is it just sort of spread?

David Devault

Southern New England and to a very limited extent in the metropolitan New York area I think is a fair way to characterize it.

Frank Schiraldi - Sandler O’Neill

Okay. And then is that something that now you're talking about the quarterly growth?

John Warren

Right.

David Devault

Yes.

Frank Schiraldi - Sandler O’Neill

And then the metro New York stuff, is that some multi family stuff or has that run the gamut as well?

David Devault

I guess I should expand metro New York to be the Philadelphia area as well and that was – there was some hotel business in there. We have a credit that represents its branches of a major financial institution underlying that credit, so it's – these are strong credits.

Frank Schiraldi - Sandler O’Neill

Okay.

John Warren

Yes, I mean the hotel as an example, Frank, is a 35% loan-to-value and it's a high grade hotel.

Frank Schiraldi - Sandler O’Neill

Okay. And then just finally, I want to ask about the securities portfolio and about the impairment charge in a quarter. I don't know if there is anymore disclosure you can give us on that as far as the preferred securities. I mean, should we assume are those agency preferred and if so, what's left on the balance sheet of that?

John Warren

Two out of three were agency preferred, the other was a financial entity, not a government agency. The agency paper we had about $1.1 million in carrying value after the impairment charge at June 30. Now, we are just going to have to continue to monitor the condition of the securities portfolio to monitor their status.

Frank Schiraldi - Sandler O’Neill

Okay. And then, in the common and preferred stocks, I know you have some or you had some utility companies as well. Added to that, the fair value on that looks like at $7.1 million now, is that – how much of that is financial? I mean I guess you just subtract the $1.1 million carrying of the agency, so then you're down to $6 million and can you tell us how much of that is financial institution?

John Warren

The majority of it.

Frank Schiraldi - Sandler O’Neill

Okay. And then the other question was on the trust preferred securities line item. Are those pooled trust preferred, and if so, is it bank only trust preferred?

John Warren

A portion of it, way under 50% of pooled securities, under 25% in fact. Most of them are – they are financial institutions. They're all investment grade rated securities. Clearly, this is a sector that is not in favor right now.

Frank Schiraldi - Sandler O’Neill

Right, okay. And would those include some REIT pooled as well or is it just bank?

John Warren

No REITs.

Frank Schiraldi - Sandler O’Neill

No REITs. And then, so what's the remainder of the 75% plus of trust preferred?

John Warren

They're financial institutions, banking companies.

Frank Schiraldi - Sandler O’Neill

But not agency?

John Warren

No.

Frank Schiraldi - Sandler O’Neill

Okay. And then, I guess just one last question, what about capital levels here, are you guys telling us – I mean, you did purchase $30 million in residential in the quarter, so – and you upped the dividend $0.01, so I guess you feel pretty comfortable with capital levels – tangible capital levels where they are, these levels?

David Devault

I think you sort of answered the question with the increase in the dividend, the way you phrased the whole thing.

Frank Schiraldi - Sandler O’Neill

Okay, alright thank you.

David Devault

You bet, thanks Frank.

John Warren

Thank you.

Operator

Our next question comes from Laurie Hunzinger [ph] from Stifel Nicolaus. Please go ahead.

Laurie Hunzinger – Stifel Nicolaus

Yes. Hi John and David. Good morning.

John Warren

Hey how are Laurie?

Laurie Hunzinger – Stifel Nicolaus

Good, thanks. Just to go back to some of the points that Frank touched on, what your month end net interest margin, do you have that?

David Devault

The margin for June was about where we were for the quarter.

Laurie Hunzinger – Stifel Nicolaus

Okay, great. And then you mentioned charitable [ph] contribution expense, is that going to be in the fourth quarter?

David Devault

Probably the third quarter, Laurie.

Laurie Hunzinger – Stifel Nicolaus

Third quarter, and is that going to be around $500,000?

John Warren

Yes.

Laurie Hunzinger – Stifel Nicolaus

Okay, great, and then within both your – in terms of income, I mean your other income and your other expenses, linked quarter, those were up, are there any non-recurring items in either of these categories?

John Warren

In other expenses, there is some things there that seasonal. So if you're looking at a linked quarter comparison, things like – I don't know, anticipating charity golf tournaments, there isn't a lot of that in the first quarter. So that tends to be somewhat irregular. There is probably about $80,000 to $100,000 of what I would call non-recurring expense and they're associated with a couple of different things.

Laurie Hunzinger – Stifel Nicolaus

Okay. And in terms of the income line, the 461 to 554, are there anything in there that's non-recurring?

John Warren

There's always things in there that are, because it's other, but there's nothing big –

Laurie Hunzinger – Stifel Nicolaus

Nothing big, okay. Okay, great. And then as far as loan loss provision, you mentioned the $1.4 million was due to sort of two factors, loan growth and economic conditions. You had massive loan growth in almost every category. Your loans are up at an annual interest [ph] rate of 27% for this quarter. What is – if you were to break out the increase, how much of it is related to loan growth versus how much of it is related to your concerns about the economy?

John Warren

It's probably more – well, it is more growth than a scientific allocation of loss exposure, but it is primarily due to the growth and we want to maintain an allowance that keeps pace with the growth. We wanted to have allowance coverage ratios that continued to be strong and made sense, so that really drove that provision level.

David Devault

Yes, when you look at quarter over quarter, Laurie, that the level was 129 in both quarters.

Laurie Hunzinger – Stifel Nicolaus

Alright.

John Warren

So, reflective really of the loan volume.

Laurie Hunzinger – Stifel Nicolaus

So that – your target is going to be about that 129 level at least right now.

John Warren

Well, in general, I think that's a level that makes sense.

Laurie Hunzinger – Stifel Nicolaus

Okay.

John Warren

Timing of charge-offs and recognition of charge-offs versus loan provisioning, is not going to be smooth from quarter to quarter, so it could vary somewhat.

Laurie Hunzinger – Stifel Nicolaus

Okay. And then, in terms of our growth, I mean, we are probably not going to see while continue to grow linked quarter at the same run rate. Is that a fair statement?

John Warren

It is a very fair statement. I mean, I think there is a real anomaly in what was going on in the financial markets from really the end of March throughout the – especially April and May of the second quarter, and we took advantage of it in several spots. And we were able to help several customers with some great loans and also some of the activity in the residential mortgage side was reflective of a unique situation there as well.

Laurie Hunzinger – Stifel Nicolaus

Okay. So, if we were to sort of model out, what we could expect to see in the last half year as far as growth, what would kind of be a good range for you?

John Warren

Less than the second quarter's growth rate.

Laurie Hunzinger – Stifel Nicolaus

Okay.

John Warren

Yes. Our pipeline has backed down to levels more akin to what we saw last year, which would put it into, I would say high – mid to high single-digit type growth, and then we will just see if there are some other opportunities that come to us because of the disruptions in the market. I think the more disruptions we see, the more phone calls we are going to get from some good customers that want to move and give us a chance at it.

Laurie Hunzinger – Stifel Nicolaus

Okay, great. And then, just jumping over to credit and (inaudible) so thanks for that. But could you just touch on as far as the commercial category – there was a pretty big jump in your loans, 30 to 69 days past too. You went from $2.2 million to $6.7 million, and just maybe a breakdown of what is the commercial real estate versus C&I, and generally how much of that category migrates over to nonperforming.

John Warren

It is mainly all C&I compared to commercial real estate and there is a $3.4 million hotel loan in that category. The rest are a variety of small business loans. The hotel loan, I can't predict where it is going to go. It is a credit that has, I think, been characterized by a strong loan-to-value ratio, but a borrower who has had some, maybe under capitalization and cash flow difficulties, and it has been a sporadically and delinquency status. It is a strong loan-to-value credit.

Laurie Hunzinger – Stifel Nicolaus

What is the loan-to-value?

John Warren

I believe it was below 50.

Laurie Hunzinger – Stifel Nicolaus

Below 50?

John Warren

Yes.

Laurie Hunzinger – Stifel Nicolaus

Okay, and it is that in market?

Unidentified Participant

Yes, that is market. Yes.

Laurie Hunzinger – Stifel Nicolaus

Okay, great. Just one last thing, if you could just touch on your demand deposit growth has been exceptional, what are you all doing to sort of pull that in and I am guessing we are not going to say that necessarily, continue with the same run rate.

David Devault

We are just working very hard with promotions and product design, and a lot of business development efforts, knocking on a lot of other business stores to develop relationships that translate into demand deposits. We try very hard with commercial borrowers first to garner the entire relationship including their operating demand deposit account. So, it is a lot of singles and doubles, and hard work.

John Warren

Yes, we are getting the benefit of most of the loan growth. You are seeing a lot of it. It is bringing deposits with us – with it, Laurie.

Laurie Hunzinger from Stifel Nicolaus

Okay.

John Warren

And then at the same time as David said, we've got – we've been in an internal program that people have setup baseball teams and are participating on their respective teams to bring in DDA accounts. So, that's helping quite a bit as well.

Laurie Hunzinger – Stifel Nicolaus

Okay, great. Thank you all very much.

John Warren

Sure thank you Laurie.

Operator

Our next question comes from John Stewart from Sandler O'Neill Asset Management. Please go ahead.

John Stewart – Sandler O'Neill Asset Management

Good morning guys.

John Warren

Hey, good morning John.

John Stewart – Sandler O'Neill Asset Management

I just wanted to go back and touch on a couple of questions that Frank raised earlier. First on the trust preferred, I believe you said the rest of the 75% is banking institutions. Are there any specific company concentrations in there that we should be aware of, to the extent you can share that?

John Warren

It's pretty well spread out, there is no significant concentration in there from an individual security. The largest holding would be about $3 million. The rest are on to $2 million value.

John Stewart – Sandler O'Neill Asset Management

And those are backed by issuer or that's for a specific security?

John Warren

Insurer.

John Stewart – Sandler O'Neill Asset Management

And then I guess just back to the preferred stock, common stock line item, you said the carrying value the GSC preferred at June 30 was 1.1, what was it at March 31?

John Warren

It must have been around closer to $2 million prior to the impairment charge.

John Stewart – Sandler O'Neill Asset Management

Okay, so you wrote up or impaired about 50% of the value is that right?

John Warren

It would have been around $1.6 million, I'm just roughly doing math quickly here. So, the impairment charge on those securities was – looks like it was about $430,000.

John Stewart – Sandler O'Neill Asset Management

The impairment charge on the GSC is $430,000 of the $1.1 million?

John Warren

Yes.

John Stewart – Sandler O'Neill Asset Management

Okay. Okay great. That was it, thanks.

John Warren

Thank you.

Operator

Our next question comes from Alper Sungur from Sidoti & Company. Please go ahead.

Alper Sungur – Sidoti & Company

Hi, good morning.

John Warren

Hi, good morning Alper.

Alper Sungur – Sidoti & Company

Hi, my question is I guess, how much for the pipeline for the commercial loan portfolio at the end of the quarter?

John Warren

I believe it was just under $100 million.

Alper Sungur – Sidoti & Company

$100 million?

David Devault

Now, pipeline is a tough thing to nail down, not everything in the pipeline closes.

Alper Sungur – Sidoti & Company

So what percentage would you say will close within the next 90 days?

David Devault

That's very hard to nail down also. And included in that number are refinancing of existing credit or maturing credits or new requests from existing costumer, so yes, I will go back to John's comment about the overall expected rate of growth as fairly the best indication for this.

Alper Sungur – Sidoti & Company

Okay. And also the broker deposits were down substantially. Will you say that you guys are in a runoff on that front?

David Devault

We had a net decrease in broker deposits over the past year. I think this what you're referring to. There was some decrease in the quarter as well. That's a source of funding we do use from time to time and you will see as you start among our various funding sources in the future.

Alper Sungur – Sidoti & Company

Okay. And any buybacks during the quarter? I missed that, but –

David Devault

No, there were not.

Alper Sungur – Sidoti & Company

There were not. Okay. Thank you very much.

John Warren

You're welcome.

David Devault

Thanks.

Operator

We show no further questions at this time I would like to turn the conference back over to Mr. Warren for any closing remarks.

John Warren

I just want to thank everybody for joining us on the conference call. As usual, if you have any questions, following up with us, I think give David or myself a call. We'd be happy to chat with you. Thank you all very much.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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Source: Washington Trust Bancorp, Inc. Q2 2008 Earnings Call Transcript
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