Financial Data and Key Metrics Changes - The company reported net income of $12.2 million, or $0.63 per share, with adjusted net income at $11.8 million, or $0.61 per share [11] - Net interest income increased to $36.4 million, up by $3.5 million or 11% on a linked quarter basis, with the margin at 229 basis points, reflecting a 34 basis point improvement [12] - Total loans decreased by $42 million or 1% from the previous quarter, including a 1% reduction in both residential and commercial loans [16] - In-market deposits reached an all-time high of $5.13 billion, up by $195 million or 4% [17] - Total equity increased to $522 million, up by $22 million from the end of Q4 [17] - The CET1 ratio improved by 56 basis points to 11.76% [18] Business Line Data and Key Metrics Changes - Wealth management revenues were $9.9 million, down by $158,000 or 2% [13] - Mortgage banking revenues totaled $2.3 million, down by $544,000 or 19% [13] - The mortgage pipeline at March 31 was $95 million, up by $35 million or 59% from the end of December [14] Market Data and Key Metrics Changes - Broker deposits decreased by $270 million, and FHLB borrowings were down by $275 million, reflecting increases in deposits and cash redeployment [17] - The loan-to-deposit ratio decreased from 105.5% to 100.7% [17] Company Strategy and Development Direction - The company is focused on deposit growth strategies, achieving results in both in-market deposits and new households [7] - Retail branches are competing effectively, supplemented by a team of retail sales officers dedicated to enhancing loan and deposit opportunities [8] - The company aims for low single-digit growth in loans, with a strong pipeline building [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low single-digit growth despite challenges in the residential mortgage portfolio and elevated payoffs [8] - The company remains committed to serving communities and stakeholders amid uncertain times [9] - Management indicated that the net interest margin is expected to rise gradually, with guidance for Q2 set at 235 basis points [35] Other Important Information - A pre-tax non-cash pension settlement charge of $6.4 million was recognized within non-interest expenses due to the termination of the qualified pension plan [14] - The effective tax rate for the first quarter was 22.3%, with an expected full-year rate of 22.4% [15] Q&A Session Summary Question: Impact of sale-leaseback and pension curtailment on operating costs - The sale-leaseback adds about $700,000 to occupancy and equipment costs annually, and there are no ongoing expenses related to the pension [24][26] Question: Size and complexion of loan pipelines - The commercial pipeline is a little over $100 million, with strong early-stage activity, while the residential side is expected to grow seasonally [30][32] Question: Expectations for net interest margin - The company anticipates a steady rise in net interest margin, with guidance for Q2 at 235 basis points [35] Question: Dividend payout ratio targets - The company aims to lower the dividend payout ratio, targeting the mid to low 80s by the end of the year [37] Question: Interest rate sensitivity and margin outlook - The company has moved closer to rate neutral due to recent restructuring, with less upside to future rate reductions for margin improvement [45] Question: Drivers of in-market core deposit growth - Good organic deposit growth was noted, with some growth attributed to a single relationship and targeted efforts by newly hired retail sales officers [48] Question: Details on non-accruing loans and credit quality - Management provided updates on specific non-accruing loans, indicating ongoing efforts to resolve issues and improve occupancy rates [66][74] Question: Consideration of stock buybacks - The board is considering stock buybacks as part of capital management, but no plan is currently in place [78]

Financial Data and Key Metrics Changes - The company reported net income of $12.2 million, or $0.63 per share, with adjusted net income at $11.8 million, or $0.61 per share [11] - Net interest income increased to $36.4 million, up by $3.5 million or 11% on a linked quarter basis, with a margin of 229 basis points, reflecting a 34 basis point improvement [12] - Total loans decreased by $42 million or 1% from the previous quarter, including a 1% reduction in both residential and commercial loans [16] - In-market deposits reached an all-time high of $5.13 billion, up by $195 million or 4% [17] - Total equity increased to $522 million, up by $22 million from the end of Q4 [17] - The CET1 capital ratio improved by 56 basis points to 11.76% [18] Business Line Data and Key Metrics Changes - Wealth management revenues decreased to $9.9 million, down by $158,000 or 2% [13] - Mortgage banking revenues totaled $2.3 million, down by $544,000 or 19% [13] - The mortgage pipeline at March 31 was $95 million, up by $35 million or 59% from the end of December [14] Market Data and Key Metrics Changes - Broker deposits decreased by $270 million, and FHLB borrowings were down by $275 million, reflecting increases in deposits and cash redeployment [17] - The loan-to-deposit ratio decreased from 105.5% to 100.7% [17] Company Strategy and Development Direction - The company is focused on deposit growth strategies, achieving results in both in-market deposits and new households [7] - Retail branches are competing effectively, supplemented by a team of retail sales officers dedicated to enhancing loan and deposit opportunities [8] - The company aims for low single-digit growth in loans, with a strong pipeline building [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low single-digit growth in loans despite challenges in the mortgage portfolio [30] - The company is closely monitoring the Fed's rate policy, with expectations for a net interest margin of 235 basis points for the next quarter [35] - Management indicated that the effective tax rate for the full year is expected to be 22.4% [16] Other Important Information - A pre-tax non-cash pension settlement charge of $6.4 million was recognized within non-interest expenses [14] - The allowance for credit losses totaled $41.1 million, providing MPL coverage of 190% [18] Q&A Session Summary Question: Impact of sale-leaseback and pension curtailment on operating costs - The sale-leaseback adds about $700,000 to occupancy and equipment costs annually, and there are no ongoing expenses related to the pension [24][26] Question: Size and complexion of loan pipelines - The commercial pipeline is a little over $100 million, with strong early-stage activity [30] Question: Expectations for net interest margin - The company anticipates a steady rise in net interest margin, with guidance limited to the next quarter [35] Question: Dividend payout ratio targets - The company aims to lower the dividend payout ratio, expecting to be in the mid to low 80s by the end of the year [37] Question: Interest rate sensitivity changes - The company has moved closer to rate neutral due to recent restructuring, reducing liability sensitivity [45] Question: Drivers of in-market core deposit growth - Strong organic deposit growth and targeted efforts by newly hired retail sales officers contributed to deposit growth [48] Question: Details on credit quality and specific loans - Management provided updates on non-accruing loans and ongoing efforts to resolve issues with specific properties [66][70]

Financial Performance - Washington Trust reported first quarter 2025 net income of $12.2 million, or $0.63 per diluted share, compared to a net loss of $60.8 million in the fourth quarter of 2024[2][3]. - Noninterest income was $22.6 million for the first quarter, a significant recovery from a loss of $77.9 million in the fourth quarter of 2024[6]. - Net income for the first quarter of 2025 was $12,179 thousand, a significant recovery from a net loss of $60,791 thousand in the previous quarter[30]. - Adjusted net income available to common shareholders was $11,762 thousand for the quarter ended March 31, 2025, compared to $9,356 thousand in the same quarter last year, representing a 25.7% increase[63]. - Basic earnings per common share for the first quarter of 2025 was $0.63, a recovery from a loss of $3.48 per share in the previous quarter[30]. Asset and Loan Management - Total loans amounted to $5.1 billion, down by 1% from the end of the preceding quarter, while in-market deposits increased to $5.0 billion, up by 4%[10][11]. - Total loans decreased to $5,096,210 thousand as of March 31, 2025, down from $5,137,838 thousand at December 31, 2024, indicating a reduction of approximately 1%[29]. - Residential mortgage loan originations for retention in portfolio increased to $27,662,000 for the three months ended March 31, 2025, compared to $15,155,000 in the previous quarter, a growth of 82.8%[38]. - Total commercial real estate loans decreased to $2,134,107 million as of March 31, 2025, from $2,154,504 million at December 31, 2024, reflecting a decline of approximately 0.93%[46]. Capital and Equity - Total shareholders' equity increased to $521.7 million, up by 4% from December 31, 2024, with a total risk-based capital ratio of 13.13%[20][21]. - Shareholders' equity increased to $521,680 thousand as of March 31, 2025, up from $499,728 thousand at December 31, 2024, representing an increase of approximately 4%[29]. - Tangible book value per share increased to $23.61 in Q1 2025 from $23.45 in Q1 2024[72]. - Tangible equity to tangible assets ratio improved to 6.98% in Q1 2025 from 5.56% in Q1 2024[72]. Income and Expense Metrics - The net interest margin increased to 2.29%, up by 34 basis points from 1.95% in the previous quarter, reflecting benefits from balance sheet repositioning transactions[4][5]. - Net interest income increased to $36,422 thousand for the three months ended March 31, 2025, compared to $31,665 thousand for the same period in 2024, reflecting an increase of about 15%[30]. - The efficiency ratio improved to 71.4% for the three months ended March 31, 2025, compared to 76.3% in the previous quarter, indicating better operational efficiency[33]. - Adjusted efficiency ratio improved to 68.7% in Q1 2025 from 73.5% in Q1 2024[65]. Credit Quality - The provision for credit losses was $1.2 million, up by $200 thousand from the previous quarter, with net charge-offs amounting to $2.3 million[17]. - Nonaccrual loans decreased to $21.6 million, or 0.42% of total loans, down from 0.45% at the end of the previous quarter[14]. - Nonperforming assets to total assets ratio improved to 0.33% as of March 31, 2025, compared to 0.34% at December 31, 2024[55]. - The allowance for credit losses on loans to nonaccrual loans ratio increased to 189.85% as of March 31, 2025, from 180.03% at December 31, 2024[55]. Dividends and Shareholder Returns - The Board declared a quarterly dividend of $0.56 per share, paid on April 11, 2025[21]. - The company declared cash dividends of $0.56 per share for the first quarter of 2025, consistent with the previous quarters[30]. Market Position and Deposits - Total deposits decreased to $5,040,581 thousand as of March 31, 2025, down from $5,115,800 thousand at December 31, 2024, a decline of about 1.5%[29]. - Noninterest-bearing demand deposits decreased to $625,590 million from $661,776 million, a decline of about 5.47%[49]. - Uninsured deposits increased to $1,378,312 million as of March 31, 2025, from $1,363,689 million at December 31, 2024, reflecting a growth of about 1.07%[50].

Core Insights - Washington Trust Bancorp, Inc. reported a net income of $12.2 million, or $0.63 per diluted share, for the first quarter of 2025, a significant recovery from a net loss of $60.8 million in the fourth quarter of 2024 [1][2][28]. Financial Performance - Net interest income for Q1 2025 was $36.4 million, an increase of $3.5 million, or 11%, from Q4 2024, with a net interest margin of 2.29%, up by 34 basis points from the previous quarter [3][29]. - Noninterest income was $22.6 million in Q1 2025, compared to a loss of $77.9 million in Q4 2024, while adjusted noninterest income was $15.6 million, down by $394 thousand, or 2%, from the preceding quarter [4][28]. - Noninterest expenses totaled $42.2 million, an increase of $7.9 million, or 23%, from Q4 2024, with adjusted noninterest expenses at $35.8 million, up by $1.5 million, or 4% [4][28]. Asset Quality - Nonaccrual loans were $21.6 million, or 0.42% of total loans, at March 31, 2025, down from $23.3 million, or 0.45%, at December 31, 2024 [13]. - The allowance for credit losses on loans was $41.1 million, or 0.81% of total loans, slightly down from $42.0 million, or 0.82%, at the end of the previous quarter [15]. Capital and Dividends - Total shareholders' equity increased to $521.7 million at March 31, 2025, up by $22.0 million, or 4%, from December 31, 2024 [17][18]. - The Board of Directors declared a quarterly dividend of $0.56 per share for the quarter ended March 31, 2025 [18]. Loan and Deposit Trends - Total loans amounted to $5.1 billion at March 31, 2025, down by $42 million, or 1%, from the end of the preceding quarter [9][37]. - In-market deposits increased to $5.0 billion, up by $195 million, or 4%, from December 31, 2024, largely due to increases in high-rate savings account balances [10][11]. Wealth Management and Mortgage Banking - Wealth management revenues decreased by 2% from the preceding quarter, totaling $9.9 million, with assets under administration at $6.8 billion, down by 4% from December 31, 2024 [6][33]. - Mortgage banking revenues totaled $2.3 million for Q1 2025, down by 19% from the preceding quarter, reflecting a lower volume of loans sold to the secondary market [6][34].

Core Insights - Washington Trust's 25th Annual Peanut Butter Drive collected 4,710 jars of peanut butter and raised over $6,100 in monetary donations, marking a 68% increase in donations compared to the previous year [1][2] Group 1: Event Overview - The Peanut Butter Drive was initiated in 2001 to replenish food pantry supplies after the holiday season, providing a nutritious staple that is popular among all age groups [3] - Over its 25-year history, the drive has amassed more than 166 tons of peanut butter, sufficient to create over 5.2 million sandwiches for those in need [3] Group 2: Community Impact - Washington Trust emphasizes its commitment to supporting local communities and organizations that provide hunger relief, especially during times of increased need [4] - The collected peanut butter and funds will directly benefit local food banks and hunger relief programs, ensuring access to nutritious food for families and individuals facing food insecurity [4] Group 3: Partnerships and Participation - The drive involved numerous local partners who hosted collection sites, including various markets, schools, and community organizations across Rhode Island, Massachusetts, and Connecticut [5] - Key food bank partners include the Rhode Island Community Food Bank, Connecticut Foodshare, and the Greater Boston Food Bank, among others [4]

Core Viewpoint - Washington Trust Bancorp (WASH) is expected to report quarterly earnings of $0.62 per share, a decline of 3.1% year-over-year, while revenues are forecasted to increase by 8.5% to $52.98 million [1] Earnings Estimates - The consensus EPS estimate for the quarter has not changed over the past 30 days, indicating that analysts have not revised their initial projections [2] - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate revisions and short-term stock performance [3] Key Metrics - Analysts predict an 'Efficiency Ratio' of 69.5%, down from 70.4% a year ago [5] - 'Total noninterest income' is expected to be $16.28 million, compared to $17.16 million in the previous year [5] - 'Net Interest Income' is forecasted to reach $36.69 million, up from $31.67 million year-over-year [5] Stock Performance - Over the past month, shares of Washington Trust have declined by 13.9%, while the Zacks S&P 500 composite has decreased by 3.9% [5] - Currently, WASH holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [5]

WESTERLY, R.I., April 10, 2025 /PRNewswire/ -- Washington Trust Bancorp, Inc. (NASDAQ: WASH), the publicly owned holding company of The Washington Trust Company, will release first quarter 2025 earnings and host a conference call with the Corporation's executives as follows: Earnings Release:        Monday, April 21, 2025, 8:00 a.m. ET Conference Call:            Monday, April 21, 2025, 10:00 a.m. ET Participant Dial In:          1-833-470-1428 (Toll-Free) International Dial In:        Globa ...

Financing and Development - Washington Trust's Commercial Banking Group provided $11 million in financing for the construction and equipment of Track 15, an 18,000 square foot food hall in the former Union Station, Providence, R.I. [1] - Track 15 is designed to honor the station's history and features seven Rhode Island-based restaurateurs offering diverse culinary options [2][3] Community Impact - The food hall aims to create a sense of community by connecting Waterplace Park, the Riverwalk system, and the city's Financial District [3] - Track 15 is positioned as a unique investment in downtown Providence, enhancing the local dining experience [3] Company Background - Washington Trust, founded in 1800, is the oldest community bank in the U.S. and a leading financial services provider in the Northeast [4] - Marsella Development Corporation has been involved in significant redevelopment projects in Providence for over four decades, including the rehabilitation of the Union Station Complex [5]

Core Points - Washington Trust Charitable Foundation donated a total of $7,000 to local nonprofits in honor of seven employees recognized for their leadership and community service [1][2] - Each of the recognized employees selected a local nonprofit to receive a $1,000 contribution, with beneficiaries including Cranston League for Cranston's Future, Amos House, and Mentor Rhode Island [2][3] - In 2024, Washington Trust employees volunteered over 8,100 hours with more than 225 local nonprofit and community organizations [3] Company Overview - Washington Trust, founded in 1800, is the oldest community bank in the U.S. and the largest state-chartered bank headquartered in Rhode Island [5] - The bank offers a wide range of financial services including commercial banking, mortgage banking, personal banking, and wealth management across Rhode Island, Connecticut, and Massachusetts [5] - Washington Trust is a publicly-owned holding company traded on NASDAQ under the ticker symbol WASH [5]

Financial Position - As of December 31, 2024, Washington Trust had total assets of $6.9 billion, total deposits of $5.1 billion, and total shareholders' equity of $499.7 million[20]. - The total loan portfolio amounted to $5.1 billion, representing 74% of total assets, with commercial loans making up 52% of total loans[21][23]. - Commercial real estate (CRE) loans accounted for 80% of the commercial loan portfolio and 42% of the total loan portfolio as of December 31, 2024[24]. - The residential real estate loan portfolio represented 41% of total loans, with loans originated for sale to the secondary market providing funds for additional lending[27]. - Consumer loans constituted 7% of total loans, with home equity lines and loans representing 94% of the total consumer portfolio[29]. - Washington Trust's investment securities portfolio amounted to $916.3 million, or 13% of total assets, as of December 31, 2024[33]. - The Bank had advances payable to the Federal Home Loan Bank (FHLB) of $1.1 billion, with available borrowing capacity of $753 million as of December 31, 2024[36]. Income and Profitability - Adjusted noninterest income for 2024 was $63.05 million, compared to $56.14 million in 2023, reflecting an increase of approximately 12.5%[201]. - The adjusted income before income taxes for 2024 was $52.03 million, down from $56.48 million in 2023, indicating a decrease of about 7.9%[201]. - The adjusted net income available to common shareholders for 2024 was $40.87 million, compared to $44.84 million in 2023, representing a decline of approximately 8.8%[204]. - The effective tax rate for 2024 was 27.7%, while the adjusted effective tax rate was 21.5%, showing a significant impact from adjustments[201]. - The company reported a net loss of $28.06 million for 2024, compared to a net income of $48.18 million in 2023, indicating a substantial decline in profitability[201]. - Adjusted diluted earnings per common share for 2024 is $2.37, down from $2.63 in 2023, while reported diluted (loss) earnings per common share is ($1.63) compared to $2.82 in 2023[206]. - Adjusted dividend payout ratio increased to 94.51% in 2024 from 85.17% in 2023, while the reported dividend payout ratio is (137.4%) compared to 79.43% in 2023[206]. - Adjusted return on average assets for 2024 is 0.57%, slightly down from 0.64% in 2023, while reported return on average assets is (0.39%) compared to 0.69% in 2023[208]. - Adjusted return on average equity for 2024 is 8.52%, down from 9.85% in 2023, while reported return on average equity is (5.84%) compared to 10.57% in 2023[208]. Regulatory Environment - The Bank is subject to regulation and supervision by the FDIC, RI Division of Banking, and Connecticut Department of Banking[66]. - The Dodd-Frank Act allows state-chartered banks to establish new branches on an interstate basis[72]. - The Bank must obtain prior approval from the RI Division of Banking and the FDIC to acquire another bank or establish a new branch office[72]. - The Federal Reserve may require a banking organization to maintain capital above minimum levels due to financial condition or anticipated growth[78]. - The Bancorp is required to maintain a minimum common equity Tier 1 capital to risk-weighted assets ratio of 4.5%, a minimum Tier 1 capital to risk-weighted assets ratio of 6.0%, and a minimum total capital to risk-weighted assets ratio of 8.0%[81]. - The Bancorp is considered "well capitalized" under the FDIC's prompt corrective action rules if it maintains a total capital to risk-weighted assets ratio of 10.0% or greater[82]. - The Bancorp's ability to pay dividends is restricted if it does not maintain the required capital conservation buffer[87]. - The Federal Reserve may prohibit bank holding companies from paying dividends if such payment is deemed unsafe or unsound, particularly if it exceeds earnings for the period[87]. - The Bank is required to report any cash transactions involving at least $10,000 to the U.S. Treasury under the Bank Secrecy Act[94]. - Financial institutions must file suspicious activity reports for transactions over $5,000 that are suspected to involve illegal funds[94]. - The Bancorp and the Bank made a one-time, permanent election to exclude AOCI from capital[80]. - The capital adequacy rules specify minimum amounts of capital as a percentage of assets that banking organizations must maintain[81]. - The Bancorp's currently outstanding trust preferred securities were grandfathered under the Federal Reserve's capital rule[81]. Market and Economic Conditions - The company faces inflationary pressures, with elevated inflation levels continuing into 2024 and potentially remaining high in 2025, impacting operational results[102]. - The Federal Reserve raised the federal funds rate several times in 2023, which may affect the company's loan origination volume and interest rate spread[102]. - Increased market volatility and adverse changes in financial conditions may negatively impact the company's liquidity and competitive position[110]. - The company may experience higher rates of default in its commercial loan portfolio compared to residential mortgage loans due to economic conditions and borrower financial health[117]. - The company is exposed to credit and market risks in its investment securities portfolio, which could be adversely affected by reduced market liquidity and increased interest rates[125]. - A downgrade of U.S. government agency securities could materially impact the company's operations, earnings, and financial condition[126]. Strategic Initiatives - The company has adopted asset and liability management policies to mitigate adverse effects of interest rate changes on net interest income[106]. - The company relies on third-party vendors for key business infrastructure, and any issues with these vendors could adversely affect service delivery[134]. - The company competes with both financial and non-financial services firms, and emerging technologies may intensify competition in the financial services industry[142]. - The corporation's strategy focuses on leveraging its regional brand to build market share and enhance customer service through both in-person and digital banking solutions[212]. - The Bank agreed to provide $7.0 million in loan subsidies over a five-year period to increase home mortgage loans, home improvement loans, and home refinance loans in specific census tracts in Rhode Island[160]. - The Bank committed to $2.0 million for focused community outreach and marketing efforts over a five-year period, consistent with historical spending levels[160]. - The Bank plans to open two full-service branches in specific census tracts in Rhode Island, including a new branch in Olneyville[160]. - The corporation completed a public offering of 2,198,528 shares at $34.00 per share, raising net proceeds of $70.5 million for investments and balance sheet optimization[214]. - The corporation sold available for sale debt securities with an amortized cost of $409.5 million, realizing a net pre-tax loss of $31.0 million, and reinvested $378.4 million into higher-yielding securities[215]. - The corporation committed to sell residential mortgage loans with an amortized cost of $344.6 million, resulting in a net pre-tax loss of $62.9 million recognized in Q4 2024[216]. - The corporation's risk management program includes oversight of credit risk, interest rate risk, liquidity risk, and operational risk to ensure informed decision-making[218]. Operational Risks - The company faces significant cybersecurity risks that could disrupt operations and damage customer trust[133]. - The company has implemented comprehensive cybersecurity measures, including regular assessments and third-party audits, to mitigate risks associated with cybersecurity threats[165]. - The Audit Committee oversees the cybersecurity program, receiving regular reports on the status of control environments and material security risks[175]. - The Bank may face significant legal risks from regulatory investigations and private actions, which could result in financial liability and reputational damage[162]. - Changes in tax laws and regulations could adversely impact the Bank's financial statements and effective income tax rate[148]. - The Bank's ability to raise additional capital may be affected by market conditions and financial performance, which could lead to regulatory restrictions[151]. - The Bank's stock price and trading volume can be volatile, influenced by various factors including operating results and market conditions[150]. - The Bank's wealth management business is subject to extensive regulation, which could limit activities and impose fines[157]. - The Bank's operations may be adversely affected by natural disasters, acts of terrorism, and other external events, impacting financial condition and results[144].