Washington Trust(US:WASH)2023-05-04 14:22Financial Performance - Net income for Q1 2023 was $12.8 million, a decrease of 22% from $16.5 million in Q1 2022[177] - Net interest income increased by 6% to $37.2 million in Q1 2023, up from $35.1 million in Q1 2022[177] - Noninterest income decreased by 23% to $13.3 million in Q1 2023, down from $17.2 million in Q1 2022[177] - Diluted earnings per share decreased to $0.74 in Q1 2023 from $0.94 in Q1 2022[177] - Return on average assets fell to 0.77% in Q1 2023 from 1.14% in Q1 2022[177] Credit Losses and Provisions - Provision for credit losses rose significantly to $800,000 in Q1 2023, compared to $100,000 in Q1 2022, reflecting higher loan growth[177] - The provision for credit losses was $800 thousand for the three months ended March 31, 2023, compared to $100 thousand for the same period in 2022, reflecting a negative economic outlook and loan growth[205] - The allowance for credit losses (ACL) on loans was $38.8 million, or 0.74% of total loans, consistent with the previous quarter[208] - Net charge-offs totaled $47 thousand for the three months ended March 31, 2023, compared to net recoveries of $148 thousand for the same period in 2022[207] - The allowance for credit losses (ACL) on loans amounted to $38.8 million at March 31, 2023, up by $753 thousand, or 2%, from December 31, 2022[301] Income and Revenue Sources - Noninterest income decreased by 23% to $13,283 thousand for the three months ended March 31, 2023, primarily due to a decline in wealth management and mortgage banking revenues[209] - Wealth management revenues decreased by 18% to $8,663 thousand, with asset-based revenues down by 17% due to a 19% decrease in average assets under administration (AUA)[210] - Mortgage banking revenues fell by 64% to $1,245 thousand, with loans sold to the secondary market dropping by 77% to $29,328 thousand[216] Expenses - Noninterest expenses increased by 8% to $33.6 million in Q1 2023, up from $31.2 million in Q1 2022[177] - Total noninterest expense increased by 8% to $33,564 thousand, driven by higher salaries and employee benefits, outsourced services, and FDIC deposit insurance costs[219] Asset and Loan Growth - Total assets grew to $6.74 billion in Q1 2023, an increase of $879.3 million from $5.86 billion in Q1 2022[190] - Total average loan balances increased by $875.7 million year-over-year, with a yield of 4.73% in Q1 2023 compared to 3.25% in Q1 2022[193] - Total loans rose by $117.8 million, or 2%, to $5.23 billion as of March 31, 2023, with growth in both residential real estate and commercial portfolios[249] - Residential real estate loans rose to $2.4 billion, an increase of $80.3 million or 3% from December 31, 2022, with 46% of total loans represented by this category[264] Deposits and Liquidity - Total deposits amounted to $5.3 billion at March 31, 2023, up by $249.6 million, or 5%, from December 31, 2022[310] - Wholesale brokered deposits increased by $250.4 million, or 70%, from December 31, 2022, as higher levels were utilized to fund balance sheet growth[311] - Uninsured deposits decreased to $1.39 billion, representing 26% of total deposits as of March 31, 2023, down from 30% at December 31, 2022[313] - Total contingent liquidity increased to $1,596,286 thousand as of March 31, 2023, up from $1,387,247 thousand at December 31, 2022, representing a 15.1% increase[320] Capital and Shareholder Information - Total shareholders' equity reached $465.0 million at March 31, 2023, an increase of $11.3 million from December 31, 2022, driven by net income of $12.8 million[327] - The Corporation declared a quarterly dividend of $0.56 per share for the three months ended March 31, 2023, compared to $0.54 per share for the same period in 2022[328] - The total risk-based capital ratio was 12.01% at March 31, 2023, down from 12.37% at December 31, 2022, indicating a slight decrease in capital adequacy[329] Interest Rate Sensitivity and Market Conditions - The Corporation's net interest income simulations showed a positive exposure of 5.73% in the 300 basis point rate increase scenario for the first 12 months as of March 31, 2023[337] - The potential outflow of deposit balances to non-bank alternatives is a concern in a rising rate environment, influenced by customer behavior and market conditions[343] - The sensitivity of savings deposits to interest rate fluctuations is a significant factor in income simulation results, which may differ from estimates[343] Branch Expansion and Market Strategy - The company opened a new full-service branch in Barrington, Rhode Island, and plans to open additional branches in Providence and Smithfield later in 2023[162] - The company continues to focus on leveraging its regional brand to build market share and enhance customer service through both in-person and digital banking solutions[162]