Washington Trust(US:WASH)2023-11-06 16:10Financial Performance - Net income for the three months ended September 30, 2023, was $11.2 million, a decrease of 40% compared to $18.7 million for the same period in 2022[198]. - Total revenues for the three months ended September 30, 2023, were $49.0 million, a decrease of 15% from $57.8 million in 2022[198]. - Net income for the nine months ended September 30, 2023, was $2.75 million, down 43% from $4.83 million in the same period of 2022[256]. Income and Expenses - Net interest income decreased by 20% to $33.8 million for the three months ended September 30, 2023, down from $42.0 million in 2022[198]. - Noninterest income declined by 4% to $15.2 million for the three months ended September 30, 2023, compared to $15.8 million in 2022[198]. - Noninterest expenses increased by 4% to $34.4 million for the three months ended September 30, 2023, compared to $33.1 million in 2022[198]. - Noninterest expenses decreased by $542,000, or 7%, for the three months ended September 30, 2023, largely due to lower salaries and employee benefits[258]. Credit Losses and Provisions - The provision for credit losses decreased by 38% to $500,000 for the three months ended September 30, 2023, from $800,000 in 2022[198]. - The provision for credit losses on loans was $900 thousand for the three months ended September 30, 2023, a 50% increase from $600 thousand in 2022, and $2.3 million for the nine months, compared to a negative provision in 2022[227]. - The provision for credit losses decreased by $300 thousand (38%) for the three months but increased by $4.1 million for the nine months ended September 30, 2023, compared to the same periods in 2022[254]. Asset and Loan Growth - Total loans increased to $5.49 billion in Q3 2023, up from $4.65 billion in Q3 2022, representing a growth of 17.9%[1]. - Total assets reached $7.12 billion in Q3 2023, compared to $6.22 billion in Q3 2022, marking an increase of 11.5%[1]. - Total deposits amounted to $5.4 billion at September 30, 2023, up by $396.6 million, or 8%, from December 31, 2022[337]. Interest Income and Margin - The net interest margin decreased to 1.97% in Q3 2023 from 2.82% in Q3 2022, a decline of 0.85 percentage points[1]. - The interest rate spread narrowed to 1.43% in Q3 2023 from 2.63% in Q3 2022, a decrease of 1.20 percentage points[1]. - Net interest income for the Commercial Banking segment decreased by $8.3 million (20%) for the three months and $10.3 million (9%) for the nine months ended September 30, 2023, compared to the same periods in 2022[253]. Equity and Dividends - Shareholders' equity decreased by $22.3 million, or 5%, as net income was offset by dividend declarations and a decrease in the accumulated other comprehensive loss (AOCL)[262]. - The Corporation declared a quarterly dividend of 56 cents per share for the three months ended September 30, 2023, compared to 54 cents per share for the same period in 2022[355]. Market and Economic Conditions - The Federal Reserve increased its target range for the Fed Funds rate to 5.25% - 5.50% as of September 30, 2023, impacting deposit products[372]. - The Corporation's liquidity management strategy funded approximately 67% of total average assets with in-market deposits for the nine months ended September 30, 2023[345]. Nonperforming Assets and Credit Quality - Nonperforming assets increased to $34.3 million, representing 0.48% of total assets, compared to 0.19% at December 31, 2022[303]. - Total past due loans decreased by $1.8 million from the end of 2022, totaling $9.733 million as of September 30, 2023[313]. - The allowance for credit losses (ACL) on loans was $40.2 million, up by $2.2 million or 6% from December 31, 2022, with a reserve coverage ratio of 0.72%[326]. Wealth Management and Other Income - Wealth management revenues decreased by $577 thousand (6%) for the three months and $3.5 million (11%) for the nine months ended September 30, 2023, compared to the same periods in 2022, primarily due to a decline in asset-based revenues[234]. - The average balance of assets under administration (AUA) decreased by 6% for the three months and 13% for the nine months ended September 30, 2023, compared to the same periods in 2022[234].