Washington Trust(US:WASH)2025-07-21 20:10Executive Summary & Q2 2025 Highlights This section provides an overview of Washington Trust Bank's second quarter 2025 performance, highlighting key financial achievements and strategic business segment growth Second Quarter 2025 Results Overview Washington Trust Bank achieved growth in net income and diluted earnings per share in Q2 2025, reflecting positive performance across its diversified business model, including increases in net interest income, wealth management revenue, and mortgage banking income, while maintaining strong capital levels | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Net Income | $13.2 Million | $12.2 Million | Increase $1.0 Million | | Diluted EPS | $0.68 | $0.63 | Increase $0.05 | | Adjusted Net Income (Non-GAAP) | - | $11.8 Million | - | | Adjusted Diluted EPS (Non-GAAP) | - | $0.61 | - | - CEO Edward O. Handy III stated that Q2 results reflect positive performance across a diversified business model, with growth in net interest income, wealth management, and mortgage banking, alongside strong capital levels3 Key Financial Highlights (QoQ) In Q2 2025, net interest margin increased by 7 basis points quarter-over-quarter to 2.36%, credit loss provisions decreased, wealth management and mortgage banking income grew by 2% and 32% respectively, and both total loans and in-market deposits increased by 1% | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Net Interest Margin | 2.36% | 2.29% | Increase 7 bps | | Provision for Credit Losses | $600 Thousand | $1.2 Million | Decrease $600 Thousand | | Wealth Management Income | Growth 2% | - | - | | Mortgage Banking Income | Growth 32% | - | - | | Total Loans | $5.1 Billion | - | Growth 1% (vs. Mar 31) | | In-Market Deposits | $5.0 Billion | - | Growth 1% (vs. Mar 31) | | In-Market Deposits | $5.0 Billion | - | Growth 9% (vs. Jun 30, 2024) | Detailed Financial Performance This section provides an in-depth analysis of the company's net interest income, noninterest income, and noninterest expense for the reporting period Net Interest Income Net interest income increased by 2% quarter-over-quarter in Q2 2025, with net interest margin rising 7 basis points to 2.36%, primarily driven by a slight increase in earning asset yields and a decrease in interest-bearing liability costs | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $37.2 Million | $36.4 Million | Increase $763 Thousand (2%) | | Net Interest Margin | 2.36% | 2.29% | Increase 7 bps | | Yield on Earning Assets | 4.99% | - | Increase 1 bps | | Cost of Interest-Bearing Liabilities | 3.12% | - | Decrease 7 bps | Noninterest Income Noninterest income decreased by 24.6% quarter-over-quarter in Q2 2025, primarily due to a $7.0 million pre-tax net gain from a sale-leaseback transaction recognized in the prior quarter; excluding this, adjusted noninterest income grew 9% QoQ, with strong performance in wealth management and mortgage banking income | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Noninterest Income | $17.1 Million | $22.7 Million | Decrease $5.6 Million (24.6%) | | Adjusted Noninterest Income (Non-GAAP) | - | - | Increase $1.4 Million (9%) | | Wealth Management Income | $10.1 Million | $9.9 Million | Increase $229 Thousand (2%) | | Mortgage Banking Income | $3.0 Million | $2.3 Million | Increase $730 Thousand (32%) | | Loan-Related Derivative Income | $676 Thousand | $101 Thousand | Increase $575 Thousand (569%) | - Wealth management income growth was primarily concentrated in seasonal tax service fee income, while assets under administration (AUA) period-end balance grew 5% to $7.2 billion6 - Mortgage banking income growth reflects an increase in loan sales to the secondary market, with loan sales increasing 55% QoQ to $116.8 million6 Noninterest Expense Noninterest expense decreased by 13% quarter-over-quarter in Q2 2025, primarily due to a $6.4 million pension plan settlement charge recognized in the prior quarter; excluding this, adjusted noninterest expense grew 2% QoQ, with increases in salaries and employee benefits and advertising expenses | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Noninterest Expense | $36.5 Million | $42.2 Million | Decrease $5.7 Million (13%) | | Adjusted Noninterest Expense (Non-GAAP) | - | - | Increase $770 Thousand (2%) | | Salaries and Employee Benefits | $23.0 Million | $22.4 Million | Increase $603 Thousand (3%) | | Advertising and Promotion Expenses | $717 Thousand | $410 Thousand | Increase $307 Thousand (75%) | - The increase in salaries and employee benefits primarily reflects higher mortgage originator commission expenses due to increased business volume7 Income Tax This section details the company's income tax expense and effective tax rate for the current and prior periods Income Tax Expense and Rate Income tax expense for Q2 2025 was $3.9 million, with an effective tax rate of 22.7%, slightly higher than the previous quarter; the company anticipates an effective tax rate of approximately 22.4% for the full year 2025 | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Income Tax Expense | $3.9 Million | $3.5 Million | Increase $400 Thousand | | Effective Tax Rate | 22.7% | 22.3% | Increase 0.4% | | Full-Year 2025 Expected Effective Tax Rate | 22.4% | - | - | Balance Sheet Overview This section provides a summary of the company's key balance sheet components, including investment securities, loans, deposits, and borrowings Investment Securities As of June 30, 2025, the total investment securities portfolio was $971 million, a 6% quarter-over-quarter increase, primarily driven by $73 million in securities purchases, partially offset by routine paydowns of mortgage-backed securities | Metric | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Securities Portfolio | $971 Million | $917 Million | Increase $54 Million (6%) | | % of Total Assets | 14% | 14% | No Change | Loans As of June 30, 2025, total loans amounted to $5.1 billion, representing a 1% quarter-over-quarter increase, with commercial loans growing 2% while residential real estate loans decreased by 1% | Metric | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Loans | $5.1 Billion | $5.096 Billion | Increase $44 Million (1%) | | Commercial Loans | - | - | Increase $57 Million (2%) | | Residential Real Estate Loans | - | - | Decrease $17 Million (1%) | | Consumer Loans | - | - | Increase $4 Million (1%) | Deposits and Borrowings As of June 30, 2025, total deposits were $5.0 billion, remaining largely flat quarter-over-quarter, with in-market deposits growing 1% while wholesale brokered deposits significantly decreased by 93%, and Federal Home Loan Bank (FHLB) advances increased by 18% | Metric | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Deposits | $5.0 Billion | $5.04 Billion | Increase $5 Million (0.1%) | | In-Market Deposits | $5.0 Billion | - | Increase $30 Million (1%) | | Wholesale Brokered Deposits | $2 Million | $27 Million | Decrease $25 Million (93%) | | FHLB Advances | $1.0 Billion | $850 Million | Increase $151 Million (18%) | | Contingent Liquidity | $1.8 Billion | - | - | - As of June 30, 2025, total contingent liquidity was $1.8 billion, including available cash, unpledged securities, and unused collateralized borrowing capacity11 Asset Quality This section provides an overview of the company's asset quality, including nonaccrual loans, past due loans, and credit loss allowances Nonaccrual and Past Due Loans As of June 30, 2025, both nonaccrual loans and past due loans increased quarter-over-quarter, with the rise in nonaccrual loans primarily attributed to a $9.4 million commercial and industrial loan being placed on nonaccrual status | Metric | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Nonaccrual Loans | $26.1 Million | $21.6 Million | Increase $4.5 Million | | Nonaccrual Loans as % of Total Loans | 0.51% | 0.42% | Increase 0.09% | | Past Due Loans | $14.0 Million | $10.2 Million | Increase $3.8 Million | | Past Due Loans as % of Total Loans | 0.27% | 0.20% | Increase 0.07% | - As of June 30, 2025, 54% of nonaccrual loans were commercial loans, and 46% were residential and consumer loans12 - As of June 30, 2025, 13% of past due loans were commercial loans, and 87% were residential and consumer loans13 Allowance for Credit Losses (ACL) & Net Charge-offs In Q2 2025, the allowance for credit losses on loans remained stable, while the provision for credit losses and net charge-offs both significantly decreased compared to the previous quarter | Metric | Q2 2025 | Q1 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Allowance for Credit Losses on Loans | $41.1 Million | $41.1 Million | No Change | | ACL on Loans as % of Total Loans | 0.80% | 0.81% | Decrease 0.01% | | Provision for Credit Losses | $600 Thousand | $1.2 Million | Decrease $600 Thousand | | Net Charge-offs | $647 Thousand | $2.3 Million | Decrease $1.653 Million | Capital and Dividends This section outlines the company's shareholders' equity, dividend payments, and capital ratios, demonstrating its strong capital position Shareholders' Equity and Dividends As of June 30, 2025, total shareholders' equity increased by 1% quarter-over-quarter, driven by net income and an improvement in accumulated other comprehensive loss, partially offset by quarterly dividends; the company's capital levels exceed regulatory minimums and are considered well-capitalized | Metric | Jun 30, 2025 | Mar 31, 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $527.5 Million | $521.7 Million | Increase $5.8 Million (1%) | | Quarterly Dividend | $0.56/share | $0.56/share | No Change | | Total Risk-Based Capital Ratio | 13.06% | 13.13% | Decrease 0.07% | | Book Value per Share | $27.36 | $27.06 | Increase $0.30 | Conference Call Information This section provides details for the upcoming conference call to discuss the company's Q2 2025 financial results Q2 2025 Earnings Conference Call Washington Trust Bank will host a conference call on July 22, 2025, to discuss its second quarter results, business highlights, and outlook, with options for dial-in, audio replay, and webcast - Conference call time: Tuesday, July 22, 2025, at 8:30 AM (ET)19 - Dial-in information: 1-833-470-1428, access code 17739519 - Webcast: Available on the Washington Trust Investor Relations website at https://ir.washtrust.com and accessible until September 30, 202519 Company Background This section provides a brief overview of Washington Trust Bank's history, services, and operational footprint Washington Trust Overview Founded in 1800, Washington Trust Bank is the oldest community bank in the United States and Rhode Island's largest state-chartered bank, offering a full range of financial services including commercial banking, mortgage banking, personal banking, and wealth management - Washington Trust Bank was founded in 1800, making it the oldest community bank in the United States20 - It offers commercial banking, mortgage banking, personal banking, and wealth management and trust services20 - The bank operates offices in Rhode Island, Connecticut, and Massachusetts20 Important Disclosures This section contains critical disclosures regarding forward-looking statements and the use of non-GAAP financial measures Forward-Looking Statements This press release contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations; investors should not place undue reliance on these statements and should carefully evaluate related risk factors - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations21 - Words identifying forward-looking statements include "believe," "expect," "anticipate," "intend," "estimate," "assume," "outlook," "will," "should," and similar expressions21 - Factors that could cause differences include changes in economic conditions, interest rate fluctuations, changes in loan demand and collectibility, market volatility, and regulatory and operational risks2224 Explanation of Non-GAAP Financial Measures This press release includes non-GAAP financial measures that management believes provide supplementary information useful to regulators and market analysts in evaluating the company's financial condition; however, these disclosures should not be considered a substitute for GAAP financial results and may not be comparable to non-GAAP measures used by other companies - Non-GAAP financial measures are used by regulators and market analysts to evaluate the company's financial condition and are useful to investors23 - Non-GAAP disclosures should not be considered a substitute for GAAP financial results and may not be comparable to those of other companies23 - Non-GAAP metrics include adjusted noninterest income, adjusted noninterest expense, adjusted net income, adjusted diluted earnings per share, and measures based on tangible common equity and tangible assets23 Financial Statements This section presents the company's condensed consolidated financial statements, including the balance sheets and statements of income Condensed Consolidated Balance Sheets This section provides the unaudited condensed consolidated balance sheets as of June 30, 2025, and prior periods, detailing the company's assets, liabilities, and shareholders' equity composition | | Jun 30, 2025 (Thousands) | Mar 31, 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Assets: | | | | | | | Cash and due from banks | $43,997 | $33,394 | $21,534 | $33,694 | $28,211 | | Interest-bearing deposits | 119,582 | 82,804 | 88,368 | 173,277 | 75,666 | | Short-term investments | 4,145 | 4,041 | 3,987 | 3,772 | 3,654 | | Mortgage loans held for sale | 35,681 | 21,953 | 21,708 | 20,864 | 26,116 | | Debt securities available for sale | 971,341 | 917,545 | 916,305 | 973,266 | 951,828 | | FHLB stock | 45,273 | 38,899 | 49,817 | 57,439 | 66,166 | | Loans, net | 5,099,201 | 5,055,154 | 5,095,878 | 5,472,240 | 5,586,724 | | Liabilities: | | | | | | | Total deposits | 5,045,248 | 5,040,581 | 5,115,800 | 5,171,890 | 4,976,126 | | FHLB advances | 1,001,000 | 850,000 | 1,125,000 | 1,300,000 | 1,550,000 | | Shareholders' Equity: | | | | | | | Total shareholders' equity | 527,519 | 521,680 | 499,728 | 502,229 | 470,957 | | Total Assets | $6,745,167 | $6,586,015 | $6,930,647 | $7,141,571 | $7,184,360 | | Total Liabilities and Shareholders' Equity | $6,745,167 | $6,586,015 | $6,930,647 | $7,141,571 | $7,184,360 | Condensed Consolidated Statements of Income This section provides the unaudited condensed consolidated statements of income for the three and six months ended June 30, 2025, and prior periods, detailing the company's interest income, interest expense, noninterest income, noninterest expense, and net income | | Jun 30, 2025 (Thousands) | Mar 31, 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Interest Income: | | | | | | | Interest and fees on loans | $67,345 | $66,656 | $71,432 | $75,989 | $76,240 | | Interest on debt securities | 9,238 | 8,835 | 7,015 | 6,795 | 6,944 | | Other interest income | 1,821 | 2,762 | 2,622 | 4,436 | 2,813 | | Total Interest and Dividend Income | 78,846 | 79,463 | 81,839 | 87,586 | 85,997 | | Interest Expense: | | | | | | | Deposits | 30,864 | 31,748 | 34,135 | 37,203 | 36,713 | | FHLB advances | 10,451 | 10,946 | 14,388 | 17,717 | 17,296 | | Subordinated debt | 346 | 347 | 380 | 404 | 403 | | Total Interest Expense | 41,661 | 43,041 | 48,903 | 55,324 | 54,412 | | Net Interest Income | 37,185 | 36,422 | 32,936 | 32,262 | 31,585 | | Provision for credit losses | 600 | 1,200 | 1,000 | 200 | 500 | | Noninterest Income: | | | | | | | Wealth management income | 10,120 | 9,891 | 10,049 | 9,989 | 9,678 | | Mortgage banking income | 3,034 | 2,304 | 2,848 | 2,866 | 2,761 | | Bank-owned life insurance income | 826 | 769 | 779 | 770 | 753 | | Gain on sale of bank-owned property | — | 6,994 | — | — | 988 | | Other income | 367 | 331 | 310 | 416 | 387 | | Total Noninterest Income | 17,078 | 22,643 | (77,892) | 16,272 | 16,660 | | Noninterest Expense: | | | | | | | Salaries and employee benefits | 23,025 | 22,422 | 21,875 | 21,350 | 21,260 | | Pension plan settlement charge | — | 6,436 | — | — | — | | Total Noninterest Expense | 36,530 | 42,196 | 34,292 | 34,504 | 33,910 | | Income Tax Expense | 3,888 | 3,490 | (19,457) | 2,849 | 3,020 | | Net Income | $13,245 | $12,179 | ($60,791) | $10,981 | $10,815 | | Diluted Earnings Per Share | $0.68 | $0.63 | ($3.46) | $0.64 | $0.63 | Selected Financial Highlights (Detailed) This section provides a detailed breakdown of key financial highlights, including share and equity-related data, capital ratios, balance sheet ratios, and performance ratios Share and Equity Related Data This section presents key metrics such as book value per share, tangible book value per share, and market value per share as of June 30, 2025, and prior periods | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Book Value per Share | $27.36 | $27.06 | $25.93 | $29.44 | $27.61 | | Tangible Book Value per Share (Non-GAAP) | $23.91 | $23.61 | $22.46 | $25.51 | $23.67 | | Market Value per Share | $28.28 | $30.86 | $31.35 | $32.21 | $27.41 | | Shares Outstanding, Period End (Thousands) | 19,562 | 19,562 | 19,562 | 17,363 | 17,363 | | Common Shares Outstanding, Period End (Thousands) | 19,283 | 19,276 | 19,274 | 17,058 | 17,058 | Capital Ratios This section lists various capital ratios as of June 30, 2025, and prior periods, demonstrating the company's capital adequacy and compliance with regulatory requirements | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Tier 1 Risk-Based Capital Ratio | 12.17% | 12.23% | 11.64% | 11.39% | 11.01% | | Total Risk-Based Capital Ratio | 13.06% | 13.13% | 12.47% | 12.21% | 11.81% | | Tier 1 Leverage Ratio | 8.66% | 8.45% | 8.13% | 7.85% | 7.82% | | Common Equity Tier 1 Capital Ratio | 11.71% | 11.76% | 11.20% | 10.95% | 10.59% | Balance Sheet Ratios This section provides balance sheet ratios as of June 30, 2025, and prior periods, including equity to assets and loans to deposits ratios | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity to Assets | 7.82% | 7.92% | 7.21% | 7.03% | 6.56% | | Tangible Equity to Tangible Assets (Non-GAAP) | 6.90% | 6.98% | 6.31% | 6.15% | 5.67% | | Loans to Deposits | 101.8% | 100.7% | 105.5% | 106.2% | 112.8% | Performance Ratios This section lists annualized performance ratios as of June 30, 2025, and prior periods, including net interest margin, return on average assets, return on average equity, and efficiency ratio, with both GAAP and non-GAAP adjusted data | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Interest Margin | 2.36% | 2.29% | 1.95% | 1.85% | 1.83% | | Return on Average Assets | 0.80% | 0.73% | (3.45%) | 0.60% | 0.60% | | Adjusted Return on Average Assets (Non-GAAP) | 0.80% | 0.71% | 0.59% | 0.60% | 0.56% | | Return on Average Tangible Assets (Non-GAAP) | 0.81% | 0.71% | 0.60% | 0.61% | 0.57% | | Return on Average Equity | 10.14% | 9.63% | (48.25%) | 8.99% | 9.43% | | Adjusted Return on Average Equity (Non-GAAP) | 10.14% | 9.30% | 8.29% | 8.99% | 8.79% | | Return on Average Tangible Equity (Non-GAAP) | 11.62% | 10.69% | 9.57% | 10.43% | 10.29% | | Efficiency Ratio | 67.3% | 71.4% | (76.3%) | 71.1% | 70.3% | | Adjusted Efficiency Ratio (Non-GAAP) | 67.3% | 68.7% | 70.0% | 71.1% | 71.8% | Business Segment Performance This section analyzes the performance of the company's key business segments, including wealth management and mortgage banking Wealth Management Results In Q2 2025, total wealth management income increased by 2% quarter-over-quarter, with transactional income significantly growing by 207% while asset-based income slightly decreased; period-end assets under administration (AUA) balance grew 5% QoQ | Metric | Q2 2025 (Thousands) | Q1 2025 (Thousands) | QoQ Change | | :--- | :--- | :--- | :--- | | Total Wealth Management Income | $10,120 | $9,891 | Increase $229 (2%) | | Asset-Based Income | $9,745 | $9,769 | Decrease $24 (0.2%) | | Transactional Income | $375 | $122 | Increase $253 (207%) | | Period-End AUA Balance | $7,181,715 | $6,818,390 | Increase $363,325 (5%) | Mortgage Banking Results In Q2 2025, mortgage banking income increased by 32% quarter-over-quarter, primarily driven by higher gains on loan sales; both residential mortgage loan originations and sales volumes significantly increased | Metric | Q2 2025 (Thousands) | Q1 2025 (Thousands) | QoQ Change | | :--- | :--- | :--- | :--- | | Total Mortgage Banking Income | $3,034 | $2,304 | Increase $730 (32%) | | Net Gains on Loan Sales | $2,460 | $1,575 | Increase $885 | | Total Residential Mortgage Loan Originations | $181,543 | $103,181 | Increase $78,362 | | Total Residential Mortgage Loan Sales | $116,775 | $75,499 | Increase $41,276 | Loan Portfolio Analysis This section provides a detailed analysis of the company's loan portfolio, segmented by type, property location, and industry Loan Composition by Type As of June 30, 2025, commercial loans constituted the largest portion of the company's loan portfolio, followed by residential real estate loans and consumer loans | Loan Type | Jun 30, 2025 (Thousands) | Mar 31, 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial Real Estate | $2,178,925 | $2,134,107 | $2,154,504 | $2,102,091 | $2,191,996 | | Commercial & Industrial | 547,318 | 535,030 | 542,474 | 566,279 | 558,075 | | Total Commercial Loans | 2,726,243 | 2,669,137 | 2,696,978 | 2,668,370 | 2,750,071 | | Residential Real Estate | 2,096,250 | 2,113,307 | 2,126,171 | 2,529,397 | 2,558,533 | | Home Equity | 300,917 | 296,563 | 297,119 | 299,379 | 302,027 | | Other Consumer | 16,850 | 17,203 | 17,570 | 17,724 | 18,471 | | Total Consumer Loans | 317,767 | 313,766 | 314,689 | 317,103 | 320,498 | | Total Loans | $5,140,260 | $5,096,210 | $5,137,838 | $5,514,870 | $5,629,102 | Commercial Real Estate Loans by Property Location As of June 30, 2025, commercial real estate loans were primarily concentrated in Connecticut, Massachusetts, and Rhode Island, with these three states collectively accounting for 89% of the total | Location | Jun 30, 2025 (Thousands) | % of Total | Dec 31, 2024 (Thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Connecticut | $850,350 | 39% | $839,079 | 39% | | Massachusetts | 650,834 | 30% | 663,026 | 31% | | Rhode Island | 429,385 | 20% | 434,244 | 20% | | Other States | 248,356 | 11% | 218,155 | 10% | | Total Commercial Real Estate Loans | $2,178,925 | 100% | $2,154,504 | 100% | Residential Real Estate Loans by Property Location As of June 30, 2025, residential real estate loans were predominantly distributed across Massachusetts and Rhode Island, collectively representing 93% of the total | Location | Jun 30, 2025 (Thousands) | % of Total | Dec 31, 2024 (Thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Massachusetts | $1,489,658 | 71% | $1,530,847 | 72% | | Rhode Island | 459,486 | 22% | 443,237 | 21% | | Connecticut | 124,623 | 6% | 128,933 | 6% | | Other States | 22,483 | 1% | 23,154 | 1% | | Total Residential Real Estate Loans | $2,096,250 | 100% | $2,126,171 | 100% | Commercial Real Estate Portfolio Segmentation As of June 30, 2025, the commercial real estate loan portfolio was primarily composed of multi-family residential properties, followed by retail and industrial/warehouse properties | Property Type | Jun 30, 2025 (Thousands) | % of Total | Dec 31, 2024 (Thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Multi-Family Residential | $629,184 | 29% | $567,243 | 26% | | Retail | 407,039 | 19% | 433,146 | 20% | | Industrial and Warehouse | 370,839 | 17% | 358,425 | 17% | | Office | 274,657 | 13% | 289,853 | 13% | | Hotel | 222,715 | 10% | 213,585 | 10% | | Medical Facilities | 193,791 | 9% | 205,858 | 10% | | Mixed-Use | 26,379 | 1% | 29,023 | 1% | | Other | 54,321 | 2% | 57,371 | 3% | | Total Commercial Real Estate Loans | $2,178,925 | 100% | $2,154,504 | 100% | Commercial & Industrial Portfolio Segmentation As of June 30, 2025, the commercial and industrial loan portfolio was primarily concentrated in the healthcare and social assistance sector, followed by real estate rental and educational services | Industry | Jun 30, 2025 (Thousands) | % of Total | Dec 31, 2024 (Thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Healthcare and Social Assistance | $118,747 | 22% | $126,547 | 23% | | Real Estate Rental | 56,715 | 10% | 63,992 | 12% | | Educational Services | 55,174 | 10% | 47,092 | 9% | | Transportation and Warehousing | 52,698 | 10% | 55,784 | 10% | | Retail Trade | 50,207 | 9% | 41,132 | 8% | | Finance and Insurance | 24,779 | 5% | 26,557 | 5% | | Accommodation and Food Services | 24,752 | 5% | 12,368 | 2% | | Information | 21,858 | 4% | 22,265 | 4% | | Manufacturing | 21,536 | 4% | 32,140 | 6% | | Arts, Entertainment, and Recreation | 19,129 | 3% | 19,861 | 4% | | Professional, Scientific, and Technical Services | 11,990 | 2% | 10,845 | 2% | | Public Administration | 2,036 | 0% | 2,186 | 0% | | Other | 87,697 | 16% | 81,705 | 15% | | Total Commercial & Industrial Loans | $547,318 | 100% | $542,474 | 100% | Non-Owner Occupied Commercial Real Estate Office Analysis As of June 30, 2025, non-owner occupied commercial real estate office loans totaled $274.7 million, with Class A and B properties accounting for a significant portion; the portfolio's weighted average loan-to-value ratio was 64%, and the debt service coverage ratio was 1.34x | Category | Jun 30, 2025 (Thousands) | Average Loan Size (Thousands) | Loan-to-Value Ratio | Debt Service Coverage Ratio | | :--- | :--- | :--- | :--- | :--- | | Class A | $102,923 | $9,406 | 58% | 1.76x | | Class B | 74,536 | 3,405 | 55% | 1.34x | | Class C | 14,757 | 1,845 | 54% | 1.25x | | Medical Office | 53,102 | 7,586 | 69% | 1.40x | | Lab Space | 29,339 | 23,480 | 91% | 0.38x | | Total Office Loans | $274,657 | $5,864 | 64% | 1.34x | - As of June 30, 2025, approximately 66% of commercial real estate office loans were secured by suburban income-producing properties, and approximately 49% of office loans are scheduled to mature by June 30, 202741 Deposit and Liquidity Analysis This section provides an in-depth analysis of the company's deposit composition, uninsured deposits, and contingent liquidity sources Deposit Composition As of June 30, 2025, the company's total deposits amounted to $5.045 billion, with in-market deposits constituting the vast majority, while wholesale brokered certificates of deposit significantly decreased; both noninterest-bearing and interest-bearing demand deposits experienced growth | Deposit Type | Jun 30, 2025 (Thousands) | Mar 31, 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Noninterest-Bearing Demand Deposits | $646,584 | $625,590 | $661,776 | $665,706 | $645,661 | | Interest-Bearing Demand Deposits (In-Market) | 668,483 | 654,599 | 592,904 | 596,319 | 532,316 | | NOW Accounts | 680,246 | 686,666 | 692,812 | 685,531 | 722,797 | | Money Market Accounts | 1,147,792 | 1,202,703 | 1,154,745 | 1,146,426 | 1,086,088 | | Savings Accounts | 693,055 | 630,413 | 523,915 | 490,285 | 485,208 | | Certificates of Deposit (In-Market) | 1,207,255 | 1,213,382 | 1,192,110 | 1,207,626 | 1,164,839 | | In-Market Deposits | 5,043,415 | 5,013,353 | 4,818,262 | 4,791,893 | 4,636,909 | | Wholesale Brokered Certificates of Deposit | 1,833 | 27,228 | 297,538 | 379,997 | 339,217 | | Total Deposits | $5,045,248 | $5,040,581 $5,115,800 | $5,171,890 | $4,976,126 | Uninsured Deposits As of June 30, 2025, total uninsured deposits were $1.366 billion, representing 27% of total deposits; after deducting related party deposits and fully collateralized preferred deposits, uninsured deposits amounted to $1.082 billion, or 21% of total deposits | Metric | Jun 30, 2025 (Thousands) | % of Total Deposits | Dec 31, 2024 (Thousands) | % of Total Deposits | | :--- | :--- | :--- | :--- | :--- | | Uninsured Deposits | $1,365,590 | 27% | $1,363,689 | 27% | | Less: Related Party Deposits | 76,352 | 1% | 94,740 | 2% | | Less: Fully Collateralized Preferred Deposits | 207,695 | 5% | 197,638 | 4% | | Uninsured Deposits, Net of Deductions | $1,081,543 | 21% | $1,071,311 | 21% | Contingent Liquidity As of June 30, 2025, the company's total contingent liquidity was $1.783 billion, primarily sourced from the Federal Home Loan Bank, Federal Reserve Bank, available cash, and unpledged securities; contingent liquidity covered uninsured deposits by 130.6% | Source | Jun 30, 2025 (Thousands) | Dec 31, 2024 (Thousands) | | :--- | :--- | :--- | | Federal Home Loan Bank | $987,119 | $752,951 | | Federal Reserve Bank | 111,454 | 70,286 | | Available Cash Liquidity | 87,662 | 36,647 | | Unpledged Securities | 596,906 | 597,771 | | Total Contingent Liquidity | $1,783,141 | $1,457,655 | | Contingent Liquidity as % of Uninsured Deposits | 130.6% | 106.9% | | Contingent Liquidity as % of Uninsured Deposits, Net of Deductions | 164.9% | 136.1% | Detailed Credit & Asset Quality Data This section provides detailed credit and asset quality data, including asset quality ratios, nonperforming assets, past due loans, and activity in allowances for credit losses and net charge-offs Asset Quality Ratios As of June 30, 2025, the ratio of nonperforming assets to total assets and nonaccrual loans to total loans both increased, while the allowance for credit losses on loans to nonaccrual loans ratio decreased | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Nonperforming Assets as % of Total Assets | 0.39% | 0.33% | 0.34% | 0.44% | 0.43% | | Nonaccrual Loans as % of Total Loans | 0.51% | 0.42% | 0.45% | 0.56% | 0.54% | | Past Due Loans as % of Total Loans | 0.27% | 0.20% | 0.23% | 0.37% | 0.21% | | ACL on Loans as % of Nonaccrual Loans | 157.27% | 189.85% | 180.03% | 136.89% | 139.04% | | ACL on Loans as % of Total Loans | 0.80% | 0.81% | 0.82% | 0.77% | 0.75% | Nonperforming Assets As of June 30, 2025, total nonperforming assets amounted to $26.108 million, with increases in both commercial nonaccrual loans and residential real estate nonaccrual loans | Asset Type | Jun 30, 2025 (Thousands) | Mar 31, 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial Real Estate | $4,276 | $7,605 | $10,053 | $18,259 | $18,390 | | Commercial & Industrial | 9,711 | 1,140 | 515 | 616 | 642 | | Total Commercial Nonaccrual Loans | 13,987 | 8,745 | 10,568 | 18,875 | 19,032 | | Residential Real Estate | 10,614 | 11,102 | 10,767 | 10,517 | 9,744 | | Home Equity | 1,507 | 1,779 | 1,972 | 1,750 | 1,703 | | Total Nonaccrual Loans | $26,108 | $21,626 | $23,307 | $31,142 | $30,479 | | Total Nonperforming Assets | $26,108 | $21,626 | $23,307 | $31,142 | $31,162 | Past Due Loans As of June 30, 2025, total past due loans amounted to $14.035 million, a significant quarter-over-quarter increase, with residential real estate past due loans accounting for the largest proportion | Loan Type | Jun 30, 2025 (Thousands) | Mar 31, 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial Real Estate | $— | $— | $— | $10,476 | $— | | Commercial & Industrial | 1,799 | 1,146 | 900 | 3 | 2 | | Total Commercial Past Due Loans | 1,799 | 1,146 | 900 | 10,479 | 2 | | Residential Real Estate | 9,772 | 6,439 | 7,741 | 6,947 | 8,534 | | Home Equity | 2,430 | 2,578 | 2,947 | 2,800 | 3,324 | | Other Consumer | 34 | 32 | 394 | 75 | 20 | | Total Consumer Past Due Loans | 2,464 | 2,610 | 3,341 | 2,875 | 3,344 | | Total Past Due Loans | $14,035 | $10,195 | $11,982 | $20,301 | $11,880 | Nonaccrual Loan Activity In Q2 2025, the balance of nonaccrual loans increased, with $10.454 million in new nonaccrual loans added, while some loans were returned to accrual status or charged off | Metric | Q2 2025 (Thousands) | Q1 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | $21,626 | $23,307 | $31,142 | $30,479 | $30,710 | | Additions to Nonaccrual | 10,454 | 2,142 | 5,417 | 1,880 | 556 | | Returned to Accrual | (1,493) | (4) | (9) | (268) | (369) | | Charge-offs | (667) | (2,522) | (2,231) | (59) | (53) | | Payments, Settlements, and Other | (3,812) | (1,297) | (11,012) | (890) | (365) | | Ending Balance | $26,108 | $21,626 | $23,307 | $31,142 | $30,479 | Allowance for Credit Losses on Loans Activity In Q2 2025, the allowance for credit losses on loans remained stable, with a current period provision of $650 thousand, charge-offs of $667 thousand, and recoveries of $20 thousand | Metric | Q2 2025 (Thousands) | Q1 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | $41,056 | $41,960 | $42,630 | $42,378 | $41,905 | | Provision for Credit Losses | 650 | 1,400 | 1,200 | 300 | 500 | | Charge-offs | (667) | (2,522) | (2,231) | (59) | (53) | | Recoveries | 20 | 218 | 361 | 11 | 26 | | Ending Balance | $41,059 | $41,056 | $41,960 | $42,630 | $42,378 | Allowance for Credit Losses on Unfunded Commitments Activity In Q2 2025, the allowance for credit losses on unfunded commitments slightly decreased, with a $50 thousand reduction in the current period's provision | Metric | Q2 2025 (Thousands) | Q1 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Beginning Balance | $1,240 | $1,440 | $1,640 | $1,740 | $1,740 | | Provision for Credit Losses | (50) | (200) | (200) | (100) | — | | Ending Balance | $1,190 | $1,240 | $1,440 | $1,640 | $1,740 | Net Loan Charge-Offs (Recoveries) In Q2 2025, net loan charge-offs amounted to $647 thousand, a significant quarter-over-quarter decrease, with commercial loan net charge-offs at $581 thousand and consumer loan net charge-offs at $66 thousand | Loan Type | Q2 2025 (Thousands) | Q1 2025 (Thousands) | Dec 31, 2024 (Thousands) | Sep 30, 2024 (Thousands) | Jun 30, 2024 (Thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial Real Estate | $274 | $2,250 | $1,961 | $— | $— | | Commercial & Industrial | 307 | 3 | 181 | 2 | 4 | | Total Commercial | 581 | 2,253 | 2,142 | 2 | 4 | | Residential Real Estate | — | — | (160) | — | — | | Home Equity | (1) | (1) | (189) | (1) | (6) | | Other Consumer | 67 | 52 | 77 | 47 | 29 | | Total Consumer | 66 | 51 | (112) | 46 | 23 | | Total | $647 | $2,304 | $1,870 | $48 | $27 | | Net Charge-offs as % of Average Loans (Annualized) | 0.05% | 0.18% | 0.14% | 0.00% | 0.00% | Consolidated Average Balance Sheets (FTE Basis) This section presents the company's consolidated average balance sheets on a fully tax-equivalent (FTE) basis, providing insights into average balances, interest income/expense, and yields/rates Three Months Ended June 30, 2025 vs. March 31, 2025 This section provides average asset, liability, interest income/expense, and yield/rate information for the three months ended June 30, 2025, compared to the three months ended March 31, 2025, all presented on a fully tax-equivalent (FTE) basis | | Average Balance (Thousands) | Interest (Thousands) | Yield/Rate | Average Balance (Thousands) | Interest (Thousands) | Yield/Rate | Change (Thousands) | Change (Thousands) | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Assets: | Jun 30, 2025 | | | Mar 31, 2025 | | | Average Balance | Interest | Yield/Rate | | Total Earning Assets | $6,354,407 | $79,063 | 4.99% | $6,488,725 | $79,668 | 4.98% | ($134,318) | ($605) | 0.01% | | Liabilities and Shareholders' Equity: | | | | | | | | | | | Total Interest-Bearing Liabilities | $5,362,385 | $41,661 | 3.12% | $5,479,407 | $43,041 | 3.19% | ($117,022) | ($1,380) | (0.07%) | | Net Interest Income (FTE) | | $37,402 | | | $36,627 | | | $775 | | | Net Interest Margin | | | 2.36% | | | 2.29% | | | 0.07% | Six Months Ended June 30, 2025 vs. June 30, 2024 This section provides average asset, liability, interest income/expense, and yield/rate information for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, all presented on a fully tax-equivalent (FTE) basis | | Average Balance (Thousands) | Interest (Thousands) | Yield/Rate | Average Balance (Thousands) | Interest (Thousands) | Yield/Rate | Change (Thousands) | Change (Thousands) | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Assets: | Jun 30, 2025 | | | Jun 30, 2024 | | | Average Balance | Interest | Yield/Rate | | Total Earning Assets | $6,421,195 | $158,731 | 4.98% | $6,971,856 | $171,702 | 4.95% | ($550,661) | ($12,971) | 0.03% | | Liabilities and Shareholders' Equity: | | | | | | | | | | | Total Interest-Bearing Liabilities | $5,420,572 | $84,702 | 3.15% | $5,942,266 | $108,003 | 3.66% | ($521,694) | ($23,301) | (0.51%) | | Net Interest Income (FTE) | | $74,029 | | | $63,699 | | | $10,330 | | | Net Interest Margin | | | 2.32% | | | 1.84% | | | 0.48% | Supplemental Non-GAAP Financial Measures This section provides reconciliations and calculations for various non-GAAP financial measures, offering additional insights into the company's underlying financial performance Adjusted Noninterest Income, Expense, and Net Income This section provides calculations for non-GAAP adjusted noninterest income, noninterest expense, pre-tax income, income tax expense, effective tax rate, and net income, to remove the impact of one-time or non-recurring items and offer a clearer view of operating performance | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Noninterest Income (Thousands) | $17,078 | $22,643 | ($77,892) | $16,272 | $16,660 | | Adjusted Noninterest Income (Non-GAAP) (Thousands) | $17,078 | $15,649 | $16,043 | $16,272 | $15,672 | | Reported Noninterest Expense (Thousands) | $36,530 | $42,196 | $34,292 | $34,504 | $33,910 | | Adjusted Noninterest Expense (Non-GAAP) (Thousands) | $36,530 | $35,760 | $34,292 | $34,504 | $33,910 | | Reported Pre-Tax Income (Thousands) | $17,133 | $15,669 | ($80,248) | $13,830 | $13,835 | | Adjusted Pre-Tax Income (Non-GAAP) (Thousands) | $17,133 | $15,111 | $13,687 | $13,830 | $12,847 | | Reported Income Tax Expense (Thousands) | $3,888 | $3,490 | ($19,457) | $2,849 | $3,020 | | Adjusted Income Tax Expense (Non-GAAP) (Thousands) | $3,888 | $3,349 | $3,242 | $2,849 | $2,771 | | Reported Effective Tax Rate | 22.7% | 22.3% | 24.2% | 20.6% | 21.8% | | Adjusted Effective Tax Rate (Non-GAAP) | 22.7% | 22.2% | 23.7% | 20.6% | 21.6% | | Reported Net Income (Thousands) | $13,245 | $12,179 | ($60,791) | $10,981 | $10,815 | | Adjusted Net Income (Non-GAAP) (Thousands) | $13,245 | $11,762 | $10,445 | $10,981 | $10,076 | Adjusted Diluted Earnings per Common Share & Efficiency Ratio This section provides calculations for non-GAAP adjusted diluted earnings per common share and efficiency ratio, offering more comparable performance measures | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Diluted EPS | $0.68 | $0.63 | ($3.46) | $0.64 | $0.63 | | Adjusted Diluted EPS (Non-GAAP) | $0.68 | $0.61 | $0.59 | $0.64 | $0.59 | | Reported Efficiency Ratio | 67.3% | 71.4% | (76.3%) | 71.1% | 70.3% | | Adjusted Efficiency Ratio (Non-GAAP) | 67.3% | 68.7% | 70.0% | 71.1% | 71.8% | Adjusted Return on Average Assets & Tangible Assets This section provides calculations for non-GAAP adjusted return on average assets and return on average tangible assets, to better reflect the profitability of the company's core operations | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Return on Average Assets | 0.80% | 0.73% | (3.45%) | 0.60% | 0.60% | | Adjusted Return on Average Assets (Non-GAAP) | 0.80% | 0.71% | 0.59% | 0.60% | 0.56% | | Return on Average Tangible Assets (Non-GAAP) | 0.81% | 0.71% | 0.60% | 0.61% | 0.57% | Adjusted Return on Average Equity & Tangible Equity This section provides calculations for non-GAAP adjusted return on average equity and return on average tangible equity, to assess the company's shareholder return capability after excluding the impact of specific items | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Return on Average Equity | 10.14% | 9.63% | (48.25%) | 8.99% | 9.43% | | Adjusted Return on Average Equity (Non-GAAP) | 10.14% | 9.30% | 8.29% | 8.99% | 8.79% | | Return on Average Tangible Equity (Non-GAAP) | 11.62% | 10.69% | 9.57% | 10.43% | 10.29% | Tangible Book Value per Share & Tangible Equity to Tangible Assets This section provides calculations for tangible book value per share and tangible equity to tangible assets ratio, as these non-GAAP metrics help investors evaluate the company's true value and capital structure after excluding the impact of intangible assets | Metric | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Tangible Book Value per Share (Non-GAAP) | $23.91 | $23.61 | $22.46 | $25.51 | $23.67 | | Tangible Equity to Tangible Assets (Non-GAAP) | 6.90% | 6.98% | 6.31% | 6.15% | 5.67% |