Washington Trust Bancorp (WASH) Q2 2025 Earnings Call July 22, 2025 08:30 AM ET Company ParticipantsSharon Walsh - SVP, Director - Marketing Strategy & PlanningEdward Handy - Chairman & CEODamon Delmonte - Managing DirectorRonald Ohsberg - SEVP, CFO & TreasurerMark Fitzgibbon - MD & Head - FSG ResearchMary E. Noons - President & COOWilliam Wray - SEVP & Chief Risk OfficerConference Call ParticipantsLaurie Hunsicker - Senior AnalystOperatorHello, everyone, and thank you for your patience. Today's call will b ...

Washington Trust Bancorp (WASH) Q2 2025 Earnings Call July 22, 2025 08:30 AM ET Speaker0Hello, everyone, and thank you for your patience. Today's call will begin short Good morning, and welcome to Washington Trust Bancorp, Inc. Conference Call. My name is Lydia, and I'll be your operator today. Today's call is being recorded.I'd like to turn the call over to Sharon Walsh, Senior Vice President and Director of Marketing and Corporate Communications. Ms. Walsh, over to you.Speaker1Thank you, Lydia. Good morni ...

ROSEMONT, Ill., July 21, 2025 (GLOBE NEWSWIRE) -- Wintrust Financial Corporation (“Wintrust”, “the Company”, “we” or “our”) (Nasdaq: WTFC) announced record net income of $384.6 million, or $5.47 per diluted common share, for the first six months of 2025, compared to net income of $339.7 million, or $5.21 per diluted common share for the same period of 2024. Pre-tax, pre-provision income (non-GAAP) for the first six months of the year totaled a record $566.3 million, compared to $523.0 million for the first ...

Charles Schwab SCHW shares gained on Monday after the company reported stronger-than-expected second-quarter results on Friday, surpassing analyst consensus estimates for both adjusted earnings per share and revenue.The robust performance has prompted leading Wall Street analysts, including those from JP Morgan and Goldman Sachs, to re-rate the stock and raise their price forecasts, citing strong fundamentals, increased trading activity, and strategic growth initiatives, including the upcoming launch of Bit ...

Traders will be focused on several key metrics as major US banks report earnings. Net interest income, loan loss provisions and credit quality, investment banking and trading revenue, and consumer resilience are among them. Traders will be closely monitoring net interest income or NII, which is the difference between what banks earn on loans and pay on deposits.NI has been declining since early 2023. A shift in the trend could have an impact. Loan loss provisions and credit quality will also be in focus.Cre ...

Financial Data and Key Metrics Changes - Western Alliance Bancorporation reported strong financial results in Q2 2025, with net interest income of nearly $700 million, growing 7.2% quarter over quarter and approximately 29% annualized [11][15] - The bank generated over $1 billion in sequential loan growth for the second consecutive quarter, funded by nearly $2 billion in quarterly deposit growth [11] - Net interest margin increased by six basis points sequentially to above 3.5%, driven by robust average earning asset growth and lower interest-bearing deposit costs [11][18] - Return on average tangible common equity reached 14.9%, and return on average assets was 1.1%, both significantly higher than Q1 [13] Business Line Data and Key Metrics Changes - HFI loans grew by $1.2 billion quarterly, with C&I loans contributing over two-thirds of the growth, particularly from regional banking and innovation sectors [20] - Non-interest income rose 16.4% quarter over quarter to $148 million, with mortgage loan production volume increasing by 25% year over year [15] - The bank's mortgage banking revenue was approximately $78 million, with core mortgage banking revenue tracking flat year over year [15] Market Data and Key Metrics Changes - Deposits increased by $1.8 billion in Q2, with significant growth in non-interest bearing and savings products, while wholesale brokered deposits declined by $300 million [21] - Regional banking deposits rose nearly $800 million, reflecting strong relationship momentum with commercial clients [22] - The digital asset banking program contributed $400 million in quarterly growth, indicating a positive trend in this market segment [22] Company Strategy and Development Direction - The company plans to unify six legacy division bank brands under the Western Bank brand by year-end, enhancing its marketing presence [13] - Management remains focused on achieving organic growth up to the $100 billion large financial institution level over the next 18 months [37] - The bank is optimistic about future deposit growth driven by regulatory changes and new deposit strategies under the new CFO [84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of asset quality, expecting criticized assets to decline in the coming quarters [12][32] - The bank anticipates net interest income growth of 8% to 10% for the year, supported by strong loan growth and delayed rate cuts [30] - Management highlighted the importance of maintaining a strong capital base, with a CET1 ratio expected to remain above 11% [29] Other Important Information - The bank's total assets increased to $86.7 billion, reflecting strong loan and deposit growth [19] - The transition of CFO responsibilities to Vishal is set for early Q4, with a thorough transition period planned [10] Q&A Session Summary Question: CFO Transition and Focus Areas - Dale Gibbons expressed excitement about the transition, emphasizing the opportunity to focus on deposit services and growth initiatives [35] - Kenneth Vecchione confirmed that the transition does not signal a change in the bank's strategic direction [37] Question: Deposit Growth Outlook - Dale Gibbons provided insights on the expected cadence of deposit flows, indicating confidence in reaching the $8 billion target despite seasonal trends [38] Question: Fee Income Growth - Management anticipates an increase in fee income driven by commercial banking activities, while mortgage-related revenue is expected to remain flat [45][46] Question: Expense Guidance - Kenneth Vecchione explained that the increase in expenses is primarily due to deposit-related costs, with a focus on maintaining efficiency [47] Question: Margin and Deposit Rates - Management indicated that net interest margin is expected to continue improving, with a focus on managing deposit costs effectively [52][54] Question: Allowance for Credit Losses - Management reassured that the allowance for credit losses is adequate, with a focus on conservative valuations of assets [70][73]

Financial Data and Key Metrics Changes - The company reported strong quarterly earnings of $534 million, resulting in earnings per share of $0.59, with adjusted earnings of $538 million or $0.60 per share [3] - Pretax pre-provision income increased by 14% year over year to $832 million, with a return on tangible common equity of 19% [3] - Average deposits grew organically by over 30% over the last five years, among the highest in its peer set [4] Business Line Data and Key Metrics Changes - Ending loans grew by 1%, while average loans remained stable; growth in ending business loans was driven by commercial and industrial (C&I) and real estate sectors [12] - Wealth management revenue has grown at more than an 8% compounded annual growth rate since 2018, contributing to record fee income [6] - Treasury management revenue increased by 8% year to date, with a 10% increase in total clients served [6] Market Data and Key Metrics Changes - Consumer deposits in priority markets grew by 20% more than in core markets during the quarter [14] - Average deposit balances in the Corporate Banking Group grew over 1% sequentially, while ending balances remained stable [15] - Net interest income rebounded, increasing by 5% linked quarter, with expectations for full year 2025 net interest income to grow between 3% to 5% [18] Company Strategy and Development Direction - The company is focused on modernizing its core technology platforms, including a new cloud-based commercial loan system and deposit system [8] - The company is not interested in depository M&A, preferring to execute its existing strategic plan and focus on organic growth [37] - The company aims to continue delivering top quartile results and has increased its dividend at a compounded annual growth rate of over 10% over the last six years [9] Management's Comments on Operating Environment and Future Outlook - Management noted that both business and consumer customers are in good shape, maintaining liquidity and managing debt levels well [31] - There is some uncertainty regarding interest rates and inflation, but overall sentiment among business customers has improved [30] - The company expects to maintain positive operating leverage over time, despite the need for ongoing investments [120] Other Important Information - The company executed $144 million in share repurchases and paid $224 million in common dividends during the quarter [23] - The estimated common equity Tier one ratio increased from 9.1% to 9.2% due to strong capital generation [23] Q&A Session Summary Question: Implications of the tax bill on loan growth and consumer spending - Management indicated that the tax package creates certainty for businesses and consumers, which is expected to lead to positive momentum in 2025 and 2026 [30][34] Question: Perspective on bank M&A activity - Management stated they are not interested in depository M&A, focusing instead on executing their current plan and exploring non-bank opportunities [37][39] Question: Details on net interest margin and deposit cost leverage - Management discussed the recent improvements in net interest margin and the expectation for stable to modest growth in the third quarter [18][52] Question: Loan growth dynamics and competitive backdrop - Management highlighted a 17% year-over-year increase in pipelines and emphasized their disciplined approach to portfolio management [59][61] Question: Credit quality and specific portfolios under scrutiny - Management noted that overall credit quality remains strong, with some challenges in specific portfolios, but they are manageable [106][108] Question: Approach to stablecoin solutions - Management expressed intent to participate in a consortium of banks for stablecoin solutions, similar to their involvement with Zelle [111][112]

Financial Data and Key Metrics Changes - Earnings per common share were reported at $0.34, with EPS excluding notable items growing 27% year over year [14] - Average loan balances increased by $2.3 billion or 1.8% from the prior quarter, while average deposits rose by $1.8 billion or 1.1% [15][20] - Adjusted common equity tier one (CET1) was 9%, up 40 basis points from last year, and tangible book value per share increased 16% year over year [8][15] - Return on tangible common equity (ROTCE) was 16.1% for the quarter, adjusted ROTCE was 17.6% [14][15] Business Line Data and Key Metrics Changes - Average loans grew by almost $10 billion year over year, with significant contributions from commercial loans and new initiatives [7][17] - New initiatives accounted for approximately 40% of total loan growth, with $900 million in growth [17] - Fee income in strategic areas such as payments, wealth, and capital markets grew by 11% year over year [8][23] Market Data and Key Metrics Changes - The company reported strong deposit growth, with primary bank relationships increasing by 46% year over year in consumer and business banking [8] - The overall cost of deposits declined by one basis point, reflecting disciplined deposit pricing [20][52] Company Strategy and Development Direction - The company is focused on organic growth and has announced the acquisition of Veritex to accelerate growth in Texas [5][10] - The acquisition is expected to enhance commercial lending and capital markets opportunities, as well as expand the consumer franchise in Texas [12][13] - The company aims to maintain a moderate to low risk appetite while delivering strong performance [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic environment, noting improving sentiment and strong growth momentum [29] - The outlook for loan growth has been increased to 6% to 8%, and net interest income guidance has been raised to 8% to 9% for the full year [30][31] - Management remains focused on driving long-term shareholder value and believes the acquisition will contribute to future growth [36][109] Other Important Information - The company is maintaining a strong liquidity position with two times coverage of uninsured deposits [9] - Credit performance remains stable, with net charge-offs at 20 basis points and an allowance for credit losses at 1.86% [15][28] Q&A Session Summary Question: Concerns about net interest income guidance - Management indicated that they are on track to potentially hit the higher end of the net interest income guidance range, with economic stability being a key factor [42][43] Question: Feedback on the Veritex acquisition - Positive feedback was received from both internal and external partners, with excitement about the opportunities the acquisition presents [45][46][48] Question: Deposit trends and competition - Management noted strong deposit performance and expects continued solid growth, with stable deposit costs anticipated [50][52] Question: Changes in expense guidance - The increase in expense guidance is primarily due to higher incentive compensation linked to better revenue outlook [62][63] Question: Loan growth and competitive environment - Management acknowledged a slowdown in growth from new initiatives but remains optimistic about future contributions [65][66] Question: Outlook for North and South Carolina - The company continues to invest in these markets, with plans for new branch openings and hiring [72][73] Question: Capital levels and future distributions - Management is focused on maintaining a strong capital position and plans to begin regular capital distributions post-acquisition [108][109]

Financial Performance - Net income available to common shareholders was $534 million[3], with diluted earnings per share at $0.59[3] - Adjusted net income available to common shareholders reached $538 million[3], resulting in adjusted diluted earnings per share of $0.60[3] - Total revenue remained stable at $1,905 million[3] - Pre-Tax Pre-Provision Income was $832 million[3] - The efficiency ratio was 560%[3] - Return on Average Tangible Common Equity was 1934% on a reported basis and 1948% on an adjusted basis[3] Loan and Deposit Trends - Average loans remained stable, while ending loans grew by 1%[8] - Average deposits increased over 1%[22] - Pipelines are up 17% YoY and commitments are up 1%[8] Net Interest Income (NII) and Margin (NIM) - NII increased by 5% QoQ, and NIM increased 13bps to 365%[27] - Expect 2025 NII to grow between 3-5%[31] Non-Interest Income and Expense - Adjusted non-interest income increased 5%[36] to $646 million[33] - Non-interest expense increased 3%[40] to $1,073 million[38] - Expect FY25 adjusted non-interest income to grow between 25-35%[36]

Financial Data and Key Metrics Changes - The company continues to be pleased with ongoing trends in business performance, with an acceleration in performance improvement exceeding internal expectations [7] - The net interest margin (NIM) has surpassed the 3% level ahead of schedule, indicating potential for further expansion [9] - The company is experiencing a remixing of deposits from higher-cost to lower-cost deposits, which is positively impacting financial performance [11] Business Line Data and Key Metrics Changes - The loan pipeline and production remain strong, although there are headwinds from elevated paydowns and market financing [10] - Fixed-rate loans, which make up about 46% of the total loan book, continue to reprice at a consistent spread, contributing positively to loan yields [14] - The company has shifted towards a higher percentage of variable production, which is expected to provide a positive tailwind for future performance [15] Market Data and Key Metrics Changes - The company is seeing a competitive market for loan pricing, which is affecting overall loan growth [10] - There is a noted seasonality in the agricultural sector, which impacts pipeline trends [24] Company Strategy and Development Direction - The company is focused on continuous improvement in expense discipline while making significant investments in talent and technology [26][28] - The hiring environment is favorable, with the company actively pursuing talent acquisition amidst competitive market conditions [29] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in executing business strategies and achieving performance targets, despite uncertainties in the economic environment [8] - The outlook for paydowns is expected to remain consistent with the first half of the year, with no significant changes anticipated [18] Other Important Information - The company emphasizes the importance of employee engagement and the need to provide resources for team success [41] - Management is optimistic about profitability improvement going into the second half of the year [42] Q&A Session Summary Question: Changes in guidance for 2025 - Management noted that guidance is typically provided in January, and while there are uncertainties, they remain confident in business trends [6][7] Question: Loan growth expectations and pipeline dynamics - Management indicated that the loan pipeline remains strong, with a shift towards commercial and industrial (C&I) relationships contributing to future growth [34] Question: Credit quality and classified loans - Management reported stable credit quality metrics, with no significant concerns regarding classified loans or past dues [36]