Washington Trust(US:WASH)2023-04-24 15:12Financial Data and Key Metrics Changes - First quarter net income was $12.8 million or $0.74 per diluted share, down from $16.6 million or $0.95 per diluted share in the prior quarter [9][14] - Net interest income decreased by $4.1 million or 10% from the preceding quarter to $37.2 million, with a net interest margin of 2.33%, down by 32 basis points [14] - Average earning assets increased by $251 million, with the yield on earning assets at 4.30%, up by 36 basis points [15] Business Line Data and Key Metrics Changes - Wealth Management revenues were $8.7 million, up by $39,000, while average AUA balances decreased by $84 million or 1% [17] - Mortgage banking revenues totaled $1.2 million, up by $142,000 or 13%, with total originations at $138 million, down by $130 million or 49% from the fourth quarter [19] - Total loans grew by $118 million or 2% from December 31, with commercial loans increasing by $33 million or 1% and residential loans by $80 million or 3% [21] Market Data and Key Metrics Changes - In-market deposits were essentially flat, down by $66 million or 1% from a year ago [21] - Uninsured deposits were estimated at $1.4 billion or 26% of total deposits, with 6% fully collateralized [22] - The average deposit size was $37,000, with $1.6 billion in contingent liquidity [22] Company Strategy and Development Direction - The company plans to continue opening new branches in Rhode Island to enhance deposit gathering, with recent openings in Barrington and upcoming branches in Olneyville and Smithfield [11][12] - The focus remains on maintaining a strong capital base and disciplined credit culture to navigate current economic challenges [39] - The company is investing in technology to improve customer experience while being cautious about spending [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of steep interest rate increases and deposit competition on performance, but expressed confidence in the company's ability to weather the current environment [8][39] - The outlook for net interest margin suggests potential further compression, with expectations for the second quarter in the $200 million to $210 million range [25][33] - Management emphasized a focus on existing customer relationships and careful capital deployment in lending [35] Other Important Information - Non-interest income comprised 26% of total revenues in the first quarter, amounting to $13.3 million, down by 4% from the previous quarter [16] - The allowance for credit losses totaled $38.8 million or 74 basis points of total loans, with non-accruing loans at 27 basis points [24] Q&A Session Summary Question: Outlook for the margin - Management expects additional margin compression, with the second quarter projected in the $200 million to $210 million range [25] Question: Cost-cutting opportunities - Management indicated no large cost-cutting initiatives are planned, as they run efficiently and are investing in new branches [26] Question: Expansion outside Rhode Island - Management stated the need to focus on deposit gathering in Rhode Island before considering expansion into Massachusetts or Connecticut due to brand recognition and marketing costs [29][30] Question: Buyback plans - Management confirmed no plans for additional buybacks at this time [31]