Washington Trust(US:WASH)2025-10-21 13:30Financial Data and Key Metrics Changes - The company reported net income of $10.8 million for Q3 2025, a decrease from $13.2 million in the previous quarter, translating to earnings per share of $0.56 compared to $0.68 [4][6] - Pre-provision pre-tax revenue (PPNR) increased by 17% from Q2 and 48% year-over-year [6] - Net interest income for Q3 was $38.8 million, up by $1.6 million (4%) from the previous quarter and by $6.6 million (20%) year-over-year [7] - Non-interest income comprised 31% of total revenue in Q3, up 3% from Q2 and 8% year-over-year [7] - Non-interest expense totaled $35.7 million in Q3, down by $804,000 (2%) [8] Business Line Data and Key Metrics Changes - Wealth Management revenues increased by 3%, with a 6% rise in asset-based revenues due to market appreciation and the acquisition of $195 million in managed assets [7] - Mortgage banking revenues reached $3.5 million, up 15% for the quarter and 22% year-over-year [8] Market Data and Key Metrics Changes - End market deposits rose by $179 million (4%) from the end of Q2 and by $431 million (9%) year-over-year [9] - Total loans decreased by $18 million, while total equity increased to $533 million, up by $6 million from the end of Q2 [9][10] Company Strategy and Development Direction - The company made key investments to drive growth, including an asset purchase from Lighthouse Financial Management, adding approximately $195 million in AUM and expanding the wealth management team [5] - The hiring of Jim Brown as Chief Commercial Banking Officer aims to strengthen commercial relationships and integrate services with the wealth division [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current portfolio quality and the company's long track record of strong credit performance despite elevated provisions for credit losses this quarter [4] - The company anticipates low single-digit loan growth for the year, with a healthy pipeline of approximately $180 million [39] Other Important Information - The company repurchased 237,000 shares at an average price of $27.18 per share, totaling $6.4 million, and an additional 21,000 shares in October [10] - The allowance for credit losses totaled $36.6 million, representing 71 basis points of total loans, with non-performing loan coverage at 261% [12] Q&A Session Summary Question: Remaining Shared National Credits size - The remaining Shared National Credits portfolio is approximately $173 million, split between commercial and industrial (C&I) and commercial real estate (CRE) [16][18] Question: Change in specific reserves on a credit - The change in reserves was due to reduced recovery expectations following a Chapter 11 situation, leading to a significant loss [19] Question: Confidence in appraisals of office properties - Confidence in appraisals is based on different properties in various markets, with some properties showing leasing momentum [24] Question: Client flows in wealth management - The company is no longer disclosing client flows in wealth management to align with peers [31] Question: Margin expectations - The company expects margin expansion of approximately five basis points in Q4 [32] Question: Loan growth and pipeline - The company anticipates low single-digit growth for the year, with a healthy pipeline of $180 million [39] Question: Buyback plans - The company has paused share repurchases to evaluate capital levels for growth opportunities [45][53]