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Washington Trust Bancorp's First Quarter 2025 Results

Washington Trust Bancorp, Inc. (Nasdaq: WASH), the parent company of The Washington Trust Company, has released its financial results for the first quarter of 2025, highlighting a net income of $12.2 million or $0.63 per diluted share. This marks a significant rebound following a net loss of $60.8 million in the previous quarter, underlining the effectiveness of the company's recent financial strategies.

In the first quarter, Washington Trust completed five sales leaseback transactions for branch locations, yielding a pre-tax net gain of $7.0 million. Furthermore, the termination of their qualified pension plan resulted in a non-cash pension settlement charge of $6.4 million which was also recorded within non-interest expenses. Excluding these extraordinary items, the adjusted net income for the quarter stands at $11.8 million, or $0.61 per diluted share.

Financial Highlights

The results reflect successful strategies focusing on strength and growth. Notably, the net interest margin increased to 2.29%, up from 1.95% in the previous quarter due to balance sheet repositioning transactions. The corporation has also recognized a provision for credit losses of $1.2 million, which was slightly higher than the previous quarter.

Wealth management sector revenues declined by 2% for the quarter, indicating a drop in asset-based revenues, leading to an end-of-period assets under administration (AUA) of approximately $6.8 billion. Mortgage banking revenues faced a sharper decrease of 19%, attributed mainly to a decline in the volume of loans sold to the secondary market. The corporation’s total loans amounted to $5.1 billion, reflecting a 1% drop from the previous quarter, while in-market deposits increased to $5.0 billion, representing a growth of 4%.

Commentary from Leadership

Edward O. Handy III, Chairman and CEO, commented, "Our first quarter results demonstrate our focused approach to enhancing our balance sheet, leading to an expansion of our net interest margin and significant growth in our deposit base. As we celebrate our 225th anniversary, we remain committed to serving our customers and communities effectively."

In terms of non-interest income, the total reached $22.6 million, a significant recovery from a loss of $77.9 million in the previous quarter. This improvement showcases the corporation's resilience and adaptability to changing market conditions.

Non-Interest Expenses and Capital Measures

On the expense side, non-interest expenses rose to $42.2 million, reflecting higher payroll and occupancy costs. However, the adjusted non-interest expenses totaled $35.8 million, marking a 4% increase from the previous quarter. The corporation’s effective tax rate for this quarter was reported at 22.3%, with expectations of a similar rate for the full year.

Washington Trust's total shareholder's equity increased to $521.7 million, boosted by net income and improved components relating to other comprehensive income. The earnings per share were $0.63, with shareholders receiving a quarterly dividend of $0.56 per share.

Future Outlook and Conference Call

A conference call is scheduled for April 21, 2025, where company officials will provide further insights into the first quarter's results and future outlook, with participation available at *1-833-470-1428. An audio replay will be available shortly after the call and accessible through May 5, 2025.

As Washington Trust Bancorp navigates the evolving financial landscape, its strong quarterly performance illustrates its commitment to growth, community focus, and prudent financial management, positioning itself solidly as a leader in the regional banking sector.