WASH - Earnings call transcript Q1 2024 | Washington Trust Bancorp, Inc.

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Operator

Good morning, and welcome to Washington Trust Bancorp, Inc.'s Conference Call. My name is Brika, and I will be your operator today. [Operator Instructions] Today's call is being recorded. And now I would like to turn the call over to Elizabeth B. Eckel, Executive Vice President, Chief Marketing and Corporate Communications Officer. Ms. Eckel.

Elizabeth Eckel

and the Washington XXXX morning, Conference Bancorp, Good for Call first you. welcome Trust to Inc.'s Thank quarter.

Mary discussed and Joining and Officer. Please of today's us Senior presentation Executive Executive Chairman Officer Chief Ron Washington members is may and Treasurer; Officer; Chief Trust's Wray, Executive today's executive Vice Senior Operating this team, Ned Ohsberg, morning Officer; Noons, President from that and on could are Vice President Financial Chief President, materially forward-looking note statements, actual and Bill and results differ Chief Risk call. contain Handy, what

Our the this harbor is morning SEC. earnings that well our earlier documents complete other documents safe as -- contained which in as as issued with statement filed was other release, are

these today's available other WASH. Chairman website Washington of NASDAQ materials Relations Investor trades introduce are symbol and under Executive ir.washtrust.com. Washington Ned the our to host, filings at pleased public Handy. on Trust I'm Officer, Trust's Chief now on and All

Edward Handy

and performance. in first remarks, interest quarter Ohsberg more our Thank you, We then our for provide Q&A comments, and call. Noons time Wray quarter prepared and detail session. good all join you Beth, Bill us offer brief your first will Ron appreciate Trust. conference After joining I'll Washington our will thank and Mary regarding morning, and for the

profit historic of ensuring of balance our levels we on towards strength to the primary be regaining continues Our focus sheet while work generation.

risk. expense controlling the in balance administration continue and interest to our capital, as can We what Washington we growth on deposit inflation management, concentration credit, works and rates

going growth opportunities forward. of are We they as prudent advantage present take positioning themselves to

automated the an deposit-related some deposit power our will tool. growth omnichannel strategies, opening roll addition including We account to soon enhancements of deposit out

detail the fee over some Ron? on Overall, this we'll work of then the pressure. reflected any manage Ron It be as inflationary the expenses value also the diversified somewhat some address to glad our have. turn our more and in good has quarter team environment. I'll done continued base might offset businesses margin now to for to revenue call this quarter, you questions reflected

Ronald Ohsberg

and Thanks, Okay. morning. Ned, good

income $X and down net X%. was X diluted of or income had per The yield $X.XX million, about million X.XX%, earning quarter by by basis was XX $XX interest quarter basis was million a $XX.X million down assets share. margin First Average $XX.X in points. increased by X.XX%, up or the points. by Net

XX in either the $XX,XXX of in-market fee side, liabilities $XXX million margin $XX,XXX deposits XX% funding interest-bearing On no average to the $XX.X in and average total first and period. Noninterest rate decreased to on by QX. increased income million, basis from by the by rose in wholesale to interest-bearing quarter points impact X.XX%. $XX million. The funding Prepayment was by revenues or amounted quarter, fourth million, up comprised XX% $X.X and income

included with associated million settlement. The the litigation first quarter $X.X

$X.X million, quarter. Excluding up $X.X or this, the $XXX,XXX. end-of-period banking million originations in revenues noninterest $X.X our the up by and QX. Wealth million, of revenues by by $XXX or in from were totaled totaled XX% AUA $XXX,XXX, income salable $X.X was were by management compared million billion, up X%. Mortgage fourth to XX% quarter XX% up

quarter. million that last These million in Recall we X% XX%. by fourth $X.X expenses. were quarter or from increased $X.X lowered fourth expenses. to which up compensation Turning by or accruals, $X.X the expense million quarter, Salaries reversed

declined actually a expense salaries this, Excluding bit.

tax year be in estimate our charitable our million by contribution foundation rate made due were the Other $X XX%. quarter, or a to In XX.X%. noninterest expenses to the down first effective XXXX was quarter. fourth tax We to XX%, full rate the largely million effective $X.X

by X% from $XX were [ million, $XX $XX loans Turning residential increased declined million while loans million $XX Total by to Total or up loans the balance ] million. (sec) commercial by sheet. December.

In-market deposits XX. were December essentially $XX from million down flat,

asset to quality. Turning

XX Asset quarter-over-quarter. loans XX XX were basis points real compared basis XX $XX.X estate were commercial basis past points total at basis NPL point ] allowance XX% of to points at as We year-end. XXX%. had [ loans on Nonaccruing total or due to loans loans loans percentage million of compared quality of a improved year-end, X totaled coverage and (sec) provided X.XX% and delinquencies. The

quarter. and provision quarter I turn this time, of was had $XXX,XXX, back $XX,XXX credit in first The charge-offs Ned. to we charge call will losses the the a of And net for at

Edward Handy

Thanks, Ron, and now we'll take questions.

Operator

Mark [Operator Instructions] Fitzgibbon from We question first Piper of take Sandler. will the

Mark Fitzgibbon

million share could the you the to or else? $X.X business, management that us, you was if something settlement was wondered I litigation with wealth had related that

Ronald Ohsberg

it was. Yes,

Mark Fitzgibbon

surrounding the litigation fully So that all this with -- is resolved people been those leaving, has that settlement?

Ronald Ohsberg

final That's the it. resolution Yes. of

Mark Fitzgibbon

Okay. outlook on the secondly, the you then if wondered your I thoughts And for with interest share us sort Ron, could margin. of net

rates. in as I thinking think you changed suggested last were Has assuming you quarter, well? XXX-basis-point that cuts had

Ronald Ohsberg

thinking a recent our had mean little X% we're Yes. later. and most I forecast

I think what lot about of there's uncertainty Fed do. going is a to still the

think quarter provide around a So will that. guidance. X.XX% plus second range you We that small I the minus be can or

Mark Fitzgibbon

that? the range $XX then million, expense $XX And the X opened do still the million you've second about expenses thus year. range, Any past quarter, talked in that's I feel this you also to for an run rate in tweaks you rate think a that Or sort branches like which other million quarter? run in Okay. had far of incorporated $XX.X

Ronald Ohsberg

Yes.

a It's higher good I think than little is million we a first the number, did in $XX Mark. quarter.

have second mortgage as activity to We seasonality. due going higher well in quarter probably will little a the seasonal some banking revenue commission have mortgage through,

Mark Fitzgibbon

positive to guess sort pivot flows those flows lost And negative. client of of last or again? to plan management. in back what that more wealth quarter. business? what's looked like continue the kind just be to any were sort They're I'm And you It have Okay. they Xx curious, producers of teams turn to I

Ronald Ohsberg

Yes.

a was attrition the would normal events. us. life previously higher behind have I -- people no, So announced look, is than say, just it

was the in nothing quarter. there the state things of in $XX instance, million those happen. For unusual payout and happened included X quarter There's

Mark Fitzgibbon

I'm getting But Is at see been as to people which time new flows I will can far kind some seems. point eye business bring stop? the for back guess that client flows Is in plan at negative have new it in there as is the there point a of to generate or...

Ronald Ohsberg

Well, Yes. net number, that's a Mark.

the fairly we've I that level looked institutions we new very granularity at really have also do say provide we some and have the that all kind So few time. competitors our comprehensive in disclosures, and other business would we so. of

we're to we but regard disclosing certainly see client they that occur. think them don't in that I outflows, are So when unusual

Edward Handy

this whether staffing Mark, you, mix we're is got at always looking plans sides. And and looking Ned. both on at and right the incentive we've I tell would levels

And an group always new opening recruiting we're We've some so we're it interviewing has right that now for. the private people. got in clients --

I at take it's place always got to much advantage think a to it be always not market at -- scale we've business to as so in than the whether but the mix there's understand got grow on we organically. grow that in are there, And organically. there be focus it we approach. help right we've when of sales We'd look tough it's rather to a and

Mark Fitzgibbon

it Okay. variation and sort last last I question have, And it's I quarter. -- of then on asked the

up we are to of they're given dividend that this look out in why capital ratios, could look to really become and at there continue your where at times excluding in ratios? ratio you that sort Why and core preserve pretty pop quarter, at if was this order to peers. elevated the things settlement, level capital dividend not relative challenging? your you cut the payout unusual the guess your of And kind strain low about pay curious, XXX%. If litigation be I payout capital ratio I'm

Ronald Ohsberg

Yes.

view. our to need would we rates, I level We We we cut that do the the shareholder to were the intention some dividend, current dividend to dividend. consider the help key that to a probably will return. that revenue don't one some and the maintain revenues knows So with what very of that the timing permanent. my sustain no would be. earnings modest on and our the have be really capital in is believe We point. do of believe dividend, and would recover at the a of We say that accretion, is impact interest capital have component If

Mark Fitzgibbon

take But the much I capital sheet. then prepared to in balance growing you remarks, your think, you about the talked ratios? curious I I'm willing be would lower opportunistically guess how

Ronald Ohsberg

Yes.

X on the total the improved that ratio we're quarter. by basis points focused risk-based and right now, So in capital

gives see So dividend. we've going and some capital ratio to stabilized the expect in that ratio, forward, we modest that's to sustain that that us adequate -- and improvement

Edward Handy

slowed to growth in way of little opportunistic longer-term line, is about help growth our down a was and, picture. WA get to reduce We've it comment view. to capital Mark, But down the looking are there. the best course, my Earnings, the of definitely with further more a fact,

on growth. And we intent build up, so to And opportunistic we to what to back certainly can earnings that's we on but help we're expense order the we're the like side everything our controlling prior front. doing capital feel can in ratios

Operator

now have We KBW. DelMonte of Damon

Damon Del Monte

out. get that event? that event? Just the that more your Is are the to going means quarter are What going the little you on wanted that? second strategy Is what bit use half second a a if kind guys to Ned, And we are rolling deposit you're be about comment to could of do a see color, that expectations? to

Edward Handy

in in, automated really account on start start. quarter, then late Thanks, and consumer second see Damon. switch out turning We'll Yes, so or probably QX that business on that omnichannel QX. invested actual the opening an side side roll and the technology excited some to technology we've the we'll either we're

-- switch rolled which which this more other be quarter. deposit is to will X also a piece technology, another in referral we've of that rolling out help called we've Refer are Friend, invested easily. a customers out. switch to of mechanism got is platform That And we're sort We us

everybody are the focused be it's to on number priority It growth. number We on we've sort one -- one to as think of on continues get the deposit funding So the our the been company been -- But here. those our side, yes, our investments. as better. culture our sales it's I've got mix long priority in for

are lenders, are they on including focused everyone, lending. commercial so the deposit all on than gathering more And

Our group the more also cash growing on cash are cash even commercial team deposits. municipal focused focused on management, our management our but management team is within municipal

standpoint, we're the And flat grow expectation So I Ron, obviously, so want from an basically year. we're far -- this we think to deposit base.

more company target that to than in much hopes deposits, think but from the we're -- the be X% run. funding of bigger turn or for the really got the year, great would long towards growth need I a X% We away funds. borrowed we've

Ronald Ohsberg

Yes.

just we state pretty our short that level expectations, expect to is see don't set changes slow dramatic to term. in are, in regard. Rhode growth But setting we the everyone to So do, base a come easy market in others. think, do some technology I deposit changes. going same through, It's cultural to changes trying right and And share now. I from thing taking not think, that's the some and is Island to

they we're than it so have to And going to better at be are.

the see we'll in happens coming quarters. So what

Damon Del Monte

Got you.

quarter Okay. the for with the here that, X% regards in and linked you outlook quarter. Appreciate first I And annualized color. that think kind growth then loan to had of growth

that on was the think throughout results first kind quarter? on do in was loans for expectation X% at kind the to consumer the year? of of the runoff balances flat the ultimately of Has year, I be be flat side, commercial expect all Or because still side. you the here the X% shifted that

Ronald Ohsberg

Yes.

call, of had that still told January construction a couple kind had that we in pipeline. up So I the the one-off and growth. did would we committed do things advances of our of most in We you made pipeline say, a that we

is here commercial pipeline in point virtually a at Our or time, one-off there. X this maybe

just burning I So think off. it's

consumer degree. think had that growth amortization the offset I side the resi we're advances the to will kind think year. and the I and of by flat I we $XXX showing course be the over some year construction on million Yes. of budgeted for of mean on

Damon Del Monte

that maybe are adding and new adding where away what's strong, the of ones ones the balance kind turn X upset Got are manage I that you because -- going quality could is turn not seeking moving the you be it. away it X the from credit? Or relationships you're like growth don't to there is kind spigot And are I customers net-net growth, you mean, current an of some to mean, that as or and strong? be off people? approach approach to

Edward Handy

keep participation strongest That's create our great going to some to them. we're We're so to loans interest customer we Yes, existing also mature, them we than mentioned. a that refi question. dry of can the type sure in yes, Right. help pay sell you powder off make noncore loans we're all want And in -- to some franchise we're customers. definitely to place, rather that allowing allowing but what

So above that more the making ancillary be customer center that the participations and deposits won't opportunities. than a with with past, lender certainly I sold the we have a need for in of we're of it's come and probably all customers us be again, think lead participation sure forward, most. And I and going think, that we'll the the buying been we business combination there at don't

to relationships. of little but everything, a yes, sensitive customer definitely it's think I So Damon, bit

Damon Del Monte

it. Got

improvement lastly for Okay. do loan credit just in absent of at And the during given Kind comfortable level there good the any outlook then you growth, types NPAs the XX-basis-point outlook, deterioration? reserve quarter. of provision the feel on

Ronald Ohsberg

And guidance, a Yes. just good just that. Yes. in than think stick came this we better at a it's I little I $X in that million told quarter call. quarter. And with a terms January would I the mean, you We assumption. probably of

Operator

[Operator from Seaport is to Instructions] Hunsicker move Research. which Laurie next of will the And we question, on

Laura Havener Hunsicker

could spot you go of month, for Do we have if to wondered March? Just you Ron, the do the have back margins. month -- margin the

Ronald Ohsberg

was Yes, Yes. it X.XX%.

Laura Havener Hunsicker

was It X.XX%.

XQ a margin bit should minus. like? for half plus back further longer? given What your comments, little or How about out Okay. And of think higher in we does the this 'XX said you look X.XX%

Ronald Ohsberg

Yes. Yes.

to wholesale between reorient I start what We think mean, more categories. shift longer kept mix on same to to we're are to things be see So will CD and allowed our I kind issues is it side do with expectations deposit banks still that experiencing Fed customer shift to are helpful delays, would the short rates short. the of other think And the mix a We've that maturities the regard happen. around their pretty pretty cut like. look the

to in the Fed yes, be to to think to But So mean, margin pressure longer for we able will takes, continues it when I funding reasonable try reduce it of cut, the to time I starts period a the on sure. our react costs. put

Laura Havener Hunsicker

you. Got

coming another a us, the sense. is in I is makes and few branch, can quarters. That you just Okay. And What where latest, remind you've that? got that's think, online

Edward Handy

online Yes. the I Providence, towards The section branch in second in Olneyville, probably which is think. a the but of of it, is due end to come quarter,

Ronald Ohsberg

in I think are [ we quarter. more ] third

Unknown Executive

third of Beginning the quarter.

Edward Handy

July? we? quarter. third of Sorry, beginning Are

fact the sizable open. population. been all of part despite to a process it's bank and it's heart a the that need a branch So really it serve to we're approvals and getting with. fairly downtown right start of a the in quite of the great renovation, we branch Providence that But was get excited It's

don't branch, opened quarter. we that, us any heard at sight than right the Yes, other which have about, in talk you've first the moment. Smithfield in and the -- So other branches

Laura Havener Hunsicker

$XX Okay. the rate, Olneyville run Got you. fully million And then quarterly be the should new does in? thinking about baked we branch your that that? how Or expense have

Ronald Ohsberg

Yes, there. that's in

Laura Havener Hunsicker

That's in there.

your nonperformers. of in then $XX Okay. that X/X and office, that's I also new just we Can And just lab the your million, space, there, the $XX.X an of news credit million office remind B could office outside us? update sort guess, classified. specifically Perfect. that's of refresh, Class also, any And sitting then then I I pristine. us guess, if is is get mean you last, the

provide you helpful. us super any Just color would be can

Edward Handy

want to you take one? Bill, that

William Wray

Sure. Sure.

property now, spec the a that large build cash sponsor is space big who's with in to lab working some going are we put chunk the suites. of a So to out

with we comfortable where participation large comfortable a the It's are with So sponsor a a We're strong it both partner. participation market. with and is. strong

sponsor the into is that $XX a good is to So fact leasing this I and repositioning boost more think the to put ready than this it's sign. million

there's -- recent opportunity stands like a again, moving the But it looks that comfortable upgrade where an But about that. for it stands been are looks in because for feel, appraisal And we the So an now. be direction there it this. it right on vectors might strong.

side, nonaccrual about we for -- asked in you it never $XX.X Class -- like, deal, it's have B, looks the that cut million, that's will On that closed. until about the but a I can't probably closed half, it's

But any on provide again, comfortable to right want specific don't that, that. direction. anything feel more the in I are So or vectors moving we the timing

the see of should this that we office concerned we also about every for get we next have anything accounting all in quarter, our gone there's can to do X and moves. We should maturities of, anything recently, ahead quarters if be result through

to feel of through ones comfortable The on started that -- we that there's went this it process, to X/X about the it. part Just chart and here. addressed very be of X/X remaining have already are

for are hawk, watching think quarters. a that we and of conservative, couple our again, it next accounting been see, like the in we coming we and improvements has office So

Operator

[Operator had further registered. no Instructions] have questions We

So back I'd like team. to the hand it to management

Edward Handy

Well, to care, and everybody. of today. for our interest presented us current time appreciate intentions hope speaking and a your joining clear forward. I always And recent with going picture performance and again you we thank state the you look and forward soon. we've your all Take

Operator

call Bancorp, with you you joining Trust may Inc. conference disconnect Thank and now has your concluded, call lines. Today's for Washington today's now

Washington Trust Bancorp (WASH) 22 Apr 242024 Q1 Earnings call transcript