WASH - Earnings call transcript Q2 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 Lydia, and I will be your operator today. [Operator Instructions] As a reminder, today's call is being recorded. I'd now like to turn the call over to Elizabeth Eckel, Executive Vice President, Chief Marketing and Corporate Communications Officer. Please go ahead.

Elizabeth Eckel

Lydia. you, Thank welcome for and Trust Inc.'s Bancorp Good Second to Quarter call the of conference morning, Washington XXXX.

Noons, Chief Joining and us team, Officer; Officer; and Executive and Senior Financial President Executive and Washington of Chief Vice Mary Ron Executive President, Ohsberg, this morning Vice Ned Bill Officer. are Handy, Wray, Chief members Executive President Risk Operating and Officer Chief Trust's Treasurer; Chairman Senior

from actual today's that forward-looking may is results call. could today's presentation materially our note Please statements differ contain what on discussed and

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

NASDAQ materials Relations "WASH". under on and these filings public our of website are Washington Investor ir.washtrust.com. available on the All at symbol other trades Trust

Trust's to Chief pleased introduce and Ned Ned? Washington host, today's . Chairman Handy. now Officer, Executive I'm

Edward Handy

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

customers strong down switching and earnings bank in enhance managing are to as we reward account We've the experience for deemphasized asset credit, remains We stabilized sheet somewhat be quarter new the quarter. to rates improved in and expenses balance tools expenses online prioritize Credit and allow. referrals. deposit to continue interest earnings and positioning to building customers' and our economy our in the controlling introduced quarter-over-quarter. as growth-oriented strength, opportunistic growth Capital ratios growth for opening,

offices. decision other to to much in the month. years, branch cloud, us section shifted forward make recent we allowing center strategic planned a Providence no existing expansion sell of members branch, this the and our consolidate look to to our operations next Olneyville we this at In a branch team have opening time. We Other than into of new operations

owned of Again, discipline the We space our our quarter. to and this efficiency. performed in review revenues quarter's optimization the expense leased pressure diversified higher on revenue Wealth fee-based With Mortgage, businesses, generated continue continued every well for margin, base contributed to and occupancy and or our results. continued nicely

the I'll call be now to Ron turn questions. the then to any some quarter, we'll on detail for more address and over Ron? glad

Ronald Ohsberg

Yes. Thanks, Ned, morning, everyone. and good

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

X.XX%. side, to increased On the average market points and decreased increased by average $XX by million. liabilities $XX X wholesale end basis The interest-bearing rate deposits funding interest-bearing on funding million by

included and in a Prepayment $X.X margin. the fee settlement or X% gain comprised income the our revenue operations quarter while the sale second Included the was quarter XX% million, first from the the center of $XX,XXX income Non-interest by quarter, any million $XX,XXX and neither $XXX,XXX with was $XXX,XXX in to $XX.X quarter second to amounted down on of first in QX. in income. impact

or up non-interest $XXX,XXX was Excluding X%. these income items, by

by banking X% million, balances. an $XXX,XXX $X.X as well increase an average in revenues totaled in servicing an asset-based gains XX%. This million, or management Mortgage $XXX,XXX $X.X revenues tax seasonal up largely of by X%. by transaction-based up Wealth were or $XXX,XXX up included XX%. revenues, of AUA correlated revenues, as in million, Realized increase of which to were $X.X $XXX,XXX increase

rate the staffing X%, higher second offset expense We decreased year expense, commissions. tax X% and mortgage or estimate XX.X%. partially rate was tax be by $XXX,XXX expenses by to reflecting will lower Non-interest expenses. effective tax from XXXX our Turning XX.X%. were levels In Salaries or $XXX,XXX payroll quarter, down effective full the QX.

$XX by from also loans down by the brokered time seasonally by X%, were were Total million million or X%. March XX. loans were Loan March by and were commercial funding based which $XX in X% deposits loans million wholesale XX, deposits, decreased from $XX Turning mix million, March decreased sheet. million second million wholesale Home or In-market Bank shift $XX down and XX. pricing. balance from a borrowings residential exclude to by Wholesale deposits, by quarter, In total $XXX on reflecting down up brokered Federal $XXX the

since Our the loan-to-deposit deposits have in quarter. deposits, reduction ratio increased brokered we the the in to third brokered due replenished quarter in

$XX,XXX quality. were had a allowance percentage NPL loans XX points The as XX quarter Turning year-to-date. and of These were points total points basis second and due totaled Non-accruing to loans We net asset loans. or XX basis million provided basis $XX.X XXX%. coverage the metrics past total in of of remain and $XX,XXX of loans solid. charge-offs

to point, the back And turn Ned. will at I call this

Edward Handy

Ron. you, this you're I know busy Thank morning. all

will So go turn and it we to ahead questions. right

you So can lines. . Lydia, if open the

Operator

with from Instructions] today Mark Our question first Piper [Operator Sandler. Fitzgibbon comes

Mark Fitzgibbon

rate you and FHLB million advances? FHLB the what you know, the brokered I subsequently. of said It those Ron, between the $XXX so And replaced had was or looked you But that advances. like with deposits rough difference brokered replaced deposits in

Ronald Ohsberg

basis pretty points. of interchangeable it look those at I much mean, as could be XX Mark, Yes. funding. sources XX, we

where is cheaper is we tend whichever to go. So

Mark Fitzgibbon

movement that starting you it bit, The How think loan-to-deposit are XXX%. to up high little . I let is ratio to was because a willing go? creep of that

Ronald Ohsberg

Yes. right down XXX% deposits back to after we now added those It's back.

it trying be bring everyone else. So just any like in be than listen, deposits to now, I honest. is to we're mean, we that don't want to ratio higher

Edward Handy

deemphasized growth, And we've asset Mark.

in loans quarter. down you think the I saw

in at obviously, XXX% the and bank. priority. both below, -- to the focused is of be is or our it growth to -- a that's a are we're retail in deposit #X management be we'd as And We folks. love challenge on but cash And lot of side for continues our area that,

with is So I to are maintain we're comfortable we'd like but reduce. or think where we it, now

Mark Fitzgibbon

then departures in $XXX more business of had, wealth outflow think bit wealth And people management a you Okay. of Any I it the recently? million. relationship business, in again, an management was the

Mary E. Noons

take The of of Mark, this two departures is had unfortunate Noons, of was one quarter. departures we advisers. quarter, an in our and I'll were unrelated. advisers, and We the that question. death was one the did Mary second unexpected first have One in

are no there's that. they So team-based trend in approach. Island where was on Rhode the This offices a

some any to attributed had just We being a levels than higher the very debts we outflow seen. very -- composition, expenses and on seeing really we've on this. deeply outflow So closed some at that. minimal that But looked was other It client not had client the just resulted in trends keeping we've a we're estates we're and into that. eye out close

Mark Fitzgibbon

September then, one NIM, expenses you could in wondered Fed And cut us assuming Ron, the in also third Okay. share outlook some for with the sort for maybe I the thoughts if on outlook and of quarter?

Ronald Ohsberg

Yes.

think loan to at know, to is we the they out have the I large book month anyone much be commercial do, of start do line I'm really when and knows X rates, QX going you X SOFR. reduce this we on and quarter in going NIM as only Fed a pretty will point, don't So go QX. NIM, think, to in with what

income down start funding So we as come a let to little out our bit of the net see gate, reprice. interest we'll probably

little repriced of short funding a be Most how choppy short of rate money through think timing are most is our and term, So and a I could for as maturity quarters, down it Overall, of lower couple cuts many rates that term, funding on come can to depending a be the lot of those. that well. is of we have us. markets beneficial

line will QX. think So but not in giving quarter yet, with be any fourth guidance we QX

Mark Fitzgibbon

position? And some capital Great. ratio? a capital the challenging given Would are for or of quarter, some I built the Do thoughts the other target sort have and this current then lastly, Okay. you your raising contemplate you more a bit on CETX little capital but environment? you what know capital

Ronald Ohsberg

regulatory from linked get we've Yes, I that this expecting see X personally see point to mentioned, up mean, ratios like some We've X improvements us to It's I on the little you basis take -- to capital Or capital there. continue improve on for back, now going we're about forward. ratio? Yes. slowed XX%. -- look we'd sequential Ned or I get to as quarter growth, going other in time capital risk-based to mean like to to had asset trajectory, our a would of capital we're a if down total quarters. our bit .

Mark Fitzgibbon

Thank you.

Ronald Ohsberg

about Mark, asked you expenses.

quarter. expenses $XX little to the expecting little a higher will be and about then in fourth bit we're Mortgage come advertising we the quarter, in QX down million. be be expect a will a So higher, commissions to

Operator

with from is question next Our Damon DelMonte KBW.

Damon Del Monte

everybody is doing well. Hope

expenses. a Just the follow-up on

realized this of related material operation gain into quarter You the cost on any how we that expecting mentioned the And earlier Are the to saw sale figure does that? that the outlook? you with savings center.

Ronald Ohsberg

thinking already I'm head. Yes. incorporated. That's off the my top And of

that's $XXX,XXX but I in. think annually, it's of already baked $XXX,XXX expenses about to

Damon Del Monte

Got Okay. it.

the for where I the commercial estate mean, side things of Okay. stress, And remains . real and in areas slower of signs then credit, favorably seeing to there pretty the trend on to provision given particularly regards any portfolio charge-offs growth. there, with your lower the outlook obviously, some continue you're loan Are low the side?

Ronald Ohsberg

say? Bill, Yes, to you want

William Wray

Sure.

office kind to . of to lot. we adverse an the Each a trends everyone pays we even a that understand which our essentially, the them couple anywhere them limp one one And are next know we have in issues, we the even way them But we of borrowers, basis. trends pay the reflected seeing portfolio And of attention are understand their We and But already assets a a to We forward. in at on we're going handling think of years, as else any with is of portfolio. we see think the particular any in a think not accounting. I about and the don't dozen we're couple maturities. time. attention office. don't office,

Damon Del Monte

it. Got

fee should been Do I little the a the bit here we bit Ron, you or how mortgage from higher has half to AUM And back are you to banking about That's wealth decline in year? overall comp on helpful. the the expect the Okay. of alluded impact of feel I -- there? just of the I guess some think, lost in income, third the fees, management in kind reflected guess, a . related fee quarter. you income thinking and

Ronald Ohsberg

Yes.

markets. wealth Our on largely depends income

out revenue. think, similar of to terms the QX wealth I would in I of to QX expect gate, look somewhat

to volume in to be X% to expect maybe up on maybe mortgage just the be XX% more -- quarter. up We -- higher driven third

Mary E. Noons

quarter. fourth did is did reflecting and be fee We -- this that in increase implement Mary. for Damon, the And numbers to start a should we third

Edward Handy

side. the On wealth

Damon Del Monte

On well side. the Got it.

all That's that Great. Okay. I had.

Operator

our Laurie And question Research. from with today Hunsicker Seaport comes next

Laura Havener Hunsicker

Hoping departed, get we wealth manage? can to that just actually how much back they advisers The X management. did

Mary E. Noons

so Officer happened the runoff been I advisers in the that I because manage of they're part that numbers unlike And -- Manager will the Portfolio Well, our portfolios, have and and I area. as a approach, their a say don't it's very Trust Associate team, to it's it's Team. departures of had but relevant has Wellesley minimal. as not that

So going runoff. we're be confident any contributor that's that, a on to big not

Laura Havener Hunsicker

Got it. And then....

Edward Handy

Mary about talked and departures death. the unexpected actually -- the one Laurie, two

investment quarters first advisers the X two course in added actually have of the well. as We

of kind we're down net one. So

Laura Havener Hunsicker

two much million was [indiscernible] that? just how one was quarters And you I you. in larger know said but I just, just related Got advisers? it $XXX outflows minimal, understand frame to of the that the Okay. of then those XQ, seen Mary, to client we've mean

Ronald Ohsberg

Yes.

their get detail, really things, into of got number So are X new their don't and you've where is clients get flows this got living of business, and but net lives spending usually And you've right? level business Laurie, that routine you we lost money.

quarter, the and business that will a business net new I say was So zero. just second in lost

Laura Havener Hunsicker

Okay.....

Ronald Ohsberg

kind Yes, . those. it's is ordinary. of Everything none of

Laura Havener Hunsicker

Got you.

$XX.X facilities, that? the sale you it good do just is the Damon's lines be Because should And top cetera. for tax out, obviously, of et a of thinking overall for then has prep but just how some the know, million out thinking noise, maybe netting number level. is Okay. we about about of Or going looking the think along where the of income . in How number? like question, back I more kind non-interest that XQ, to everything stripping June

Ronald Ohsberg

For non-interest total income?

Laura Havener Hunsicker

income. non-interest Total

Ronald Ohsberg

side track because of We're doing loans will expect much we're Like and swap Yes. to the I be close mortgage I types wealth just think QX, to said, we're now. those up on anything in not much X% about not of of to QX not doing anything we right -- XX%. originating

Laura Havener Hunsicker

Got it.

Okay.

level. to be So that close will this

us then can more in helpful. Are the this that to Okay. you potentially That's facilities, bit? sale of a you is toward of What other sell? look about super as it. little there back help half terms of else we year? Got And expecting gains think

Ronald Ohsberg

time No. I considered have mean, to we're time doing from sale -- leasebacks. we some

that. implement could we So

We have we kind at plan generate some no no but moment, now of do at excess right have for that could facilities are some us we're to intending gains other specific to of. the that point. There that disclose that

Laura Havener Hunsicker

Got it.

I any there? the on that refresh that then that I appreciate about what million certainly all able And realize and terms non-accrual question office. is and on can currently Okay. in vacancy you're you $XX.X the on may just a be cash just and . to fee, you But movement, not of release. put you last thinking us provide all this give Can in -- you detail, color the

William Wray

Sure. That's This I'll XX% is properties, one which that, X Laurie. take Bill. is vacant. of

want which count with like over. other resolution we but there's tenanted The some there never it again, to potential, right street it's property, only until The now. looks latter is retail front

on properties, both feel improving. So they're the fact not about there's that good some but that they're that. movement We stable non-accrual, to

So they that's stand. where

Laura Havener Hunsicker

those . are that is buildings And located Connecticut, office the Okay. suburban correct? both are

William Wray

is One all to Boston and is And No. -- point out Connecticut the delinquencies. we no other I have Metro. want do suburban they're

So continue that perform. even these non-accrual are properties on to

to non-performers performing they're the, phrase, old yes. So use

Laura Havener Hunsicker

it. Got it. Got

that? we your due the coming in then book X, if of years, the does but X, -- Where XX% maturity is are we the how next around X look of next . And quarters? look and X sort that Okay. with

William Wray

the Actually, that's we -- about, just talked couple properties mostly the of they're non-accruals.

view me a next of properties market let a it's for as So minute, quarters, office about out maturities but there. magic in those exit we life couple sentence. much there's not -- and the no essentially talk frankly, There's

them, we with So be look one beyond. and it to at of we're going to maturity assuming each

credit we the market kind that's on down at that manage the so some sponsor. to and appears And work course with be great. a the would of there But to and refinance go out these. be point, we our the is how sponsors have If there rates with stay assumption

Operator

We have no further questions in the queue.

comments. over to turn Handy Ned any . the I'll back for closing So call

Edward Handy

in time and today. speaking you again Trust, to your Well, you we joining look We all appreciate for thank us all to forward certainly soon. and interest your Washington

So have a great day, everybody.

Operator

for call. This concludes today's Thank you joining.

You may now disconnect your lines.

Washington Trust Bancorp (WASH) 23 Jul 242024 Q2 Earnings call transcript