WASH - Earnings call transcript Q3 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'll be your operator today. [Operator Instructions] As a reminder, today's call is being recorded.

Now I'll turn the call over to Sharon Walsh, Vice President, Director of Marketing Strategy and Planning. Ms. ahead. go please Walsh,

Sharon Walsh

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

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

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

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

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

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

Edward Handy

very to pleased After report us for call. credit closely I'm more will to off. in prepared that Thank continues remarks, third pay and the the appreciate you, thank join comment rebuild results. provide briefly then joining Q&A for strength quarter, time session. our financial capacity Mary Bill the and sheet while Sharon. on managing our and build and efforts to earnings balance morning, on Good and to quarter our Ron respect We Trust. and proactively you I'll much will your detail our and your Washington interest

Although it, has margin it stabilized. is not where yet want we

to appreciation management mortgage and The action are implied current economic on our Fed rates fee pipeline helping the Our improved market AUA. are in performing and outlook support continued wealth well. businesses build

customer-focused prudent modest still our to teams quarter. investments and the delivered growth on and have front the expense be activity encouraging and continue in technology We strong

strong, current remains will remain franchise believe pivot. and manages the Fed such through as team our we prudently customer as Our

statistics strong capital catalyst and September, we report customer Providence already growth in as addition opened a the In and controlled will branch great continued of a for and to quarter, In in ratios, it neighborhood potential Ron full-service base. credit see improved in-market deposit strength for Olneyville new expenses. community the a

Although have we expansion dedicated plans, caring for our and on focus team currently customers our continues we the additional serve. branch don't communities

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

Ronald Ohsberg

the from The Thanks, $XX.X income $X.XX Ned, or everyone. interest fee X a and margin in compared income morning, operations -- center. Net per prepayment income by quarter was the Included QX. There XX% for good million, X.XX%, by third to $XX Noninterest was revenue $XXX,XXX the and the was down of up $XXX,XXX points. $XX,XXX or quarter. Net income in X%. the share. preceding amounted third on no or gain X% to by quarter comprised million, $XX.X penalties in up was quarter sale $XXX,XXX million of prepayment were second our basis

AUA X%. $XX income or noninterest management or X%. $X.X X%. totaled by Wealth Excluding up this, or up up was million revenues $XXX,XXX were million, $XXX billion, by by $XXX,XXX

revenues expenses up promotion totaled June. an about due million, banking X% $XXX $XXX,XXX from including our in end to Mortgage QX, XX September or of X% X% and was by of mortgage pipeline or up timing. from increase Noninterest and up at $X.X expense the million, $XXX,XXX $XXX,XXX were advertising

effective to we tax And rate quarter XX%. it for be third The XX.X%. XXXX, was expect

down million exclude In-market deposits, million. deposits X%. X%. $XXX $XX by brokered by by Total broker million Turning decreased to $XX wholesale $XX or the down loans $XXX FHLB up X%. deposits, Wholesale were or million million were were borrowings or million loans by by decreased time sheet. X%, while up $XXX Commercial were balance which residential or and

loan-to-deposit ratio by the equity from quarter. from million end XXX% of $XXX up Our second XXX%. Total amounted to $XX decreased the million, to

And metrics remain due to at The in on was were the points net status on to estate $XXX,XXX and of this increase in and points and charge-offs loans and to since loans. due NPL one now credit do in credit Our solid. total XX that that of loans been we total Ned. asset due the Nonaccruing loans of maturity. loans or expect I'll turn $XX.X totaled quality be The third XX commercial largely time, the $XX,XXX nonaccrual coverage fourth back XX the were call past allowance basis. basis has and resolved is real loan basis fourth We quarter on And basis year-to-date quarter. XXX%. provided points past quarter past million had a

Edward Handy

And now open to Ron. Lydia. we'll questions, it Thanks, up

Operator

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

Mark Fitzgibbon

missed on Ron, I commercial think pipeline. I your comment the

$XXX you million the said pipeline. the mortgage think I mention commercial pipeline? size Did you of

Ronald Ohsberg

up second that's in $XX it's the from And didn't. I million quarter. million, and $XX

Mark Fitzgibbon

would average guess rough on you what pipeline? rate that And

Ronald Ohsberg

Most doing plus would -- is, million. $XXX excuse of we're what million $XXX say, me, I FHLB

Mark Fitzgibbon

balances fourth just then about running higher like feel Will Or noticed that $XXX balances cash quarter? million. were sense? Okay. now normalize you cash And I Great. right secondly, up makes in the

Ronald Ohsberg

we quarter, and some we already loan down pay Yes. some just that We No, paid CDs payoffs, brokered run as down to timing. third we also in replenished brokered and that's used well. cash maturing We've CDs and -- FHLB. the had

would million. So about $XXX no, that to plan we down run to

Mark Fitzgibbon

the likely then next two? quarter us if think you're you margin think about or costs could Okay. and deposit quickly help look to take of sort is the trajectory you to in able wonder how what down like And I the of

Ronald Ohsberg

Yes.

the down, lot that loan up. income you would to way deposit way call, were likely say, in But betas. the would reductions betas as I they on a bit the deposit going higher betas quarter. as fourth $XXX,XXX range rate can be I will June to I are on the reduce the lag those tell a than in on million net maybe the mentioned So interest $X

at on deposits an customer market been keeping eye of money and have competition aggressively our the being and We mindful retention. looking

But I bit on of good to loan. is think markets a a of the are money there compared still down. a those we where lag we're little doing job repricing

that impact a So view as bit. But that us will we timing. probably

balance Our will definitely liability help reductions sensitive rate the sheet us. and is

Mark Fitzgibbon

you expect Is to margin do So in quarter? down be bit what... the that fourth a little the

Ronald Ohsberg

Yes, part. sorry. I I'm didn't answer that

be So we about to margin expect the flat.

Mark Fitzgibbon

think? do then And first sort rise you in start to of the quarter,

Ronald Ohsberg

Yes.

I we think going expand. the the margin Fed into cut, continues assuming to expect to XXXX,

that repricing keep -- have time we start we of it all over in Now thing whole again. mind cuts, the every kind

net rates come down. through margin will as to have just on basis, we expand the So work that. yes, a But

Mark Fitzgibbon

you you Okay. million confidence comments, days resolve And from XX that to quarter. your $XX.X delinquent fourth will then suggest that? What is gives seem loan the in such in that

Ronald Ohsberg

negotiating time and that quite we're been for feel very like a We've close some to resolution.

Mark Fitzgibbon

that talk maturity bit office those And about million loans what lastly, little the you $XX Okay. then classified, schedule on a the of are maybe could look like?

Ronald Ohsberg

take Bill, that you one? do Yes. to want

William Wray

Sure.

one couple. have resolution matured. That's imminent. the One We is that's a has

maturing will Another this then and more quarter be one in 'XX.

term. So near fairly

essentially credit be our maturity. approach we Our hit it's maturity as offices to enhance to have on to a life we borrowers working with and sentence, all

or that's going we're So And of others the there's are a we of magic $XX or them refi getting with sale. resolution we agreement have on borrowers to are take of to That with expecting the we're resolution not about and guarantors quarter. kind classified to said, enhance market an and moving. the this out a us working current, keep million structure, all get and kind any

the done by had a it strong and done We everything wall standpoint. couple next test And stress fairly to an rolling years. their assessment. within maturity no results we've have from of So firm third-party outside surprises we

So that. we feel on of like we're top

Operator

from with KBW. Our next question DelMonte comes Damon

Damon Del Monte

Is to was loan I this of of growth want just bit that just some letting the talk first believe maturities and during little to with the by the decline? during the the I balances led a question, quarter function driven pulling you kind it being a kind naturally So quarter down, occur were there quarter? of late in about guys Or surprises back CRE.

Ronald Ohsberg

Yes.

a would say, things. couple of I it's So

bit I think year, we were this pull into to coming you our activity. back think on told we a I going origination

It's of But us in managed now, we ramp out the up and intentionally. few see. quarter. behind that's start being expecting we're underwriting And that, the that's credits paydowns. think we reflected a in also So numbers to you kind fourth normal to

Damon Del Monte

Should we [indiscernible]. expect

Edward Handy

carry the into Yes, door opportunities growth would expect and open that beyond say that commercial with quarter, low new of is being of that. kind X% or the result I the we pipeline of for $XX will a and in of XXXX. there But fourth out kind X% single-digit our grow on the it and teams we'll million growth renewal

growth sort to X feel good we I the back quarter I the in teams we'll or next say, normal. that. are and muted have, back then would think out So about But of and

Damon Del Monte

the Ron, And of reflect your outlook, the expectation that it. the that described? guys you Got just growth on comments does NII

Ronald Ohsberg

the quarter the the quarter to that. timing I of on a due Yes. just fourth in the won't help growth mean, us lot fourth disbursements

a So forward. into XXXX. But income accretive jumping I it's yes, that's going mean, interest going be off more of net to yes, to

Damon Del Monte

Got it.

costs I interest-bearing at have X:XX? to Okay. your happen were the spot deposit then Do the for you think quarter rate And X.XX%.

Ronald Ohsberg

Unfortunately, have that disposal. my at I don't

Damon Del Monte

material focused just on guys final here. one last are one on I And then expenses. Okay. know any you containing growth

of kind you're here we going in for an how $XX.X-ish about expect think looking you range million to XXXX, of Or higher? trend quarter of this and think of fourth to do you able it in kind kind Just kind do keep it update the forward?

Ronald Ohsberg

and fourth be line that third guide Yes. the higher to I will with next in be yet, I but we're expenses to the expect year, would I mean, not think quarter. ready quarter on

Operator

Seaport comes question from Research Laura with next Our Partners. Hunsicker

Laura Havener Hunsicker

On have do September? for you margin, spot margin the

Ronald Ohsberg

Yes.

September that was on has basis but keep So impact. day margin a we an count X.XX%, in mind month-by-month --

basis say, X would count day I is So points.

on call So X.XX%. it, normalized kind of a basis,

Laura Havener Hunsicker

was you refresh the refresh million, us is back which I just help and of and my million to that of Yes. that? Great. Ron terms are then things. I B had $XX.X or of what I us And exactly know guess, that I $XX.X notes up guess, maybe think A Bill, are you in make had can space, fourth And on, the sitting that Class exactly then also is us your $XX.X being $XX fourth I in Can quarter lab that vacancy, that terms quarter properties, you X just you about million, just office. that can was in resolved Okay. but refresh was think partly that? And we with with the where what couple credit? resolution, in Can a you you maybe where us Class going million. in

could you refresh you X could on maybe then, or through if also maybe big us reserves that? just just And So us are and specific step there any know on X if vacancies those? I loans, because

William Wray

There's Classified. X properties it. in

to One going classified strategies going which current, Boston -- one where meaning have the while. by not is continuing is They're sale, for for properties those set literally the which something feel today XX, them about done. is this one closes, XX% are occupied, The that's guarantor to a but classified which both quarter. stand. expected in for been one solid pursuing that's But of Connecticut, remainder keep B going. exit who's Class That's agreement of properties under are that is until it's we pretty X in and of close both it of But listing which them set that. a resolution, it's on of of

this it we're say but closes, Boston so. the we So confident done will quarter, property can't be pretty that until

that represents the is last On lab a the which in of months leased million, that's That leasing. from over gone has X space, to XXX,XXX $XX.X feet square XX% lot. leased X%

So a the based $XX of property put spec has equity got borrower momentum. injection million work The to a significant very on lot of in build-outs.

moves got a interest or the classification or All not the of a number, with and accounting. as lot the to to that it's making by leased least at be we're amount evidenced that's traction at out by terms believe that's it leasing said, of of we until going in any stabilized moment it's there. XXX% So leases again,

Laura Havener Hunsicker

know Got is that have total the current don't exposure I it. $XXX on you north And together? on know million, number then, that? loan of of with a million, Bill, all but $XX.X if the what added it's banks I

William Wray

have I get it. provide a to and calculator

million. it's $XXX think I

Laura Havener Hunsicker

lab? And Great. any Bs those specific have do reserves Okay. either Class of this on then or you

William Wray

not lab, the in Not merited.

On do, accounting appropriately the other but we and Class Bs, rules. yes, by set

impaired We'll like any and have set reflected into for individual There's loss. the charge-off of that of I for So already don't certainly we aggregate impairment case there's been an one one properties that's on act But balance. number if we time those need the in those actually X, to something I'd up move individually ahead total. other to. on of X% a there's And the about in disclose.

Laura Havener Hunsicker

then I reserves looking [indiscernible], what on guess at at the Okay. excluding And that your medical, we're is as moment? your

William Wray

points, Our office when that's real commercial estate then create basis XXX individual but is factor we part reserve our needed. segment. of impairment obviously And total

Laura Havener Hunsicker

Got it.

in last due. terms And of office Okay. just coming question then the

in here X have years. in coming So of think that's a out what's next quarter fourth next of you XX% help about and due the what's [indiscernible] Can due you in how the coming due us breaking coming terms year?

William Wray

then and one there's this that's million already million that's resolution, and year. quarter, $XX including one next matured for $XX It's for the set

Laura Havener Hunsicker

in quarter million? million the next includes million $XX.X $XX $XX then for the fourth that year and

William Wray

Yes.

Operator

so for you questions, comments. pass further closing no I'll Ned have We any to Instructions] Handy back [Operator

Edward Handy

all your questions. a time, We interest Washington us and are your Lydia, We presented we thank Thanks, in appreciate where of you headed. and hope and clear today. we've picture for where your we're Trust joining

thank day, and look very Have all to great a speaking you So to forward soon. we you much.

Operator

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

now disconnect you Thank very much. may You lines. your

Washington Trust Bancorp (WASH) 22 Oct 242024 Q3 Earnings call transcript