WASH - Earnings call transcript Q4 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. I'd now like to turn the call over to Sharon Walsh, Senior Vice President, Marketing Strategy and Planning. Please go ahead.

Sharon Walsh

Thank you, Lydia. Good morning, and welcome to Washington Trust Bancorp, Inc.'s Conference Call for the Fourth Quarter of 2024.

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

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

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

Edward Handy

for impact of the detail call. more a us that customer fourth and mention on Union, next million some session. We time sheet well Head Thank it Rhode in the months, enhanced will The to the down The to a positive for thank that. Though which now Michelle actual week. more We Good initiative fourth Banking. future momentum detail services, providing further briefly strategies. I'll experience. address the results. expensive branch investment. and our hired focus us recognized to We'll capacity on and for will comment provide and resulted with I'd in fourth sale loans shareholders us have occur preceding then sale glad combined the reduction to Ron on Ron you and quarter, Digital from turn strengthened Again, new provide funding. but occurred over was your appreciate on These loan loans paying wholesale allowing quarter, the the quarter, them, look to reinvestment into our for quarter value provide and thank take announced revenues the impact financial on very quarter. additional as led Michelle's and Island customers organic conference support you, remarks, of provide the much on Ron wholesale funding of the previously in Kile, we very strategy. and in foundation, the of native, where morning, loss our for communities this and and in raise detail development a December favorably growth pricing actions, and this as Ron Retail details joined beyond the our entailed to Trust. respect business opportunity like will be last a Credit quarter, to showed few we retail also she I'll who will capital the Q&A reinvesting some then questions. maturing fourth the any serve. lower-yielding and this shareholders pleased growth Bill will subsequent our impact. I'm securities fourth Ron? for over Mary $XX.X tremendous call occurred will prepared and forward the Federal financial and and securities deposit higher-yielding and securities sale joining balance in locked quarter Washington selling Sharon. join interest We repositioning, After

Ronald Ohsberg

good morning, everyone. and Ned, Thanks,

of a $XX.X reported net $X.XX share the loss we Ned million in or per fourth quarter. As said,

of or This $XX.X Net million, improvement by X.XX%, or margin adjusted basis effect $XXX,XXX interest $X.XX and XX was was balance lower Excluding per the up the the amounted balance income management year. to sheet income partial The on modestly AUA noninterest the net impact or million amounted million up of rates balances repositioning the and down asset $XXX,XXX income by points. of by billion down repositioning $XX,XXX was net banking up and share. or at X%. end margin. Adjusted $X.X reflected totaled revenues losses, the $XX Wealth X%. $X.X $XX.X Mortgage by revenues were the spot or $XX,XXX X%. totaled to X% by sheet $XX million, million,

$XXX,XXX reflecting million totaled Turning tax were quarter accruals. decreased effective performance-based million, to fourth advertising [ compensation the and expense to X%. was and up $XXX,XXX benefits $XXX,XXX amounted or noninterest expense million ] and expense the expenses. $X.X Salaries fourth Also, promotion the or $XX.X in and X%, XX.X% by quarter. XX.X (sic) rate down tax by adjusted to adjustments by due These timing. Adjusted was for to income

the tax about XXXX full be XX.X%. effective expect rate We year to

to $XX for by Turning $XXX loans sale. largely or X%. commercial million XX%, Total decreased Total held to sheet. by down the were Residential increased balance or of million reclassification X%. the million $XXX loans $XXX by loans million loans or to due

were up brokered or down $XX were and million. by borrowings $XX $XXX deposits deposits In-market were X% down million FHLB and million

XXX.X% XXX.X%. Our decreased from loan-to-deposits to ratio

loans XX% at Our were allowance fourth total Ned. provision $X in at at of compared totaled and end XXX%. of the million the points XX, this due past basis fourth credit the credit to $X.X of the The We full charge-offs basis quarter NPL net $X XX provided metrics of asset The million and for the back XX XXXX. At quality and turn or September coverage quarter of losses and time, million million. I'll loans year to year had for was call XX September compared XX. XX loans points remain were solid. Nonaccruing $XX to basis points

Edward Handy

Thanks, Lydia, Ron. we take now And can questions.

Operator

from question Hunsicker with Seaport a Partners. have Research We Laurie Instructions] [Operator

Laura Havener Hunsicker

start until can margin about of isn't moving with even of think reflected some you this really just of that end because now Ron, hoping, us especially parts, So help and the the January. all obviously

forward-looking, different terms of about items, maybe if your you you're do the on especially that quantify also loan-to-deposit impact help of ratio, how of us cetera. So wholesale margin? if spot in of could paydown December how and the in basis have impact CDs, terms think in you funding about the et you light balances a And then thinking it points,

you think wanted I anything to be us can XX point just So starting supposed at then margin? And clarify also, a was pickup to beginning swap May. basis about help expiration your of the on

check to wanted on too. Just that,

can So anything great. help margin you us would be in with

Ronald Ohsberg

Yes.

just Laurie, swap So on May that's that XXXX. of piece,

Laura Havener Hunsicker

that And is May X?

Ronald Ohsberg

Yes.

Laura Havener Hunsicker

basis XX still that's points? And Okay.

Ronald Ohsberg

what Yes, Yes. changed. published hasn't we

So yes.

increase very Over Friday. be span, the balance the our to sheet X.XX expect NIM assets will earning $X.X between the a the that we year will XXXX. billion which to billion to the the the course X.XX in for after So repositioning of to of That X.XX in projecting We're over about quarter. average first and of be we X.XX quarter. settlement on to fourth sold loans, $X.X the range impactful

that down And So down expectation be that X.XX. over for December will is FHLB asset we bring margin will of paying somewhat. the the spot was balances funding next couple primarily our earning months. The

Laura Havener Hunsicker

then you there? and thinking And how CDs and about are repricing deposits Okay. just

Ronald Ohsberg

Yes.

still reprice I will past. retail be CDs months CDs CDs brokered you've that down. also in asked the just few to the Xx, continue numbers So wholesale will know this next funding, Fed that. included but cut brokered you -- our on repricing maturing over and the we I is And some about short-term have we regular included see gave will in -- the

it will Right paying FHLB. is brokered more we'll reverses, funding little expensive are on use But And down those wholesale on that. that more sense We now, rely be to. to when makes CDs then it a somewhat when trend heavily than the anyway.

Laura Havener Hunsicker

Okay.

December, does And Okay. on clarify, capital, then million include issuance that these X? just want to I the in $X.XXX

Ronald Ohsberg

again, that Laurie? Say

Laura Havener Hunsicker

Is this in already numbers? X the

Ronald Ohsberg

sorry, Laurie. I'm

Sharon Walsh

that [ ship? Does include ] the

Ronald Ohsberg

Included size. the [ I'm sorry. Yes, ship ]

Laura Havener Hunsicker

Okay. That's helpful. That's December as of XX.

looking more on a dividend. that ratio, safe. Can Obviously, just about you that? target how it's Ned, you're then and substantially comment you for And Okay. thinking payout on question just

Ronald Ohsberg

not... Yes, we're

Edward Handy

ahead, Ron. an part of trend. this It's important Go

Ronald Ohsberg

Yes.

to Laurie. we're planning on the changes So making dividend, any not

Laura Havener Hunsicker

Okay.

the And credit... Okay.

Edward Handy

But the but the coverage coverage is better. ratio obviously -- ratio

Laura Havener Hunsicker

Right. Much better.

Okay.

wanted to it from you. Just hear

guess, $XX.X Okay. of things, a awesome. office, think respect that's help resolution, to about couple Credit, can you with just I us million the

broadly, in that $X.X nonaccruals, X that stated line just quarter? but your at item. that's on was charge-offs office? that love How I it give And this was little more a any those You new us things. And color to I'm coming, chart you color is guess, looking the that B much Class just a can I there? then million came. wanted

Ronald Ohsberg

Bill, do you to take want that?

William Wray

is I total. Yes, can charge-off nonaccrual about of This half the -- Bill. jump was about resolution in. The the was

actually And that next in under agreement you talked came late I resolved is to more likely this quarter be would other but quarter. guess, probably, so the one about

So looking for again, of lot We're these, a of with expeditious resolution. paying we're all attention.

low to So keep we're these levels. continue these hoping at to numbers

Laura Havener Hunsicker

Great. that that was Okay. the Is million, in correct? office. $X.X And

William Wray

under that's one agreement. the Yes, that's

Laura Havener Hunsicker

That's under agreement.

Okay.

And on then office is the have reserve you lab -- $XX.X gone notes Do overall last And do number? sort a also, leasing, Okay. that on had as XX% to your million that quarter. What office I refresh of Great. X just X kind in had more any then you from that now? of of my a questions. have refresh

William Wray

Sure.

factors The way a stress. office we use don't doesn't I CECL. segment manage guessing is because CRE within points it. has which under But definitely manage And XXX it use about under office, a then reserve think, fact are work call -- carry that first I'm and it as office. specific appraisals reflect to that other the one, have basis our data We we just we enough here, don't reserve. the segment, against drive to of don't -- includes We we things

been our So question which your XXXX that's more to reserve it the has very pick see but this occupied. adequately was up activity XX% for on slow already specific no quarter. now though. is space, then lab large XX than -- Leasing -- starting CRE segment is again, office They're reserved. And other

there especially investment. the So significant we feel -- with

Okay.

Operator

question with a Damon DelMonte have from We Instructions] [Operator KBW.

Damon Del Monte

thought in. I margin That for being the called In though. very on the expected I wondering am Sorry, outlook color event, restructuring. all the had it wasn't for impact apparently, but queue any on thanks helpful. I I the why from and was didn't I queued the

your wondering that's Just loan as are of opportunities. now like you what and behind that far as growth kind thoughts

up in you've what go balance loan Now kind few a a quarters? think of growth seen of of some do years forward conservative the you still of more kind could freed restraint feel a like you Or kind margin, that we've of on on approach the and to back past? it's sheet capacity going more for kind some

Edward Handy

a question, it's Yes, great Damon.

the building pipeline. we're back So

You know growth down in slowed we things. kind XXXX, side of of purposely the loan

limit We're low-ish, towards C&I. that The C&I. we're the coming pipeline side. X%-ish We're concentration opportunity. loan so -- issue of We'd there's towards lean XXX. the there is We're over lean now it's on back. of. right but the growth kind that no got seeing not aware commercial pipeline period thinking to And about the like We've CRE is over

And to on so be need we careful front. that

at seeing We is real structure We're is still pricing looking The opportunity. The decent. are deals. out good. estate

So we're tends there, to calibrating the loans, deposits more focus growth to, wanting on it. again, to C&I bring because with it make wanting

and side we growth the out. rate seeing rates. interesting people of on funding appropriately. is of priority Our longer-term We're loan are things the an to figure It's more making as fixed wondering interest about picture sure environment fund requests rate

resi, there of is towards so but And opportunity Resi, tilting the on let the sight opportunity, and think existing I line line should there Mary current portfolio X% off to interesting but and resi might sort side. sight the of our we've an current operation the is be it's commercial running sales. upside then talk environment. But about, been kind we

So be XX% of of volume sold. will we're kind thinking still the

Ron, side that grow. And won't we'd mild the sheet think over that reduction of couple thinking I actually So we're the quarters, correct? we're next in -- the have of portfolio balance

Ronald Ohsberg

right. that's Yes,

Edward Handy

the Damon? that resi On Hope portfolio. helps,

Damon Del Monte

It It Yes. does. does.

you about type And regards perspective If growth $XXX thinking for to of to the Ron, from year? year-over-year a over reasonable it X% you for are 'XX, expenses, kind mean, Perfect. X% like Okay. how of million it at were with of I I mean, growth? next then of kind is

Ronald Ohsberg

Yes.

of rest revenue the as yes, regard let in me guidance bring well. to year, So the with for there

market you call benefits what mortgage a line. around tracks what does. on largely be. we revenue X% do So need the that and on reset are about assuming expectations to and revenue could year-over-year. X% conditions XX% wealth know, market rate. But as dependent projecting, We volume growth We're Mortgage, a increase salaries it, to origination wealth, in for the run largely

that we're which kind we've our people XX to been to, to in also substantially the So just referred restoring years. of people after We've X some investments making past our are by levels. X over on. addition And annual we merit you reduced reduced incentive also holding years raises, of normal about headcount comp off

commissions track the third reinvestment the do those there. we're and mortgage will Mortgage So to gains, second in seasonally back some and going concentrated are also quarter.

we're So projecting, at rate and to call our looking million $XX.X all on it, increase run salaries benefits in, quarter. an per and

are about our estimated million quarter. $XX.X other expenses of All per

revenue So an fee increased increase. increased seeing but also we NIM, expense are

Damon Del Monte

it. Got

Okay.

So add those million. X, $XX it's like

Okay. All right.

So that makes sense.

getting mean, side. the relief the yes, you're So top I on

can a of more franchise reinvest the couple rest taking it into you the of So conservative the approach years. after last

Makes sense. that the on and was that. fee -- me I well, Okay. as that some you it and on probably about of gave insight kind I covers trumped gave to guess because income ask going me us

it. think I has else that's yes, been So and asked Everything answered.

Operator

Thank you.

queue. the in have further We questions no

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

Edward Handy

we've a celebrate for our state, going difference will impact occasion, forward. I'd value and this August live customers, in our focused to on quarter for capital we a positive as the of shareholders, year. of fourth our Lydia, and the and and making our you meaningful we the thank I us our enhancing picture clear Trust and note raise our XXXth today. communities on work the XX, also serve. we're of Thanks, that hope employees we presented Washington mark joining XXXX, current continuing legacy places And like plans

great very So to and you everybody. appreciate forward Have soon. again speaking look we with time your today much a day,

Operator

joining. call. our concludes you much This for very Thank

may now lines. your disconnect You

Washington Trust Bancorp (WASH) 30 Jan 252024 Q4 Earnings call transcript