On April 22, 2024, Washington Trust Bancorp Inc (WASH, Financial) disclosed its first-quarter earnings for 2024, revealing a net income of $10.9 million, or $0.64 per diluted share, surpassing the analyst's estimated net income of $7.73 million. This performance compares to a net income of $12.9 million, or $0.76 per diluted share, in the previous quarter. The earnings details were released in their recent 8-K filing.
Washington Trust Bancorp Inc, through its subsidiary, The Washington Trust Company, offers a range of financial services including commercial banking, mortgage banking, personal banking, and wealth management. The company primarily generates its revenue from the Commercial Banking segment.
Financial Highlights and Performance Metrics
The company reported a decrease in net interest income to $31.7 million in Q1 2024, down by 3% from the previous quarter, primarily due to higher funding costs which outpaced increases in asset yields. Despite this, noninterest income saw a significant rise, totaling $17.2 million, up 29% from Q4 2023, boosted notably by a $2.1 million litigation settlement.
Wealth management revenues increased by 5% to $9.3 million, correlating with a 7% increase in the average balance of wealth management assets under administration. Mortgage banking also showed robust growth with revenues up 61% to $2.5 million, reflecting higher realized gains on loan sales and positive changes in the fair value of mortgage loans held for sale.
Total loans grew modestly by 1% to $5.7 billion, while deposits slightly decreased by 0.4% to $4.7 billion. The bank’s asset quality improved with nonaccrual loans decreasing to 0.54% of total loans, down from 0.79% in the previous quarter.
Challenges and Strategic Focus
Edward O. Handy III, Chairman and CEO, emphasized the ongoing margin pressure from rising funding costs as a key challenge. However, he highlighted the strength of Washington Trust's diversified business model in generating solid noninterest income amidst these challenges. The bank remains focused on managing the balance sheet, maintaining credit quality, and controlling expenses to navigate future uncertainties effectively.
Investor Insights
Washington Trust's ability to exceed net income expectations amidst economic pressures highlights its operational resilience and strategic execution. The growth in wealth management and mortgage banking revenues underscores the potential for diversified income streams to buffer against interest rate volatility. Investors should note the bank's proactive measures in asset and wealth management, aiming to enhance shareholder value in a fluctuating economic environment.
The bank declared a quarterly dividend of $0.56 per share, consistent with previous quarters, underscoring its commitment to returning value to shareholders. With capital levels well above regulatory minimums, Washington Trust is positioned as a stable entity in the financial sector.
For detailed financials and future outlook discussions, stakeholders are encouraged to join the upcoming conference call scheduled for April 22, 2024, or visit the Investor Relations section on Washington Trust's website.
Explore the complete 8-K earnings release (here) from Washington Trust Bancorp Inc for further details.
