Washington Trust Bancorp (WASH) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $10.8 million ($0.63 per share), nearly flat sequentially and down 4% year-over-year, reflecting stable credit quality, effective expense management, and ongoing investment in technology and marketing for deposit growth.

• New digital enhancements, deposit growth tools, and marketing campaigns were launched to improve customer experience and drive deposit growth.

• Opened a new branch in Providence and Smithfield, with further expansion planned; operations were consolidated to optimize efficiency.

• Fee-based businesses, including wealth management and mortgage banking, performed well and contributed to higher revenues.

• Noninterest income benefited from a $2.1 million litigation settlement and a $988,000 gain on sale of a facility.

Financial highlights

• Net income for Q2 2024 was $10.8 million, or $0.63 per share; net interest income was $31.6 million, with a net interest margin of 1.83%.

• Noninterest income was $16.7 million, up 16% year-over-year and down 3% sequentially, but up 4% excluding one-time items.

• Wealth management revenues rose 4% sequentially to $9.7 million; mortgage banking revenues increased 10% to $2.8 million.

• Noninterest expenses decreased by 1% from Q1; salaries expense fell 2%.

• Total loans were $5.63 billion, down 0.3% from year-end; deposits were $4.98 billion, down 7%.

Outlook and guidance

• Q3 net interest margin expected to be in line with Q2, with continued pressure from elevated funding costs and deposit mix shifts.

• Q3 expenses projected at about $35 million, with higher mortgage commissions and advertising; Q4 expenses expected to decline.

• Noninterest income in Q3 expected to be similar to Q2, with mortgage revenue up 5-10% and wealth management fee increases reflected in Q3 and Q4.

• Management remains focused on navigating economic headwinds and positioning for future growth.

• Full-year 2024 effective tax rate expected to be approximately 21.2%.