W.t.b. Financial Corp. · OTC:WTBFA
W.t.b. Financial — Shareholder Meeting (April 2025)
40 slides from W.t.b. Financial's shareholder meeting presentation, Apr 21, 2025
Slide 1: W.T.B. Financial Corporation Annual Shareholders' Meeting
2025 W.T.B. Financial Corporation Annual Shareholders’ Meeting Presented by: Kevin Blair Larry Sorensen President Chief Financial Officer Washington Trust Bank W.T.B. Financial Corporation
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expe
Slide 3: Presentation Outline
PRESENTION OUTLINE ▪ Company Overview ▪ High Level Perspective on 2024 ▪ Evidence of stability ▪ Sources of Disruption ▪ WTBFC 2024 Positioning and Performance ▪ Q1 2025 Performance Highlights ▪ Strategic Initiatives ▪ Closing Thoughts
Slide 4: Company Overview
W.T.B. Financial Corporation Company Overview
Slide 5: Mission and Geographic Footprint
MISSION AND GEOGRAPHIC FOOTPRINT Our Mission Markets Served We will be the best at understanding and meeting the financial needs of our customers. We will focus our unique strengths as a community bank on serving those customers who perceive a distinct value in building long-term relationships with
Slide 6: Core Identity: WTBFC | WTB
CORE IDENTITY: WTBFC | WTB ▪ Pacific Northwest regional community bank ▪ Relationship banking business model ▪ 120 + years of heritage ▪ High value customer relationships ▪ 4th generation Chairman of the Board ▪ Organic customer growth ▪ Private ownership and family heritage ▪ Broad customer base an
Slide 7: Financial Management Principles
FINANCIAL MANAGEMENT PRINCIPLES Balance Sheet Strength: Shareholder Value / Capital Discipline: ▪ Credit discipline…strong allowance position ▪ Maintain capital adequacy ▪ Disciplined capital management ▪ Internal capital generation for growth ▪ Ample liquidity resources ▪ Competitive returns (divid
Slide 8: High Level Perspective on 2024
High Level Perspective on 2024 Evidence of Stability: Sources of Disruption: ▪ GDP ▪ Federal Fiscal Picture ▪ Unemployment ▪ Monetary Challenges ▪ Money Supply ▪ Political Landscape ▪ Inflation ▪ Trade Policy
Slide 9: GDP (Quarterly; YoY % Change)
GDP (Quarterly; YoY % Change) +12.2% Average GDP Growth 2.6% -7.5% Tech Bust Great Recession COVID 9/11
Slide 10: % Unemployment Rate (U3; Monthly)
% Unemployment Rate (U3; Monthly) +14.8% +10.0% +6.3% Average Unemployment Rate 3.8% +4.4% Tech Bust Great 9/11 Recession COVID
Slide 11: Money Supply (M2 YoY % Change)
Money Supply (M2 YoY % Change) +26.5% M2 Growth < 5.0% Tech Bust Great -5.0% COVID 9/11 Recession
Slide 12: Inflation (Fed Target; PCE YoY % Change)
Inflation (Fed Target; PCE YoY % Change) +5.6% FOMC policy goal of 2.0% inflation (PCE) PCE Average < 3.0% Tech Bust Great 9/11 Recession COVID
Slide 13: 10-Year UST Bond Yields
10-Year UST Bond Yields Some Stability 4.5% +/- Tech Bust Great 9/11 Recession COVID
Slide 14: National Debt
National Debt $36T Tech Bust Great 9/11 Recession $23T COVID $9T $6T
Slide 15: Federal Budget Deficits
Federal Budget Deficits $9.0T of budget deficits Tech Bust Great COVID 9/11 Recession
Slide 16: Interest on National Debt
Interest on National Debt $1.1T annual rate $508B Tech Bust Great COVID 9/11 Recession
Slide 17: Federal Reserve Total Assets
Federal Reserve Total Assets $8.9T Great Recession $6.8T $800B COVID
Slide 18: Annual Trade Deficit (monthly)
Annual Trade Deficit (monthly) - $395B Annualized - $130B Jan 2025 Tech Bust Great > $1T 9/11 COVID Recession Annualized
Slide 19: Political Disruption
Political Disruption Political change and instability in an uncertain world: ▪ Trade Policy…Tariffs ▪ DOGE ▪ Immigration ▪ Cultural Polarity ▪ Russia/Ukraine ▪ Middle East ▪ China/Taiwan Uncertainty and instability brings volatility Balance sheet strength crucial in uncertain times
Slide 20: WTBFC 2024 Positioning and Performance
WTBFC 2024 Positioning and Performance
Slide 21: Balance Sheet Normalizing
BALANCE SHEET NORMALIZING ▪ Deposit portfolio stabilizing: ▪ Deposits up $923 million to $8.8 billion since bottoming at $7.9 billion in Q2 2023 ▪ Noninterest deposits of $3.2 billion, or 37% of total…down from peak of 48% at YE 2020 ▪ Cost of interest-bearing liabilities declining on lower borrowin
Slide 22: Total Assets and Mix
TOTAL ASSETS AND MIX Total Assets ($ in millions) YE 2024 Asset Mix ($ in millions) Net Loans $6,739 63% $11,446 $11,090 $10,737 $10,712 $10,423 Securities $3,038 28% $9,814 Other Assets $514 5% Investible Cash $445 4% 2020 2021 2022 2023 2024 Q1 2025 Assets rose above $11B in 2021/2023, then decr
Slide 23: Total Liabilities, Equity and Mix
TOTAL LIABILITIES, EQUITY AND MIX Total Liabilities and Equity ($ in millions) YE 2024 Liability/Equity Mix ($ in millions) $11,090 $11,446 Interest Bearing $10,737 $10,712 $5,587 52% $10,423 Deposits $9,814 $833 $897 $867 $934 $947 Non-Interest- $807 $9,890 $1,914 $3,218 30% $9,217 Bearing Deposits
Slide 24: Cash/Investment Portfolio Positioning
CASH/INVESTMENT PORTFOLIO POSITIONING Investible Cash (upper) Bond Cash Flow Annually and Securities (lower) ($ in millions) $5,313 ($ in millions) $600 $653 $1.3 billion $4,571 $4,043 $1,987 $4,033 $1,007 $274 $3,484 $3,272 $1.0 billion $1,463 $445 $400 $474 $383 $361 $355 $291 $276 $3,759 $3,566 $
Slide 25: Loan Portfolio Positioning (YE 2024)
LOAN PORTFOLIO POSITIONING (YE 2024) Total Loans ($ in millions) Loan Mix ($'s in millions) $7,063 $6,893 $6,510 CRE Loans $2,541 37% $6,042 SFR Loans $1,770 26% $5,592 $5,536 C&I Loans $1,557 23% C&D Loans $602 9% AG Loans $287 4% Consumer Loans $125 2% 2020 2021 2022 2023 2024 Q1 2025 Loan growt
Slide 26: Focus on Capital
FOCUS ON CAPITAL Shareholders' Equity ($'s in millions) $934 $947 ▪ Shareholders’ equity: $897 $833 $867 ▪ Up $37 million, or 4.1% in 2024 $807 ▪ Up $127 million, or 16% since YE 2020 ▪ Capital levels well above regulatory minimums ▪ Significant capital buffers ▪ $273 million for Total Risk Based Ca
Slide 27: Credit Performance
CREDIT PERFORMANCE ▪ Credit performance has seen some erosion: ▪ Ag sector showing some pressure ▪ Noncurrent/Classified loans were up on a few large borrowers ▪ Classified loans remain at moderate levels ▪ $97 million at YE 2023, or 1.5% of total loans ▪ $156 million at YE 2024, or 2.3% of total lo
Slide 28: Credit Performance Metrics
CREDIT PERFORMANCE METRICS Noncurrent Loans ($'s in millions) Noncurrent loans rose to $75 million, or 0.70% of assets and ORE as % of Assets Some emerging weakness in AG portfolio 0.70% A few larger loans went nonaccrual (largely situational) Deterioration does not appear systemic at this t
Slide 29: Financial Performance Overview
FINANCIAL PERFORMANCE OVERVIEW ▪ Major Progress Normalizing the Balance Sheet ▪ Borrowings down $1.9 billion from peak to $500 million ▪ Bond portfolio cash flow coming back for reinvestment ▪ E/A and Leverage Ratios growing ▪ Performance Metrics improving ▪ Low yielding fixed rate cash flows being
Slide 30: Normalization: Key BS Elements
Normalization: Key BS Elements Borrowings ($'s in millions) Bond Balances ($'s in millions) Bonds down by $1.0 billion $1,915 $1,915 $3,758 $3,729 $3,669 $3,576 $3,565 $3,458 $1,565 $3,433 $1,549 $3,357 $1,472 $3,037 $2,798 $1,068 $1,000 $500 $500 Interest Expense: Borrowings (Quarterly; $'s in 000'
Slide 31: Normalization: Restoring Earning Power
Normalization: Restoring Earning Power Net Interest Margin Margin has widened 80 bps since Q1 2024 3.47% Pay down of high cost borrowings 3.15% Declining deposit costs Recycling of lower rate fixed asset cash flows to market Quarterly net interest revenue is up $16 million since Q2 2024
Slide 32: Normalization: Key Performance Metrics
Normalization: Key Performance Metrics Efficiency Ratio Efficiency ratio coming down from peak Expense discipline 80.4% Wider margins and higher net interest revenue More progress to be made 74.6% Return on assets improving Higher earnings Lower assets 64.7% More progress to be made
Slide 33: Wealth Management and Trust Division
WEALTH MANAGEMENT AND TRUST DIVISION Key business line…complements banking client book ▪ Wealth management, fiduciary, trust and investment services ▪ Competitive advantage for high value and affluent customers ▪ Long-term, relationship-based business line Attractive financial dynamics ▪ Stable, fee
Slide 34: WTBFC Shareholder Value Metrics
WTBFC SHAREHOLDER VALUE METRICS Years Ended December 31, Income (000's) and Per Share Data 2023 2024 $ Change % Change Earnings flat YoY, but on the rise in Q4 Net Income $ 55,851 $ 55,797 $ (54) -0.10% Regular dividends steady at $7.40 Diluted Earnings per Common Share $ 22.29 $ 22.32 $ 0.03 0.
Slide 35: WTBFC Q1 2025 Performance Highlights
WTBFC Q1 2025 PERFORMANCE HIGHLIGHTS ▪ Net income totaled $17.1 million, down $3.8 million from Q4 2024 ▪ Provision expense: Increased $3.9 million to $2.9 million in Q1 2025 ▪ There was a release of $1 million in loan loss reserves in Q4 2024 due to a decline in loans ▪ Two less days for earnings i
Slide 36: WTBFC Strategic Initiatives
WTBFC Strategic Initiatives
Slide 37: Key Strategic Initiatives
Key Strategic Initiatives Modernized Business Mobile Upgrade Loan Personal Money Corporate Website Banking App Origination System Management Tool Enhanced user interface Enhance mobile banking Enhanced loan Deployed personal with improved site experience for business origination process for financia
Slide 38: Key Strategic Operational Enhancements
Key Strategic Operational Enhancements Information WTB Enterprise Risk Management Innovation Lab Management Enhanced sales and operational Launched process for cross In Process: Multi-year effort management reporting tools to functional team to oversee and to enhance enterprise improve visibility to
Slide 39: Strategic Initiatives: Locations
Strategic Initiatives: Locations Market Moves Western Washington ▪ Southwest Washington: • Entered Vancouver market with financial Center (Opened November 2024) • Hired Commercial Team Lead in Tacoma. ▪ Downtown Seattle: ▪ Consolidated onto single floor of Two Union Square. ▪ Northwest Washington: •
Slide 40: Thank you for your continued support!
Thank you for your continued support! We appreciate it!