Washington Trust Bancorp, Inc. · NASDAQ:WASH
Washington Trust Bancorp — Q4 2024 Earnings Presentation
31 slides from Washington Trust Bancorp's earnings presentation, Jan 30, 2025
Slide 1: Investor Deck Q4 2024
Investor Deck Q4 2024 NASDAQ: WASH
Slide 2: Safe Harbor: Forward-Looking Statements
Safe Harbor Forward-Looking Statements In this presentation, “we,” “our,” “us,” “Washington Trust” or the “Company” refers to Washington Trust Bancorp, Inc., and our consolidated subsidiaries, including The Washington Trust Company, of Westerly, unless the context indicates that we refer only to the
Slide 3: The Washington Trust Investment Story
The Washington Trust Investment Story LEVERAGING Full suite of Commercial, Retail, and Wealth OUR STRONG 1 Management & Estate planning capabilities comparable to much larger banks MARKET 2 POSITION AND Strong diversification of revenue, with 33% from fees for RESILIENT fiscal year ending December 3
Slide 4: Washington Trust At-a-Glance
WA S H I N G T O N T R U S T AT - A - G L A N C E $7B Regional Financial Services Provider Founded in 1800 Oldest Community bank in the US Largest State-Chartered Bank In Rhode Island $6.9B $5.1B $5.1B Assets Loans Deposits Diverse Revenue Streams Premier Regional Shareholder Returns Wealth Manageme
Slide 5: Prestigious Recognition
WA S H I N G T O N T R U S T AT - A - G L A N C E Prestigious Recognition Named to the Forbes list of Best-In-State Banks 2024 for the 4th consecutive year. Named as one of Rhode Island’s Best Places to Work by Providence Business News for the 14th year in a row. Named as one of the Healthiest Emplo
Slide 6: December 2024 Strategic Actions
S U M M A R Y December 2024 Strategic Actions Common stock offering and balance sheet repositioning result in improved future earnings, higher capital levels to support growth and an improved interest rate risk profile Common stock offering on 12/12/2024 1 Common Stock Issued ~2.2 million new shares
Slide 7: FY 2025 Outlook
FY 2025 Outlook Guidance from earnings conference call on January 30, 2025 Average Earning Assets $6.3 - $6.4B Net Interest Margin Q1 2.30-2.35% Q4 2.45-2.50% Wealth Management Revenues Up 5% (largely market dependent) Mortgage Banking Revenues Up 5-10% Salaries & Benefits $23.5mm per quarter Other
Slide 8: Strong, Diversified Franchise
Strong, Diversified Franchise o Commercial Banking o Grow C&I footings through focus on existing developed industry verticals, adding SBA expertise, and expanding focus beyond RI borders o High quality CRE franchise (developer relationships) 1 Core Bank o Leading credit quality o Retail Banking o St
Slide 9: Selective Growth While Enhancing Stakeholder Value
O U R S T R AT E G Y Selective Growth While Enhancing Stakeholder Value Strategic Priorities #1 Growing deposits and improving the mix #2 Rapid deployment of technology Return to historical investments to enhance customer rate of earnings experience expansion #3 Deepening client relationships thro
Slide 10: High Quality Loan Portfolio
L O A N S High Quality Loan Portfolio 64% 99% Total Loan Portfolio Variable rate Residential lending ($ in billions) loans(1) in RI, MA, & CT(1) $5.6 $5.1 $5.1 o Q4 2024 balance sheet Consumer (7%) repositioning included the $4.2 $4.3 Residential (41%) sale of ~ $345mm of residential mortgages at a
Slide 11: NIM Inflection Realized in Q4 2024
NET INTEREST MARGIN & REPRICING NIM Inflection Realized in Q4 2024 o Fed rate cuts expanded NIM 10 bps in Q4 2024 Net Interest Margin o Balance sheet repositioning and 2024 rate cuts to 3.50% $175 expand quarterly NIM ~50 bps by Q4 2025 3.00% $150 o April 2026 - amortization of swap termination 2.50
Slide 12: Asset Quality: Historical Differentiator
A S S E T Q U A L I T Y Historical Differentiator for Washington Trust NCO / Average Loans 1.2% 1.0% 0.8% 0.6% 162 bps 0.4% 0.2% 0.0% -0.2% Cumulative losses YTD 09/2024 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2006 – 9/30/2024 (bps) WASH 162 Average
Slide 13: Steady, Balanced Mix of Deposits
DEPOSITS Steady, Balanced Mix of Deposits Total In-Market Deposit Portfolio 2.45% 21% ($ in billions) Cost of in-market Uninsured deposits deposits (1) after exclusions (2) $4.7 $4.8 o Give customers the options $4.7 $4.5 Time deposits of banking where, when and $3.8 (25%) how they choose MM & Savin
Slide 14: Largest Community Bank in Rhode Island
LARGEST Community Bank in Rhode Island Rhode Island Market Share (1) 11.5% $172M Rank Institution (ST) Branch Count Total Deposits in Market ($B) Total Market Share Market Share Avg. in-market 1 Citizens (RI) 54 $15.6 36.7% in Rhode Island (1) deposits per branch (2) 2 Bank of America (NC) 24 8.7 20
Slide 15: Generating Diverse Income Sources
R E V E N U E Generating Diverse Income Sources Revenue Contributions From Fee Revenue Outpaces Peer Group All Major Business Lines Better than 95% of peer group (2) ($ in millions) Non-Interest Income(3) / Operating Income(4) $226.9 $228.8 $218.6 50.0% $193.2 $194.6 8% 45.0% 40.0% 6% 35.0% 20% 30.0
Slide 16: Sizeable Wealth Management Operation
W E A LT H M A N A G E M E N T Sizeable Wealth Management Operation o Full range of personalized financial services aimed at building $7.1B AUA o customized solutions for clients Key differentiators: o breadth of our holistic advisory services, which go o Key contributor to pre-tax income beyond wha
Slide 17: Origination Mix Shifted Back to Salable
MORTGAG E BANKING Origination Mix Shifted Back to Salable o Business model has reverted to salable originations, driving gains on sale o Team strategically located in various geographic areas within Rhode Island, Massachusetts and Connecticut to effectively meet market opportunities o Our operations
Slide 18: Peer Comparisons – Q3 2024
P R O F I TA B I L I T Y M E T R I C S Peer Comparisons – Q3 2024 Core ROE (1) Risk-Weighted Core ROA (2) 18.00% 2.50% 15.00% 2.00% 12.00% 1.50% 9.00% 1.00% 6.00% 0.50% 3.00% 0.00% 0.00% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD 09/2024 2006 2007 2
Slide 19: Capital Supports Dividend
C A P I TA L P O S I T I O N / B A L A N C E S H E E T Capital Supports Dividend o Solid balance sheet, fee-intensive business model CET1 Ratio 20.00% o Balance sheet repositioning = substantial Risk 16.00% Based Capital improvement in 2025 (~75 bps) 12.00% 8.00% o Temporary decline in Tangible Equi
Slide 20: Long History of Industry-Leading Dividend Yields
DELIVERING SHAREHOLDER VALUE Long History of Industry-Leading Dividend Yields 7.15% (1) Tangible Book Value per Share Plus Cumulative Dividend per Share CAGR Dividend Yield 10.57% 12/31/2006 to 09/30/2024 7.11% 7.78% Paid consistent dividend for more than a century WASH Average peer Median peer Cash
Slide 21: Supplemental Information
Supplemental Information 21
Slide 22: Commercial Lending Portfolio
Commercial Lending Portfolio Commercial Real Estate (CRE): $2.2 billion Multi-Family: generally low-rise suburban with high amenities, have benefited from the COVID exodus from the cities. None subject to rent % of CRE Portfolio by Segment as of 12/31/24 control, only small % of units are designated
Slide 23: Office Portfolio
Office Portfolio o Office portfolio consists of 48 loans with o Approximately 51% of the total commercial a Carry Value of $290 million. real estate office balance will mature before December 31, 2026. Asset Quality Weighted Average Non- Debt Accrual Avg Loan Loan to Service Special (included in Bal
Slide 24: Residential & Home Equity
Residential & Home Equity Residential Home Equity Total portfolio ($ millions) $ 2,126.2 $ 297.1 FICO score* 764 755 Total delinquencies 0.36% 0.99% Nonperforming 0.51% 0.66% Net charge-offs to average loans -0.01% -0.07% LTV (1) 55.5% 19.0% CT 6% Other 1% MA RI 72% 21% At or for the twelve months e
Slide 25: Income Statement
Income Statement For the Year Ended Adjusted Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, $s in thousands 2024 (1) 2024 2023 2022 2021 2020 Interest and dividend income $340,678 $ 340,678 $ 308,659 $ 194,465 $ 157,995 $ 169,936 Interest expense 212,230 212,230 171,561 38,475 16,560 42,492 Net int
Slide 26: Balance Sheet
Balance Sheet Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, $s in thousands 2024 2023 2022 2021 2020 Assets: Cash and cash equivalents $ 113,889 $ 90,184 $ 118,422 $ 178,493 $ 202,268 Total securities 916,305 1,000,380 993,928 1,042,859 894,571 Total loans 5,137,838 5,647,706 5,110,139 4,272,925 4,195,990
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Dec 31, Dec 31, $s in thousands, except per share amounts 2024 2023 Calculation of tangible book value per share Total shareholders’ equity, as reported - GAAP $499,728 $472,686 Less end of period balances of: Goodwill 63,909 63,909 Identifiable intangible assets, net 2,8
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures Dec 31, Dec 31, $s in thousands, except per share amounts 2024 2023 Noninterest (loss) income, as reported - GAAP ($27,797) $56,140 Less adjustments: Realized losses on securities, net (31,047) 0 Losses on sale of portfolio loans, net (62,888) 0 Net gain on sale of bank-o
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures As calculated by S&P Global Market Intelligence Dec 31, Dec 31, 2024 2023 Effective tax rate - GAAP 27.70% 14.70% Less: impact of adjustments -6.2% 5.8% Adjusted effective tax rate - Non-GAAP 21.50% 20.50% Dec 31, Dec 31, $s in thousands, except per share amounts 2024 202
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures As calculated by S&P Global Market Intelligence Dec 31, Dec 31, 2024 2023 Efficiency ratio, as reported - GAAP 136.2% 69.1% Less: impact of adjustments 64.6% 0.0% Adjusted efficiency ratio - Non-GAAP 71.6% 69.1% Dec 31, Dec 31, $s in thousands, except per share amounts 20
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures As calculated by S&P Global Market Intelligence Dec 31, Dec 31, $s in thousands, except per share amounts 2024 2023 Net (loss) income available to common shareholders, as reported - GAAP $ (28,038) $ 48,091 Less : adjustments, after-tax (68,907) 3,249 Adjusted net income
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