Washington Trust Reports Strong Fourth Quarter and Full-Year 2025 Results (Form 8-K)

Washington Trust Reports Strong Fourth Quarter and Full-Year 2025 Results

WESTERLY, R.I., January 28, 2026 (PR NEWSWIRE)…Washington Trust Bancorp, Inc. (Nasdaq: WASH; "Washington Trust" or the "Corporation"), today reported fourth quarter 2025 net income of $16.0 million, or $0.83 per diluted share, up from $10.8 million, or $0.56 per diluted share, for the preceding quarter. Full-year 2025 net income totaled $52.2 million, or $2.71 per diluted share, compared to a net loss of $28.1 million, or a $1.63 loss per diluted share, for 2024. Excluding the impact of previously disclosed infrequent transactions from both periods, full-year 2025 adjusted net income (non-GAAP) totaled $51.8 million, or $2.69 per diluted share, compared to adjusted net income (non-GAAP) of $40.9 million, or $2.37 per diluted share, for 2024.

"Our fourth quarter results reflect continued earnings momentum and improving profitability, with year-over-year performance supported by margin expansion, strong in-market deposit growth, and increases in wealth management and mortgage banking revenues," said Washington Trust Chairman and Chief Executive Officer Edward O. "Ned" Handy III. "As we enter 2026, the addition of resources in our commercial and wealth management business lines, including the recently announced dedicated institutional banking team, positions us well for sustainable growth."

FOURTH QUARTER HIGHLIGHTS (Q4 2025 vs. Q3 2025, unless otherwise noted):

•The net interest margin was 2.56%, up by 16 basis points. Full-year 2025 net interest margin was 2.40%, up by 53 basis points from 2024.

•The provision for credit losses normalized to $600 thousand, and asset quality metrics improved.

•Wealth management revenues increased by 5%.

•Mortgage loan originations and sales increased 21% and 25%, respectively.

•Loan balances were stable at $5.1 billion.

•In-market deposits (total deposits less wholesale brokered deposits) were up by 1% from September 30, 2025 and 9% from December 31, 2024.

•Capital ratios remained strong, with a total risk-based capital ratio of 12.95% at December 31, 2025.

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RESULTS OF OPERATIONS (Q4 2025 vs. Q3 2025, unless otherwise noted):

Net Interest Income

Net interest income was $40.7 million, up by $1.9 million, or 5%, and the net interest margin was 2.56%, up by 16 basis points. This was supported by lower funding costs and included an increase in loan prepayment income.

•Commercial loan prepayment fee income was $516 thousand (a 3 basis point benefit to net interest margin).

•Average interest-earning assets decreased by $93 million, due to decreases in loans and securities. The yield was 4.93%, down by 6 basis points.

•Average interest-bearing liabilities decreased by $104 million, due to decreases in wholesale funding balances, partially offset by growth in in-market deposits. The rate was 2.84%, down by 24 basis points.

Noninterest Income

Noninterest income was $18.5 million, up by $867 thousand, or 5%.

•Wealth management revenues amounted to $10.9 million, up by $479 thousand, or 5%. Average assets under administration ("AUA") increased by 4%.

•Mortgage banking revenues totaled $3.3 million, down by $251 thousand, or 7%, as increases in gains on sales were offset by changes in fair value on mortgage loans held for sale and forward loan commitments. The change in fair value reflects seasonality in the loan pipeline. Mortgage banking revenues increased by 14% compared to the fourth quarter of 2024.

•Loan related derivative income totaled $1.1 million, up by $810 thousand.

Noninterest Expense

Noninterest expense totaled $38.0 million, up by $2.3 million, or 6%.

•Salaries and employee benefits expense amounted to $23.6 million, up by $973 thousand, or 4%, reflecting higher levels of performance- and volume-based compensation, as well as increased staffing.

•Other noninterest expenses totaled $3.9 million, up by $1.3 million, or 51%, largely due to a $1.0 million contribution made by Washington Trust to its charitable foundation.

Income Tax

Income tax expense totaled $4.7 million, up by $1.6 million. The effective tax rate was 22.7%, compared to 22.2%. The Corporation expects its full-year 2026 effective tax rate to be approximately 22.0%.

FINANCIAL CONDITION (Dec 31, 2025 vs. Sep 30, 2025, unless otherwise noted):

Investment Securities

The securities portfolio totaled $940 million, down by $22 million, or 2%, and remained at 14% of total assets.

Loans

Total loans amounted to $5.1 billion, up by $12 million.

•Commercial loans increased by $23 million, or 1%.

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•Residential real estate loans decreased by $23 million, or 1%.

•Consumer loans increased by $12 million, or 4%.

Deposits and Borrowings

Total deposits amounted to $5.3 billion, up by $47 million, or 1%. There were no wholesale brokered deposits at the end of either period. FHLB advances totaled $626 million, down by $165 million, or 21%.

Contingent liquidity amounted to $2.0 billion at the end of 2025 and consisted of available cash, unencumbered securities, and unused collateralized borrowing capacity.

Capital and Dividends

Total shareholders' equity was $543.6 million, up by $10.6 million, or 2%, reflecting net income and improvement in accumulated other comprehensive loss, which were offset, in part, by quarterly dividend declarations and a net increase in treasury stock.

•In the fourth quarter, the Corporation repurchased 20,855 shares of its common stock, at an average price of $27.03 and a total cost of $564 thousand, under its stock repurchase program.

•The Board of Directors declared a quarterly dividend of 56 cents per share for fourth quarter. The dividend was paid on January 14, 2026 to shareholders of record on January 2, 2026.

•Capital levels exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 12.95%, compared to 12.90%.

•Book value per share was $28.56, compared to $27.98.

ASSET QUALITY (Dec 31, 2025 vs. Sep 30, 2025, unless otherwise noted):

Credit quality metrics improved in the fourth quarter, with reductions in nonaccrual loans and net charge-offs.

Nonaccrual loans were $12.9 million, or 0.25% of total loans, down from $14.0 million, or 0.27%, and consisted entirely of residential and consumer loans.

Past due loans were $11.4 million, or 0.22% of total loans, up from $8.1 million, or 0.16%, and included $655 thousand of commercial loans and $10.7 million of residential and consumer loans.

The Corporation recorded $160 thousand of net recoveries in the fourth quarter, compared to net charge-offs of $11.4 million in the preceding quarter. The provision for credit losses normalized and totaled $600 thousand in the fourth quarter, compared to $6.8 million in the third quarter.

The allowance for credit losses ("ACL") on loans amounted to $37.2 million, or 0.73% of total loans, compared to $36.6 million, or 0.71%.

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Conference Call

Washington Trust will host a conference call to discuss its fourth quarter results, business highlights, and outlook on Thursday, January 29, 2026 at 8:30 a.m. (Eastern Time). Individuals may dial in to the call at 1-833-470-1428 and enter Access Code 58400. An audio replay of the call will be available, shortly after the conclusion of the call, by dialing 1-866-813-9403 and entering the Replay Access Code 478781. The audio replay will be available through February 12, 2026. Also, a webcast of the call will be posted in the Investor Relations section of Washington Trust's website, https://ir.washtrust.com, and will be available through March 31, 2026.

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Background

Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company. Founded in 1800, Washington Trust is the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies. Washington Trust offers a full range of financial services, including commercial banking, mortgage banking, personal banking, and wealth management and trust services through its offices located in Rhode Island, Connecticut, and Massachusetts. The Corporation's common stock trades on NASDAQ under the symbol WASH. Investor information is available on the Corporation's website at https://ir.washtrust.com.