How Does Washington Trust Company Work?

Washington Trust Company's unique value proposition stems from its 225-year heritage as the nation's oldest community bank, combined with ongoing investments in digital innovation and personalized service. This approach fosters deep trust and loyalty within the industry.

• Tailored financial advice
• Streamlined banking experiences
• Human-focused, technology-enabled approach
• Deep community roots and long-standing trust

Washington Trust Bancorp, Inc. reported strong performance in the second quarter of 2025. Net interest income reached $37.2 million, a 2% increase from the previous quarter, with the net interest margin improving to 2.36%. This growth was supported by strategic balance sheet adjustments made in late 2024, which involved selling lower-yielding assets and reducing high-cost funding. Wealth management revenues also saw a 2% increase to $10.1 million, driven by seasonal transaction activity, with assets under administration reaching $7.2 billion as of June 30, 2025. Mortgage banking revenues demonstrated significant growth, jumping 32% to $3.0 million in Q2 2025, and totaled $11.0 million for the full year 2024, a 65% increase year-over-year.

• Net interest income for Q2 2025: $37.2 million (up 2% QoQ).
• Net interest margin in Q2 2025: 2.36% (up 7 bps QoQ).
• Wealth management revenues in Q2 2025: $10.1 million (up 2% QoQ).
• Assets under administration (Wealth Management) as of June 30, 2025: $7.2 billion.
• Mortgage banking revenues in Q2 2025: $3.0 million (up 32% QoQ).
• Mortgage banking revenues for full year 2024: $11.0 million (up 65% YoY).
• Pre-tax net gain from branch sales leaseback transactions (Q1 2025): $7.0 million.
• Strategic balance sheet repositioning in late 2024 aimed at future revenue enhancement.

The company's monetization strategies are rooted in traditional banking income from loans and investments, complemented by fee-based income from its specialized services. A notable strategic move was the balance sheet repositioning in December 2024, which, despite a $93.9 million net pre-tax loss from sale transactions recognized in Q4 2024, was designed to positively impact future revenues and provide growth capacity. Further enhancing its financial structure, the company completed sales leaseback transactions for five branch locations in Q1 2025, generating a $7.0 million pre-tax net gain within noninterest income. Understanding these operations provides insight into the Brief History of Washington Trust and its evolution.

Washington Trust Company leverages its 225-year history as the oldest community bank in the nation, fostering significant trust and brand recognition. Its diversified business model, encompassing commercial, personal, mortgage banking, and wealth management, provides revenue stability. The company's strong capital position, evidenced by a total risk-based capital ratio of 13.13% as of March 31, 2025, surpasses regulatory requirements, offering a distinct competitive edge. Furthermore, a proactive stance on information security and customer education regarding online scams highlights a commitment to client protection.

• 225-year history as the oldest community bank
• Diversified revenue streams across multiple banking segments
• Strong focus on relationship banking and deposit growth
• Robust capital position exceeding regulatory minimums
• Commitment to information security and customer protection

Washington Trust Company's operations are subject to various risks, including managing deposit costs and sensitivity to interest rate changes, which affected its net interest margin and loan growth in early 2025. The company reported an increase in the provision for credit losses in Q1 2025, though nonaccrual loans remained low at 0.51% of total loans by Q2 2025. Despite overall revenue growth, its wealth management unit experienced 13 consecutive quarters of net outflows. Ongoing concerns about cyber threats are addressed through its Enterprise Risk Management program.

• Deposit cost management and liability sensitivity are key risks.
• Economic headwinds and interest rate fluctuations impact net interest margin and loan growth.
• Loan performance and credit loss provisions require careful monitoring.
• Wealth management net outflows present a challenge for that segment.
• Cyber threats and data security are ongoing operational concerns.

Looking forward, Washington Trust is strategically repositioning its balance sheet, a process completed in January 2025, to enhance future revenues and growth capacity. The company exceeded its Q2 2025 net interest margin target of 2.35%, achieving 2.36%, and is working to rebuild loan pipelines for low single-digit loan growth. This strategic approach, detailed further in the Marketing Strategy of Washington Trust, aims to sustain profitability. The company's strong capital base, sound credit metrics, and consistent dividend history position it well to manage future challenges and maintain income generation capabilities, reflecting its commitment to fiduciary services and comprehensive financial planning.