"Washington Trust delivered solid first quarter 2026 results, led by an increase in net interest margin, which reflects the strength of our core banking business and continued benefits from the December 2024 balance sheet repositioning transactions," said Washington Trust Chairman and Chief Executive Officer Edward O. "Ned" Handy III. "Our balance sheet remains strong, and as we move through 2026, Washington Trust is focused on delivering long‑term shareholder value while providing customers with personalized service, local decision‑making, and a comprehensive suite of financial products and services."
FIRST QUARTER HIGHLIGHTS (Q1 2026 vs. Q4 2025, unless otherwise noted):
Returns on average equity and average assets were 9.23% and 0.78% for the first quarter.
Net interest margin ("NIM") was 2.63%, up by 7 basis points and up by 34 basis points from the first quarter of 2025.
The provision for credit losses was $4.0 million for the first quarter.
Wealth management revenues decreased by 2% and were up by 8% from the first quarter of 2025.
Mortgage banking revenues were seasonally down by 6%, and were up by 32% from the first quarter of 2025.
Loan balances were down by 2% from both December 31, 2025 and March 31, 2025.
In-market deposits (total deposits less wholesale brokered deposits) were down by 2% from December 31, 2025 and up by 3% from March 31, 2025.
Capital ratios remained strong, with a total risk-based capital ratio of 13.38% at March 31, 2026.
RESULTS OF OPERATIONS (Q1 2026 vs. Q4 2025, unless otherwise noted):
Net Interest Income
Net interest income was down by $223 thousand, or 1%, and as noted above NIM was up by 7 basis points. Compared to the first quarter of 2025, net interest income was up by $4.1 million, or 11%, and NIM was up by 34 basis points.
Commercial loan prepayment fee income was $116 thousand (a 1 basis point benefit to NIM), compared to $516 thousand (a 3 basis point benefit to NIM) in the prior quarter.
Average interest-earning assets decreased by $88 million, and the yield was down by 7 basis points.
Average interest-bearing liabilities decreased by $49 million, and the rate was down by 19 basis points.
Noninterest Income
Noninterest income was down by $1.2 million, or 6%. Adjusted noninterest income (non-GAAP) was up by $1.7 million, or 11%, from the first quarter of 2025.
Wealth management revenues decreased by $205 thousand, or 2%, and average assets under administration ("AUA") decreased by 1%. Compared to the first quarter of 2025, wealth management revenues increased by $756 thousand, or 8%, and average AUA increased by 10%.
Mortgage banking revenues were down by $205 thousand, or 6%, largely driven by a seasonal decline in loan sales volume. Mortgage banking revenues increased by 32% compared to the first quarter of 2025.
Loan related derivative income totaled $227 thousand, down by $854 thousand, reflecting lower transaction volume.
Noninterest Expense
Noninterest expense was down by $218 thousand, or 1%. Adjusted noninterest expense (non-GAAP) was up by $2.0 million, or 6%, from the first quarter of 2025.
Salaries and employee benefits expense increased by $693 thousand, or 3%, largely reflecting higher payroll taxes associated with the start of a new calendar year. Compared to the first quarter of 2025, salaries and employee benefits expense increased by $1.9 million, or 9%, reflecting staffing increases, including the addition of resources in our commercial banking and wealth management business lines.
Other noninterest expenses were down by $1.2 million, or 31%, largely due to a $1.0 million contribution made by Washington Trust to its charitable foundation in the prior quarter.
Income Tax
Income tax expense was down by $1.2 million. The effective tax rate was 21.6%, compared to 22.7%. The Corporation expects its full-year 2026 effective tax rate to be approximately 21.5%.
FINANCIAL CONDITION (Mar 31, 2026 vs. Dec 31, 2025, unless otherwise noted):
Investment Securities
The securities portfolio totaled $912 million, down by $28 million, or 3%, and remained at 14% of total assets.
Loans
Total loans amounted to $5.0 billion, down by $120 million, or 2%.
Commercial loans decreased by $95 million, or 3%.
Residential real estate loans decreased by $21 million, or 1%.
Consumer loans decreased by $3 million, or 1%.
Deposits and Borrowings
Total deposits amounted to $5.2 billion, and were down by $105 million, or 2%. Compared to March 31, 2025, deposits were up by $124 million, or 2%. In-market deposits, which exclude wholesale brokered deposits, decreased by $105 million, or 2%. Compared to March 31, 2025, in-market deposits were up by $151 million, or 3%.
FHLB advances totaled $576 million, and were down by $50 million, or 8%. Compared to March 31, 2025, FHLB advances were down by $274 million, or 32%.
Contingent liquidity amounted to $2.0 billion at March 31, 2026 and consisted of available cash, unencumbered securities, and unused collateralized borrowing capacity.
Capital and Dividends
Total shareholders' equity was $546.8 million, up by $3.2 million, or 1%.
The Board of Directors declared a quarterly dividend of 56 cents per share for the first quarter. The dividend was paid on April 10, 2026 to shareholders of record on April 1, 2026.
Capital levels exceeded the regulatory minimum levels to be considered well capitalized, with a total risk-based capital ratio of 13.38%, compared to 12.95%.
Book value per share was $28.72, compared to $28.56.
ASSET QUALITY (Mar 31, 2026 vs. Dec 31, 2025, unless otherwise noted):
Nonaccrual loans were $40.4 million, or 0.81% of total loans, up from $12.9 million, or 0.25%. The increase was largely due to two commercial real estate office loans that were placed on nonaccrual status.
Past due loans were $16.4 million, or 0.33% of total loans, up from $11.4 million, or 0.22%, and included $7.0 million of commercial loans and $9.4 million of residential and consumer loans.
The provision for credit losses totaled $4.0 million in the first quarter, compared to $600 thousand in the prior quarter. The first quarter provision largely reflected an increase in specific reserves, partially offset by a decline in loan portfolio balances. The Corporation recorded $10 thousand of net charge-offs in the first quarter, compared to net recoveries of $160 thousand in the preceding quarter.
The allowance for credit losses ("ACL") on loans amounted to $41.1 million, or 0.82% of total loans, compared to $37.2 million, or 0.73%.
Conference Call
Washington Trust will host a conference call to discuss its first quarter results, business highlights, and outlook on April 21, 2026, at 8:30 a.m. (Eastern Time). Individuals may dial in to the call at 1-833-470-1428 and enter Access Code 948138. 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 238648. The audio replay will be available through May 5, 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 June 30, 2026.
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.
Forward-Looking Statements
This press release contains statements that are "forward-looking statements." We may also make forward-looking statements in other documents we file with the U.S. Securities and Exchange Commission ("SEC"), in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors, or employees. You can identify forward-looking statements by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "outlook," "will," "should," and other expressions that predict or indicate future events and trends and which do not relate to historical matters. You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties, and other factors, some of which are beyond our control. These risks, uncertainties, and other factors may cause our actual results, performance, or achievements to be materially different from the anticipated future results, performance, or achievements expressed or implied by the forward-looking statements.
Some of the factors that might cause these differences include the following:
changes in general business and economic conditions (including the impact of ongoing armed conflicts, tariffs, inflation, current or future U.S government shutdowns, and concerns about liquidity) on a national basis and in the local markets in which we operate;
interest rate changes or volatility, as well as changes in the balance and mix of loans and deposits;
changes in customer behavior due to political, business and economic conditions;
changes in loan demand and collectability;
the possibility that future credit losses are higher than currently expected due to changes in economic assumptions or adverse economic developments;
ongoing volatility in national and international financial markets;
reductions in the market value or outflows of wealth management AUA;
decreases in the value of securities and other assets;
increases in defaults and charge-off rates;
changes in the size and nature of our competition;
changes in, and evolving interpretations of, existing and future laws, rules and regulations;
changes in accounting principles, policies and guidelines;
operational risks including, but not limited to, changes in information technology, cybersecurity incidents, fraud, natural disasters, war, terrorism, civil unrest and future pandemics;
regulatory, litigation and reputational risks; and
changes in the assumptions used in making such forward-looking statements.
In addition, the factors described under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as updated by our Quarterly Reports on Form 10-Q and other filings submitted to the SEC, may result in these differences. You should carefully review all of these factors, and you should be aware that there may be other factors that could cause these differences. The forward-looking statements in this report were based on information, plans, and estimates at the date of this report, and we assume no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.
Supplemental Information - Explanation of Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles ("GAAP"), this press release contains certain non-GAAP financial measures. Washington Trust's management believes that the supplemental non-GAAP information, such as adjusted noninterest income, adjusted noninterest expense, adjusted income before income taxes, adjusted income tax expense, adjusted net income, adjusted diluted earnings per common share, adjusted return on average assets, adjusted return on average equity, and adjusted efficiency ratio, as well as measurements and ratios based on tangible equity and tangible assets, is utilized by regulators and market analysts to evaluate a company's financial condition and therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures, which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Washington Trust Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands)
Mar 31, 2026 vs. Dec 31, 2025
Mar 31, 2026 vs. Mar 31, 2025
Mar 31,2026
Dec 31,2025
Mar 31,2025
$
%
$
%
Assets:
Cash and due from banks
$27,781
$29,481
$33,394
(1,700)
(5.8 %)
($5,613)
(16.8 %)
Interest-earning deposits with correspondent banks
60,090
61,375
82,804
(1,285)
(2.1)
(22,714)
(27.4)
Short-term investments
12,313
12,878
4,041
(565)
(4.4)
8,272
204.7
Mortgage loans held for sale, at fair value
32,127
35,833
21,953
(3,706)
(10.3)
10,174
46.3
Available for sale debt securities, at fair value
911,958
940,342
917,545
(28,384)
(3.0)
(5,587)
(0.6)
Federal Home Loan Bank stock, at cost
28,273
29,473
38,899
(1,200)
(4.1)
(10,626)
(27.3)
Loans:
Total loans
5,014,885
5,134,388
5,096,210
(119,503)
(2.3)
(81,325)
(1.6)
Less: allowance for credit losses on loans
41,126
37,236
41,056
3,890
10.4
70
0.2
Net loans
4,973,759
5,097,152
5,055,154
(123,393)
(2.4)
(81,395)
(1.6)
Premises and equipment, net
25,900
25,402
26,068
498
2.0
(168)
(0.6)
Operating lease right-of-use assets
35,855
35,904
36,048
(49)
(0.1)
(193)
(0.5)
Investment in bank-owned life insurance
116,010
115,126
107,546
884
0.8
8,464
7.9
Goodwill
63,909
63,909
63,909
—
—
—
—
Identifiable intangible assets, net
4,148
4,303
2,682
(155)
(3.6)
1,466
54.7
Other assets
167,073
170,516
195,972
(3,443)
(2.0)
(28,899)
(14.7)
Total assets
$6,459,196
$6,621,694
$6,586,015
($162,498)
(2.5 %)
($126,819)
(1.9 %)
Liabilities:
Deposits:
Noninterest-bearing deposits
$585,415
$595,092
$625,590
($9,677)
(1.6 %)
($40,175)
(6.4 %)
Interest-bearing deposits
4,579,218
4,674,898
4,414,991
(95,680)
(2.0)
164,227
3.7
Total deposits
5,164,633
5,269,990
5,040,581
(105,357)
(2.0)
124,052
2.5
Federal Home Loan Bank advances
576,000
626,000
850,000
(50,000)
(8.0)
(274,000)
(32.2)
Junior subordinated debentures
22,681
22,681
22,681
—
—
—
—
Operating lease liabilities
38,724
38,726
38,716
(2)
—
8
—
Other liabilities
110,385
120,713
112,357
(10,328)
(8.6)
(1,972)
(1.8)
Total liabilities
5,912,423
6,078,110
6,064,335
(165,687)
(2.7)
(151,912)
(2.5)
Shareholders' Equity:
Common stock
1,223
1,223
1,223
—
—
—
—
Paid-in capital
198,654
198,323
197,570
331
0.2
1,084
0.5
Retained earnings
444,508
442,741
435,233
1,767
0.4
9,275
2.1
Accumulated other comprehensive loss
(78,435)
(79,309)
(99,179)
874
(1.1)
20,744
20.9
Treasury stock, at cost
(19,177)
(19,394)
(13,167)
217
(1.1)
(6,010)
(45.6)
Total shareholders' equity
546,773
543,584
521,680
3,189
0.6
25,093
4.8
Total liabilities and shareholders' equity
$6,459,196
$6,621,694
$6,586,015
($162,498)
(2.5 %)
($126,819)
(1.9 %)
Washington Trust Bancorp, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited; Dollars and shares in thousands, except per share amounts)
Q1 2026 vs. Q4 2025
Q1 2026 vs. Q1 2025
Q1 2026
Q4 2025
Q1 2025
$
%
$
%
Interest income:
Interest and fees on loans
$64,338
$67,040
$66,656
($2,702)
(4.0 %)
($2,318)
(3.5 %)
Interest on mortgage loans held for sale
375
606
958
(231)
(38.1)
(583)
(60.9)
Taxable interest on debt securities
8,768
9,100
8,827
(332)
(3.6)
(59)
(0.7)
Nontaxable interest on debt securities
7
8
7
(1)
(12.5)
—
—
Dividends on Federal Home Loan Bank stock
585
792
1,022
(207)
(26.1)
(437)
(42.8)
Other interest income
909
1,291
1,993
(382)
(29.6)
(1,084)
(54.4)
Total interest and dividend income
74,982
78,837
79,463
(3,855)
(4.9)
(4,481)
(5.6)
Interest expense:
Deposits
27,370
30,060
31,748
(2,690)
(8.9)
(4,378)
(13.8)
Federal Home Loan Bank advances
6,777
7,696
10,946
(919)
(11.9)
(4,169)
(38.1)
Junior subordinated debentures
310
333
347
(23)
(6.9)
(37)
(10.7)
Total interest expense
34,457
38,089
43,041
(3,632)
(9.5)
(8,584)
(19.9)
Net interest income
40,525
40,748
36,422
(223)
(0.5)
4,103
11.3
Provision for credit losses
4,000
600
1,200
3,400
566.7
2,800
233.3
Net interest income after provision for credit losses
36,525
40,148
35,222
(3,623)
(9.0)
1,303
3.7
Noninterest income:
Wealth management revenues
10,647
10,852
9,891
(205)
(1.9)
756
7.6
Mortgage banking revenues
3,045
3,250
2,304
(205)
(6.3)
741
32.2
Card interchange fees
1,385
1,217
1,509
168
13.8
(124)
(8.2)
Service charges on deposit accounts
785
843
744
(58)
(6.9)
41
5.5
Loan related derivative income
227
1,081
101
(854)
(79.0)
126
124.8
Income from bank-owned life insurance
885
886
769
(1)
(0.1)
116
15.1
Gain on sale of bank-owned properties, net
—
—
6,994
—
—
(6,994)
(100.0)
Other income
329
374
331
(45)
(12.0)
(2)
(0.6)
Total noninterest income
17,303
18,503
22,643
(1,200)
(6.5)
(5,340)
(23.6)
Noninterest expense:
Salaries and employee benefits
24,340
23,647
22,422
693
2.9
1,918
8.6
Outsourced services
4,383
4,067
4,346
316
7.8
37
0.9
Net occupancy
2,890
2,642
2,741
248
9.4
149
5.4
Equipment
903
852
891
51
6.0
12
1.3
Legal, audit, and professional fees
936
667
750
269
40.3
186
24.8
FDIC deposit insurance costs
935
1,028
1,262
(93)
(9.0)
(327)
(25.9)
Advertising and promotion
547
1,029
410
(482)
(46.8)
137
33.4
Amortization of intangibles
155
155
204
—
—
(49)
(24.0)
Pension plan settlement charge
—
—
6,436
—
—
(6,436)
(100.0)
Other expenses
2,676
3,896
2,734
(1,220)
(31.3)
(58)
(2.1)
Total noninterest expense
37,765
37,983
42,196
(218)
(0.6)
(4,431)
(10.5)
Income before income taxes
16,063
20,668
15,669
(4,605)
(22.3)
394
2.5
Income tax expense
3,463
4,694
3,490
(1,231)
(26.2)
(27)
(0.8)
Net income
$12,600
$15,974
$12,179
($3,374)
(21.1 %)
$421
3.5 %
Weighted avg common shares outstanding - basic
19,039
19,034
19,276
Weighted avg common shares outstanding - diluted
19,173
19,159
19,370
Per share information:
Basic earnings per common share
$0.66
$0.84
$0.63
($0.18)
(21.4 %)
$0.03
4.8 %
Diluted earnings per common share
$0.66
$0.83
$0.63
($0.17)
(20.5 %)
$0.03
4.8 %
Cash dividends declared
$0.56
$0.56
$0.56
$—
— %
$—
— %
Washington Trust Bancorp, Inc. and Subsidiaries
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited; Dollars and shares in thousands, except per share amounts)
Mar 31,2026
Dec 31,2025
Mar 31,2025
Mar 31, 2026 vs. Dec 31, 2025
Mar 31, 2026 vs. Mar 31, 2025
Share and Equity Related Data:
Book value per share
$28.72
$28.56
$27.06
$0.16
0.6 %
$1.66
6.1 %
Tangible book value per share (non-GAAP) (1)
$25.14
$24.97
$23.61
$0.17
0.7 %
$1.53
6.5 %
Market value per share
$33.46
$29.55
$30.86
$3.91
13.2 %
$2.60
8.4 %
Shares issued at end of period
19,562
19,562
19,562
— shs
— %
— shs
— %
Shares outstanding at end of period
19,041
19,035
19,276
6 shs
— %
(235) shs
(1.2 %)
Capital Ratios (2):
Tier 1 risk-based capital
12.46 %
12.14 %
12.23 %
32 bps
23 bps
Total risk-based capital
13.38 %
12.95 %
13.13 %
43 bps
25 bps
Tier 1 leverage ratio
8.80 %
8.65 %
8.45 %
15 bps
35 bps
Common equity tier 1
11.99 %
11.68 %
11.76 %
31 bps
23 bps
Balance Sheet Ratios:
Equity to assets
8.47 %
8.21 %
7.92 %
26 bps
55 bps
Tangible equity to tangible assets (non-GAAP) (1)
7.49 %
7.25 %
6.98 %
24 bps
51 bps
Loans to deposits (3)
96.9 %
97.4 %
100.7 %
(50) bps
(380) bps
Q1 2026
Q1 2026
Q4 2025
Q1 2025
vs. Q4 2025 (bps)
vs. Q1 2025 (bps)
Performance Ratios (4):
Net interest margin (5)
2.63 %
2.56 %
2.29 %
7
34
Return on average assets (6)
0.78 %
0.95 %
0.73 %
(17)
5
Adjusted return on average assets (non-GAAP) (1)
0.78 %
0.95 %
0.71 %
(17)
7
Return on average tangible assets (non-GAAP) (1)
0.79 %
0.96 %
0.71 %
(17)
8
Return on average equity (7)
9.23 %
11.70 %
9.63 %
(247)
(40)
Adjusted return on average equity (non-GAAP) (1)
9.23 %
11.70 %
9.30 %
(247)
(7)
Return on average tangible equity (non-GAAP) (1)
10.53 %
13.39 %
10.69 %
(286)
(16)
Efficiency ratio (8)
65.3 %
64.1 %
71.4 %
120
(610)
Adjusted efficiency ratio (non-GAAP) (1)
65.3 %
