WASH — Washington Trust Bancorp, Inc.

Summary of Washington Trust Bancorp, Inc. (WASH) Q2 2026 Earnings Call

1. Key Financial Results and Metrics:

• Net Income: $16 million, or $0.83 per share, up $3.4 million or $0.17 from Q1 2026.
• Pre-Provision Pretax Net Revenue (PPNR): Increased by 9% from Q1 and 23% year-over-year.
• Net Interest Income: $41.8 million, up 3% from Q1 and 12% year-over-year.
• Net Interest Margin (NIM): 2.73%, up 10 basis points from Q1 and 37 basis points year-over-year. Expected to rise to 2.75% in Q3 and 2.80% in Q4.
• Total Loans: Increased by 2% from Q1, with commercial loans up $63 million.
• Deposits: Grew by 4% from Q1 and 6% year-over-year.
• Asset Quality: Nonaccruing loans decreased to 78 basis points from 81 basis points in Q1, though past due loans increased to 81 basis points.

2. Strategic Updates and Business Highlights:

• Washington Trust is set to open its 30th branch in Bristol, Rhode Island, enhancing market presence.
• A new digital banking solution for small businesses is expected to launch in the fall.
• The company welcomed Jeff Wilhelm to the Board, bringing expertise in digital innovation and cybersecurity.
• The Institutional Banking initiative has positively impacted commercial and industrial loan growth.

3. Forward Guidance and Outlook:

• The company anticipates continued mid-single-digit loan growth for the year, with a focus on the Institutional Banking Group and commercial real estate.
• The pipeline for commercial loans remains strong, with expectations for sustained growth despite seasonal slowdowns in the nonprofit sector.
• Management is optimistic about maintaining strong earnings growth and margin expansion in the upcoming quarters.

4. Bad News, Challenges, or Points of Concern:

• Payoffs in the commercial real estate sector have been a headwind, with $112 million in payoffs reported in Q2, slightly exceeding new loan formations.
• Past due loans increased significantly, attributed to a single commercial real estate loan, raising concerns about potential credit quality deterioration.
• Competition for deposits is intensifying, which may pressure margins despite recent improvements.

5. Notable Q&A Insights:

• Management indicated that the growth in the Institutional Banking group is primarily driven by educational loans, with no current focus on college loans, although there are opportunities in the pipeline.
• The company expects C&I loans to grow at a faster pace than other segments over the next 18 months.
• Discussions are ongoing regarding a Class B office loan that is under special mention, with management expressing confidence in the relationship with the borrower and the asset's long-term viability.

Overall, Washington Trust reported strong financial performance in Q2 2026, with growth in loans and deposits, while also outlining strategic initiatives to enhance digital offerings and market presence. However, challenges related to loan payoffs and increasing past due loans warrant attention moving forward.