0000737468FALSE00007374682024-12-202024-12-20

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 20, 2024
WASHINGTON TRUST BANCORP, INC.
(Exact Name of Registrant as Specified in Charter)
Rhode Island001-3299105-0404671
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
23 Broad Street
Westerly,Rhode Island02891
(Address of principal executive offices)(Zip Code)
(401)348-1200
(Registrant's telephone number, including area code)
N/A
(Former name or address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
COMMON STOCK, $.0625 PAR VALUE PER SHARE
WASH
The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act. ☐


Item 7.01 Regulation FD Disclosure.

Washington Trust Bancorp, Inc. (the “Corporation”) is making available a presentation providing detailed information about the balance sheet repositioning described under Item 8.01 of this Current Report on Form 8-K. This presentation is furnished herewith as Exhibit 99.2.

Item 8.01. Other Events.

On December 20, 2024, the Corporation announced balance sheet repositioning transactions intended to support continued organic growth and capital generation.

The press release issued by the Corporation on December 20, 2024 related to the balance sheet repositioning transactions is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No.Exhibit
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES


    Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


WASHINGTON TRUST BANCORP, INC.
Date:December 20, 2024By:/s/ Ronald S. Ohsberg
Ronald S. Ohsberg
Senior Executive Vice President, Chief Financial Officer and Treasurer


Exhibit 99.1
bancorpflatbluehorizontalaa.jpg
    NASDAQ: WASH

Media Contact: Sharon M. Walsh
SVP, Director of Marketing Strategy and Planning
Telephone: (401) 348-1286
E-mail: smwalsh@washtrust.com
Date: December 20, 2024
FOR IMMEDIATE RELEASE


Washington Trust Announces Balance Sheet Repositioning

WESTERLY, R.I., December 20, 2024 (PR NEWSWIRE)…Washington Trust Bancorp, Inc. (Nasdaq: WASH) (the “Corporation”), parent company of The Washington Trust Company, of Westerly (the “Bank”), today announced Bank balance sheet repositioning transactions to support continued organic growth and capital generation.

“Like many banks, we have been carrying low-yielding assets on our balance sheet following rapid increases in interest rates over the past few years. These assets have been earning interest below current market rates, which has impacted our earnings and ability to reinvest and expand our business. We had the opportunity to raise approximately $70 million in capital to support the sale of these low-yielding assets and reinvestment of the proceeds into assets with higher rates,” stated Edward “Ned” O. Handy III, Washington Trust Chairman and CEO. “This will allow us to focus on growth and investment which is good for shareholders, employees, customers and the communities we serve. This has also made us even stronger financially and will set us up for improved profitability in 2025 and beyond.”

Pursuant to the terms of the transactions, the Bank sold approximately $409 million of available for sale debt securities with a weighted average yield of 2.65% and has agreed to sell approximately $345 million in residential mortgage loans with a weighted average rate of 3.03%. The sale of the residential mortgage loans is expected to settle in the first quarter of 2025. The Bank has also reinvested approximately $378 million into available for sale debt securities with a weighted average yield of 5.30%. Additionally, the Bank expects to pay down approximately $352 million of wholesale funding balances with an estimated weighted average rate of 4.50% in the first quarter of 2025.

The sale transactions are expected to result in a net after-tax loss of approximately $70 million that will be recognized in the fourth quarter of 2024. While this will cause the Corporation to report a net loss for the fourth quarter and the full year of 2024, it has been entirely funded by the $70 million in capital raised through our previously disclosed equity offering.

The Corporation will provide additional details on this balance sheet repositioning in a presentation that will be furnished as an exhibit to a Form 8-K with the Securities and Exchange Commission (“SEC”) and will be accessible on the Corporation’s website at https://ir.washtrust.com.


Exhibit 99.1
ABOUT WASHINGTON TRUST BANCORP, INC.
Washington Trust Bancorp, Inc., NASDAQ: WASH, is the publicly-owned holding company of The Washington Trust Company (“Washington Trust”, “the Bank”), with $7.1 billion in assets as of September 30, 2024. Founded in 1800, Washington Trust is recognized as 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 values its role as a community bank and is committed to helping the people, businesses, and organizations of New England improve their financial lives. The Bank offers a wide range of commercial banking, mortgage banking, personal banking and wealth management services through its offices in Rhode Island, Connecticut and Massachusetts and a full suite of convenient digital tools. Washington Trust is a member of the FDIC and an equal housing lender.

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 on a national basis and in the local markets in which we operate;
•changes in customer behavior due to political, business, and economic conditions, including inflation and concerns about liquidity;
•interest rate changes or volatility, as well as changes in the balance and mix of loans and deposits;
•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 legislation or regulation and 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, 2023, 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. These forward-looking statements 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.

NON-GAAP FINANCIAL MEASURES
This press release and related presentation may contain references to measures that are not defined in generally accepted accounting principles (“GAAP”). Management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity, 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.

December 2024 Investor Presentation NASDAQ: WASH

 
Disclaimers 2 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 parent company, Washington Trust Bancorp, Inc. This presentation contains certain statements that may be considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which are based on various assumptions (some of which are beyond our control), may be identified by reference to a future period or periods, or by the use of forward-looking terminology such as “believe,” “expect,” “estimate,” “anticipate,” “continue,” “plan,” “approximately,” “intend,” “objective,” “goal,” “project” or other similar terms or variations on those terms, or the future or conditional verbs such as “will,” “may,” “should,” “could” and “would.” These forward-looking statements were based on information, plans and estimates at the date of this presentation, and Washington Trust assumes no obligation to update forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes. Actual results, performance or achievements of Washington Trust may differ materially from those discussed in these forward-looking statements, as a result of, among other factors, the factors described under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) and updated by our Quarterly Reports on Form 10-Q and other reports filed with the SEC. You should carefully review all of these factors. You should be aware that there may be other factors that could cause these differences and many of which are beyond our control, including, but not limited, to: changes in general business and economic conditions on a national basis and in the local markets in which we operate; changes in customer behavior due to political, business and economic conditions, including inflation and concerns about liquidity; interest rate changes or volatility, as well as changes in the balance and mix of loans and deposits; 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 assets under administration; 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 legislation or regulation and 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. Non-GAAP Financial Measures This presentation contains references to measures that are not defined in generally accepted accounting principles (“GAAP”). Management believes that the supplemental non-GAAP information, which consists of measurements and ratios based on tangible equity, 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.

 
Announced common stock offering on 12/12/2024 Common Stock Offering Issued ~2.2 million new shares at $34 per/share o 6.3% discount to last sale (12/12/2024) o Net cash proceeds of ~$70 million to repay wholesale funding balances at weighed average rate of ~4.50% Agreed to sell ~$345 million in low-yielding residential mortgage loans Residential Mortgage Loan Sale (Sale is expected to settle in Q1 2025) o ~$145 million in adjustable-rate mortgages o ~$200 million in fixed-rate mortgages o Weighted average rate of ~ 3.03% o Proceeds to repay $282 million in wholesale funding balances at weighted average rate of ~4.50% Sold ~409 million of available-for-sale securities and reinvested into ~$378 million of securities at higher ratesSecurities Sale & Reinvestment o Weighted average yield of ~2.65% of securities sold o Weighted average yield of ~5.30% on securities reinvested 3 Summary of December Strategic Actions All figures shown are approximations unless otherwise noted (1) Net proceeds received by the Company, after deducting underwriting discounts and commissions, and deducting estimated operating expenses payable by the Company (2) The balance sheet repositioning transactions are expected to result in a net after-tax loss of approximately $70 million that will be recognized in the fourth quarter of 2024 1 2 3 Balance Sheet Repositioning $70 million(1) $70 million after-tax loss(2) Common stock offering and balance sheet repositioning will result in improved future earnings, higher capital levels to support growth and an improved interest rate risk profile

 
4 Highlights of Equity Raise and Balance Sheet Repositioning 1.85% 1.85% 0.31% Q3 2024 Actual Q3 2024 Pro Forma Net Interest Margin $10,981 $10,981 $2,650 Q3 2024 Actual Q3 2024 Pro Forma Net Income(1) ($ thousands) $0.64 $0.64 $0.06 Q3 2024 Actual Q3 2024 Pro Forma Diluted EPS(1) (Per Common Share) 10.95% 10.95% 0.57% 09/30/2024 Actual 09/30/2024 Pro Forma Common Equity Tier 1 Ratio 0.60% 0.60% 0.18% Q3 2024 Actual Q3 2024 Pro Forma Return on Average Assets(2) 10.43% 10.43% 1.83% Q3 2024 Actual Q3 2024 Pro Forma Return on Average Tangible Common Equity(3) 2.16%$13,631 11.52%0.78% $0.70 12.26% (1) Excludes the net after-tax loss of approximately $70 million that will be recognized in the fourth quarter of 2024 resulting from the balance sheet repositioning sales transactions (2) Consists of net income divided by average total assets (3) This is a non-GAAP financial measure. See appendix for a reconciliation of non-GAAP financial measures to GAAP financial measures Equity Raise & Balance Sheet Repositioning Benefit

 
5 Performance Momentum In addition to the common stock offering and balance sheet repositioning, our future operating results are expected to benefit from the following: o Net Interest Income & Net Interest Margin (“NIM”)(1) - declining rates benefit liability-sensitive balance sheet o Wealth Management - benefiting from improved equity markets and client fee restructure o Mortgage Banking fees - return to saleable originations has lifted sales revenue through YTD 2024; more originators expected to be hired in 2025 (commission-based) Amortization of swap termination expense ceases in April 2026 o $13.6 million unamortized at 9/30/24 o Pre-tax expense of $715 thousand per month, $8.6 million per year o Estimated annualized pro forma EPS impact = $0.37 (at 9/30/24)(2) o Estimated annualized pro forma NIM impact = 12bp (at 9/30/24)(3) (1) Consists of net interest income divided by average interest-earning assets (2) Assumes pre-tax amortization expense of $8.581 million, tax rate of 25.5%, and diluted shares for the quarter ended September 30, 2024 of $17.140 million (3) Assumes pre-tax amortization expense of $8.581 million, and interest earning assets for the quarter ended September 30, 2024 of $7.001 billion

 
6 Appendix Calculation of Non-GAAP Financial Measures Q3 2024 Pro-FormaQ3 2024$s in thousands Calculation of Adjusted ROATCE $13,623 $10,973 Net income available to common shareholders $509,274 485,654Average Shareholders Equity Less average balances: 63,90963,909Goodwill 3,1893,189Identifiable intangible assets, net $442,176 $418,556 Total tangible assets at end of period 12.26%10.43%Adjusted ROATCE - Non-GAAP

 
v3.24.4
Cover Page Document
Dec. 20, 2024
Cover Page [Abstract]  
Document Type 8-K
Document Period End Date Dec. 20, 2024
Entity Registrant Name WASHINGTON TRUST BANCORP, INC.
Entity Incorporation, State or Country Code RI
Entity File Number 001-32991
Entity Tax Identification Number 05-0404671
Entity Address, Address Line One 23 Broad Street
Entity Address, City or Town Westerly,
Entity Address, State or Province RI
Entity Address, Postal Zip Code 02891
City Area Code (401)
Local Phone Number 348-1200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000737468
Amendment Flag false
Title of 12(b) Security COMMON STOCK, $.0625 PAR VALUE PER SHARE
Trading Symbol WASH
Security Exchange Name NASDAQ
Washington Trust Bancorp (NASDAQ:WASH)
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