WESTERLY, R.I., Dec. 20,
2024 /PRNewswire/ -- 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.
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.
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SOURCE Washington Trust Bancorp, Inc.