Conferencia de resultados del T3 de 2026 de Washington Trust (WASH): el margen se expande, previsión del NIM para el T4 en el 2.85%-2.90%

Conclusiones clave

• Washington Trust Bancorp registró un beneficio neto en el tercer trimestre de 2026 de 19,4 millones de dólares, o 1,01 dólares por acción, lo que representa un aumento de 3,4 millones de dólares y 0,18 dólares por acción respecto al segundo trimestre.
• Los ingresos netos por intereses aumentaron un 7% intertrimestralmente y un 15% interanual hasta alcanzar los 44,7 millones de dólares. El margen neto de intereses se amplió al 2,84%, 11 puntos básicos más que en el segundo trimestre y 44 puntos básicos más que en el mismo periodo del año anterior.
• Los depósitos aumentaron 77 millones de dólares, o un 1%, durante el trimestre y un 4% interanual, mientras que la financiación mayorista disminuyó 80 millones de dólares, o un 18%, desde el 30 de junio.
• Las métricas crediticias mejoraron tras la resolución de un préstamo para oficinas de 22,3 millones de dólares. Los préstamos morosos cayeron al 0,48% del total de préstamos frente al 0,78% del segundo trimestre.
• La dirección estimó el margen neto de intereses del cuarto trimestre en el 2,85%-2,90%. Las perspectivas incluyen la subida de tipos de septiembre, pero excluyen posibles alzas adicionales.
• La cartera de proyectos de préstamos comerciales ascendía a aproximadamente 230 millones de dólares al 30 de septiembre y estaba orientada hacia el crédito comercial e industrial (C&I). La dirección mantiene su objetivo de crecimiento trimestral del 2% al 3% para los préstamos comerciales.

Datos financieros clave

El trimestre incluyó 283.000 dólares de ingresos por intereses del trimestre anterior procedentes de un préstamo que volvió a devengar intereses, lo que aportó aproximadamente 2 puntos básicos al margen neto de intereses. La tasa impositiva efectiva fue del 20,4%.

Rendimiento comercial y operativo

Los ingresos por gestión de patrimonios cayeron un 1% respecto al T2, pero aumentaron un 7% interanual. El incremento de los ingresos basados en activos se vio compensado por el descenso estacional de los ingresos por comisiones de servicios fiscales.

Los ingresos de la banca hipotecaria disminuyeron debido a la contracción de la cartera de solicitudes de hipotecas y al aumento de los tipos de interés del mercado. Los ingresos por derivados relacionados con préstamos aumentaron en 924.000 dólares, mientras que los ingresos por seguros de vida propiedad del banco incluyeron una ganancia de 954.000 dólares.

El sector inmobiliario comercial impulsó el crecimiento de los préstamos en el T3. La dirección señaló que la cartera total de préstamos creció a una tasa anualizada de aproximadamente el 5% durante el trimestre, mientras que la cartera comercial creció a una tasa anualizada de alrededor del 10%.

La cartera de proyectos comerciales de aproximadamente 230 millones de dólares estuvo orientada hacia los préstamos C&I, incluidos unos 40 millones de dólares en el grupo de banca institucional. La dirección espera que la actividad institucional se fortalezca en el T4 y el T1 tras la debilidad estacional del T3.

Washington Trust también se prepara para abrir dos sucursales en Rhode Island a finales del T4. La dirección estimó el ritmo de gasto anual recurrente en aproximadamente 750.000-800.000 dólares por sucursal.

Previsiones de la dirección

La dirección prevé un margen neto de intereses para el T4 del 2,85%-2,90%. Washington Trust sigue siendo ligeramente sensible a los activos, y la estimación incluye únicamente la subida de tipos de septiembre. La dirección estimó que cada alza adicional de 25 puntos básicos en los tipos de interés podría añadir entre 1 y 2 puntos básicos al ritmo de margen.

Aproximadamente 2.100 millones de dólares de la cartera de préstamos están vinculados al SOFR o al tipo preferencial, reajustándose los préstamos ligados al SOFR con carácter mensual por lo general. Se espera que la reinversión de los flujos de caja de la cartera de préstamos residenciales de 2.000 millones de dólares aporte un impulso al margen de 1 a 2 puntos básicos por trimestre. La dirección también confirmó un beneficio adicional de 4 puntos básicos resultante de la cancelación de un swap.

Se prevé que los gastos no procedentes de intereses del T4 aumenten en aproximadamente 1,5 millones de dólares con respecto al T3, reflejando inversiones en sucursales, marketing, tecnología y personal. Esto excluye la aportación anual de 750.000 dólares a la fundación benéfica de la empresa. La dirección ratificó un nivel aproximado de gastos para el T4 de 41 millones de dólares, incluida dicha aportación.

Se espera que la tasa impositiva efectiva para todo el año 2026 sea de aproximadamente el 21,5%.

Riesgos y factores a vigilar

La presión competitiva sigue siendo significativa para los activos inmobiliarios comerciales de alta calidad. La dirección citó diferenciales de mercado en el rango de 170-180 puntos básicos, lo que podría limitar el beneficio de la repreciación de los préstamos inmobiliarios comerciales (CRE) concedidos a tipos más bajos.

Un inmueble de Clase A de aproximadamente 6 millones de dólares fue traspasado a la categoría de dudoso debido a un potencial riesgo de valoración, a pesar de mantener una ocupación estable, patrocinadores comprometidos y ningún impago. El préstamo no vence hasta 2031.

La dirección está trabajando con los patrocinadores para buscar una salida a una exposición de 6,6 millones de dólares en espacios de laboratorio. Otro inmueble independiente de 28 millones de dólares destinado a laboratorios está alquilado al 95% y podría salir de la categoría de mención especial si el rendimiento de los alquileres de los inquilinos sigue mejorando.

El patrimonio neto total disminuyó durante el trimestre debido a la menor valoración razonable de los títulos de deuda disponibles para la venta y al dividendo trimestral. La dirección señaló que las ratios de capital bajo la normativa GAAP siguen siendo más ajustadas que las de sus competidores, a pesar de que los coeficientes de capital regulatorio son satisfactorios.

Aspectos destacados del turno de preguntas con analistas

• Financiación mediante depósitos: La dirección atribuyó gran parte del crecimiento de los depósitos sin intereses a las relaciones de banca institucional y a las cuentas operativas vinculadas. El banco pretende mantener el crecimiento de los depósitos cerca del crecimiento de los préstamos, conservando la opción de utilizar la financiación mayorista cuando proceda.
• Crecimiento de los préstamos: Las fuertes amortizaciones en la primera mitad del año significan que la empresa no espera recuperar suficiente volumen para alcanzar un crecimiento de un dígito medio en el año natural 2026. En su lugar, el objetivo declarado refleja un ritmo recurrente, que incluye un crecimiento trimestral del 2%-3% en préstamos comerciales.
• Costes de las sucursales: Se producirán algunos gastos de contratación e inmobiliarios antes de que se abran las dos nuevas sucursales. La dirección coincidió en que incluir aproximadamente 300.000 dólares de gasto trimestral adicional en el T1 de 2027 era un supuesto razonable de modelización a medida que las sucursales se incorporen por completo.
• Asignación de capital: La dirección no tiene planes actuales para recomprar acciones. El capital se retiene para respaldar el crecimiento previsto del balance y de los préstamos.

Transcripción completa de la conferencia de resultados

Transcripción completa de la conferencia de resultados

Comentarios de la dirección

Operator

Good morning, and welcome to Washington Trust Bancorp, Inc.'s Q3 2026 Conference Call. My name is Hillary, and I'll be your operator today. [Operator Instructions] As a reminder, today's call is being recorded.

I'll now turn the call over to Sharon Walsh, Senior Vice President, Director of Marketing and Corporate Communications. Sharon, please go ahead.

Sharon Walsh

Thank you, Hillary. Good morning, and welcome to Washington Trust Bancorp, Inc.'s conference call for the third quarter of 2026.

Joining us this morning are members of Washington Trust's executive team, Ned Handy, Chairman and Chief Executive Officer; Mary Noons, President and Chief Operating Officer; Ron Ohsberg, Senior Executive Vice President, Chief Financial Officer and Treasurer; and Bill Wray, Senior Executive Vice President and Chief Risk Officer.

Please note that today's presentation may contain forward-looking statements, and our actual results could differ materially from what is discussed on today's call. Our complete safe harbor statement is contained in our earnings release, which was issued yesterday, as well as other documents that are filed with the SEC.

All of these materials and other public filings are available on our Investor Relations website at ir.washtrust.com. Washington Trust trades on NASDAQ under the symbol WASH.

I'm now pleased to introduce you to today's host, Washington Trust's Chairman and Chief Executive Officer, Ned Handy. Ned?

Edward Handy

Thank you, Sharon. Good morning, everyone, and thank you for joining our third quarter conference call. We continue to appreciate your time and your interest in Washington Trust. I'll begin with a few comments about the quarter, and then Ron will provide more detail on our financial performance.

Following our remarks, Mary and Bill will join us for the question-and-answer session. We delivered another strong quarter marked by growth in earnings and net interest income, continued margin expansion and improved operating efficiency. Our asset quality metrics improved, reflecting the resolution of a commercial real estate office loan. Our capital position remains strong and supports prudent growth.

We're continuing to expand our presence in Rhode Island with 2 new branches opening in the coming months. These locations will provide the trusted advice, comprehensive solutions, convenience and personalized service that our customers deserve.

We look forward to building long-term financial partnerships with individuals, families and businesses in these markets.

And now I'll turn the call over to Ron to provide additional details on our third quarter financial results. Ron?

Ronald Ohsberg

Yes. Thanks, Ned, and good morning, everyone. Third quarter net income was $19.4 million or $1.01 per share, up by $3.4 million or $0.18 from the preceding quarter. Pre-provision pretax net revenue, or PPNR, was up 20% from Q2 and up by 26% year-over-year. Net interest income was $44.7 million, up by 7% from Q2 and up by 15% year-over-year.

The margin was 2.84%, up by 11 basis points from Q2 and up by 44 basis points year-over-year. The third quarter included $283,000 of second quarter interest income from a loan that was returned to accrual during the quarter, and this benefited the NIM by about 2 basis points.

Noninterest income was up by $1.6 million or 9% compared to Q2 and by -- up by 15% year-over-year. Wealth management revenues were down by 1% compared to Q2 and up by 7% year-over-year. In the third quarter, an increase in asset-based revenues were offset by a decline in tax servicing fee -- a seasonal decline in tax servicing fee income.

Mortgage banking revenues totaled $3.2 million, down by 9% from the second quarter and down by 10% year-over-year, reflecting a decrease in the mortgage pipeline as well as rising market interest rates. Loan-related derivative income was up by $924,000 and income from bank-owned life insurance was up largely due to the recognition of a gain of $954,000 in the third quarter.

Noninterest expense totaled $38.8 million in the third quarter, up by $200,000 or 0.5%. Our third quarter effective tax rate was 20.4%, and we expect our full year 2026 rate to be approximately 21.5%.

Turning to the balance sheet. Total loans were up by 1% from June 30. Total commercial loans increased by $62 million or 2.3%, driven by growth in the CRE portfolio. Deposits were up by $77 million or 1% from the end of the second quarter and up by $213 million or 4% year-over-year. And wholesale funding was down by $80 million or 18% from the end of June.

Total equity amounted to $531 million, down by $23 million from the end of the second quarter. In the third quarter, net income was offset by a decline in the fair value of available-for-sale debt securities as well as the quarterly dividend. The dividend remains at $0.56 per share.

Turning to asset and credit quality. Overall, our asset and credit quality metrics improved. At September 30, nonaccruing loans were 48 basis points on total loans, decreasing from 78 basis points and past due loans were 54 basis points on total loans, down by -- down from 81 basis points at the end of the second quarter.

The improvement was largely driven by the resolution of an office loan of $22.3 million that was placed on nonaccrual in the first quarter. During the third quarter, this loan was restructured, resulting in $18.5 million being returned to accrual and $3.8 million being charged off. In the third quarter, we recognized $1.8 million provision for credit losses.

And at this time, I will turn the call back over to Ned.

Edward Handy

Thanks, Ron, and we'll move to question and answers.

Operator

[Operator Instructions] Your first question comes from the line of Justin Crowley from Piper Sandler. A reminder to unmute yourself locally if you would like to ask the question on your device. I will move to the next question. Please rejoin the queue if you are looking to ask a question. Your next call comes from the line of Damon DelMonte from KBW.

Preguntas y respuestas

Damon Del Monte

Just wanted to start on the outlook for the margin. You've had a string of consecutive quarters of nice margin expansion. And just kind of curious, Ron, to get your thoughts on how you see it kind of playing out over the back half of this year and as we go into '27, especially with the rate hike that we had in September and the prospects of additional hikes over the coming quarters as well.

Ronald Ohsberg

Yes. So, Damon, it's probably a little early to be talking about 2027, but our -- we've revised our guidance for Q4. We're going to guide to a range of 2.85% to 2.90%.

Damon Del Monte

Okay, great. When we think about...

Ronald Ohsberg

So, yes, I would say that we remain modestly asset sensitive. So, that guidance includes just the September rate hike at this point. And we think that each 25 basis point hike probably gives us 1 to 2 basis points on the run rate.

Damon Del Monte

2 basis points on the run rate. Okay, great. And then kind of along those lines, the noninterest-bearing deposit growth has been really strong in the last couple of quarters. Just any color on what's driving that?

Ronald Ohsberg

Yes. I think a good part of it is the institutional banking team onboarding operating accounts related to the relationships that they're bringing in is probably the biggest driver. But I think we have kind of an across-the-board approach to taking in deposits across both retail and commercial at this point. So, yes, we had pretty good growth in the quarter, and we'll see if we can maintain that.

Damon Del Monte

Got it. Okay. And then just one more for me. On the expense outlook, a good quarter this quarter, pretty much flat. Just curious on your outlook for the fourth quarter and kind of any puts and takes around that.

Ronald Ohsberg

Yes. Yes. So, listen, on the last call, we guided to a $1 million increase in the quarter, and we came in below that. I would say a lot of that is timing related. So, we're going to see a shift to some of that previously expected expense growth shifting into the fourth quarter.

So, for the fourth quarter, we're looking at an increase of about $1.5 million. We are making some targeted investments in a few areas, including some new branches that are coming online, some marketing spend, some technology spend, some personnel spend, kind of that $1.5 million is kind of evenly distributed across that.

That -- none of that includes our annual $750,000 contribution to our charitable foundation. So, that would be incremental to the $1.5 million.

Operator

Your next question comes from the line of Justin Crowley from Piper Sandler.

Justin Crowley

Hopefully, you can hear me now.

Edward Handy

We can, Justin.

Justin Crowley

Perfect. Ron, just going back to the margin. If I remember correctly, I believe you were going to get another 4 basis points benefit from the terminated swap this quarter. So, I just wanted to confirm that, that was the case.

Ronald Ohsberg

Yes, it is.

Justin Crowley

Okay. And then I guess just looking out a little further, do you have detail on what loan repricings look like if we go out to the end of 2027? What that looks like from a volume and then just rate pickup standpoint?

Ronald Ohsberg

Yes. So, we've got, call it, about $2.1 billion of SOFR and prime-based loans. So, each -- those SOFR loans are resetting monthly. So, that's kind of the repricing that we see immediately every time the Fed makes a change.

Justin Crowley

Okay. And then -- but for the -- like the fixed to floating or any of the like 5-year CRE paper, do you get any benefit there, just kind of given some of the growth you put on back in 2022?

Ronald Ohsberg

I'm sorry, say that again, Justin.

Justin Crowley

Just for the 5-year fixed to floating type commercial real estate paper. If I just kind of like look back to growth you put on 5 years ago, I would think there's some benefit there as we get into next year, although perhaps not.

Edward Handy

Yes. I would say -- Justin, it's Ned. I would say that CRE loans that are maturing that were underwritten at much lower rates are obviously -- to the extent that they do extend and don't pay off, we still see a fair amount of those paying off even before maturity. But I'd say we get a little bit of a lift, obviously, from the lows.

I will tell you, though, that what we're seeing in the market in general is spreads are tightening. As rates rise, they tend to, especially in sort of high-quality assets. So, we're seeing spreads in the, I don't know, 170s, 180s for high-quality assets. So, that bites into that benefit a little bit.

And obviously, there's a lot of competition for quality assets. So, it's a mix. I mean I think we're getting a little bit of a lift off of the lows. But I think in general, the market is very competitive and spreads are getting a little thinner.

Ronald Ohsberg

Yes. So, Justin, I can add to that. Really, there's more of a tangible benefit, I think, on the residential side. We've got a $2 billion residential book. So, as that's amortizing and we're reinvesting those cash flows, that's giving us a tailwind of about 1 to 2 basis points a quarter.

Justin Crowley

Okay. Got it. That's helpful. And then just on loan growth, I think you guys have talked about mid-single digits previously. It seems like that might be tough to get to just barring a really strong fourth quarter. So, just kind of curious how you're thinking about that trend line from here.

Ronald Ohsberg

Yes. Yes. So, listen, I would say when we think about mid-single digits, we're really talking about run rate versus calendar year. So, we had strong payoffs in the first and second quarter. So, we're not going to make that up inside of 2026.

But I think our loan growth in the second quarter and in the third quarter was pretty strong, and we're looking at annualized total portfolio growth of 5%, and we're looking at within the commercial book about 10%. So, this quarter, the commercial book delivered 2.3%. That's kind of within our target range of 2% to 3% quarterly commercial growth, which over the year, we're looking at that averaging out to about 10% annualized growth.

Justin Crowley

Okay. Got it. And then maybe just one last one as a follow-up to that a little. Just any thoughts on the mix as we go forward? You saw CRE come back after the slower first half with some of the payoffs you alluded to and then the softer period on the C&I or institutional group. So, just kind of curious how you're thinking about both of those areas?

Edward Handy

Yes, that's a good question. And I think as we guided, the growth in Q3 would be sort of real estate heavy given the seasonality of the institutional, especially in the education space, the institutional business. But the pipeline going forward, I mean, we've got about a $230 million pipeline as of 9/30, which is weighted towards C&I, with about $40 million of that today in the institutional group.

We did do a $10 million New England school deal in the third quarter. So, there was a little bit of institutional, but I think it kind of followed as we predicted that it would slow down a little bit in Q3 and pick up Q4 and into Q1. But pipeline is pretty strong and again, weighted towards commercial.

Operator

Your next question comes from the line of Laurie Hunsicker, who is a private investor.

Laura Havener Hunsicker

Laurie Hunsicker from Seaport. I just wanted to circle back here on expenses. I just want to make sure that I'm getting this right. So, round numbers, you're going to be about $41 million or so for the fourth quarter, including the Charitable Foundation of $750,000?

Ronald Ohsberg

Yes.

Laura Havener Hunsicker

Okay. And then obviously, that is including the branch spend, the Bristol and the Pawtucket. Can you update us on exactly when those are opening? And then just help us think about is that fourth quarter then a fully baked run rate? Or how should we be thinking about that?

Ronald Ohsberg

No. They're coming on. Laurie, I don't have the exact timing, but right around the end of the quarter. There is some ramp-up spending that occurs. We have to hire the people. We've got some real estate costs. So, some of that expense is -- you can see it in our -- you will see it in our run rate even before the branch is opened. But the ongoing run rate for a branch is around $750,000 to $800,000 a year.

Laura Havener Hunsicker

Okay. So, just in terms of 1-quarter expense modeling, just thinking about maybe another $400,000 add for those branches to be fully phased. Or maybe it's a little less, maybe it's 150 a branch or maybe 300 additional -- $300,000 additional of expense into the first quarter of '27.

Ronald Ohsberg

I think that's fair. Yes.

Laura Havener Hunsicker

Okay. Okay. And do you have any branches planned now for 2027?

Ronald Ohsberg

We have nothing planned, although I would say that we are still interested in expanding the branch footprint. So, nothing to talk about yet, but in coming quarters, we probably have something to talk about there.

Laura Havener Hunsicker

Okay. Okay. Great. Yes, loved seeing your deposit growth and just very. You held the line almost across the board on raising rates there. So, your loan-to-deposit ratio now sitting below 95%, which is great. Can you help us think about what that target looks like into next year? And then maybe, Ned, just very high level, can you talk about the competitive pressures you're seeing on deposit costs in order to grow those buckets?

Ronald Ohsberg

Yes. So, yes, we're very pleased with our loan-to-deposit ratio, which is at a level a low level that we've rarely been at in the past. And as you know, Laurie, we've been quite a bit higher than that previously. We're committed to maintaining our deposit growth in the neighborhood of where our loan growth is. Our loan growth will be higher in the coming couple of years than it has been in the previous couple of years.

So, we will have our work cut out for us to keep that deposit growth going and making sure that we can fund those loans. We don't have -- we've got internal policy limits and things of that nature. But I don't have a target loan-to-deposit ratio to share with you. I will say that we would rely on wholesale funding to some degree to fund appropriate loan growth when we get to that point. I don't know. That's about the best I can tell you.

Laura Havener Hunsicker

Okay. Okay. And do you have a spot margin?

Ronald Ohsberg

Yes. I mean, call it 2.85% for September.

Laura Havener Hunsicker

Okay. Great. And then I just had a couple of questions on credit. Loved, obviously, seeing the $22 million resolution. The $6 million Class A that was new into nonperformers, I guess, what is that loan? What's the occupancy? What's maybe your thoughts on timing of resolution there?

William Wray

Laurie, this is Bill Wray. That's been there for a while. Committed sponsors never missed a payment, but we just felt it was the appropriate time to look at potential valuation risk, but the property doesn't mature until 2031. So, occupancy has been level, but it's not at stabilized levels. So, we felt that was just the right step to take at this point.

Laura Havener Hunsicker

Okay. But so last quarter, it was performing and then you moved it to nonperformer. I'm just wondering what triggered that?

William Wray

I'm just thinking about valuation risk, I think, and we felt it was the right time. Again, there's been no change in commitment from the sponsors, no change in occupancy up or down. And as you said, they've never missed a payment.

Laura Havener Hunsicker

Okay. Okay. Great. And then I just wondered on the $6.6 million lab space, any update on that? I know that was in sort of initial lease-up phase, I think last time we were chatting. Any color to add there?

William Wray

We are working with the sponsors on that and moving towards an exit scenario. And so we're in the middle of those discussions.

Laura Havener Hunsicker

Okay. Okay. And then last one for me. The $28 million lab space that's unclassified, I think there was a thought that, that potentially could be returning here to -- that it could certainly be migrating out of special mention here in the next couple of quarters. I have in my notes that property was fully leased. Can you just update us on when we might see movement in that?

William Wray

It's fully leased, 95%. We've been waiting for the tenants to burn off free rent and show performance. All trends have been positive. And so we're feeling reasonably good about a near-term move out of special mention. But until we have all the quarter-end information in terms of rent payments, we don't -- we can't commit to that yet, but that's where it's headed, we think.

Laura Havener Hunsicker

Okay. Great. And then one very last question, Ned, for you. Obviously, your capital ratios are very, very strong here. Can you just refresh us on revisiting the buyback and how you're thinking about that?

Edward Handy

Yes. I mean we don't have any plans to buy stock back at this point, the price is high. I mean we've got the capital. We've got other things to invest in, and we want to make sure we have ample capital to support the growth we're looking forward to on the loan side. So, I think we'll kind of keep our position of holding off on repurchases at the moment. Ron, I don't know if you have other...

Ronald Ohsberg

No, that's it. I mean we've got plans to grow the balance sheet. So, we're going to hold on to that capital right now. Laurie, I mean, listen, our regulatory capital ratios look fine. Our GAAP capital ratios remain on the lighter side of the peer group. We recognize that. We've recognized that for a while. So, I think the prudent thing for us to do right now is to deploy that capital into the growth of the business.

Operator

There are no further questions at this time. I will now turn the call back to Ned Handy, Chairman and CEO, for closing remarks.

Edward Handy

Well, thank you, everybody. Again, we appreciate your time and your interest in Washington Trust and very much look forward to speaking with you again next quarter. Have a great day, everybody.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.