Washington Bancorp (WASH) AI Stock Analysis

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Washington Bancorp

(NASDAQ:WASH)

63Neutral

Washington Bancorp's recent performance is characterized by strengths in cash flow and potential future growth, yet challenged by current profitability issues and mixed technical indicators. The negative P/E ratio suggests undervaluation concerns, although the high dividend yield is a positive feature for investors seeking income. The earnings call highlighted strategic initiatives that may improve future performance, but the current financial instability tempers enthusiasm.

Washington Bancorp (WASH) vs. S&P 500 (SPY)

Market Cap

$513.32M

Dividend Yield8.41%

Average Volume (3M)215.42K

Price to Earnings (P/E)12.2

Beta (1Y)1.37

Revenue Growth-14.04%

EPS Growth-155.40%

CountryUS

Employees618

SectorFinancial

Sector Strength81

IndustryBanks - Regional

Share Statistics

EPS (TTM)-1.57

Shares Outstanding19,276,148

10 Day Avg. Volume276,065

30 Day Avg. Volume215,423

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)6.14

Price to Cash Flow (P/CF)8.00

P/FCF Ratio3.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$35.67

Price Target Upside31.77% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

Washington Bancorp Business Overview & Revenue Model

Company DescriptionWashington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that offers various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment provides various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages and construction loans; commercial and industrial loans; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits, as well as debit card, automated teller machine, telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services. The Wealth Management Services segment provides investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents' estates, as well as institutional trust services comprising custody and fiduciary services. This segment serves personal and institutional clients. The company also operates as a licensed broker-dealer; and offers variable annuities and college savings plans. As of December 31, 2021, it had 10 branch offices located in southern Rhode Island, 13 branch offices located in the greater Providence area in Rhode Island, and 1 branch office located in southeastern Connecticut. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.

How the Company Makes MoneyWashington Bancorp makes money primarily through the interest income generated from its lending activities, such as personal loans, mortgages, and commercial loans. The company also earns revenue from fees associated with its banking and financial services, including account maintenance fees, transaction fees, and fees for specialized financial products or advisory services. Additionally, Washington Bancorp may generate income through investment activities, leveraging its financial assets to earn returns. Significant partnerships with other financial institutions or service providers can also contribute to its earnings, enhancing its product offerings or expanding its market reach.

Washington Bancorp Financial Statement Overview

Summary

Washington Bancorp exhibits strengths in revenue growth and maintaining a solid equity position. However, recent profitability challenges, as evidenced by negative net income, pose a risk to financial performance. The company shows resilience in cash flow generation, but must address profitability concerns to strengthen its overall financial health.

Income Statement

Positive

Washington Bancorp's income statement shows mixed performance. The gross profit margin remains strong, indicating efficient cost management relative to revenue. However, the net income turned negative in the latest year, highlighting profitability issues. Revenue growth over the past year was significant, but the net profit margin and EBIT margin are concerning due to recent losses.

Balance Sheet

Positive

The balance sheet reflects a stable equity position with no debt in the latest report, which is positive for financial stability. The equity ratio is healthy, showing a strong equity base relative to total assets. However, the return on equity has weakened due to the negative net income, indicating reduced profitability on shareholders' investments.

Cash Flow

Positive

Cash flow analysis shows that Washington Bancorp maintains a positive operating cash flow, which is vital for ongoing operations. The free cash flow has grown over the recent period, indicating improved cash generation. However, the operating cash flow to net income ratio has been affected by the negative net income, emphasizing the need for improved profitability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
340.68M	190.04M	218.59M	228.83M	226.89M
	Gross Profit
340.68M	363.41M	218.59M	228.83M	226.89M
	EBIT
334.92M	72.65M	129.65M	98.19M	89.16M
	EBITDA
0.00	61.33M	95.50M	102.49M	93.25M
	Net Income Common Stockholders
-28.06M	48.18M	71.68M	76.87M	69.83M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
25.52M	90.18M	1.11B	1.22B	1.10B
	Total Assets
6.93B	7.20B	6.66B	5.85B	5.71B
	Total Debt
1.18B	1.24B	1.03B	196.69M	648.26M
	Net Debt
1.07B	1.16B	916.75M	21.43M	454.11M
	Total Liabilities
6.43B	6.73B	6.21B	196.69M	648.26M
	Stockholders Equity
499.73M	472.69M	453.67M	564.81M	534.20M
Cash Flow		Free Cash Flow
39.14M	26.55M	106.87M	97.32M	33.07M
	Operating Cash Flow
39.14M	31.60M	113.01M	100.81M	36.48M
	Investing Cash Flow
-70.84M	-550.84M	-999.04M	-240.90M	-264.24M
	Financing Cash Flow
32.09M	491.00M	825.96M	116.31M	291.57M

Washington Bancorp Technical Analysis

Technical Analysis Sentiment

Negative

Last Price27.07

Price Trends

50DMA

30.21

Negative

100DMA

31.40

Negative

200DMA

30.92

Negative

Market Momentum

MACD

-1.13

Positive

RSI

38.92

Neutral

STOCH

34.71

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WASH, the sentiment is Negative. The current price of 27.07 is below the 20-day moving average (MA) of 28.88, below the 50-day MA of 30.21, and below the 200-day MA of 30.92, indicating a bearish trend. The MACD of -1.13 indicates Positive momentum. The RSI at 38.92 is Neutral, neither overbought nor oversold. The STOCH value of 34.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WASH.

Washington Bancorp Risk Analysis

Washington Bancorp disclosed 38 risk factors in its most recent earnings report. Washington Bancorp reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Washington Bancorp Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMBC	76 Outperform	$542.09M	10.48	10.52%	1.87%	17.53%	19.94%
THFF	70 Outperform	$510.41M	10.76	8.78%	4.32%	13.46%	-21.20%
HTBK	68 Neutral	$515.07M	12.69	5.95%	6.22%	3.35%	-37.36%
FSBC	67 Neutral	$549.01M	11.39	13.39%	3.11%	17.32%	-18.15%
Sector *	63 Neutral	$12.75B	9.36	8.64%	84.32%	13.82%	-3.89%
WASH	63 Neutral	$513.32M	12.16	-5.77%	8.41%	-14.04%	-155.40%
ORRF	60 Neutral	$514.36M	17.84	5.64%	3.49%	62.98%	-45.76%

* Financial Sector Average

Performance Comparison

WASH

Washington Bancorp

27.07

4.58

20.36%

THFF

First Financial Indiana

44.11

10.63

31.75%

HTBK

Heritage Commerce

8.51

1.08

14.54%

ORRF

Orrstown Financial Services

26.84

2.44

10.00%

SMBC

Southern Missouri Bancorp

48.56

8.99

22.72%

FSBC

Five Star

26.24

5.44

26.15%

Washington Bancorp Earnings Call Summary

Earnings Call Date: Jan 29, 2025 | % Change Since: -15.11% | Next Earnings Date: Apr 21, 2025

Earnings Call Sentiment Neutral

The earnings call reflects a strategically challenging quarter with a significant net loss due to balance sheet repositioning. However, the capital raise and improved financial metrics indicate potential growth and stronger future performance. Credit quality remains strong, and new leadership is expected to drive deposit growth. While the immediate impacts are negative, the long-term outlook is cautiously optimistic.

Highlights

Strategic Capital Raise

Washington Trust Bancorp, Inc. announced a December capital raise of $70.5 million, allowing for future growth and investment. This strategic move is expected to favorably impact future revenues despite resulting in a short-term loss.

Improved Financial Metrics

Net interest income increased by $674,000 or 2%, and the net interest margin improved by 10 basis points to 1.95%.

Strong Asset and Credit Quality

Non-accruing loans decreased from 56 basis points to 45 basis points, and past due loans decreased from 37 basis points to 23 basis points.

New Leadership in Retail Banking

Michelle Kile was hired as the new Head of Retail Banking, expected to enhance deposit growth strategies.

Lowlights

Significant Net Loss

The fourth quarter reported a net loss of $60.8 million or $3.46 per share, attributed to balance sheet repositioning asset losses.

Residential Loan Decrease

Total residential loans decreased by $403 million or 16%, primarily due to the reclassification of $345 million to loans held for sale.

Slight Decline in Noninterest Income

Adjusted noninterest income declined by $229,000 or 1%, with mortgage banking revenues down by $18,000 or 1%.

Company Guidance

During the Washington Trust Bancorp, Inc. fourth-quarter 2024 conference call, several key financial metrics and strategic initiatives were discussed. The company reported a net loss of $60.8 million, or $3.46 per share, primarily due to a balance sheet repositioning which involved a capital raise of $70.5 million, and selling and reinvesting in securities. Excluding these asset losses, adjusted net income was $10.4 million, or $0.59 per share. Net interest income rose by 2% to $32.9 million with a margin of 1.95%, reflecting a 10 basis point increase. Wealth management revenues were slightly up, totaling $10 million, while mortgage banking revenues were $2.8 million. Noninterest expenses decreased by 1% to $34.3 million. The company also highlighted a positive outlook for 2025, projecting a net interest margin increase to 2.45%-2.50% by the fourth quarter, with average earning assets expected to be between $6.3 billion to $6.4 billion. Additionally, Washington Trust announced the appointment of Michelle Kile as the new Head of Retail Banking to drive deposit growth strategies.

Washington Bancorp Corporate Events

Business Operations and Strategy

Washington Bancorp Repositions Balance Sheet for Growth

Positive

Dec 20, 2024

Washington Trust Bancorp, Inc. announced a strategic repositioning of its balance sheet to support organic growth and capital generation. This involves selling low-yield assets and reinvesting in higher-yield securities, resulting in a short-term net loss but strengthening the bank’s financial position and improving profitability prospects for 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.