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Washington Trust Bancorp (WASH)
NASDAQ:WASH
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Washington Bancorp
(NASDAQ:WASH)
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Rating:70Outperform
Price Target:
$37.00
â–²(9.82% Upside)
Action:UpgradedDate:02/25/26
The score is driven primarily by improving financial performance and a constructive earnings outlook (margin tailwinds, better funding mix), supported by attractive income/valuation. Offsetting factors are historical volatility in earnings/cash flows and mixed near-term technical momentum, plus expense pressure and residual CRE/office risk.
Positive Factors
Net interest margin expansion
Management projects durable NIM tailwinds from a one-time swap termination and ongoing organic expansion. Structural margin improvement, reinforced by a better funding mix, should support sustainable net interest income and profitability over the next several quarters absent major rate shocks.
Improving funding mix & deposit growth
A larger core deposit base and reduced wholesale funding materially lower funding fragility and cost. This structural shift improves liquidity profile and reduces margin volatility, making interest income less dependent on expensive external funding over the medium term.
Mortgage production strength
Sustained mortgage origination scale diversifies fee revenue and deepens customer relationships, providing cross-sell opportunities into deposits and wealth services. Higher origination capacity and a larger pipeline enhance recurring noninterest income potential through origination and servicing channels.
Negative Factors
Earnings and cash flow volatility
Historic swings from profit to loss and uneven operating cash flow reduce predictability for capital allocation, dividends, and buybacks. Volatility makes stress-testing and planning harder, increasing the likelihood of reactive reserve or capital moves in tougher cycles.
Reserve coverage low vs peers
Relatively low CECL coverage leaves less buffer against loan deterioration versus peers, increasing sensitivity to adverse credit cycles. Combined with localized CRE/office exposure, lower reserves could necessitate larger provisioning if asset quality weakens.
Rising operating expense pressure
Sustained increases in salary, benefits, branch expansion and one-time items lift ongoing operating costs. Higher structural expense growth can compress margins and returns unless revenue growth or efficiency gains outpace these cost increases over the medium term.
Washington Bancorp (WASH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$654.40M
Dividend Yield7.17%
Average Volume (3M)131.10K
Price to Earnings (P/E)12.4
Beta (1Y)1.02
Revenue Growth-27.82%
EPS Growth-159.63%
CountryUS
Employees618
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.83
Shares Outstanding19,039,948
10 Day Avg. Volume102,206
30 Day Avg. Volume131,096
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)1.04
Price to Sales (P/S)1.49
P/FCF Ratio10.78
Enterprise Value/Market Cap2.06
Enterprise Value/Revenue3.55
Enterprise Value/Gross Profit6.53
Enterprise Value/Ebitda19.13
Forecast
1Y Price Target
$31.00Price Target Upside-7.98% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering3
EPS Forecast (FY)3.37
Revenue Forecast (FY)$232.85M
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 generates revenue through various key streams, including interest income from loans and mortgages, fees from banking services, and investment income. The primary revenue driver is the interest earned on loans issued to customers, which typically includes personal loans, business loans, and mortgage loans. Additionally, the bank earns fee income from services such as account maintenance, ATM usage, and overdraft charges. Significant partnerships with local businesses and community organizations also contribute to its customer base and revenue, as these collaborations often result in tailored financial products that meet the specific needs of the market. Moreover, Washington Bancorp's commitment to digital banking solutions has opened new avenues for revenue generation through online services and improved operational efficiency.
Washington Bancorp Key Performance Indicators (KPIs)
Washington Bancorp Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 27, 2026
Earnings Call Sentiment Positive
The call presented multiple clear strengths — notable YoY earnings growth, meaningful NII and margin expansion, deposit growth and improved funding mix, strong mortgage originations for the year, wealth momentum, and solid credit metrics. Offsetting items include rising noninterest expenses, a seasonal decline in the mortgage pipeline, modest recent loan growth with residential runoff, reserves that are lower relative to peers, and a small but lingering office exposure. Management provided constructive guidance (NIM tailwinds, ~5% loan growth target) and disclosed targeted investments (institutional banking team, Pawtucket branch) that support future growth. On balance, positives outweigh the challenges.Q4-2025 Updates
Positive Updates
Strong Quarterly and Yearly Earnings Growth
Net income of $16.0M in Q4 vs. $10.8M in prior quarter; EPS $0.83 vs. $0.56 QoQ. Adjusted EPS up 41% year-over-year.
Net Interest Income and Margin Expansion
Net interest income $40.7M, up 5% QoQ and 24% YoY. Net interest margin 2.56%, +16 bps QoQ and +61 bps YoY; management projects further NIM tailwinds (swap termination +13 bps by Q3 and organic +3-4 bps/quarter assuming stable Fed funds).
Deposit Growth and Funding Mix Improvement
End market deposits up 1% QoQ and 9% YoY; wholesale funding down $165M (−21% from September), contributing to improved funding mix and margin.
Wealth Management Momentum
Wealth management revenues +5% QoQ; average AUA +4% QoQ and +9% YoY. Executed a wealth asset purchase (Lighthouse) and added business development/financial planning resources; average fees ~60 bps.
Mortgage Production Strength (Full Year)
Full year mortgage originations $667M, up 31% YoY. Mortgage origination and sales volumes increased 21% and 25% respectively; mortgage banking revenues $3.3M in Q4, +14% YoY (seasonally −7% QoQ).
Credit and Asset Quality Improvement
Provision for credit losses normalized; nonaccruing loans 25 bps of total loans; nonaccruing commercial loans 0; past due loans 22 bps; net recoveries $160k in Q4. One CRE past due was brought current in January.
Capital and Equity Position
Total equity $544M, up $11M QoQ. CET1 ~11.9% (near 12%), risk-based capital ~13%; dividend maintained at $0.56 per share.
Strategic Commercial Bank Hiring and Branch Expansion
Hired a 4-person institutional/commercial banking team (from Brookline) focused on Northeast C&I and not-for-profit clients; plan to open a de novo branch in Pawtucket in 2026 to expand local footprint.
Negative Updates
Noninterest Expense Pressure
Noninterest expense $38M in Q4, up 6% QoQ; full year adjusted noninterest expense up 7%. Salaries and benefits increased $973k (4%) in Q4 and other noninterest expenses rose $1.3M, including a $1.0M charitable contribution.
Seasonal Weakness in Mortgage Pipeline
Mortgage pipeline at December 31 was $81M, down 37% seasonally from September, resulting in Q4 mortgage banking revenue down 7% sequentially.
Loan Growth Lagging Near-Term Expectations
Total loans essentially stable with only a $12M increase from September; management said net loan growth 'wasn't where we wanted it to be' though they target ~5% YoY loan growth going forward with 4-5% CRE growth and faster C&I growth as new hires ramp.
Reserve Levels Viewed as Low Relative to Peers
Management indicated CECL reserves are on the lower end relative to peers (noted as 'mid-70' coverage range) and may fluctuate; optics could be seen as conservative compared with peer banks.
Office/CRE Workout Exposure
~$6M office-classified loan remains (matures 2031) with occupancy in the mid-40%—management is nursing occupancy and believes sponsors are committed, but recovery is gradual.
Planned Expense Increases in 2026
Q1 2026 salary & benefit run-rate expected to increase ~6% (merit, FICA, new hires); other expenses expected ~+5% YoY; branch addition to add ~$600k annually when opened.
No Immediate Share Repurchase Commitment
With CET1 near 12% management is evaluating buybacks but has not committed to acceleration of repurchases despite an existing authorization (582,000 shares remaining of 850,000 authorized).
Company Guidance
Management reiterated that the mid-2.50% NIM is sustainable (Q4 NIM 2.56%) and expects a 13-basis-point run‑rate benefit from a swap termination (＋9 bps in Q2, ＋4 bps in Q3) plus organic expansion of ~3–4 bps per quarter (assuming no Fed moves), implying a Q4 2026 NIM of about 2.78–2.82%; they see net loan growth of roughly 5% year‑over‑year (CRE growth ~4–5%, C&I faster), end‑market deposits up 1% QoQ and 9% YoY (wholesale funding down $165M or 21% since 9/30), total equity $544M (+$11M QoQ), CET1 ~12% and risk‑based ~13%, dividend steady at $0.56, and 850k shares authorized for buyback with ~582k remaining. For 2026 they penciled a full‑year tax rate of ~22%, Q1 salary/benefit expense up ~6% (other noninterest expense ~+5% YoY), a new branch and related staffing adding about $600k annually (late summer/fall), and a charitable foundation item modeled at $750k; operationally Q4 results included net income $16M ($0.83/sh), adjusted EPS +41% YoY, net interest income $40.7M (+5% QoQ, +24% YoY), noninterest income +5% QoQ (adjusted +15% YoY), noninterest expense $38M (+6% QoQ, FY adjusted +7%), mortgage banking revenue $3.3M with a $81M pipeline, FY mortgage originations $667M (+31% YoY), wealth AUA +4% QoQ/ +9% YoY with wealth revenue +5% (avg fees ~60 bps), and credit metrics showing normalized provisioning, nonaccruing loans 25 bps, past due loans 22 bps, net recoveries $160k and reserve coverage in the mid‑70s under CECL.Washington Bancorp Financial Statement Overview
Summary
Fundamentals improved in 2025 with a strong revenue rebound and a return to profitability, and leverage metrics also improved. However, results have been volatile (notably the 2024 loss) and cash flow generation has been inconsistent year-to-year, reducing confidence in durability across the cycle.Income Statement
Revenue rebounded strongly in 2025 (up 29.4% YoY) after a down 2024, and profitability recovered meaningfully: net income swung from a loss in 2024 to a $52.2M profit in 2025, with net margin back to ~13.7% (similar to 2023). However, results have been volatile over the period—2021–2022 showed much higher margins, followed by a sharp profitability drawdown in 2024—suggesting earnings sensitivity to the rate/credit cycle and less consistent operating momentum than top-tier peers.71
Positive
Balance Sheet
Leverage improved materially in 2025, with debt-to-equity dropping to ~1.34x from elevated levels in 2023–2024 (~2.63x and ~2.36x), and return on equity recovering to ~9.6% after turning negative in 2024. That said, the balance sheet has shown sizable leverage swings over time (including very low leverage in 2021), which points to a changing funding mix and a risk profile that has not been fully stable across cycles.63
Positive
Cash Flow
Cash generation remains positive and, in 2025, free cash flow matched net income (free cash flow to net income of 1.0x), indicating earnings were well-supported by cash that year. The main weakness is variability: free cash flow declined ~25.3% in 2025 after increases in 2024, and operating cash flow has moved around significantly year-to-year, reducing visibility into steady internal capital generation.58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 381.08M | 310.78M | 364.80M | 257.07M | 245.39M |
| Gross Profit | 206.98M | 96.15M | 190.04M | 219.89M | 233.65M |
| EBITDA | 67.41M | -34.06M | 61.33M | 95.50M | 102.49M |
| Net Income | 52.24M | -28.06M | 48.18M | 71.68M | 76.87M |
Balance Sheet | |||||
| Total Assets | 6.62B | 6.93B | 7.20B | 6.66B | 5.85B |
| Cash, Cash Equivalents and Short-Term Investments | 42.36M | 177.61M | 1.09B | 1.11B | 1.22B |
| Total Debt | 726.13M | 1.18B | 1.24B | 1.03B | 196.69M |
| Total Liabilities | 6.08B | 6.43B | 6.73B | 6.21B | 5.29B |
| Stockholders Equity | 543.58M | 499.73M | 472.69M | 453.67M | 564.81M |
Cash Flow | |||||
| Free Cash Flow | 52.55M | 53.67M | 26.55M | 106.87M | 97.32M |
| Operating Cash Flow | 52.55M | 57.67M | 31.60M | 113.01M | 100.81M |
| Investing Cash Flow | -375.00K | 231.30M | -550.84M | -999.04M | -240.90M |
| Financing Cash Flow | -51.08M | -265.27M | 491.00M | 825.96M | 116.31M |
Washington Bancorp Technical Analysis
Neutral
33.69
Price Trends
32.25
Positive
29.87
Positive
28.62
Positive
Market Momentum
0.65
Positive
47.29
Neutral
33.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WASH, the sentiment is Neutral. The current price of 33.69 is below the 20-day moving average (MA) of 35.47, above the 50-day MA of 32.25, and above the 200-day MA of 28.62, indicating a neutral trend. The MACD of 0.65 indicates Positive momentum. The RSI at 47.29 is Neutral, neither overbought nor oversold. The STOCH value of 33.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $492.65M | 8.62 | 14.72% | 1.53% | 24.90% | 28.06% | |
73 Outperform | $618.93M | 35.06 | 11.37% | 3.71% | 42.22% | 1207.84% | |
70 Outperform | $654.40M | 12.43 | 10.02% | 7.17% | -27.82% | -159.63% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $613.74M | 11.27 | 10.23% | 0.84% | 8.26% | 94.53% | |
64 Neutral | $628.09M | 10.44 | 10.25% | 2.66% | 6.01% | 38.05% | |
59 Neutral | $641.96M | 8.69 | -4.98% | 3.89% | -28.00% | -174.60% |
* Financial Sector Average
WASH
Washington Bancorp
34.37
4.80
16.22%
FISI
Financial Institutions
31.89
5.35
20.16%
HIFS
Hingham Institution For Savings
281.50
28.05
11.07%
SHBI
Shore Bancshares
18.79
4.13
28.17%
CBNK
Capital Bancorp
29.82
0.09
0.32%
ALRS
Alerus Financial
24.37
4.85
24.87%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.