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Washington Trust Bancorp (WASH)
NASDAQ:WASH
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Washington Bancorp
(NASDAQ:WASH)
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Rating:61Neutral
Price Target:
$36.00
â–²(2.10% Upside)
WASH scores moderately due to materially weakened profitability (recent losses and margin pressure) despite stable revenue, which outweighs improvements in leverage and positive cash generation. Technicals are bullish but overbought, supporting momentum while raising near-term risk. Valuation and yield are attractive, and earnings-call guidance on NIM expansion, funding mix improvement, and loan-growth targets provides a positive forward backdrop, tempered by expense pressure and residual CRE/office risk.
Positive Factors
NIM expansion and NII tailwinds
Management projects sustained NIM expansion driven by a one‑time swap termination and steady organic repricing, targeting ~2.78–2.82% by Q4 2026. Higher structural margins increase recurring net interest income, bolstering medium‑term earnings power and resilience to modest loan growth shortfalls.
Improving funding mix via deposit growth
A 9% YoY deposit increase and $165M reduction in wholesale funding materially strengthen the low‑cost funding base. This structural shift lowers funding volatility, reduces margin pressure from expensive wholesale lines, and supports sustainable loan growth and NIM stability over the medium term.
Wealth and mortgage franchise momentum
Growing wealth AUA and fee revenue plus strategic asset buys diversify revenue away from pure interest income. A broader fee base and stronger mortgage/wealth pipelines increase cross‑sell potential, smooth cyclicality, and support durable noninterest income contribution as teams and acquisitions scale.
Negative Factors
Negative profitability and revenue trend
TTM declining revenues and negative net margins indicate persistent earnings weakness. Sustained losses erode internal capital generation, limit ability to fund growth or reserve builds, and make dividend and buyback policies contingent on a durable reversal in margins rather than transient NIM gains.
Elevated leverage and rising debt reliance
A high and rising debt‑to‑equity profile increases interest and refinancing risk and reduces financial flexibility. With ROE turned negative in the TTM, leverage amplifies earnings volatility and constrains the bank's ability to absorb credit shocks or invest in growth without further funding tradeoffs.
Structural expense pressure from planned increases
Management forecasts structural expense increases—higher salary run‑rate, elevated other noninterest costs, and a de novo branch cost—pressuring operating leverage. Persistent cost growth will constrain margin recovery from NIM gains and require meaningful revenue upside to restore profitability sustainably.
Washington Bancorp (WASH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$654.23M
Dividend Yield7.17%
Average Volume (3M)106.92K
Price to Earnings (P/E)12.7
Beta (1Y)0.97
Revenue Growth-27.82%
EPS Growth-159.63%
CountryUS
Employees618
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.83
Shares Outstanding19,034,935
10 Day Avg. Volume134,050
30 Day Avg. Volume106,925
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)1.08
Price to Sales (P/S)1.73
P/FCF Ratio10.02
Enterprise Value/Market Cap2.10
Enterprise Value/Revenue4.67
Enterprise Value/Gross Profit12.60
Enterprise Value/Ebitda-47.29
Forecast
1Y Price Target
$31.00Price Target Upside-12.08% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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
Financial performance is mixed. The income statement is the primary drag (Income Statement Score 34) due to the shift from solid profitability in 2021–2023 to losses in 2024 and TTM despite relatively stable revenue. Offsetting this, the balance sheet shows improved leverage (debt-to-equity down to ~1.6 in TTM; Balance Sheet Score 48) and cash generation is a relative bright spot with positive and improving operating/free cash flow (Cash Flow Score 62), but overall earnings durability remains the key risk.Income Statement
Operating performance has weakened materially. Revenue is down slightly in TTM (Trailing-Twelve-Months) (-1.76%) and essentially flat-to-down in 2024, following strong growth in 2023. More importantly, profitability has flipped from solid profits in 2021–2023 (healthy positive margins) to losses in 2024 and TTM (Trailing-Twelve-Months), with negative operating and net margins, indicating pressure on spreads/credit costs/expenses. The main strength is that the business previously demonstrated strong earnings power (2022–2023), but the current loss-making trajectory is the dominant concern.34
Negative
Balance Sheet
The balance sheet shows mixed signals. Leverage improved meaningfully in TTM (Trailing-Twelve-Months) with debt-to-equity dropping to ~1.6 from ~2.36 in 2024 (and higher levels in 2022–2023), which is a constructive de-risking trend. Equity has been relatively steady and assets are broadly stable. However, returns on equity deteriorated sharply (negative in 2024 and only modestly positive in TTM (Trailing-Twelve-Months)), reflecting the hit to earnings and limiting capital generation. Overall: better leverage trend, but profitability/capital build remains pressured.48
Neutral
Cash Flow
Cash generation is a relative bright spot. Operating cash flow and free cash flow are positive in TTM (Trailing-Twelve-Months) and improved versus 2024, with strong TTM (Trailing-Twelve-Months) free-cash-flow growth (13.29%). Free cash flow is also broadly in line with net income in ratio terms based on the provided figures. The weakness is that cash flow coverage metrics shown are very low in most years outside of 2022, suggesting cash generation may be less robust relative to obligations than the absolute free cash flow number implies, and consistency has been uneven across the period.62
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 294.55M | 310.78M | 364.80M | 257.07M | 245.39M | 269.38M |
| Gross Profit | 109.23M | 96.15M | 190.04M | 219.89M | 233.65M | 214.54M |
| EBITDA | -29.11M | -34.06M | 61.33M | 95.50M | 102.49M | 93.25M |
| Net Income | -24.52M | -28.06M | 48.18M | 71.68M | 76.87M | 69.83M |
Balance Sheet | ||||||
| Total Assets | 6.72B | 6.93B | 7.20B | 6.66B | 5.85B | 5.71B |
| Cash, Cash Equivalents and Short-Term Investments | 280.63M | 177.61M | 1.09B | 1.11B | 1.22B | 1.10B |
| Total Debt | 852.42M | 1.18B | 1.24B | 1.03B | 196.69M | 648.26M |
| Total Liabilities | 6.18B | 6.43B | 6.73B | 6.21B | 5.29B | 5.18B |
| Stockholders Equity | 533.02M | 499.73M | 472.69M | 453.67M | 564.81M | 534.20M |
Cash Flow | ||||||
| Free Cash Flow | 70.34M | 53.67M | 26.55M | 106.87M | 97.32M | 33.07M |
| Operating Cash Flow | 71.65M | 57.67M | 31.60M | 113.01M | 100.81M | 36.48M |
| Investing Cash Flow | 346.46M | 231.30M | -550.84M | -999.04M | -240.90M | -264.24M |
| Financing Cash Flow | -436.52M | -265.27M | 491.00M | 825.96M | 116.31M | 291.57M |
Washington Bancorp Technical Analysis
Positive
35.26
Price Trends
29.71
Positive
28.56
Positive
27.79
Positive
Market Momentum
1.08
Negative
77.20
Negative
91.51
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WASH, the sentiment is Positive. The current price of 35.26 is above the 20-day moving average (MA) of 30.83, above the 50-day MA of 29.71, and above the 200-day MA of 27.79, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 77.20 is Negative, neither overbought nor oversold. The STOCH value of 91.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 | $507.52M | 9.01 | 14.72% | 1.53% | 24.90% | 28.06% | |
76 Outperform | $634.11M | 10.66 | 10.25% | 2.66% | 6.01% | 38.05% | |
73 Outperform | $625.28M | 36.21 | 11.37% | 3.71% | 42.22% | 1207.84% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $650.70M | 12.05 | 10.23% | 0.84% | 8.26% | 94.53% | |
61 Neutral | $654.23M | 12.68 | 10.02% | 7.17% | -27.82% | -159.63% | |
59 Neutral | $663.10M | 9.12 | -4.98% | 3.89% | -28.00% | -174.60% |
* Financial Sector Average
WASH
Washington Bancorp
35.72
4.77
15.40%
FISI
Financial Institutions
34.27
7.86
29.76%
HIFS
Hingham Institution For Savings
316.09
65.34
26.06%
SHBI
Shore Bancshares
19.75
4.18
26.85%
CBNK
Capital Bancorp
31.91
0.88
2.83%
ALRS
Alerus Financial
25.59
4.71
22.55%
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.