WESTERLY – The Washington Trust Bancorp Inc. reported first-quarter profit of $12.6 million on Monday, up 3.3% from $12.2 million in the same period a year ago, despite a nearly $10 million year-over-year decline in revenue.
Earnings per diluted share were 66 cents, up 3 cents from the first quarter of 2025. The results did not meet Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 77 cents per share.
The holding company for The Washington Trust Co. posted revenue of $92.3 million in the period, down from $102.1 million recorded in the first quarter of 2025 when the bank benefited from a $7 million gain on the sale of bank-owned properties.
Offsetting the lower year-over-year revenue was the lack of the pension plan settlement charge of $6.4 million the bank recorded in the first quarter of 2025 in connection with the termination of the bank’s qualified pension plan.
Washington Trust's revenue net of interest expense, which is a company’s revenue after deducting interest expense, was $57.8 million, also below Street forecasts and down from $59.1 million a year earlier.
Net interest income totaled $40.5 million for the quarter, up 11% from $36.4 million a year earlier. The improvement reflected a higher net interest margin and lower funding costs.
Net interest margin – a key metric that assesses what the company earns on interest charged on loans minus the interest it pays for deposits – was 2.63%, up from 2.29% in the first quarter of 2025.
The company attributed the margin expansion to continued benefits from its balance sheet repositioning strategy completed in late 2024.
“We delivered solid first quarter 2026 results, led by an increase in net interest margin, which reflects the strength of our core banking business and continued benefits from the December 2024 balance sheet repositioning transactions,” said Washington Trust Chairman and CEO Edward O. “Ned” Handy III.
Interest income on loans declined to $64.3 million from $66.7 million a year ago, while total interest expense fell to $34.5 million from $43.0 million, reflecting lower deposit and borrowing costs.
Noninterest income totaled $17.3 million, down from $22.6 million in the first quarter of 2025. The prior-year period included a $7.0 million gain from the sale of bank-owned properties, which did not recur.
On an adjusted basis, excluding a prior-year $7 million gain from the sale of bank-owned properties, noninterest income rose 11% to $17.3 million from $15.6 million a year earlier, the bank said.
Wealth management revenues increased 7.1% year over year to $10.6 million, supported by higher assets under administration, which rose nearly 10%.
Mortgage banking revenues increased 30.4% from a year ago to $3.0 million, though they declined sequentially due to seasonal volume patterns.
Noninterest expense totaled $37.8 million, down from $42.2 million in the first quarter of 2025, which included a $6.4 million pension plan settlement charge. On an adjusted basis, expenses increased 6% year over year, driven primarily by higher compensation costs tied to staffing growth in commercial banking and wealth management.
Provision for credit losses totaled $4 million, up from $1.2 million a year ago, reflecting higher specific reserves tied to commercial real estate exposures.
Loans totaled $5.01 billion, down 1.8% from $5.10 billion a year ago, with declines across commercial real estate and residential portfolios.
In-market deposits rose 2.4% year over year to $5.16 billion from $5.01 billion.
Nonaccrual loans rose to $40.4 million, or 0.81% of total loans, compared with $21.6 million, or 0.42%, a year earlier, driven largely by two commercial real estate office loans.
Total assets were $6.46 billion, down 1.9% from $6.59 billion in the first quarter of 2025.
(Material from The Associated Press was used in this report.)
Matthew McNulty is a PBN staff writer. He can be reached at McNulty@PBN.com or on X at @MattMcNultyNYC.
