Washington Trust Bancorp Reports Q1 Earnings Miss, Significant Rise in Nonaccrual Loans
WASH sits 43% above its 52-week low of $25.23.
Summary
Washington Trust Bancorp reported a 21% sequential decline in Q1 net income and a substantial increase in nonaccrual loans, primarily from commercial real estate, raising asset quality concerns.
Key Events · Earnings and Guidance · WASH
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Q1 Net Income Decline
Net income fell 21.1% sequentially to $12.6 million ($0.66 diluted EPS) from $16.0 million ($0.83 diluted EPS) in Q4 2025.
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Surge in Nonaccrual Loans
Nonaccrual loans increased by 212.9% quarter-over-quarter to $40.4 million, primarily due to two commercial real estate office loans.
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Increased Credit Loss Provision
The provision for credit losses jumped 566.7% to $4.0 million, reflecting the rise in problematic loans.
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Reduced ACL Coverage
The allowance for credit losses on loans to nonaccrual loans significantly decreased from 288.14% to 101.70%, indicating lower coverage for the increased nonaccrual assets.
Analysis · WASH · Finance
Washington Trust Bancorp's first quarter results show a notable deterioration in asset quality, with nonaccrual loans surging over 200% quarter-over-quarter, largely driven by two commercial real estate office loans. This significant increase in problematic loans, coupled with a 566% rise in the provision for credit losses and a sharp drop in net income, indicates growing credit risk. While the net interest margin improved and capital ratios remain strong, the substantial increase in nonaccrual loans and reduced coverage by the allowance for credit losses are key concerns for investors, especially as the stock trades near its 52-week high.
At the time of this filing, WASH was trading at $36.10 on NASDAQ in the Finance sector, with a market capitalization of approximately $688.1M. The 52-week trading range was $25.23 to $37.08. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.