Washington Trust's Q4 2024 Earnings Call: Examining Contradictions in Loan Growth, Deposits, and Mortgage Income

These are the key contradictions discussed in Washington Trust's latest 2024Q4 earnings call, specifically including: Loan Growth and Pipeline, Deposit and Cash Management, Loan-to-Deposit Ratio and Deposit Growth Strategy, and Mortgage Income Growth Expectations:



Capital Raise and Balance Sheet Repositioning:
- Washington Trust Bancorp reported a net loss of $60.8 million or $3.46 per share in the fourth quarter.
- The loss was due to a balance sheet repositioning which involved selling lower-yielding securities and reinvesting into higher-yielding securities, as well as paying down expensive wholesale funding.

Net Interest Margin Improvement:
- Net interest margin was 1.95%, up by 10 basis points.
- This improvement was a result of lower interest rates and the partial impact of the balance sheet repositioning.

Deposit and Loan Trends:
- Total loans were down by $377 million or 7%, primarily due to the reclassification of $345 million to loans held for sale.
- In-market deposits were up $26 million or 1% while brokered deposits were down $82 million.

Credit Quality and Allowance for Loan Losses:
- Non-accruing loans were 45 basis points and past due loans were 23 basis points at the end of the year.
- The allowance totaled $42 million or 82% of total loans, providing NPL coverage of 180%.

Executive Appointment and Strategic Focus:
- Washington Trust hired Michelle Kile as the new Head of Retail Banking.
- This appointment aims to boost deposit growth strategies in line with the company's focus on providing enhanced value for shareholders, customers, and communities.