Washington Trust Bancorp’s first quarter results were met with a strongly negative market reaction, as the company missed Wall Street’s revenue and non-GAAP profit expectations. Management pointed to ongoing net interest margin expansion as a positive driver, supported by the bank’s December 2024 balance sheet repositioning. However, the quarter was weighed down by a higher provision for credit losses, driven by reserve builds on two commercial real estate office loans that were moved to nonaccrual status. Chief Risk Officer Bill Wray described the bank’s approach as "cautious on office," noting that the issues were concentrated in a handful of properties and that overall office exposure has been reduced in recent years.
Is now the time to buy WASH? Find out in our full research report (it’s free for active Edge members).
Washington Trust Bancorp (WASH) Q1 CY2026 Highlights:
- Revenue: $58 million vs analyst estimates of $58.79 million (10.9% year-on-year growth, 1.3% miss)
- Adjusted EPS: $0.66 vs analyst expectations of $0.76 (13% miss)
- Adjusted Operating Income: $16.23 million vs analyst estimates of $19.56 million (28% margin, 17% miss)
- Market Capitalization: $586.7 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Washington Trust Bancorp’s Q1 Earnings Call
- Justin Crowley (Piper Sandler) asked for details on the two office loans moved to nonaccrual. Chief Risk Officer William Wray explained both loans had triggering events in March and are being closely monitored, with expectations of eventual resolution or return to performing status.
- Justin Crowley (Piper Sandler) inquired about the risk profile of the remaining office loan portfolio. Wray responded that office exposure has declined to $230 million and is actively managed, with ongoing use of qualitative risk factors and regular maturity wall and refinance analysis.
- Justin Crowley (Piper Sandler) requested an update on loan growth assumptions. CEO Ned Handy reiterated mid-single-digit growth expectations, with most new originations expected from C&I and institutional banking, and CRE likely posting flat to low single-digit growth.
- Damon Del Monte (KBW) questioned the outlook for operating expenses. CFO Ron Ohsberg projected a $1 million sequential increase in Q2, mainly from advertising, mortgage commissions, and project costs, with further incremental costs as a new branch opens later in the year.
- Laura Hunsicker (Seaport Research) asked about the composition and outlook for office loans in special mention or nonaccrual status. Wray detailed the maturity profile, occupancy rates, and resolution paths for each affected loan, emphasizing prudence and active engagement with sponsors.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the pace of loan and deposit growth from the institutional banking division and recent commercial banking hires, (2) trends in net interest margin as swap benefits phase in and interest rate environments evolve, and (3) the resolution of commercial real estate office loans currently in nonaccrual or special mention status. Execution on digital banking initiatives and the new branch opening will also be key signposts for future performance.
Washington Trust Bancorp currently trades at $30.81, down from $36.10 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
The Best Stocks for High-Quality Investors
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
