Executive Summary

EPS beat despite elevated credit costs: Diluted EPS of $0.56 vs $0.46* consensus, aided by net interest income growth, a 4 bps NIM expansion to 2.40%, and lower noninterest expense; offset by a $6.8M provision tied to two resolved credit exposures . EPS consensus from S&P Global*.
Revenue broadly in-line: Company total revenue (NII + noninterest) was $56.5M; S&P consensus was $56.4M*, though S&P’s revenue methodology shows $49.7M* “actual” (bank revenue definitions vary). NII rose 4% q/q and 20% y/y; noninterest income grew 3% q/q . S&P Global*.
Balance-sheet momentum and de-risking: In‑market deposits rose 4% q/q, loan-to-deposit fell to 98%, FHLB advances declined 21% q/q; nonaccrual loans fell to 27 bps of loans after charge-offs on two credits, with commercial nonaccruals at $1M .
Outlook: Management guides to ~5 bps NIM expansion in Q4, Q4 noninterest expense ~ $37M, 2025 ETR ~22.5%; buybacks paused after completing a $7M internal allocation; ~$350M of FHLB maturities in Q4 provide additional funding tailwind .

What Went Well and What Went Wrong

What Went Well
- NIM and NII improved: NIM rose to 2.40% (+4 bps q/q; +55 bps y/y); NII grew to $38.8M (+4% q/q; +20% y/y) . “We expanded our net interest income and margin” — CEO Ned Handy .
- Fee engines up: Wealth management revenues rose 3% q/q (asset‑based +6%); AUA +7% q/q to $7.68B; mortgage banking revenues +15% q/q and +22% y/y; loans sold rose to $126.5M .
- Funding mix/liquidity improved: In‑market deposits +4% q/q; loans/deposits down to 98%; FHLB advances cut to $791M (−21% q/q); contingent liquidity $1.84B (127% of uninsured deposits) .
What Went Wrong
- Elevated provision/charge-offs: Provision rose to $6.8M (from $0.6M), driven by $11.4M in net charge-offs on two commercial exposures: an SNC to a telecom contractor (−$8.3M) and a Class B office note sale (−$3.0M) .
- EPS down q/q on credit cost: EPS fell to $0.56 from $0.68, primarily due to higher provision despite stronger pre‑provision results .
- Office credit scrutiny persists: Questions on appraisal reliability and office marks; management cited market-specific challenges and moved quickly to dispose of a problem asset; Class A office special mention increased linked-quarter, though management expects stabilization with leasing progress .

Financial Results

Results vs prior periods and vs consensus (company “Total revenue” = Net interest income + Noninterest income)

Metric	Q3 2024 (oldest)	Q2 2025	Q3 2025 (newest)
Total Revenue ($M)	$32.262 + $16.272 = $48.534	$37.185 + $17.078 = $54.263	$38.833 + $17.636 = $56.469
Diluted EPS ($)	$0.64	$0.68	$0.56
Net Interest Margin (%)	1.85%	2.36%	2.40%
Provision for Credit Losses ($M)	$0.2	$0.6	$6.8
Noninterest Expense ($M)	$34.504	$36.530	$35.726
Efficiency Ratio (%)	71.1%	67.3%	63.3%

Estimates comparison (S&P Global; methodology for bank “revenue” may differ)

Metric	Q1 2025	Q2 2025	Q3 2025	Q4 2025
EPS Cons. Mean ($)	0.63*	0.633*	0.464*	0.738*
EPS Actual ($)	0.61* [Company reported $0.63 per 8-K]	0.68* [Company $0.68]	0.56* [Company $0.56]	—
Revenue Cons. Mean ($M)	53.156*	54.072*	56.391*	56.378*
Revenue Actual ($M, S&P method)	57.865*	53.663*	49.669*	—

Values with asterisks (*) retrieved from S&P Global. Company-reported totals for Q3 2025 revenue are shown in the first table.

Segment/line-of-business detail (selected noninterest revenue)

Noninterest Revenue ($M)	Q3 2024 (oldest)	Q2 2025	Q3 2025 (newest)
Wealth Management Revenues	9.989	10.120	10.373
Asset-based Revenues	9.770	9.745	10.307
Mortgage Banking Revenues	2.866	3.034	3.501
Card Interchange Fees	1.321	1.247	1.163
Service Charges on Deposits	0.784	0.808	0.841
Loan-related Derivative Income	0.126	0.676	0.271

Key performance indicators (balance sheet, credit, capital, activity)

KPI	Q3 2024 (oldest)	Q2 2025	Q3 2025 (newest)
Assets Under Administration ($B)	7.052	7.182	7.682
Residential Loans Sold ($M)	120.338	116.775	126.487
Total Loans ($B)	5.515	5.140	5.123
In‑Market Deposits ($B)	4.792	5.043	5.223
FHLB Advances ($B)	1.300	1.001	0.791
Loan‑to‑Deposit Ratio (%)	106.2%	101.8%	98.0%
Nonaccrual Loans ($M)	31.142	26.108	14.016
Past Due Loans ($M)	20.301	14.035	8.112
ACL / Loans (%)	0.77%	0.80%	0.71%
TBVPS ($)	25.51	23.91	24.39
Total RBC Ratio (%)	12.21%	13.06%	12.90%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin (bps)	Q4 2025	—	~+5 bps q/q (±)	Introduced
Noninterest Expense ($M)	Q4 2025	~$37 per quarter (Jan guide)	~ $37 in Q4 (marketing & $0.5M foundation contribution)	Maintained
Effective Tax Rate	FY 2025	~22.4% (mid-year)	~22.5%	Slightly higher
Share Repurchases	Remainder of 2025	$7M internal allocation (completed in Q3 + Oct)	Paused; reevaluate vs growth needs	Paused
FHLB Advances	Q4 2025	—	~$350M maturities in Q4 (paydowns expected)	New context
Dividend	Ongoing	$0.56/qtr (Q2, Q3)	$0.56 declared/paid for Q3	Maintained

Earnings Call Themes & Trends

Topic	Q1 2025 Mentions	Q2 2025 Mentions	Q3 2025 Current Period	Trend
Net Interest Margin	NIM inflected to 2.29% on balance sheet repositioning	Rose to 2.36% (+7 bps)	2.40%; guide +~5 bps in Q4	Improving
Deposits & Liquidity	In‑market deposits +4% q/q; wholesale reduced	Brokered near zero; contingent liquidity $1.78B	In‑market +4% q/q; liquidity $1.84B; L/D 98%	Strengthening
Credit/Office Exposure	Elevated office charge-offs in prior quarter	Office portfolio detail; some nonaccruals	Resolved two credits; office marks questioned; commercial nonaccruals $1M	De-risking but monitored
Wealth Management	AUA fell in Q1; revenues −2% q/q	AUA +5% q/q; revenues +2%	AUA +7% q/q with Lighthouse acquisition; revenues +3%	Reaccelerating
Mortgage Banking	Revenues −19% q/q	+32% q/q	+15% q/q; +22% y/y; loans sold up	Improving
Capital/Buybacks	Book value improved; no buyback	No buyback mentioned	$6.4M repurchase in Q3; paused after Oct	Opportunistic/pause
Leadership / Growth	—	—	Hired Chief Commercial Banking Officer; expand C&I/CRE	Investment for growth

Management Commentary

“We expanded our net interest income and margin, grew our wealth management and mortgage banking revenues, delivered strong in‑market deposit growth, and prudently managed expenses.” — CEO Ned Handy .
“We made several significant investments to drive future growth...purchasing the client accounts of Lighthouse Financial Management...and hiring a new senior executive...to lead our commercial banking division.” — CEO Ned Handy .
“We resolved two significant credit exposures this quarter...We...do not believe that this quarter’s results are indicative of any adverse credit trend.” — CFO Ron Ohsberg .
On office valuations: “It’s very difficult for appraisals of office properties in this market...we decided to take an actual note sale offer and dispose of it.” — Chief Risk Officer Bill Wray .

Q&A Highlights

Credit resolution and reserves: $11.3M charge-offs on two credits; the telecom SNC recovery prospects dropped post‑Q2; the office note was sold given weak local leasing comps; management emphasizes property/market specificity and conservative marks .
Shared National Credits: ~$173M SNC exposure, ~$90M CRE and ~$84M C&I .
Margin outlook: Expect ~5 bps q/q NIM expansion in Q4; spot margin for September ~2.43% .
Expenses: Q4 noninterest expense expected around $37M (marketing timing, $0.5M foundation) .
Capital returns: Completed $6.4M Q3 buyback at $27.18; bought $21k shares in October; pausing further repurchases to prioritize growth capital .
Funding: ~$350M FHLB maturities in Q4; plan to pay down advances with deposit inflows/cash .

Estimates Context

EPS beat: Q3 2025 EPS $0.56 vs $0.464* consensus; Q2 2025 EPS $0.68 vs $0.633* consensus . Values with asterisks (*) retrieved from S&P Global.
Revenue: Company total revenue $56.5M vs S&P consensus $56.4M*; S&P’s reported “actual” revenue $49.7M* reflects a differing bank revenue definition than company NII+noninterest. Values with asterisks (*) retrieved from S&P Global.

Key Takeaways for Investors

Core earnings power improving: NIM expansion, rising NII, and fee growth are driving better pre‑provision performance, with efficiency ratio improving to 63% .
One‑time credit clean-up: Elevated provision/charge‑offs tied to two identified credits reduced nonaccruals and should not indicate a broader credit trend per management; commercial nonaccruals now ~$1M .
Funding and liquidity are tailwinds: In‑market deposit growth, reduced FHLB reliance, and pending Q4 maturities should lower funding costs and aid NIM .
Fee momentum broad-based: Wealth management’s asset‑based revenues and mortgage banking volumes strengthened; AUA uplift includes Lighthouse assets .
Capital deployment balanced: $6.4M repurchased in Q3 at attractive levels; buybacks paused to support commercial growth under new leadership; dividend maintained at $0.56 .
Near-term setup: Q4 NIM expansion and controlled opex are potential catalysts; watch for loan growth reacceleration and stability in office credit metrics .
Medium-term thesis: Improving deposit mix and fee engines, coupled with disciplined credit, can support ROA/ROE normalization toward pre‑rate shock levels; monitor macro, office valuations, and wealth flows .

Notes:
- All company figures cited from Washington Trust’s Q3 2025 8‑K/press release and prior quarters as referenced in brackets.
- Values with asterisks (*) are retrieved from S&P Global and may use differing methodologies for bank “revenue.”

Sources

Q3 2025 8‑K/Press Release and supplemental tables
Q3 2025 Earnings Call Transcript
Q2 2025 8‑K/Press Release
Q1 2025 Press Release
Appointment of Chief Commercial Banking Officer

WASHINGTON TRUST BANCORP INC (WASH)·Q3 2025 Earnings Summary