Washington Trust Bancorp (WASH) swings to a $52.2M profit as interest margin and noninterest income rebound

Washington Trust Bancorp (WASH) reported net income of $52.2 million for the year ended Dec. 31, 2025, reversing a net loss in the prior year. (recent trading data)

WASH stock chart

WASH

Margin lift plus a noninterest-income recovery — but with one-offs

This was not a fluke. The profit turnaround was powered by a stronger core margin: net interest income rose to about $153.2 million as the bank got paid more on loans and investments than it paid on deposits and wholesale funding. That helped offset a higher provision for credit losses of $9.2 million—management is reserving a bit more for problem loans even as visible problem credits actually fell.

Noninterest income, the line where banks earn fees and record trading, mortgage and other gains or losses, swung sharply to a positive $75.9 million in 2025 from a negative $27.8 million a year earlier. That swing looks dramatic on the surface, but it hides offsetting items: the results included large realized losses on securities and losses on the sale of portfolio loans that hit the noninterest-income line, while a $7.0 million gain on sale of bank-owned properties and stronger wealth-management revenue helped pull the line into positive territory.

Banking core still the engine; wealth adds steady lift

The banking segment produced roughly $45.2 million of the consolidated profit, while Wealth Management Services contributed about $7.1 million. That split matters because Washington Trust is first and foremost a lender: loans were roughly 78% of assets at year-end, and commercial real estate (CRE) made up about 43% of the total loan book. Wealth revenues—and the $7.8 billion of assets under advisement at year-end—act like a fee buffer when lending swings.

Put simply: the core lending business and higher interest income carried the year, and wealth management helped smooth the ride when loan-sale activity and investment marks bounced around.

Balance sheet and credit picture

Total assets finished the year at $6.62 billion, with total loans at $5.13 billion and deposits around $5.3 billion. That means Washington Trust remains a classic regional balance-sheet bank: big on loans, local deposit funding and a sizable investment portfolio.

Credit quality showed improvement in a useful headline number: total nonaccrual loans fell to about $12.9 million from $23.3 million a year earlier. That’s meaningful because it suggests fewer borrowers have been moved into a troubled status even while the bank took a prudential increase in its allowance via the $9.2 million provision. Net cash from operating activities was healthy too—about $80.3 million—which gives the franchise room to absorb volatility.

One-offs you should know

• Realized losses on securities and losses on sales of portfolio loans were recorded against noninterest income and are key reasons noninterest income looks choppy.
• A $6.99 million gain from selling bank-owned properties helped offset some of those hits in the same noninterest-income bucket.
• There was a pension plan settlement charge of about $6.4 million that affected operating results; think of this as a one-time operating cost rather than an ongoing business trend.

Those are the kinds of line items that can make a year look much better or worse depending on timing. The underlying trend—more interest income, stable deposit funding and lower nonaccruals—is what underpins the profit swing.

What the numbers mean for the stock and strategy

From a trader’s perspective, the market reaction has been muted but mixed. WASH closed the most recent session at about $33.94, down roughly 1.1% on the session; technical indicators show the stock trading below its 20-day moving average but above the 50-day, and the relative strength index sits in the mid-30s, which means momentum is leaning toward the oversold side but the medium-term trend hasn’t broken. For context on the pace of recent moves, see the bank’s the annual results and the what the company does.

Strategically, the bank remains a southern New England lender with a heavy CRE and residential mortgage footprint. That concentration means future earnings will remain sensitive to regional commercial real estate trends and mortgage market churn—both downside risks and upside opportunities if rates stabilize or loan sales prove profitable.

One more lens: the bank reported that it completed a balance-sheet repositioning that involved loan sales earlier in 2025. If management continues to use loan sales to manage exposure and capital, expect episodic hits to noninterest income (or occasional gains) as part of the normalization process.

Keep an eye on two things next: how provisions trend in the first quarter (they’ll reveal whether the $9.2 million uptick was precautionary or a new baseline) and any continued loan-sale activity or realized investment losses. Those will determine whether the 2025 rebound is durable or mostly the result of a favorable interest-rate mix and timing of one-offs.