WASHINGTON TRUST BANCORP INC
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
WASH$38.62-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000737468-24-000041
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0000737468-25-000024
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 278 previous paragraphs and 285 current paragraphs.
139 unchanged; 87 reworded; 54 added; 43 removed; 9 previous and 5 current paragraphs rearranged.
Tables are not compared: 34 previous and 37 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (54)
Current report
•changes in, and evolving interpretations of, existing and future laws, rules and regulations;
Current report
Non-GAAP Financial Measures and Reconciliation to GAAP
Current report
In addition to evaluating the Corporation’s results of operations in accordance with GAAP, management supplements this evaluation with an analysis of certain non-GAAP financial measures, such as adjusted noninterest income, adjusted noninterest expense, adjusted income before income taxes, adjusted income tax expense, adjusted effective tax rate, adjusted net income, adjusted net income available to common shareholders, adjusted diluted earnings per common share, adjusted return on average assets and adjusted return on average equity.
Current report
We believe these non-GAAP financial measures are utilized by regulators and market analysts to evaluate the Corporation’s results of operations and financial condition, and therefore such information is useful to investors. In addition, these non-GAAP financial measures remove the impact of infrequent items that may obscure trends in the Corporation’s underlying performance. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures, which may be presented by other companies. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Current report
Each presentation below reconciles the “as reported” GAAP measure to the adjusted non-GAAP measure.
Current report
The following table presents adjusted noninterest income, adjusted noninterest expense, adjusted income before income taxes, adjusted income tax expense, adjusted effective tax rate, adjusted net income, and adjusted net income available to common shareholders:
Current report
(1)Calculated as income tax expense divided by income before income taxes.
Current report
(2)Calculated as income tax expense, adjusted for the tax impact of the adjustments as outlined in the table above, divided by income before income taxes, adjusted for the pre-tax impact of the adjustments as outlined in the table above.
Current report
The following table presents adjusted diluted earnings per common share:
Current report
(1)Net income available to common shareholders divided by weighted average diluted common and potential shares outstanding.
Current report
(2)Net income available to common shareholders, adjusted for the after-tax impact of adjustments as outlined in the table above, divided by weighted average diluted common and potential shares outstanding.
Current report
The following table presents adjusted return on average assets and adjusted return on average equity:
Current report
(1)Annualized based on the actual number of days in the period.
Current report
(2)Net income divided by total average assets.
Current report
(3)Net income, adjusted for the after-tax impact of adjustments as outlined in the table above, divided by total average assets.
Current report
(4)Net income available to common shareholders divided by total average equity.
Current report
(5)Net income available to common shareholders, adjusted for the after-tax impact of adjustments as outlined in the table above, divided by total average equity.
Current report
Net income totaled $12.2 million for the three months ended March 31, 2025, compared to $10.9 million reported for the same period in 2024. These results included the following:
Current report
•In the first quarter of 2025, sales-leaseback transactions were completed for five branch locations and a pre-tax net gain on the sale of the bank-owned properties totaling $7.0 million was recognized within noninterest income.
Current report
•Also in the first quarter of 2025 and in connection with the termination of the Corporation's qualified pension plan, a pre-tax non-cash pension plan settlement charge of $6.4 million was recognized within noninterest expenses.
Current report
•In the first quarter of 2024, noninterest income included income of $2.1 million associated with a litigation settlement.
Current report
Excluding these items, adjusted net income (non-GAAP) for the three months ended March 31, 2025 was $11.8 million, compared to $9.4 million for the same period in 2024, up by $2.4 million, or 26%. This increase was driven by an increase in net interest income.
Current report
Interest income amounts presented in the preceding table include the following adjustments for taxable equivalency:
Current report
The improvement in net interest income, FTE net interest income and NIM discussed below largely reflected benefits from the balance sheet repositioning transactions previously announced in December 2024, which included the sale of lower-yielding debt securities and residential real estate loans, reinvestment into higher-yielding debt securities, and pay-down of higher-cost FHLB advances and wholesale brokered time deposits.
Current report
-49- average rate paid on wholesale brokered deposits for the three months ended March 31, 2025 was 5.05% down from 5.22% for the same period in 2024.
Current report
The provision for credit losses for the three months ended March 31, 2025 included the impact of losses on individually analyzed nonaccrual commercial loans and reflected our estimate of forecasted economic conditions.
Current report
Net charge-offs totaled $2.3 million for the three months ended March 31, 2025, compared to net charge-offs of $52 thousand for the same period in 2024. See additional discussion under the caption “Asset Quality.”
Current report
Noninterest income amounted to $22.6 million for the three months ended March 31, 2025, compared $17.2 million for the same period in 2024. Noninterest income for the three months ended March 31, 2025 included the recognition of a $7.0 million net gain associated with sales-leaseback transactions. Included in other noninterest income in 2024 was income of $2.1 million associated with a litigation settlement. Excluding the impact of these transactions, adjusted noninterest income (non-GAAP) was $15.6 million for the three months ended March 31, 2025, compared to $15.1 million in the same period in 2024, up by $586 thousand, or 4%.
Current report
For the three months ended March 31, 2025, mortgage banking revenues were down by $202 thousand, or 8%, compared to the same period in 2024. An increase in the volume of loans sold was offset by a decline in the sales yield. The decrease in mortgage banking revenues also included changes in the fair value on mortgage loans held for sale and forward loan commitments.
Current report
Card interchange fee income or the three months ended March 31, 2025 was up by $364 thousand, or 32%, from the same period in 2024 This included the receipt of a third-party contract incentive, as well as revenue generated from debit card transaction volume.
Current report
Noninterest expense amounted to $42.2 million for the three months ended March 31, 2025, compared $34.4 million for the same period in 2024. Noninterest expense for the three months ended March 31, 2025 included a pre-tax non-cash pension
Current report
-53- plan settlement charge of $6.4 million in connection with the termination of the Corporation's qualified pension plan. Excluding the impact of this transaction, adjusted noninterest expense (non-GAAP) was $35.8 million for the three months ended March 31, 2025, up by $1.4 million, or 4%, from the same period in 2024.
Current report
The increase in the effective income tax rate on both a GAAP and non-GAAP basis largely reflected an increase in state tax expense and a higher proportion of taxable income to pre-tax book income.
Current report
The Corporation’s net deferred tax assets are reported in other assets and amounted to $41.5 million at March 31, 2025, down from $63.0 million at December 31, 2024. This decrease included the realization of a deferred tax asset associated with the loans that were reclassified to held for sale and written down to fair value in December 2024 and then sold in January 2025. Management believes deferred tax assets, net of the valuation allowance, are more-likely-than-not to be realized.
Current report
Net interest income for the Commercial Banking segment for the three months ended March 31, 2025 increased by $4.8 million from the same period in 2024. This improvement reflected benefits from the balance sheet repositioning transactions previously announced in December 2024. See additional discussion under the caption “Net Interest Income” above.
Current report
Noninterest income derived from the Commercial Banking segment for the three months ended March 31, 2025 was up by $7.1 million from the comparable period in 2024, largely due a first quarter 2025 net gain of $7.0 million associated with sales-leaseback transactions that were completed for five branch locations.. See additional discussion under the caption “Noninterest Income” above.
Current report
Commercial Banking noninterest expenses for the three months ended March 31, 2025 were up by $5.5 million from the same period in 2024. Approximately $4.9 million of the total pension plan settlement charge of $6.4 million that was recognized in the first quarter of 2025 was allocated to the Commercial Banking segment. The remaining increase in Commercial Banking noninterest expenses reflected increases in salaries and employee benefits expense and outsourced services. See additional discussion under the caption “Noninterest Expense” above.
Current report
For the three months ended March 31, 2025, noninterest expenses for the Wealth Management Services segment increased by $2.3 million from the comparable period in 2024. Approximately $1.5 million of the total pension plan settlement charge of $6.4 million that was recognized in the first quarter of 2025 was allocated to the Wealth Management Services segment. The remaining increase in Wealth Management Services noninterest expenses included increases in salaries and employee benefits expense and outsourced services expense. See additional discussion under the caption “Noninterest Expense” above.
Current report
Mortgage loans held for sale at lower of cost or market decreased from the end of 2024. As part of the previously announced balance sheet repositioning transactions, residential mortgage loans that were held in portfolio were reclassified to held for sale at December 31, 2024. On January 24, 2025, the sale was completed and the cash proceeds received, along with in-market deposit growth, were used to pay down FHLB and wholesale brokered time deposits in the first quarter of 2025.
Current report
Total loans amounted to $5.1 billion at March 31, 2025, down by $41.6 million, or 1%, from the end of 2024.
Showing the first 40 of 54 passages. Open the source sections for the rest.
Removed paragraphs (43)
Previous report
Net income totaled $11.0 million and $32.7 million, respectively, for the three and nine months ended September 30, 2024, compared to $11.2 million and $35.2 million, respectively, reported for the same periods in 2023. Year-to-date results largely reflected lower net interest income and a modest increase in noninterest expenses, partially offset by higher noninterest income and a relatively lower provision for credit losses.
Previous report
The decline in net interest income in 2024 was driven by higher rates paid on, and increases in, average interest-bearing liability balances, which offset the benefit of higher yields on, and increases in, average interest-earning asset balances. Noninterest income benefited from a $2.1 litigation settlement received in the first quarter of 2024 and a net gain of $988 thousand recognized on the sale of a bank-owned operations facility in the second quarter of 2024. In addition, the increase in noninterest income in 2024 reflected higher mortgage banking and wealth management revenues, partially offset by lower loan related derivative income.
Previous report
(1) Interest income includes adjustments for taxable equivalency of $234 thousand and $241 thousand, respectively, for the three months ended September 30, 2024 and 2023.
Previous report
(1) Interest income includes adjustments for taxable equivalency of $683 thousand and $703 thousand, respectively, for the nine months ended September 30, 2024 and 2023.
Previous report
-48- composition of interest-earning assets and interest-bearing liabilities. Prepayment penalty income associated with loan payoffs is included in net interest income.
Previous report
Net interest income includes the periodic recognition of prepayment penalty fee income associated with commercial loan payoffs. There was no prepayment penalty fee income recognized in the three months ended September 30, 2024. Prepayment penalty fee income amounted to $66 thousand for the nine months ended September 30, 2024 and had essentially no benefit to NIM. This compared to $71 thousand (or 0 basis point benefit to NIM) and $245 thousand (or 1 basis point benefit to NIM), respectively, for the three and nine months ended in September 30, 2023.
Previous report
NIM was 1.85% and 1.84%, respectively, for the three and nine months ended September 30, 2024, compared to 1.97% and 2.11%, respectively, for the same periods in 2023. While NIM benefited from higher market interest rates on loans, it was adversely impacted by a higher cost of funds.
Previous report
As market interest rates rose between periods, deposit balances shifted from lower-cost deposits to higher-cost deposits. Average in-market interest-bearing deposits, which excludes wholesale brokered deposits, for the three and nine months ended September 30, 2024 increased by $70.7 million and $128.9 million, respectively, from the average balances for the
Previous report
The provision for credit losses in 2024 largely reflected continued, yet subsiding, slowdown of loan prepayment speeds and modest specific reserve allocations on an individually analyzed nonaccrual commercial loan, partially offset by a decline in loan balances and relatively stable to improving forecasted economic conditions.
Previous report
Net charge-offs totaled $48 thousand for the three months ended September 30, 2024, compared to net charge-offs of $30 thousand for the same period in 2023. For the nine months ended September 30, 2024, net charge-offs totaled $127 thousand, compared to net charge-offs of $114 thousand for the same period in 2023.
Previous report
See additional discussion under the caption “Asset Quality” for further information on asset quality metrics and the ACL on loans.
Previous report
For the three and nine months ended September 30, 2024, mortgage banking revenues were up by $758 thousand and $3.0 million, respectively, compared to the same periods in 2023. The increase in mortgage banking revenues was mainly attributable to increases in both sales volume and sales yield.
Previous report
Income from BOLI for the nine months ended September 30, 2024, was down by $492 thousand from the same period in 2023, reflecting the recognition of $658 thousand in non-taxable income in the first six months of 2023 associated with the receipt of life insurance proceeds.
Previous report
Other income for the nine months ended September 30, 2024 was up by $3.0 million from the same period in 2023. Included in other income in 2024 was a net gain of $988 thousand recognized on the sale of a bank-owned operations facility in the second quarter and $2.1 million associated with a litigation settlement in the first quarter. Excluding the impact of these items, other income for the nine months ended September 30, 2024 was down modestly by $83 thousand from the same period in 2023.
Previous report
Legal, audit and professional fees for the three and nine months ended September 30, 2024 decreased by $222 thousand and $649 thousand, respectively, compared to the same periods in 2023, reflecting lower legal fees.
Previous report
FDIC deposit insurance costs for the three and nine months ended September 30, 2024 increased by $217 thousand and $819 thousand, respectively, compared to the same periods in 2023, reflecting the impact of increases in average assets from a year ago and a higher FDIC deposit assessment rate.
Previous report
Advertising and promotion expense for the nine months ended September 30, 2024 increased by $442 thousand due to an increase in such activities.
Previous report
The Corporation’s net deferred tax assets amounted to $46.0 million at September 30, 2024, compared to $53.8 million at December 31, 2023. This decline largely reflected decreases in deferred tax assets associated with increases in fair value of securities available for sale due to changes in market interest rates.
Previous report
Net interest income for the Commercial Banking segment for the three and nine months ended September 30, 2024 decreased by $1.5 million and $8.9 million, respectively, from the same periods in 2023. Net interest income was adversely impacted by higher rates paid on, and increases in, average interest-bearing liability balances, which offset the benefit of higher yields on, and increases in, average interest-earning asset balances.
Previous report
Noninterest income derived from the Commercial Banking segment for the three and nine months ended September 30, 2024 was up by $72 thousand and $2.7 million, respectively, from the comparable periods in 2023. The year-to-date increase in Commercial Banking noninterest income reflected higher mortgage banking revenues and a net gain recognized in the second quarter of 2024 on the sale of a bank-owned operations facility. These were partially offset by lower income from loan related derivatives and BOLI. See additional discussion under the caption “Noninterest Income” above.
Previous report
Commercial Banking noninterest expenses for the three and nine months ended September 30, 2024 were up by $790 thousand and $4.0 million, respectively, from the same periods in 2023, largely reflecting increases in salaries and employee benefits expense, outsourced services, and FDIC deposit insurance costs, as well as reductions in legal fees. See additional discussion under the caption “Noninterest Expense” above.
Previous report
For the three and nine months ended September 30, 2024, noninterest expenses for the Wealth Management Services segment decreased by $676 thousand and $2.2 million, respectively, from the comparable periods in 2023, largely reflecting decreases in salaries and employee benefits expense and legal fees. See additional discussion under the caption “Noninterest Expense” above.
Previous report
Total assets amounted to $7.1 billion at September 30, 2024, down by $61.3 million, or 1%, from the end of 2023.
Previous report
Cash and due from banks increased by $120.1 million, or 138%, from December 31, 2023, reflecting temporarily higher cash balances on deposit at correspondent banks.
Previous report
The securities portfolio decreased by $27.1 million, or 3%, from the end of 2023, reflecting routine pay-downs on mortgage-backed securities, partially offset by an increase in fair value of available for sale securities due to changes in market interest rates.
Previous report
Total loans decreased by $132.8 million, or 2%, from the end of 2023, with the largest decline in the residential real estate portfolio.
Previous report
Total deposit balances decreased by $176.3 million from the end of 2023, reflecting a decline in wholesale brokered time deposits that was partially offset by in-market deposit growth. FHLB advances increased by $110.0 million, or 9%, from December 31, 2023.
Previous report
Shareholders’ equity increased by $29.5 million, or 6%. Net income and an increase in the AOCL component of shareholders' equity were partially offset by dividend declarations.
Previous report
Total loans amounted to $5.5 billion at September 30, 2024, down by $132.8 million, or 2.4%, from the end of 2023.
Previous report
(1)Includes a $19 thousand negative basis adjustment associated with fair value hedges at September 30, 2024. See Note 6 to the Unaudited Consolidated Financial Statements for additional disclosure.
Previous report
Residential real estate loans amounted to $2.5 billion at September 30, 2024, down by $75.1 million, or 3%, from the balance at December 31, 2023, as total origination activity declined and a lower proportion of loans was originated for portfolio.
Previous report
Residential real estate loan origination and refinancing activities decreased in response to increases in market interest rates and changes in the housing markets. The proportion of residential real estate loans originated for portfolio has decreased for balance sheet management purposes.
Previous report
Total nonaccrual loans decreased by $13.5 million from the end of 2023, reflecting a decline in nonaccrual commercial real estate loans. Nonaccrual commercial real estate loans decreased by $14.6 million from the balance at December 31, 2023, primarily due to one loan secured by a healthcare facility that returned to accruing status in the first quarter of 2024.
Previous report
As of September 30, 2024, the balance of nonaccrual commercial real estate loans consisted of two collateral dependent loans. One loan for $10.5 million is secured by an office property in Massachusetts and is past due, as the loan matured in the third quarter of 2024. The other loan for $7.8 million is secured by an office property in Connecticut, is current with respect to payment terms and was modified as a TLM in 2023. These loans were individually assessed for credit impairment and based on the estimated fair value of the collateral less estimated costs to sell (when appropriate), specific reserves of $500 thousand were deemed necessary at September 30, 2024.
Previous report
Total past due loans increased by $9.0 million from the end of 2023, largely due to the $10.5 million nonaccrual commercial real estate loan discussed above under the caption “Nonaccrual Loans.”
Previous report
Management employs a process and methodology to estimate the ACL on loans that evaluates both quantitative and qualitative factors. The methodology for evaluating quantitative factors consists of two basic components. The first component involves pooling loans into portfolio segments for loans that share similar risk characteristics. The second component involves individually analyzed loans that do not share similar risk characteristics with loans that are pooled into portfolio segments.
Previous report
The ACL for individually analyzed loans is measured using a DCF method based upon the loan’s contractual effective interest rate, or at the loan’s observable market price, or, if the loan was collateral dependent, at the fair value of the collateral.
Previous report
The ACL for pooled loans is measured utilizing a DCF methodology to estimate credit losses for each pooled portfolio segment. The methodology incorporates a probability of default and loss given default framework. Loss given default is estimated based on historical credit loss experience. Probability of default is estimated using a regression model that incorporates econometric factors. Management utilizes forecasted econometric factors with a one-year reasonable and supportable forecast period and one-year straight-line reversion period in order to estimate the probability of default for each loan portfolio segment. The DCF methodology combines the probability of default, the loss given default, prepayment speeds, and remaining life of the loan to estimate a reserve for each loan. The sum of all the loan level reserves are aggregated for each portfolio segment and a loss rate factor is derived. Quantitative loss factors for pooled loans are also supplemented by certain qualitative risk factors reflecting management’s view of how losses may vary from those represented by quantitative loss rates.
Previous report
-65- subsiding, slowdown of loan prepayment speeds and modest specific reserve allocations on an individually analyzed nonaccrual commercial loan, partially offset by a decline in loan balances and relatively stable to improving forecasted economic conditions.
Previous report
Net charge-offs totaled $48 thousand for the three months ended September 30, 2024, compared to $30 thousand for the same period in 2023. For the nine months ended September 30, 2024, net charge-offs totaled $127 thousand, compared to net charge-offs of $114 thousand for the same period in 2023.
Showing the first 40 of 43 passages. Open the source sections for the rest.
Reworded paragraphs (87)
Previous wording
The following discussion should be read in conjunction with the Corporation’s Audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2023, and in conjunction with the condensed Unaudited Consolidated Financial Statements and notes thereto included in Item 1 of this report. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results for the full-year ended December 31, 2024 or any future period.
Current wording
The following discussion should be read in conjunction with the Corporation’s Audited Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024, and in conjunction with the condensed Unaudited Consolidated Financial Statements and notes thereto included in Item 1 of this report. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results for the full-year ended December 31, 2025 or any future period.
Previous wording
•changes in general business and economic conditions on a national basis and in the local markets in which we operate;
Current wording
•changes in general business and economic conditions (including the impact of recently imposed tariffs by the U.S. Administration and foreign governments, inflation and concerns about liquidity) on a national basis and in the local markets in which we operate;
Previous wording
•changes in customer behavior due to political, business, and economic conditions, including inflation and concerns about liquidity;
Current wording
•changes in customer behavior due to political, business and economic conditions;
Previous wording
•the possibility that future credits losses are higher than currently expected due to changes in economic assumptions or adverse economic developments;
Current wording
•the possibility that future credit losses are higher than currently expected due to changes in economic assumptions or adverse economic developments;
Previous wording
•changes in legislation or regulation and accounting principles, policies, and guidelines;
Current wording
•changes in accounting principles, policies and guidelines;
Previous wording
Our largest source of operating income is net interest income, which is the difference between interest earned on loans and securities and interest paid on deposits and borrowings. In addition, we generate noninterest income from a number of
Current wording
Our largest source of operating income is net interest income, which is the difference between interest earned on loans and securities and interest paid on deposits and borrowings. In addition, we generate noninterest income from a number of sources, including wealth management services, mortgage banking activities, and deposit services. Our principal noninterest expenses include salaries and employee benefit costs, outsourced services provided by third-party vendors, occupancy and facility-related costs, and other administrative expenses.
Previous wording
We continue to leverage our strong regional brand to build market share and remain steadfast in our commitment to provide superior service. We believe the key to future growth is providing customers with convenient in-person service and digital banking solutions. In January 2024, we opened a new full-service branch in Smithfield, Rhode Island, and in September 2024, we opened a new full-service branch in the Olneyville section of Providence.
Current wording
We continue to leverage our strong regional brand to build market share and remain steadfast in our commitment to provide superior service. We believe the key to future growth is providing customers with convenient in-person service and digital banking solutions.
Previous wording
ERM is an overarching program that includes all areas of the Corporation. A framework approach is utilized to assign responsibility and to ensure that the various business units and activities involved in the risk management life-cycle are effectively integrated. The Corporation has adopted the “three lines of defense” strategy that is an industry best practice for ERM. Business units are the first line of defense in managing risk. They are responsible for identifying, measuring, monitoring, and controlling current and emerging risks. They must report on and escalate their concerns. Corporate functions such as Credit Risk Management, Financial Administration, Information Assurance, and Compliance represent the second line of defense. They are responsible for policy setting and for reviewing and challenging the risk management activities of the business units. They collaborate closely with business units on planning and resource allocation with respect to risk management. Internal Audit is a third line of defense. They provide independent assurance to the Board of Directors of the effectiveness of the first and second lines in fulfilling their risk management responsibilities.
Current wording
ERM. Business units are the first line of defense in managing risk. They are responsible for identifying, measuring, monitoring, and controlling current and emerging risks. They must report on and escalate their concerns. Corporate functions such as Credit Risk Management, Financial Administration, Information Assurance, and Compliance represent the second line of defense. They are responsible for policy setting and for reviewing and challenging the risk management activities of the business units. They collaborate closely with business units on planning and resource allocation with respect to risk management. Internal Audit is a third line of defense. They provide independent assurance to the Board of Directors of the effectiveness of the first and second lines in fulfilling their risk management responsibilities.
Previous wording
The following tables present daily average balance, interest, and yield/rate information, as well as net interest margin on an FTE basis. Tax-exempt income is converted to an FTE basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit. Unrealized gains (losses) on available for sale securities, changes in fair value on mortgage loans held for sale, and basis adjustments associated with fair value hedges are excluded from the average balance and yield calculations. Nonaccrual loans, as well as interest recognized on these loans, are included in amounts presented for loans.
Current wording
The following table presents daily average balance, interest, and yield/rate information, as well as net interest margin on an FTE basis. Tax-exempt income is converted to an FTE basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit. Unrealized gains (losses) on available for sale securities, changes in fair value on mortgage loans held for sale, and basis adjustments associated with fair value hedges are excluded from the average balance and yield calculations. Nonaccrual loans, as well as interest recognized on these loans, are included in amounts presented for loans.
Previous wording
Net interest income, the primary source of our operating income, totaled $32.3 million and $95.5 million, respectively, for the three and nine months ended September 30, 2024, compared to $33.8 million and $104.4 million, respectively, for the same periods in 2023. Net interest income is affected by the level of and changes in interest rates, and changes in the amount and
Current wording
Net interest income, the primary source of our operating income, totaled $36.4 million for the three months ended March 31, 2025, compared to $31.7 million for the same period in 2024. Net interest income is affected by the level of and changes in interest rates, and changes in the amount and composition of interest-earning assets and interest-bearing liabilities. Net interest income includes the periodic recognition of prepayment penalty fee income associated with commercial loan payoffs. Prepayment penalty fee income amounted to $8 thousand and $20 thousand, respectively, in the three months ended March 31, 2025 and 2024, and had essentially no benefit to NIM in either period.
Previous wording
The analysis of net interest income, NIM, and the yield on loans is also impacted by changes in the level of net amortization of premiums and discounts on securities and loans, which is included in interest income. Changes in market interest rates affect the level of loan prepayments and the receipt of payments on mortgage-backed securities. Prepayment speeds generally increase as market interest rates decline and decrease as market interest rates rise. Changes in prepayment speeds could increase or decrease the level of net amortization of premiums and discounts, thereby affecting interest income. As noted in the Unaudited Consolidated Statements of Cash Flows, net amortization of premiums and discounts on securities and loans (a net reduction to net interest income) amounted to $878 thousand for the nine months ended September 30, 2024, compared to $1.0 million for the same period in 2023.
Current wording
The analysis of net interest income, NIM, and the yield on loans is also impacted by changes in the level of net amortization of premiums and discounts on securities and loans, which is included in interest income. Changes in market interest rates affect the level of loan prepayments and the receipt of payments on mortgage-backed securities. Prepayment speeds generally increase as longer-term market interest rates decline and decrease as longer-term market interest rates rise. Changes in prepayment speeds could increase or decrease the level of net amortization of premiums and discounts, thereby affecting interest income. As noted in the Unaudited Consolidated Statements of Cash Flows, net amortization of premiums and discounts on securities and loans (a net reduction to net interest income) amounted to $94 thousand for the three months ended March 31, 2025, compared to $265 thousand for the same period in 2024.
Previous wording
FTE net interest income for the three and nine months ended September 30, 2024 amounted to $32.5 million and $96.2 million, respectively, down by $1.5 million and $9.0 million, respectively, from the same periods in 2023. For the three and nine months ended September 30, 2024, increases in average interest-bearing liability balances, net of increased average interest-earning assets, reduced net income by $493 thousand, and $4.9 million, respectively. Increases in funding costs outpaced increases in asset yields, reducing net interest income by $1.0 million and $4.1 million, respectively, for the three and nine months ended September 30, 2024.
Current wording
FTE net interest income for the three months ended March 31, 2025 amounted to $36.6 million up by $4.7 million from the same period in 2024. For the three months ended March 31, 2025, decreases in average interest-bearing liability balances, net of decreases in average interest-earning assets, increased net income by $1.3 million. Decreases in funding costs outpaced decreases in asset yields, increasing net interest income by $3.4 million for the three months ended March 31, 2025. NIM was 2.29% for the three months ended March 31, 2025, compared to 1.84% for the same period in 2024.
Previous wording
Total average securities for the three and nine months ended September 30, 2024 decreased by $72.1 million and $64.0 million, respectively, from the average balances for the same periods a year earlier primarily due to routine pay-downs. The FTE rate of return on the securities portfolio for the three and nine months ended September 30, 2024 was 2.44% and 2.47%, respectively, compared to 2.44% and 2.45% respectively, for the same periods in 2023.
Current wording
Total average securities for the three months ended March 31, 2025 decreased by $103.1 million from the average balances for the same period a year earlier primarily due to routine pay-downs. The FTE rate of return on the securities portfolio for the three months ended March 31, 2025 was 3.43% compared to 2.49% for the same period in 2024.
Previous wording
Total average loan balances for the three and nine months ended September 30, 2024 increased by $88.8 million and $325.3 million, respectively, from the average loan balances for the comparable 2023 periods, largely reflecting growth in average balances of CRE loans. The increase in average loan balances for the year-to-date period also reflected growth in the average balance of residential real estate loans. The yield on total loans for the three and nine months ended September 30, 2024 was 5.44% and 5.41%, respectively, compared to 5.14% and 4.95%, respectively, in the corresponding periods in 2023, reflecting higher market interest rates between periods.
Current wording
Total average loan balances for the three months ended March 31, 2025 decreased by $562.8 million from the average loan balances for the comparable 2024 period, largely reflecting a decrease in average balances of residential real estate loans. The yield on total loans for the three months ended March 31, 2025 was 5.31% compared to 5.38% in the corresponding period in 2024.
Previous wording
Higher levels of wholesale funding were used to fund balance sheet growth. The average balance of FHLB advances for the three and nine months ended September 30, 2024 increased by $370.4 million and $328.1 million, respectively, compared to the average balances for the same periods in 2023. Due to increases in market interest rates between periods, the average rate paid on such advances for both the three and nine months ended September 30, 2024 was 4.95%, up from 4.71% and 4.66%, respectively, for the same periods in 2023. Included in total average interest-bearing deposits were wholesale brokered deposits, which decreased by $201.5 million and $27.2 million, respectively, from the same periods in 2023. The average rate paid on wholesale brokered deposits for the three and nine months ended September 30, 2024 was 5.27% and 5.24%, respectively, up from 5.02% and 4.59%, respectively, for the same periods in 2023.
Current wording
FHLB advances and brokered time deposits are utilized as wholesale funding sources. The average balance of FHLB advances for the three months ended March 31, 2025 decreased by $280.1 million compared to the average balances for the same period in 2024. The average rate paid on such advances for the three months ended March 31, 2025 was 4.62%, down from 4.91% for the same period in 2024, reflecting lower short-term market interest rates. Included in total average interest-bearing deposits were wholesale brokered deposits, which decreased by $511.2 million from the same period in 2024. The
Previous wording
-49- same periods in 2023, with increases in time deposits and interest-bearing demand deposits. The average rate paid on in-market interest-bearing deposits for the three and nine months ended September 30, 2024 was 3.06% and 3.00%, respectively, up from 2.57% and 2.18%, respectively, for the same periods in 2023. The average balance of noninterest-bearing demand deposits for the three and nine months ended September 30, 2024 decreased by $100.3 million and $129.4 million, respectively, from the average balances for the same periods in 2023.
Current wording
Average in-market interest-bearing deposits, which excludes wholesale brokered deposits, for the three months ended March 31, 2025 increased by $334.0 million from the average balances for the same periods in 2024, largely reflecting increases in interest-bearing demand deposits and money market account balances. The average rate paid on in-market interest-bearing deposits for the three months ended March 31, 2025 was 2.77% down from 2.93% for the same period in 2024. The average balance of noninterest-bearing demand deposits for the three months ended March 31, 2025 decreased by $43.8 million from the average balances for the same period in 2024.
Previous wording
The provision for credit losses results from management’s review of the adequacy of the ACL. The ACL is management’s estimate, at the reporting date, of expected lifetime credit losses and includes consideration of current forecasted economic
Current wording
The provision for credit losses results from management’s review of the adequacy of the ACL. The ACL is management’s estimate, at the reporting date, of expected lifetime credit losses and includes consideration of current forecasted economic conditions. Estimating an appropriate level of ACL necessarily involves a high degree of judgment.
Previous wording
The provision for credit losses recognized in 2023 provided for loan growth and largely reflected slowdown of loan prepayment speeds and stable to improving forecasted economic conditions.
Current wording
The provision for credit losses recognized three months ended March 31, 2024 provided for loan growth and was reflective of continued slowdown of loan prepayment speeds and estimated forecasted economic conditions.
Previous wording
The ACL on loans was $42.6 million, or 0.77% of total loans, at September 30, 2024, compared to $41.1 million, or 0.73% of total loans, at December 31, 2023.
Current wording
The ACL on loans was $41.1 million, or 0.81% of total loans, at March 31, 2025, compared to $42.0 million, or 0.82% of total loans, at December 31, 2024.
Previous wording
Revenue from wealth management services represented 58% of total noninterest income for the nine months ended September 30, 2024, compared to 62% for the same period in 2023. A substantial portion of wealth management revenues is dependent on the value of wealth management AUA and is closely tied to the performance of the financial markets. This portion of wealth management revenues is referred to as “asset-based” and includes trust and investment management fees. Wealth management revenues also include “transaction-based” revenues that are not primarily derived from the value of assets.
Current wording
Wealth management services represent our largest source of non interest income. A substantial portion of wealth management revenues is dependent on the value of wealth management AUA and is closely tied to the performance of the financial markets. This portion of wealth management revenues is referred to as “asset-based” and includes trust and investment management fees. Wealth management revenues also include “transaction-based” revenues that are not primarily derived from the value of assets.
Previous wording
Wealth management revenues for the three and nine months ended September 30, 2024 increased by $1.0 million and $2.3 million, respectively, from the same periods in 2023, reflecting an increase in asset-based revenues. The change in asset-based revenues correlated with the change in average AUA balances. The average balance of AUA for the three and nine months ended September 30, 2024 increased by 9% and 10%, respectively, from the average balance for the same periods in 2023.
Current wording
Wealth management revenues for the three months ended March 31, 2025 increased by $553 thousand, or 6%, from the same period in 2024, reflecting an increase in asset-based revenues. The change in asset-based revenues correlated with the change in average AUA balances. The average balance of AUA for the three months ended March 31, 2025 increased by 5% from the average balance for the same period in 2024.
Previous wording
The end of period AUA balance amounted to $7.1 billion at September 30, 2024. The following table presents the changes in wealth management AUA balances:
Current wording
The end of period AUA balance amounted to $6.8 billion at March 31, 2025, down by $259.4 million, or 4%, from December 31, 2024, including net investment depreciation that reflected financial market declines in March 2025. The following table presents the changes in wealth management AUA balances:
Previous wording
Mortgage banking revenues represented 16% of total noninterest income for nine months ended September 30, 2024, compared to 12% for the same period in 2023. These revenues are dependent on mortgage origination volume and are sensitive to interest rates and the condition of housing markets. While loan origination and refinancing activities decreased in response to increases in market interest rates, a larger proportion of loans were originated for sale in 2024. The composition of mortgage banking revenues and the volume of loans sold to the secondary market are shown in the following table:
Current wording
Mortgage banking revenues are dependent on mortgage origination volume and are sensitive to interest rates and the condition of housing markets. The composition of mortgage banking revenues and the volume of loans sold to the secondary market are shown in the following table:
Previous wording
Loan related derivative income from interest rate swap contracts with commercial borrowers for the three and nine months ended September 30, 2024, decreased by $956 thousand and $819 thousand, respectively, from the same periods in 2023, reflecting a decline in volume.
Current wording
Loan related derivative income from interest rate swap contracts with commercial borrowers for the three months ended March 31, 2025, decreased by $183 thousand, or 64%, from the same period in 2024, reflecting a decline in volume.
Previous wording
Salaries and employee benefits expense, the largest component of noninterest expense, for the three and nine months ended September 30, 2024 decreased by $272 thousand and increased by $391 thousand respectively, compared to the same periods in 2023. The changes included the impact of adjustments to performance-based compensation accruals, merit increases, and lower staffing levels.
Current wording
Salaries and employee benefits expense, the largest component of noninterest expense, for the three months ended March 31, 2025 increased by $647 thousand, or 3%, compared to the same period in 2024. Increases in compensation were partially offset by lower staffing levels.
Previous wording
Outsourced services expense for the three and nine months ended September 30, 2024 increased by $448 thousand and $1.2 million, respectively, compared to the same periods in the prior year. The increases reflected changes to and expansion of services, including software as a service, that are provided by third-party vendors.
Current wording
Outsourced services expense for the three months ended March 31, 2025 increased by $566 thousand, or 15%, compared to the same period in the prior year. The increases reflected expansion of and volume-related changes to third-party vendor provided software-as-a-service.
Previous wording
The effective income tax rates in the table above differed from the blended statutory rates, primarily due to tax benefits related to income from BOLI, federal tax credits, and tax-exempt income. The blended statutory rates include the federal income tax rate of 21% and a blended state income tax rate net of a federal tax benefit. The increase in the blended statutory rates in the table above reflect the impact of a fourth quarter 2023 Massachusetts tax law change.
Current wording
The effective income tax rates differed from the federal rate of 21%, primarily due to state income tax, partially offset by benefits from tax-exempt income, income from BOLI, and federal tax credits. The blended statutory rates include the federal income tax rate of 21% and a blended state income tax rate net of a federal tax benefit.
Previous wording
The provision for credit losses for the three and nine months ended September 30, 2024 decreased by $300 thousand and $600 thousand, respectively from the same periods in 2023. See additional discussion under the caption “Provision for Credit Losses” above.
Current wording
The provision for credit losses for the three months ended March 31, 2025 increased by $500 thousand from the same period in 2024. See additional discussion under the caption “Provision for Credit Losses” above.
Previous wording
For the three and nine months ended September 30, 2024, noninterest income derived from the Wealth Management Services segment increased by $974 thousand and $4.5 million, respectively, from the same periods in 2023, reflecting an increase in asset-based revenues. The year-to-date increase also included income of $2.1 million associated with a litigation settlement in the first quarter of 2024. See further discussion under the caption “Noninterest Income” above.
Current wording
For the three months ended March 31, 2025, noninterest income derived from the Wealth Management Services segment decreased by $1.6 million from the same period in 2024. Included in noninterest income in 2024 was income of $2.1 million associated with a litigation settlement. Excluding this item, Wealth Management noninterest income increased by $517 thousand, largely reflecting an increase in asset-based revenues. See further discussion under the caption “Noninterest Income” above.
Previous wording
The Corporation uses an independent pricing service to obtain quoted prices. The prices provided by the independent pricing service are generally based on observable market data in active markets. The determination of whether markets are active or inactive is based upon the level of trading activity for a particular security class. Management reviews the independent pricing service’s documentation to gain an understanding of the appropriateness of the pricing methodologies. Management also reviews the prices provided by the independent pricing service for reasonableness based upon current trading levels for similar securities. If the prices appear unusual, they are re-examined and the value is either confirmed or revised. In addition, management periodically performs independent price tests of securities to ensure proper valuation and to verify our understanding of how securities are priced. As of September 30, 2024 and December 31, 2023, management did not make any adjustments to the prices provided by the pricing service.
Current wording
The Corporation uses an independent pricing service to obtain quoted prices. The prices provided by the independent pricing service are generally based on observable market data in active markets. The determination of whether markets are active or inactive is based upon the level of trading activity for a particular security class. Management reviews the independent pricing service’s documentation to gain an understanding of the appropriateness of the pricing methodologies. Management also reviews the prices provided by the independent pricing service for reasonableness based upon current trading levels for similar securities. If the prices appear unusual, they are re-examined and the value is either confirmed or revised. In addition, management periodically performs independent price tests of securities to ensure proper valuation and to verify our
Previous wording
See Notes 3 and 7 to the Unaudited Consolidated Financial Statements for additional information regarding the determination of fair value of investment securities.
Current wording
See Notes 3 and 8 to the Unaudited Consolidated Financial Statements for additional information regarding the determination of fair value of investment securities.
Previous wording
The securities portfolio represented 14% of total assets at both September 30, 2024 and December 31, 2023. The largest component of the securities portfolio is mortgage-backed securities, all of which are issued by U.S. government agencies or U.S. government-sponsored enterprises.
Current wording
The securities portfolio represented 14% of total assets at March 31, 2025, compared to 13% of total assets at December 31, 2024. The largest component of the securities portfolio is mortgage-backed securities, all of which are issued by U.S. government agencies or U.S. government-sponsored enterprises.
Previous wording
The securities portfolio decreased by $27.1 million, or 3%, from the end of 2023. This decrease included $54.1 million of routine pay-downs on mortgage-backed securities and an increase of $26.9 million (pre-tax) in the fair value of available for sale securities.
Current wording
The securities portfolio increased by $1.2 million, or 0.1%, from the end of 2024. This included an increase of $16.9 million (pre-tax) in the fair value of available for sale securities, partially offset by $15.4 million of routine pay-downs on mortgage-backed securities.
Previous wording
As of September 30, 2024, the carrying amount of available for sale debt securities included net unrealized losses of $125.4 million, compared to net unrealized losses of $152.2 million as of December 31, 2023. The net unrealized losses were primarily concentrated in obligations of U.S. government agencies and U.S. government-sponsored enterprises, including mortgage-backed securities, and primarily attributable to relative changes in market interest rates since the time of purchase. See Note 3 to the Unaudited Consolidated Financial Statements for additional information.
Current wording
As of March 31, 2025, the carrying amount of available for sale debt securities included net unrealized losses of $116.4 million, compared to net unrealized losses of $133.3 million as of December 31, 2024. The net unrealized losses were primarily concentrated in obligations of U.S. government agencies and U.S. government-sponsored enterprises, including mortgage-backed securities, and primarily attributable to relative changes in market interest rates since the time of purchase. See Note 3 to the Unaudited Consolidated Financial Statements for additional information.
Previous wording
The commercial loan portfolio represented 48% of total loans at both September 30, 2024 and December 31, 2023.
Current wording
The commercial loan portfolio represented 52% of total loans at both March 31, 2025 and December 31, 2024.
Previous wording
In making commercial loans, we may occasionally solicit the participation of other banks. The Bank also participates in commercial loans originated by other banks. In such cases, these loans are individually underwritten by us using standards similar to those employed for our self-originated loans. Our participation in commercial loans originated by other banks amounted to $679.2 million and $652.7 million, respectively, at September 30, 2024 and December 31, 2023. Our participation in commercial loans originated by other banks also includes shared national credits. Shared national credits are defined as participation in loans or loan commitments of at least $100.0 million that are shared by three or more banks.
Current wording
In making commercial loans, we may occasionally solicit the participation of other banks. The Bank also participates in commercial loans originated by other banks. In such cases, these loans are individually underwritten by us using standards similar to those employed for our self-originated loans. Our participation in commercial loans originated by other banks amounted to $673.5 million and $685.7 million, respectively, at March 31, 2025 and December 31, 2024. Our participation in commercial loans originated by other banks also includes shared national credits. Shared national credits are defined as participation in loans or loan commitments of at least $100.0 million that are shared by three or more banks.
Previous wording
CRE loans totaled $2.1 billion at September 30, 2024, down by $4.3 million, or 0.2%, from the balance at December 31, 2023.
Current wording
CRE loans totaled $2.1 billion at March 31, 2025, down by $20.4 million, or 1%, from the balance at December 31, 2024.
Previous wording
In the first nine months of 2024, CRE advances and originations amounted to $183.2 million and were more than offset by payments.
Current wording
In the first three months of 2025, CRE advances and originations amounted to $43.8 million and were more than offset by payments.
Previous wording
Construction and development loans included in the CRE loan portfolio amounted to $131.3 million and $214.6 million, respectively, as of September 30, 2024 and December 31, 2023.
Current wording
Construction and development loans included in the CRE loan portfolio amounted to $105.3 million and $102.2 million, respectively, as of March 31, 2025 and December 31, 2024.
Previous wording
Shared national credit balances outstanding included in the CRE loan portfolio at September 30, 2024 and December 31, 2023, totaled $82.8 million and $47.4 million, respectively. At September 30, 2024 and December 31, 2023, balances of $62.3 million and $29.0 million, respectively, were included in the pass-rated category of commercial loan credit quality and balances of $20.5 million and $18.4 million, respectively, were included in the classified category. All of these loans were current with respect to contractual payment terms at both dates.
Current wording
-58- and $63.7 million, respectively, were included in the pass-rated category of commercial loan credit quality and balances of $21.4 million and $21.0 million, respectively, were included in the classified category. All of these loans were current with respect to contractual payment terms at both dates.
Showing the first 40 of 87 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
ERM is an overarching program that includes all areas of the Corporation. A framework approach is utilized to assign responsibility and to ensure that the various business units and activities involved in the risk management life-cycle are effectively integrated. The Corporation has adopted the “three lines of defense” strategy that is an industry best practice for
Current report — wording carried from elsewhere
-56- understanding of how securities are priced. As of March 31, 2025 and December 31, 2024, management did not make any adjustments to the prices provided by the pricing service.
Current report — wording carried from elsewhere
The following table sets forth the composition of the Corporation’s loan portfolio:
Current report — wording carried from elsewhere
Shared national credit balances outstanding included in the CRE loan portfolio at March 31, 2025 and December 31, 2024, totaled $85.2 million and $84.7 million, respectively. At March 31, 2025 and December 31, 2024, balances of $63.8 million
Current report — wording carried from elsewhere
-67- collateralized borrowing capacity with the FRBB and also maintains additional collateralized borrowing capacity with the FHLB in excess of levels used in the ordinary course of business. Borrowing capacity is impacted by the amount and type of assets available to be pledged.
Rearranged previous paragraphs (9)
Previous report — wording carried elsewhere
-43- sources, including wealth management services, mortgage banking activities, and deposit services. Our principal noninterest expenses include salaries and employee benefit costs, outsourced services provided by third-party vendors, occupancy and facility-related costs, and other administrative expenses.
Previous report — wording carried elsewhere
-50- conditions. Estimating an appropriate level of ACL necessarily involves a high degree of judgment.
Previous report — wording carried elsewhere
The following is a summary of loans:
Previous report — wording carried elsewhere
2024 were four loans purchased for portfolio and serviced by others amounting to $933 thousand. Management monitors the collection efforts of its third-party servicers as part of its assessment of the collectability of nonperforming loans.
Previous report — wording carried elsewhere
The ACL on loans is management’s estimate of expected lifetime credit losses on loans carried at amortized cost. The ACL
Previous report — wording carried elsewhere
For residential real estate loans and real estate collateral dependent consumer loans that are in the process of collection, valuations are obtained from independent appraisal firms with values determined on an “as is” basis.
Previous report — wording carried elsewhere
For additional information regarding FHLB advances see Note 9 to the Unaudited Consolidated Financial Statements.
Previous report — wording carried elsewhere
-68- transactions include commitments to extend credit, standby letters of credit, forward loan commitments, loan related derivative contracts and interest rate risk management contracts. For additional information on derivative financial instruments and financial instruments with off-balance sheet risk see Notes 6 and 16 to the Unaudited Consolidated Financial Statements.
Previous report — wording carried elsewhere
-69- deposit rates and balances are related to changes in short-term interest rates. The relationship between short-term interest rate changes and deposit rate and balance changes may differ from the ALCO’s estimates used in income simulation.