Washington Trust in RI to report 4Q loss from securities, mortgage sales

Washington Trust Bancorp in Westerly, R.I., which recently raised capital, repositioned its balance sheet in a move that will lead to a net loss for the fourth quarter and full-year 2024.

The company said in a press release that it sold $409 million of debt securities and that it has agreed to sell $345 million in mortgages. The transactions should have a net after-tax loss of $70 million.

Washington Trust reinvested $378 million of the proceeds from the securities sale into higher-yielding debt securities. The company also plans to pay down about $352 million of wholesale funding balances during the first quarter.

“Like many banks, we have been carrying low-yielding assets on our balance sheet following rapid increases in interest rates over the past few years,” Ned Handy, the company’s chairman and CEO, said in the release.

“These assets have been earning interest below current market rates, which has impacted our earnings and ability to reinvest and expand our business,” he added. The repositioning “will allow us to focus on growth and investment which is good for shareholders, employees, customers and the communities we serve.”

The company recently raised $70 million by selling common stock.