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On Tuesday, Keefe, Bruyette & Woods maintained their Market Perform rating on Washington Trust Bancorp (NASDAQ:WASH) with a steady price target of $31.00. The financial institution announced the initiation of a new stock repurchase program slated to begin on May 15, 2025, and conclude a year later on May 15, 2026. This program will authorize Washington Trust to buy back up to 850,000 shares, which is approximately 4.4% of its current outstanding common stock. Notably, the bank maintains a strong dividend program with a current yield of 7.63% and has consistently paid dividends for 42 consecutive years, as highlighted in InvestingPro’s comprehensive analysis.
The announcement was received as a modestly positive development for Washington Trust by the analysts at Keefe, Bruyette & Woods. Although the firm has not incorporated any buyback expectations into their financial model for Washington Trust, they anticipate that the bank will take a more opportunistic approach to repurchasing shares throughout the year. This is especially likely considering the bank’s improved financial position following a balance sheet restructuring and capital raise that took place in late 2024.
Washington Trust’s recent financial maneuvers have fortified its balance sheet, positioning the bank for potentially increased repurchase activity compared to the previous two years. In 2023, Washington Trust repurchased $8.8 million worth of stock, while in 2024, it did not engage in any repurchase activity.
The repurchase program is set against the backdrop of Washington Trust’s stock trading at 1.09 times book value, which may offer an attractive entry point for the bank to reduce its share count and return value to its shareholders. While the bank currently shows a weak overall financial health score, InvestingPro data indicates that net income is expected to grow this year, with analysts projecting a return to profitability. The new repurchase program is expected to commence soon, offering a potential boost to shareholder value through 2025 and into 2026. For deeper insights into Washington Trust’s financial metrics and growth potential, investors can access the detailed Pro Research Report, available exclusively on InvestingPro.
In other recent news, Washington Trust Bancorp Inc. reported its financial results for the first quarter of 2025, revealing a slight miss on earnings per share (EPS) with $0.61, compared to the forecasted $0.64. However, the company exceeded revenue expectations, achieving $59.07 million against a projected $50.2 million. This mixed performance was accompanied by an 11% increase in net interest income from the previous quarter. Washington Trust also announced a new stock repurchase program, authorizing the buyback of up to 850,000 shares, approximately 4.4% of its outstanding shares. The program is set to commence on May 15, 2025, and reflects the company’s ongoing capital management strategy. Additionally, during its recent annual meeting, shareholders elected three directors and ratified Crowe LLP as the independent auditor for the fiscal year ending December 31, 2025. Analyst firms, including Piper Sandler and KBW, participated in the earnings call, seeking insights into the company’s financial strategies and future plans. Washington Trust’s management provided guidance on anticipated low single-digit loan growth and plans to reduce the dividend payout ratio by year-end.
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