Washington Trust Announces Pricing of Upsized Stock Offering

Rhea-AI Summary

Washington Trust Bancorp (NASDAQ: WASH) has announced the pricing of its upsized public offering of 1,911,764 shares of common stock at $34.00 per share. The offering is expected to generate approximately $61.75 million in proceeds after underwriting discounts and commissions. The company has also granted a 30-day option to purchase up to 286,764 additional shares.

The offering is expected to close on December 16, 2024. The proceeds will be used for general corporate purposes, including supporting organic growth, bank investments, and balance sheet optimization strategies. These strategies include selling lower-yielding loans, repaying wholesale funding, and purchasing higher-yielding debt securities. BofA Securities is serving as the sole book-running manager for the offering.

Positive

• Expected to raise $61.75 million in new capital
• Proceeds will support organic growth and balance sheet optimization
• Strategy includes replacing lower-yielding assets with higher-yielding securities

Negative

• Stock offering will dilute existing shareholders
• Share price set at $34.00 represents potential discount to market value
• Additional 286,764 shares may be sold, causing further dilution

Insights

Financial Analyst

This $61.75 million stock offering by Washington Trust represents a significant capital raise that will strengthen the bank's balance sheet and support growth initiatives. The pricing at $34.00 per share for 1.91 million shares appears to be strategically timed. The bank's planned use of proceeds for balance sheet optimization, including the sale of lower-yielding assets and repayment of wholesale funding, indicates a proactive approach to improving profitability in the current interest rate environment.

The potential for an additional 286,764 shares through the overallotment option could bring in extra capital if market conditions are favorable. This capital raise should provide flexibility for organic growth while maintaining strong regulatory capital ratios. The involvement of BofA Securities as the sole book-runner suggests strong institutional interest in the offering.

Market Research Analyst

The upsized offering demonstrates strong market demand and investor confidence in Washington Trust's growth strategy. The timing aligns with broader industry trends where regional banks are seeking to optimize their balance sheets amid evolving interest rate dynamics. The planned sale of lower-yielding loans and securities, coupled with the repayment of wholesale funding, should help improve the bank's net interest margin and overall profitability metrics.

The pricing represents careful consideration of market conditions and shareholder interests. This capital injection positions Washington Trust competitively in its market, providing resources for strategic investments while maintaining financial flexibility. The successful execution of this offering could serve as a positive indicator for similar regional banks looking to raise capital.

WESTERLY, R.I., Dec. 12, 2024 /PRNewswire/ -- Washington Trust Bancorp, Inc. (Nasdaq: WASH) (the "Corporation"), parent company of The Washington Trust Company, of Westerly (the "Bank"), today announced the pricing of its previously announced underwritten public offering of 1,911,764 shares of its common stock at a public offering price of $34.00 per share.  The expected proceeds to the Corporation, after deducting underwriting discounts and commissions but before deducting operating expenses payable by the Corporation, are approximately $61.75 million.  In addition, the Corporation has granted the underwriter a 30-day option to purchase up to an additional 286,764 shares of the Corporation's common stock at the public offering price, less underwriting discounts, and commissions.  The offering is expected to close on December 16, 2024, subject to the satisfaction of customary closing conditions.

The Corporation intends to use the net proceeds of this offering for general corporate purposes to support continued organic growth and capital generation, which are expected to include investments in the Bank and Bank balance sheet optimization strategies involving the sale of lower-yielding loans and available for sale debt securities, the repayment of wholesale funding balances and the purchase of debt securities with current market yields.

BofA Securities is serving as the sole book-running manager for the offering.

ADDITIONAL INFORMATION REGARDING THE OFFERING

The common stock offering is being made pursuant to a shelf registration statement on Form S-3 (File No. 333-274430), which was filed with the Securities and Exchange Commission (the "SEC") on September 8, 2023, and declared effective by the SEC on September 29, 2023.  A preliminary prospectus supplement to which this communication relates has been filed with the SEC, and a prospectus supplement will be filed with the SEC prior to the closing of the common stock offering.  Before you invest in any securities, you should read the preliminary prospectus supplement and accompanying prospectus, including the risk factors set forth therein, the registration statement and the documents incorporated by reference therein, and the other documents that the Corporation has filed with the SEC for more complete information about the Corporation and the offering. Copies of these documents are available at no charge by visiting EDGAR on the SEC's website at www.sec.gov.  When available, copies of the preliminary prospectus supplement, the prospectus supplement and accompanying prospectus related to the offering may also be obtained from BofA Securities, NC1-022-02-25, 201, North Tryon Street, Charlotte, NC 28255-0001, Attention: Prospectus Department or by email at dg.prospectus_requests@bofa.com.

NO OFFER OR SOLICITATION

This press release does not constitute an offer to sell, a solicitation of an offer to sell, or the solicitation of an offer to buy any securities. There will be no sale of securities in any jurisdiction in which such an offering, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains statements that are "forward-looking statements." Forward looking-statements include all statements that are not historical facts and include any statements regarding the completion of the offering and the intended use of net proceeds from the offering. We may also make forward-looking statements in other documents we file with the SEC, in our annual reports to shareholders, in press releases and other written materials, and in oral statements made by our officers, directors, or employees. You can identify forward-looking statements by the use of the words "believe," "expect," "anticipate," "intend," "estimate," "assume," "outlook," "will," "should," and other expressions that predict or indicate future events and trends and which do not relate to historical matters. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from such forward-looking statements. A detailed discussion of factors that could affect our results is included in the Corporation's SEC filings, including Item 1A. "Risk Factors" of its Annual Report on Form 10-K for the year ended December 31, 2023. You should not rely on forward-looking statements, because they involve known and unknown risks, uncertainties, and other factors, some of which are beyond our control. These risks, uncertainties, and other factors may cause our actual results, performance, or achievements to be materially different from the anticipated future results, performance, or achievements expressed or implied by the forward-looking statements. The Corporation undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations, except as required by law.

ABOUT WASHINGTON TRUST BANCORP, INC.

Washington Trust Bancorp, Inc., NASDAQ: WASH, is the publicly-owned holding company of The Washington Trust Company ("Washington Trust", "the Bank"), with $7.1 billion in assets as of September 30, 2024. Founded in 1800, Washington Trust is recognized as the oldest community bank in the nation, the largest state-chartered bank headquartered in Rhode Island and one of the Northeast's premier financial services companies. Washington Trust values its role as a community bank and is committed to helping the people, businesses, and organizations of New England improve their financial lives. The Bank offers a wide range of commercial banking, mortgage banking, personal banking and wealth management services through its offices in Rhode Island, Connecticut and Massachusetts and a full suite of convenient digital tools. Washington Trust is a member of the FDIC and an equal housing lender.

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SOURCE Washington Trust Bancorp, Inc.

FAQ

How much money will Washington Trust (WASH) raise from its December 2024 stock offering?

Washington Trust expects to raise approximately $61.75 million in proceeds after underwriting discounts and commissions from the offering of 1,911,764 shares at $34.00 per share.

What is the price per share for Washington Trust's (WASH) December 2024 stock offering?

The public offering price is $34.00 per share.

How will Washington Trust (WASH) use the proceeds from its 2024 stock offering?

The proceeds will be used for general corporate purposes, supporting organic growth, bank investments, and balance sheet optimization strategies, including selling lower-yielding loans and purchasing higher-yielding debt securities.

When will Washington Trust's (WASH) December 2024 stock offering close?

The offering is expected to close on December 16, 2024, subject to customary closing conditions.

How many additional shares can be purchased through the overallotment option in WASH's 2024 offering?

The underwriter has a 30-day option to purchase up to an additional 286,764 shares at the public offering price.