Washington Trust Bancorp, Inc.

Good morning and welcome to Washington Trust Bancorp, Inc.' 's conference call. My name is Sarah and I will be your operator today. If participants need assistance during the call at any time, please press star zero. Participants interested in asking a question at the end of the call should press star one to get in the queue. Today's call is being recorded. And now I will turn the call over to Elizabeth B. Eckel, Senior Vice President Chief Marketing and Corporate Communications Officer. Ms. Echol, please begin.

Thank you. Good morning and welcome to Washington Trust Bancorp Bank's first quarter 2021 conference call. Joining us for today's call are members of Washington Trust Executive Team, Ned Handy, Chairman and Chief Executive Officer, Mark Gim, President and Chief Operating Officer, Ron Osberg, Senior Executive Vice President, Chief Financial Officer and Treasurer, and Bill Ray, Senior Executive Vice President and Chief Risk Officer. As a reminder, today's call may contain forward-looking statements and actual results could differ materially from what is discussed. Our complete Safe Harbor Statement appears in our earnings press release as well as other documents filed with the SEC. You may view these materials as well as the Safe Harbor Statement in its entirety on our investor relations site at ir.washtrust.com. Washington Trust trades on NASDAQ under the symbol WASH. I'm now pleased to introduce the host of today's call, Washington Trust CEO and Chairman Ned Handy.

Thank you very much, Beth, and good morning, everyone. I hope you're all doing well and that you've all been able to stay healthy since our last call. We appreciate your continued interest in Washington Trust, and thank you very much for taking the time to join us this morning. Today's agenda is similar to past calls. I'll provide an overview of our first quarter highlights, and then Ron Osberg will review our financial performance. After our prepared remarks, Mark Gimm and Bill Ray will join us to answer any questions you may have about the quarter. I'm pleased to report that Washington Trust posted strong first quarter results with net income of $20.5 million or $1.17 per diluted share, up from $18.6 million or $1.07 per diluted share reported in the fourth quarter of 2020. Quarterly earnings increased substantially from the first quarter of 2020 when we first started feeling the impact of COVID-19. If you look back over the past year, it's incredible to think about what's transpired. When the pandemic hit, it abruptly forced us to change the way we work, the way we communicate, and the way we serve our customers. Our results reflect our success at adapting to change. They also show just how important consistency is during times of change and uncertainty. Throughout the pandemic, our employees worked hard to ensure they consistently delivered a high level of service and maintained a human connection with their clients, and it made all the difference. I can't say enough about how proud I am of our team and the work they do. Our business model has also consistently provided a diverse stream of earnings for us through various economic cycles, and that has served us well during this crisis and this period of extended low interest rates. Our returns on average equity and average assets improved from fourth quarter levels. We remained well capitalized, and our risk-based capital ratio was 13.85% at the end of the first quarter. We believe our capital position suits our business model supports our dividend, and provides us with opportunities for future growth. I'd now like to take a few moments to share some first quarter highlights. In-market deposits, which exclude wholesale brokered time deposits, reached an all-time high $4 billion in the first quarter, up 6% from the fourth quarter, and up 23% from a year ago. Deposit growth has continued and included temporary increases associated with PPP loan origination funds deposited to customer accounts. As a result of the increase in low-cost deposits, we saw improvement in both our loan-to-deposit ratio and our margin. Deposit growth has also allowed us to continue to reduce federal home loan bank borrowings. This influx of deposits is a nationwide trend as consumers buckled down, saving stimulus checks and putting aside funds to ensure they could meet day-to-day living expenses while riding out the COVID-19 pandemic. Industry research shows that Consumer saving tends to slow down and consumer spending picks up as soon as there are positive signs of economic growth. We're cautiously optimistic about consumer strength, but think it's too early to predict what will happen with consumer behavior in the short run. And we're seeing more and more businesses open up now that state governments and health officials have eased many of the COVID-19 restrictions. We reopened our branch lobbies on April 1st with safety measures still in place, and have seen a gradual uptick in branch traffic. And speaking of branches, next month we'll open a new branch in East Greenwich, Rhode Island. It's a great location that offers tremendous opportunities for retail, wealth management, and small business banking. We have a seasoned team of professionals in place and are looking forward to opening the doors in May. We still believe branches are an important part of our community banking model. Over the past year, we've seen more and more customers use digital and telephone banking services, as well as other types of technology, to conduct their banking transactions. However, as I mentioned earlier, we also believe our customers enjoy the human connection and meeting face-to-face with our trusted advisors to discuss financial solutions. We're committed to meeting our customers where they want, whether it's on a technological platform, at a physical location, or both. We strive to deliver a safe, convenient, and high quality customer experience across all channels. Turning to credit and lending, asset quality is stable and the economic outlook has improved given the acceleration of the vaccine rollout and the continuation of government stimulus. Based on this, we released about 2 million in credit loss reserves in the quarter. Ron will provide more details on this shortly. Total loans amounted to 4.2 billion for the first quarter, down slightly from the end of the fourth quarter, but up by 104 million or 3% from a year ago. We originated over 1,000 PPP loans totaling 97 million in the first quarter, and we processed PPP forgiveness on about 700 loans totaling $66 million. Aside from PPP lending, commercial loan originations and construction advances were offset by payoffs and paydowns. On a positive note, commercial pipelines have been improving since February, and have returned almost to pre-pandemic levels. We've seen a resurgence across all business lines and are hopeful that commercial lending activity will pick up as economic recovery begins. Residential mortgage originations and sales were down from the record levels in the fourth quarter of 2020. Mortgage banking revenues total 11.9 million for the first quarter, down by 2.2 million or 15% from the fourth quarter of 2020. but up by 5.8 million or 96% from a year ago. Our mortgage team continues to work diligently. Although there was an uptick in mortgage rates in the first quarter, inventory levels continue to remain very low. We had robust application activity throughout the first quarter and into April, and the pipeline is currently very strong. At some point in 2021, mortgage banking activities may start to normalize, but timing is somewhat difficult to predict given the impact of very tight supply and continued low rates. Our Wealth Management Division's assets under administration, or AUA, reached a record $7 billion at March 31st, up 3% from the end of 2020 and up 32% from March 31st, 2020. This growth reflects financial market appreciation as well as strong business development and client retention efforts, net of routine client asset flows. Wealth management revenues were $9.9 million for the first quarter, up 7% from the preceding quarter, providing a key source of non-interest income to the bottom line. We're very pleased with our Wealth Management Division's first quarter performance. And now I'd like to turn the call over to Ron for a review of our financial performance. Ron?