WASH Stock: 8.1%-Yielding Hidden Gem in the Regional Banking Space
June 12, 2025
Washington Trust Bancorp Investors Reap Big Rewards?
Regional banks don’t represent the most “happening” corner of the stock market. They rarely make headlines and aren’t getting hyped up in Reddit threads or in the financial press. But this is exactly why income investors should pay attention to the stocks of these financial institutions.
There are over 4,000 regional and community banks across the U.S., quietly running the engines of local economies. These banks serve small businesses and fund mortgages, yet most investors don’t even know their names. (Source: “US regional bank deals rise as lenders aim to bolster balance sheets,” Reuters, August 19, 2024.)
So, why should income investors pay attention to regional banks?
Because hidden in this corner of the stock market are banks that offer stable dividend yields and undervalued stock prices. These banks are worth a closer look, especially after the 2023 regional bank panic.
Washington Trust Bancorp Inc (NASDAQ:WASH) is one of them. WASH stock isn’t anything flashy, but it pays a rock-solid 8.1% dividend, has a long history of shareholder returns, and is showing signs of a quiet comeback.
What Does Washington Trust Bancorp Do?
Washington Trust Bancorp is the holding company for The Washington Trust Company. Founded in 1800, Washington Trust is Rhode Island’s oldest community bank. It provides a wide range of banking and financial services to individuals and businesses and operates through two main segments: Commercial Banking and Wealth Management Services.
The regional bank’s Commercial Banking segment offers a variety of deposit accounts, including checking, savings, money market, retirement, and time deposits. It also offers lending products, which include commercial real estate loans, commercial and industrial loans, residential mortgages, home construction loans, and consumer loans.
This segment of the bank also offers banking tools like debit cards, ATMs, phone and online banking, mobile banking, remote deposit, and other cash management services. It also manages an investment portfolio and wholesale funding services.
The Wealth Management Services segment offers investment management, financial planning, and trust and estate services including acting as trustee, custodian, or guardian. These servers are offered to individuals and institutions. (Source: “Profile,” Yahoo! Finance, last accessed June 9, 2025.)
WASH Stock Offers a Fat 8.1% Dividend Yield
One of the first things you’ll notice with WASH stock is the dividend yield.
At the current price of around $27.75, WASH shareholders get $2.24 on annual basis, with a dividend yield of close to 8.1%. In today’s market, this is high yield; in fact, in the banking sector, it’s almost unheard of.
Just for some perspective, JPMorgan Chase & Co (NYSE:JPM) has a dividend yield of 2.1%, and Invesco KBW Regional Banking ETF (NASDAQ:KBWR), an exchange-traded fund (ETF) that holds regional banks, has a yield of 2.83%.
Comparing a big bank like JPMorgan Chase, a bank-holding ETF like KBWR, and WASH stock, you’ll find that investors get paid several times more if they’re holding WASH.
Now the best part: Washington Trust Bancorp’s management hasn’t cut its payout, even when many other regional banks have adjusted their dividends or outright cut them.
In fact, Washington Trust has been growing its dividend and boasts a track record of paying consistent dividends for over 40 years. The last hike came in late 2020, raising the quarterly payout from $0.54 to $0.56.
Ten years ago, WASH stock paid a quarterly dividend of $0.34 per share. So, over the past 10 years, Washington Trust Bancorp’s quarterly dividend payment has increased close to 65%.
Chart Courtesy of StockCharts.com
How High Could WASH Stock Go?
In the midst of the regional bank panic of 2023, WASH stock suffered significantly. Within months, it dropped 50%.
Since bottoming in May 2023, WASH stock has been trending higher, finding strong support around the $20.00 price level.
The stock has been trending upwards; in late 2024, it made an attempt to get close to its 2023 high. It’s interesting to note that, as the stock price has been trending higher, volume has been increasing as well. This is bullish. It tells us that investors are accumulating.
I think all the bases are loaded for WASH stock to test its 2023 highs again. Obviously, this is based on overall macroeconomic conditions remaining stable and interest rates not going through wild swings.
Wall Street analysts have an average one-year target on WASH stock at around $30.75, with a high target of around $35.00. (Source: “Analysis,” Yahoo! Finance, accessed June 9, 2025.)
The Lowdown on WASH Stock
Let’s call it what it is: WASH stock won’t see an exponential move anytime soon in the way that a meme stock would. It is a quiet bank stock that’s flying under the radar.
But WASH does offer everything that income investors should look for in a stock pick:
- A reliable 8.1% dividend
- A decent financial performance
- A stable balance sheet
- Investor-friendly management
- Low valuations
WASH stock is also liked by institutional investors. As per the most recent data, 232 institutions own 70.12% of all outstanding shares. BlackRock Inc, FMR LLC, and The Vanguard Group, Inc. are three of the top institutional owners of the stock. (Source: “Holders,” Yahoo! Finance, last accessed June 9, 2025.)
