8 unchanged sentences
Available for sale debt securities, at fair value (amortized cost $919,853;
−Removed: net of allowance for credit losses on securities of $0 at March 31, 2020)
+Added: net of allowance for credit losses on securities of $0 at June 30, 2020)
Federal Home Loan Bank stock, at cost
8 unchanged sentences
Federal Home Loan Bank advances
+Added: Payment Protection Program Lending Facility
Junior subordinated debentures
6 unchanged sentences
authorized 60,000,000 shares;
−Removed: 17,363,457 shares issued and 17,251,532 shares outstanding at March 31, 2020 and 17,363,455 shares issued and outstanding at December 31, 2019
+Added: 17,363,457 shares issued and 17,260,217 shares outstanding at June 30, 2020 and 17,363,455 shares issued and outstanding at December 31, 2019
Paid-in capital
2 unchanged sentences
Treasury stock, at cost;
−Removed: 111,925 shares at March 31, 2020
+Added: 103,240 shares at June 30, 2020
Total shareholders’ equity
5 unchanged sentences
(Dollars and shares in thousands, except per share amounts)
−Removed: Three months ended March 31,
+Added: Periods ended June 30,
Interest income:
9 unchanged sentences
Junior subordinated debentures
+Added: Other interest expense
Total interest expense
9 unchanged sentences
Income from bank-owned life insurance
+Added: Net realized losses on securities
Total noninterest income
22 unchanged sentences
(Dollars in thousands)
−Removed: Three months ended March 31,
+Added: Periods ended June 30,
Other comprehensive income (loss), net of tax:
2 unchanged sentences
Net change in defined benefit plan obligations
−Removed: Total other comprehensive income, net of tax
+Added: Total other comprehensive (loss) income, net of tax
Total comprehensive income
4 unchanged sentences
(Dollars and shares in thousands)
−Removed: For the three months ended March 31, 2020
+Added: For the three months ended June 30, 2020
Shares Outstanding
Comprehensive
+Added: Income (Loss)
+Added: Treasury Stock
+Added: Balance at March 31, 2020
+Added: Total other comprehensive loss
+Added: Cash dividends declared ($0.51 per share)
+Added: Share-based compensation
+Added: Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered
+Added: Balance at June 30, 2020
+Added: For the six months ended June 30, 2020
+Added: Shares Outstanding
+Added: Comprehensive
(Loss) Income
Treasury Stock
−Removed: Balance at January 1, 2020
+Added: Balance at December 31, 2019
Cumulative effect of change in accounting principle - Topic 326
4 unchanged sentences
Treasury stock purchased under 2019 Stock Repurchase Program
+Added: Balance at June 30, 2020
+Added: The accompanying notes are an integral part of these unaudited consolidated financial statements.
+Added: Washington Trust Bancorp, Inc.
+Added: and Subsidiaries
+Added: Consolidated Statements of Changes in Shareholders' Equity (unaudited)
+Added: (Dollars and shares in thousands)
+Added: For the three months ended June 30, 2019
+Added: Shares Outstanding
+Added: Comprehensive
+Added: (Loss) Income
+Added: Treasury Stock
Balance at March 31, 2019
−Removed: For the three months ended March 31, 2019
+Added: Total other comprehensive income
+Added: Cash dividends declared ($0.51 per share)
+Added: Share-based compensation
+Added: Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered
+Added: Balance at June 30, 2019
+Added: For the six months ended June 30, 2019
Shares Outstanding
2 unchanged sentences
Treasury Stock
−Removed: Balance at January 1, 2019
+Added: Balance at December 31, 2018
Cumulative effect of change in accounting principle - Topic 842
3 unchanged sentences
Exercise of stock options, issuance of other compensation-related equity awards, net of awards surrendered
−Removed: Balance at March 31, 2019
+Added: Balance at June 30, 2019
The accompanying notes are an integral part of these unaudited consolidated financial statements.
3 unchanged sentences
(Dollars in thousands)
−Removed: Three months ended March 31,
+Added: Six months ended June 30,
Cash flows from operating activities:
5 unchanged sentences
Share-based compensation
−Removed: Tax benefit from stock option exercises and other equity awards
+Added: Tax (expense) benefit from stock option exercises and other equity awards
Income from bank-owned life insurance
Net gains on loan sales, including fair value adjustments
+Added: Net realized losses on securities
Proceeds from sales of loans, net
Loans originated for sale
−Removed: Decrease in operating lease right-of-use assets
−Removed: Decrease in operating lease liabilities
+Added: (Increase) decrease in operating lease right-of-use assets
+Added: Increase (decrease) in operating lease liabilities
Increase in other assets
Increase in other liabilities
−Removed: Net cash (used in) provided by operating activities
+Added: Net cash provided by operating activities
Cash flows from investing activities:
3 unchanged sentences
Available for sale debt securities:
+Added: Proceeds from sale of:
+Added: Other investment securities available for sale
Maturities, calls and principal payments of:
2 unchanged sentences
Available for sale debt securities:
−Removed: Purchases of Federal Home Loan Bank stock
+Added: Net redemption (purchases) of Federal Home Loan Bank stock
Net increase in loans
8 unchanged sentences
Repayment of Federal Home Loan Bank advances
+Added: Proceeds from Payment Protection Program Lending Facility
Treasury stock purchased
2 unchanged sentences
Net cash provided by financing activities
−Removed: Net increase (decrease) in cash and cash equivalents
+Added: Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
5 unchanged sentences
(Dollars in thousands)
−Removed: Three months ended March 31,
+Added: Six months ended June 30,
Noncash Activities:
33 unchanged sentences
In response, we are committed to working with and supporting our customers experiencing financial difficulty due to the COVID-19 pandemic, including loan payment deferrals and participation in the Small Business Administration's (“SBA’s”) Paycheck Protection Program (“PPP”).
−Removed: In addition, we implemented our business continuity and pandemic plans, which include remote working arrangements for the majority of our workforce, closing our branches and offering drive-through banking or special banking services by appointment only, and promoting social distancing.
government and regulatory agencies have taken several actions to provide support to the U.S.
3 unchanged sentences
In addition to the general impact of the COVID-19 pandemic, certain provisions of the CARES Act, as well as other recent legislative and regulatory relief efforts, are expected to have a material impact on the Corporation’s operations.
−Removed: Also, the actions of t he Board of Governors of the Federal Reserve System (the “FRB”) to combat the economic contraction caused by the COVID-19 pandemic, including the reduction of the target federal funds rate and quantitative easing programs, could, if prolonged, adversely affect the Corporation’s net interest income and margins, and profitability.
+Added: Also, the actions of the Board of Governors of the Federal Reserve System (the “FRB”) to combat the economic contraction caused by the COVID-19 pandemic, including the reduction of the target federal funds rate and quantitative easing programs, could, if prolonged, adversely affect the Corporation’s net interest income and margins, and profitability.
While it is not possible to know the full extent of these impacts as of the date of this filing, detailed below are potentially material items of which we are aware.
As noted above, net interest income could be reduced.
−Removed: Also, in accordance with regulatory guidance, Washington Trust is actively working with borrowers impacted by the COVID-19 pandemic to defer payments.
−Removed: While interest will
+Added: In accordance with regulatory guidance, Washington Trust is actively working with borrowers impacted by the COVID-19 pandemic to defer payments.
+Added: While interest will continue to be recognized in accordance with GAAP, should eventual credit losses on these deferments emerge, interest income would be negatively impacted.
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: continue to be recognized in accordance with GAAP, should eventual credit losses on these deferments emerge, interest income would be negatively impacted.
The provision for credit losses could increase.
4 unchanged sentences
government, if that should change, Washington Trust could be required to increase its allowance for credit losses through an additional provision for credit losses charged to earnings.
−Removed: Noninterest income could be reduced.
−Removed: Uncertainty regarding COVID-19 could cause further volatility in the financial markets.
−Removed: A substantial portion of wealth management revenues is dependent on the value of wealth management assets under administration and is closely tied to the performance of the financial markets.
−Removed: COVID-19 could also cause disruption in the loan origination process.
−Removed: Mortgage banking revenues are dependent on mortgage origination volume and are sensitive to interest rates and the condition of housing markets.
−Removed: As noted above, the Corporation implemented its business continuity and pandemic plans, which include remote working arrangements for the majority of its workforce.
−Removed: While there has been no material impact to the Corporation’s employees as of this report date, if COVID-19 escalates further it could also potentially create business continuity issues.
−Removed: The Corporation does not currently anticipate significant challenges to its ability to maintain systems and controls in light of the measures the Corporation has taken to prevent the spread of COVID-19.
+Added: PPP loans amounted to $ 212.2 million as of June 30, 2020 .
Valuation and fair value measurement challenges may occur.
−Removed: Management performed an interim impairment assessment on goodwill as a result of changes in the macroeconomic environment resulting from the COVID-19 pandemic in the three month period ended March 31, 2020 .
+Added: As of June 30, 2020, the Corporation had $ 63.9 million in goodwill, of which $ 41.3 million was allocated to the Wealth Management Service s reporting unit and $ 22.6 million was allocated to the Commercial Banking reporting unit.
Goodwill represents the excess of the purchase price over the net fair value of the acquired businesses.
−Removed: As of March 31, 2020 , the Corporation had $ 63.9 million in goodwill, of which $ 41.3 million was allocated to the Wealth Management Service s reporting unit and $ 22.6 million was allocated to the Commercial Banking reporting unit.
−Removed: The results of the interim impairment assessment indicated that the remaining fair value significantly exceeded the carrying value for both reporting units.
−Removed: The COVID-19 pandemic could cause further and sustained decline in the Corporation’s stock price or the occurrence of additional valuation triggering events that could result in an impairment charge to earnings.
+Added: In the first quarter of 2020, management performed an interim impairment assessment on goodwill as a result of changes in the macroeconomic environment resulting from the COVID-19 pandemic.
+Added: The results of that interim impairment assessment indicated that the remaining fair value significantly exceeded the carrying value for both reporting units.
+Added: Management has also taken into consideration events and circumstances that arose since the interim assessment and has concluded that it is more-likely-than-not that the fair value of both reporting units continue to exceed their carrying value.
+Added: The COVID-19 pandemic could cause a further or sustained decline in the Corporation’s stock price or the occurrence of additional valuation triggering events that could result in an impairment charge to earnings.
The extent to which the COVID-19 pandemic will continue to impact the Corporation’s business, results of operations, and financial condition, as well as regulatory capital and liquidity ratios, will depend on future developments, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic, as well as further actions the Corporation may take as may be required by government authorities or that the Corporation determines is in the best interests of its employees and customers.
12 unchanged sentences
The Corporation adopted ASU 2016-13, including the subsequent ASUs issued to clarify Topic 326 (“Topic 326”), on January 1, 2020.
−Removed: The Corporation assembled a cross-functional project team that met regularly to address the additional data requirements, to determine the approach for implementation and to identify new internal controls over enhanced accounting processes for
−Removed: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: estimating the allowance for credit losses (“ACL”).
+Added: The Corporation assembled a cross-functional project team that met regularly to address the additional data requirements, to determine the approach for implementation and to identify new internal controls over enhanced accounting processes for estimating the allowance for credit losses (“ACL”).
This included assessing the adequacy of existing loan and loss data, assessing models for default and loss estimates, conducting limited “trial” runs and analytical reviews through December 31, 2019, and completing independent model validation and documentation of ACL processes and controls in the first quarter of 2020.
3 unchanged sentences
The increases in the ACL on loans and unfunded commitments upon adoption resulted in a one-time cumulative-effect adjustment that decreased retained earnings by $ 6.1 million , net of deferred tax balances of $ 1.9 million .
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
The Corporation has elected the five-year phase-in option, provided by regulatory guidance issued by the Federal Deposit Insurance Corporation (“FDIC”) in March 2020, which delays the estimated impact of Topic 326 on regulatory capital for the first two years and then phases it in over a three-year period beginning in 2022.
26 unchanged sentences
The adoption of ASU 2019-12 is not expected to have a material impact on the Corporation’s consolidated financial statements.
−Removed: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
Reference Rate Reform - Topic 848
7 unchanged sentences
ASU 2020-04 also provides numerous optional expedients for hedge accounting.
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
+Added: The Corporation has assembled a cross-functional project team that meets periodically to discuss the approach for implementing ASU 2020-04.
+Added: The Corporation has completed an inventory of contracts that reference LIBOR and is currently reviewing underlying documents and contracts, as well as assessing the risks with the transition to a new reference rate.
ASU 2020-04 is effective as of March 12, 2020 through December 31, 2022, with adoption permitted as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued.
4 unchanged sentences
Some or all of these reserve requirements may be satisfied with vault cash.
−Removed: Effective March 26, 2020, the FRB reduced the reserve requirement ratios to zero percent to eliminate the need for depository institutions, such as the Bank, to maintain balances in accounts at the FRB to satisfy reserve requirem ents.
+Added: Effective March 26, 2020, the FRB reduced the reserve requirement ratios to zero percent to eliminate the need for depository institutions, such as the Bank, to maintain balances in accounts at the FRB to satisfy reserve requirements.
At December 31, 2019 , the reserve balance was $ 27.9 million and was included in cash and due from banks in the Unaudited Consolidated Balance Sheets.
−Removed: As of March 31, 2020 and December 31, 2019 , cash and due from banks includes interest-bearing deposits in other banks of $ 136.8 million and $ 83.4 million , respectively.
+Added: As of June 30, 2020 and December 31, 2019 , cash and due from banks includes interest-bearing deposits in other banks of $ 161.7 million and $ 83.4 million , respectively.
See Note 9 for additional disclosure regarding cash collateral pledged to derivative counterparties.
9 unchanged sentences
The Corporation also excludes accrued interest from the estimate of credit losses.
−Removed: Accrued interest receivable on available for sale debt securities totaled $ 2.8 million and $ 2.9 million , respectively, as of March 31, 2020 and December 31, 2019 .
+Added: Accrued interest receivable on available for sale debt securities totaled $ 2.7 million and $ 2.9 million , respectively, as of June 30, 2020 and December 31, 2019 .
A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain.
Accrued interest for a debt security placed on nonaccrual is reversed against interest income.
−Removed: There were no debt securities on nonaccrual status and therefore there was no accrued interest related to debt securities reversed against interest income for the three months ended March 31, 2020 and 2019.
+Added: There were no debt securities on nonaccrual status and therefore there was no accrued interest related to debt securities reversed against interest income for the three and six months ended June 30, 2020 and 2019.
For available for sale debt securities in an unrealized loss position, management first assesses whether the Corporation intends to sell, or if it is likely that the Corporation will be required to sell the security before recovery of its amortized cost basis.
1 unchanged sentence
For debt securities available for sale that do not meet either these criteria, management evaluates whether the decline in fair value has resulted from credit losses or other factors.
−Removed: In making this
−Removed: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: assessment, management considers both quantitative and qualitative factors.
+Added: In making this assessment, management considers both quantitative and qualitative factors.
A substantial portion of available for sale debt securities held by the Corporation are obligations issued by U.S.
5 unchanged sentences
government were to default.
−Removed: As such, the Corporation has elected the practical expedient of a zero loss estimate due to credit for these securities.
+Added: As such, the Corporation utilized a zero credit loss estimate for these securities.
For available for sale debt securities that are not guaranteed by U.S.
government agencies and U.S.
−Removed: government-sponsored enterprises, such as individual name issuer trust preferred debt securities and corporate bonds, management utilizes a third party credit modeling tool based on observable market data, which assists management in identifying any potential credit risk associated with its available for sale debt securities.
+Added: government-sponsored enterprises, such as individual name issuer trust preferred debt securities and corporate bonds, management utilizes a third party credit modeling tool based on observable market data, which assists management in identifying
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
+Added: any potential credit risk associated with its available for sale debt securities.
This model estimates probability of default, loss given default and exposure at default for each security.
7 unchanged sentences
(Dollars in thousands)
−Removed: March 31, 2020
+Added: June 30, 2020
Amortized Cost
11 unchanged sentences
Total available for sale debt securities
−Removed: Total securities
The following table presents the amortized cost, gross unrealized holding gains, gross unrealized holding losses and fair value of securities by major security type and class of security:
13 unchanged sentences
Total available for sale debt securities
−Removed: Total securities
−Removed: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: As of March 31, 2020 and December 31, 2019 , debt securities with a fair value of $ 400.0 million and $ 431.9 million , respectively, were pledged as collateral for FHLB borrowings, potential borrowings with the FRB, certain public deposits and for other purposes.
+Added: As of June 30, 2020 and December 31, 2019 , debt securities with a fair value of $ 353.1 million and $ 431.9 million , respectively, were pledged as collateral for FHLB borrowings, potential borrowings with the FRB’s discount window, certain public deposits and for other purposes.
See Note 7 for additional disclosure on FHLB borrowings.
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
The schedule of maturities of available for sale debt securities is presented below.
4 unchanged sentences
Available for Sale
−Removed: March 31, 2020
+Added: June 30, 2020
Amortized Cost
4 unchanged sentences
Total debt securities
−Removed: Included in the above table are debt securities with an amortized cost balance of $ 155.4 million and a fair value of $ 151.7 million at March 31, 2020 that are callable at the discretion of the issuers.
−Removed: Final maturities of the callable securities range from 1 month to 17 years, with call features ranging from 1 month to 2 years.
+Added: Included in the above table are debt securities with an amortized cost balance of $ 178.4 million and a fair value of $ 176.0 million at June 30, 2020 that are callable at the discretion of the issuers.
+Added: Final maturities of the callable securities range from 3 years to 17 years, with call features ranging from 1 month to 1 year.
+Added: The following table summarizes amounts relating to sales of securities:
+Added: (Dollars in thousands)
+Added: For the periods ended June 30,
+Added: Proceeds from sales
+Added: Gross realized gains
+Added: Gross realized losses
+Added: Net realized losses on securities
Assessment of Available for Sale Debt Securities for Impairment
2 unchanged sentences
Management evaluates both qualitative and quantitative factors to assess whether an impairment exists.
−Removed: For the accounting policy on the assessment of available for sale debt securities for impairment that was in effect prior to the adoption of Topic 326, see Note 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
−Removed: The following table summarizes available for sale debt securities in an unrealized loss position for which an allowance for credit losses on securities has not been recorded at March 31, 2020, segregated by length of time the securities have been in a continuous unrealized loss position:
+Added: For the accounting policy on the assessment of available for sale debt securities for impairment that was in effect prior to the adoption of Topic 326 on January 1, 2020, see Note 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
+Added: The following table summarizes available for sale debt securities in an unrealized loss position for which an allowance for credit losses on securities has not been recorded at June 30, 2020 , segregated by length of time the securities have been in a continuous unrealized loss position:
(Dollars in thousands)
1 unchanged sentence
12 Months or Longer
−Removed: March 31, 2020
−Removed: Obligations of U.S.
−Removed: government-sponsored enterprises
+Added: June 30, 2020
Mortgage-backed securities issued by U.S.
26 unchanged sentences
government-sponsored enterprises.
−Removed: The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due at March 31, 2020 .
−Removed: Management believes that the unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality.
+Added: The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due at June 30, 2020 .
+Added: Management believes that the unrealized losses on these debt securities are a function of changes in investment spreads and interest rate movements and not changes in credit quality.
Management expects to recover the entire amortized cost basis of these securities.
Furthermore, the Corporation does not intend to sell these securities and it is likely that the Corporation will not be required to sell these securities before recovery of their cost basis, which may be maturity.
−Removed: Therefore, no allowance for credits losses on securities was recorded at March 31, 2020 .
+Added: Therefore, no allowance for credits losses on securities was recorded at June 30, 2020 .
Individual Name Issuer Trust Preferred Debt Securities
−Removed: Included in debt securities in an unrealized loss position at March 31, 2020 were five trust preferred securities issued by four individual companies in the banking sector.
−Removed: Management believes the unrealized losses on these debt security holdings are primarily attributable to changes in the investment spreads and interest rates and not changes in the credit quality of the issuers of the debt securities.
+Added: Included in debt securities in an unrealized loss position at June 30, 2020 were five trust preferred securities issued by four individual companies in the banking sector.
Based on the information available through the filing date of this report, all individual name issuer trust preferred debt securities held in our portfolio continue to accrue interest and make payments as expected with no payment deferrals or defaults on the part of the issuers.
−Removed: As of March 31, 2020 , individual name issuer trust preferred debt securities with an amortized cost of $ 2.0 million and unrealized losses of $ 421 thousand were rated below investment grade by Standard & Poors, Inc.
Management reviewed the collectibility of these securities taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting period date as well as credit rating changes between the reporting period date and the filing date of this report, and other information.
−Removed: We noted no additional downgrades to below investment grade between March 31, 2020 and the filing date of this report.
−Removed: Based on this review, management concluded that it expects to recover the entire amortized cost basis of these securities.
+Added: As of June 30, 2020 , individual name issuer trust preferred debt securities with an amortized cost of $ 2.0 million and unrealized losses of $ 254 thousand were rated below investment grade by Standard & Poors, Inc.
+Added: Another individual name issuer trust preferred security with an amortized cost of $ 2.0 million and an unrealized loss of $ 245 thousand as of June 30, 2020 was downgraded by S&P to a rating of BB+ (below investment grade) on July 22, 2020.
+Added: We noted no additional downgrades to below investment grade between June 30, 2020 and the filing date of this report.
+Added: Management believes the unrealized losses on these debt securities are primarily attributable to changes in the investment spreads and interest rates and not material changes in the credit quality of the issuers of the debt securities.
+Added: Management expects to recover the entire amortized cost basis of these securities.
Furthermore, the Corporation does not intend to sell these securities and it is likely that the Corporation will not be required to sell these securities before recovery of their cost basis, which may be maturity.
−Removed: Therefore, no allowance for credit losses on securities was recorded at March 31, 2020 .
+Added: Therefore, no allowance for credit losses on securities was recorded at June 30, 2020 .
Corporate Bonds
−Removed: At March 31, 2020 , the Corporation had three corporate bond holdings with unrealized losses totaling $ 2.7 million .
+Added: At June 30, 2020 , the Corporation had three corporate bond holdings with unrealized losses totaling $ 2.1 million .
These investment grade corporate bonds were issued by large corporations in the financial services industry.
−Removed: The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due at March 31, 2020 .
−Removed: Management reviewed the collectibility of these securities taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting period
+Added: The issuers of these securities continue to make timely principal and interest payments and none of these securities were past due at June 30, 2020 .
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: date as well as credit rating changes between the reporting period date and the filing date of this report, and other information.
−Removed: Management believes the unrealized losses on these bonds are primarily attributable to changes in the investment spreads and interest rates and not changes in the credit quality of the issuers of the debt securities.
+Added: Management reviewed the collectibility of these securities taking into consideration such factors as the financial condition of the issuers, reported regulatory capital ratios of the issuers, credit ratings, including ratings in effect as of the reporting period date as well as credit rating changes between the reporting period date and the filing date of this report, and other information.
+Added: Management believes the unrealized losses on these debt securities are primarily attributable to changes in the investment spreads and interest rates and not changes in the credit quality of the issuers of the debt securities.
Management expects to recover the entire amortized cost basis of these securities.
Furthermore, the Corporation does not intend to sell these securities and it is likely that the Corporation will not be required to sell these securities before recovery of their cost basis, which may be maturity.
−Removed: Therefore, no allowance for credit losses was recorded at March 31, 2020 .
+Added: Therefore, no allowance for credit losses was recorded at June 30, 2020 .
Note 5 - Loans
11 unchanged sentences
Construction and development loans are made to businesses for land development or the on-site construction of industrial, commercial, or residential buildings.
−Removed: Commercial and industrial (“C&I”) consists of loans to businesses and individuals, a substantial portion of which are fully or partially collateralized by real estate.
+Added: Commercial and industrial (“C&I”) consists of loans to businesses and individuals, a portion of which are fully or partially collateralized by real estate.
+Added: C&I also includes $ 212.2 million of PPP loans as of June 30, 2020 .
Residential real estate consists of mortgage and homeowner construction loans secured by one- to four-family residential properties.
Other consists of loans to individuals secured by general aviation aircraft and other personal installment loans.
−Removed: Includes net unamortized loan origination costs of $ 5.2 million and $ 5.3 million , respectively, at March 31, 2020 and December 31, 2019 and net unamortized premiums on purchased loans of $ 724 thousand and $ 995 thousand , respectively, at March 31, 2020 and December 31, 2019 .
−Removed: As of March 31, 2020 and December 31, 2019 , loans amounting to $ 2.2 billion and $ 2.1 billion , respectively, were pledged as collateral to the FHLB under a blanket pledge agreement and to the FRB for the discount window.
+Added: Includes net unamortized loan origination fees of $ 453 thousand at June 30, 2020 and net unamortized loan origination costs of $ 5.3 million , at December 31, 2019 and net unamortized premiums on purchased loans of $ 1.1 million and $ 995 thousand , respectively, at June 30, 2020 and December 31, 2019 .
+Added: As of June 30, 2020 and December 31, 2019 , loans amounting to $ 2.2 billion and $ 2.1 billion , respectively, were pledged as collateral to the FHLB under a blanket pledge agreement and to the FRB.
See Note 7 for additional disclosure regarding borrowings.
9 unchanged sentences
Days Past Due
−Removed: March 31, 2020
+Added: June 30, 2020
Total Past Due
15 unchanged sentences
Total consumer
−Removed: Included in past due loans as of March 31, 2020 and December 31, 2019 , were nonaccrual loans of $ 11.4 million and $ 11.5 million , respectively.
−Removed: All loans 90 days or more past due at March 31, 2020 and December 31, 2019 were classified as nonaccrual.
+Added: Included in past due loans as of June 30, 2020 and December 31, 2019 , were nonaccrual loans of $ 10.6 million and $ 11.5 million , respectively.
+Added: All loans 90 days or more past due at June 30, 2020 and December 31, 2019 were classified as nonaccrual.
Nonaccrual Loans
3 unchanged sentences
When loans are placed on nonaccrual status, interest previously accrued but not collected is reversed against current period income.
−Removed: Subsequent interest payments received on nonaccrual loans are applied to the outstanding principal balance of the loan or recognized as interest income depending on management’s assessment of the ultimate collectability of the loan.
+Added: Subsequent interest payments received on nonaccrual loans are applied to the outstanding principal balance of the loan or recognized as interest income depending on management’s assessment of the ultimate collectibility of the loan.
Loans are removed from nonaccrual status when they have been current as to principal and interest for a period of time, the borrower has demonstrated an ability to comply with repayment terms, and when, in management’s opinion, the loans are considered to be fully collectible.
10 unchanged sentences
Accruing loans 90 days or more past due
−Removed: For nonaccrual loans with a carrying value of $ 490 thousand as of March 31, 2020 , no ACL was deemed necessary.
−Removed: As of March 31, 2020 and December 31, 2019 , loans secured by one- to four-family residential property amounting to $ 3.8 million and $ 5.8 million , respectively, were in process of foreclosure.
−Removed: Nonaccrual loans of $ 6.5 million and $ 5.9 million , respectively, were current as to the payment of principal and interest at March 31, 2020 and December 31, 2019 .
−Removed: There were no significant commitments to lend additional funds to borrowers whose loans were on nonaccrual status at March 31, 2020 .
+Added: For nonaccrual loans with a carrying value of $ 1.4 million as of June 30, 2020 , no ACL was deemed necessary.
+Added: As of June 30, 2020 and December 31, 2019 , loans secured by one- to four-family residential property amounting to $ 3.4 million and $ 5.8 million , respectively, were in process of foreclosure.
+Added: Nonaccrual loans of $ 5.5 million and $ 5.9 million , respectively, were current as to the payment of principal and interest at June 30, 2020 and December 31, 2019 .
+Added: There were no significant commitments to lend additional funds to borrowers whose loans were on nonaccrual status at June 30, 2020 .
The following table presents interest income recognized on nonaccrual loans segregated by loan class:
(Dollars in thousands)
−Removed: Three months ended March 31, 2020
Interest Income Recognized
+Added: Periods ended June 30, 2020
Commercial real estate
5 unchanged sentences
Troubled Debt Restructurings
−Removed: A loan that has been modified or renewed is considered to be a troubled debt restructuring when two conditions are met:
+Added: A loan that has been modified or renewed is considered to be a troubled debt restructuring (“TDR”) when two conditions are met:
1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower’s benefit that would not otherwise be considered for a borrower or a transaction with similar credit risk characteristics.
These concessions may include modifications of the terms of the debt such as deferral of payments, extension of maturity, reduction of principal balance, reduction of the stated interest rate other than normal market rate adjustments, or a combination of these concessions.
−Removed: Debt may be bifurcated
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: with separate terms for each tranche of the restructured debt.
+Added: be bifurcated with separate terms for each tranche of the restructured debt.
Restructuring of a loan in lieu of aggressively enforcing the collection of the loan may benefit the Corporation by increasing the ultimate probability of collection.
−Removed: The Corporation's ACL reflects the effects of a troubled debt restructuring when management reasonably expects at the reporting date that a troubled debt restructuring will be executed with an individual borrower.
−Removed: A troubled debt restructuring is considered reasonably expected no later than the point when management concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession to avoid a default.
−Removed: Reasonably expected troubled debt restructurings and executed troubled debt restructurings are evaluated individually to determine the required ACL.
+Added: The Corporation's ACL reflects the effects of a TDR when management reasonably expects at the reporting date that a TDR will be executed with an individual borrower.
+Added: A TDR is considered reasonably expected no later than the point when management concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession to avoid a default.
+Added: Reasonably expected TDRs and executed TDRs are evaluated individually to determine the required ACL.
Troubled debt restructurings that did not involve a below-market rate concession and perform in accordance with their modified contractual terms for a reasonable period of time may be included in the Corporation’s existing pools based on the underlying risk characteristics of the loan to measure the ACL.
−Removed: Restructured loans are classified as accruing or non-accruing based on management’s assessment of the collectability of the loan.
+Added: Restructured loans are classified as accruing or non-accruing based on management’s assessment of the collectibility of the loan.
Loans which are already on nonaccrual status at the time of the restructuring generally remain on nonaccrual status for approximately six months before management considers such loans for return to accruing status.
Accruing restructured loans are placed into nonaccrual status if and when the borrower fails to comply with the restructured terms and management deems it unlikely that the borrower will return to a status of compliance in the near term and full collection of principal and interest is in doubt.
−Removed: Troubled debt restructurings are reported as such for at least one year from the date of the restructuring.
−Removed: In years after the restructuring, troubled debt restructured loans are removed from this classification if the restructuring did not involve a below-market rate concession and the loan is performing in accordance with their modified contractual terms for a reasonable period of time.
−Removed: The recorded investment in troubled debt restructurings consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring.
−Removed: For accruing troubled debt restructured loans, the recorded investment also includes accrued interest.
−Removed: The recorded investment in troubled debt restructurings was $ 864 thousand and $ 869 thousand , respectively, at March 31, 2020 and December 31, 2019 .
−Removed: The ACL on loans included specific reserves for these troubled debt restructurings of $ 95 thousand and $ 97 thousand , respectively, at March 31, 2020 and December 31, 2019 .
−Removed: For the three months ended March 31, 2020 and 2019 , there were no loans modified as a troubled debt restructuring.
−Removed: For the three months ended March 31, 2020 and 2019 , there were no payment defaults on troubled debt restructured loans modified within the previous 12 months.
−Removed: As of March 31, 2020 , there were no significant commitments to lend additional funds to borrowers whose loans had been restructured in a troubled debt restructuring.
−Removed: The Corporation elected to account for eligible loan modifications under Section 4013 of the CARES Act.
−Removed: To be an eligible loan under Section 4013 of the CARES Act, a loan modification must be (1) related to the COVID-19 pandemic;
+Added: TDRs are reported as such for at least one year from the date of the restructuring.
+Added: In years after the restructuring, TDRs are removed from this classification if the restructuring did not involve a below-market rate concession and the loan is performing in accordance with their modified contractual terms for a reasonable period of time.
+Added: The recorded investment in TDRs consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring.
+Added: For accruing TDRs, the recorded investment also includes accrued interest.
+Added: The recorded investment in TDRs was $ 6.5 million and $ 869 thousand , respectively, at June 30, 2020 and December 31, 2019 .
+Added: The ACL on loans included specific reserves for these TDRs of $ 137 thousand and $ 97 thousand , respectively, at June 30, 2020 and December 31, 2019 .
+Added: As of June 30, 2020 , there were no significant commitments to lend additional funds to borrowers whose loans had been restructured in a TDR.
+Added: The Corporation has elected to account for eligible loan modifications under Section 4013 of the CARES Act.
+Added: To be eligible under Section 4013 of the CARES Act, a loan modification must be (1) related to the COVID-19 pandemic;
(2) executed on a loan that was not more than 30 days past due as of December 31, 2019;
and (3) executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the national emergency declared by the President on March 13, 2020 concerning the COVID-19 outbreak (the “national emergency”) or (B) December 31, 2020.
−Removed: Eligible loan modifications are not required to be classified as troubled debt restructured loans and will not be reported as past due provided that they are performing in accordance with the modified terms.
+Added: Eligible loan modifications are not required to be classified as TDRs and will not be reported as past due provided that they are performing in accordance with the modified terms.
Interest income will continue to be recognized in accordance with GAAP unless the loan is placed on nonaccrual status in accordance with the nonaccrual loans accounting policy described above.
+Added: As of June 30, 2020, Washington Trust has executed 583 modifications on loan balances of $ 652.2 million .
+Added: The majority of these modifications qualified as eligible loan modifications under Section 4013 of the CARES Act and therefore, were not required to be classified as TDRs and were not reported as past due.
+Added: Twelve of these modifications on loan balances of $ 5.6 million were past due before the COVID-19 pandemic and therefore, were classified as TDRs and were included in past due loans as of June 30, 2020.
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
+Added: The following tables present loans modified as a TDR:
+Added: (Dollars in thousands)
+Added: Outstanding Recorded Investment (1)
+Added: Pre-Modifications
+Added: Post-Modifications
+Added: Three months ended June 30,
+Added: Commercial real estate
+Added: Commercial & industrial
+Added: Total commercial
+Added: Residential Real Estate:
+Added: Residential real estate
+Added: Total consumer
+Added: The recorded investment in TDRs consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring.
+Added: For accruing TDRs, the recorded investment also includes accrued interest.
+Added: (Dollars in thousands)
+Added: Outstanding Recorded Investment (1)
+Added: Pre-Modifications
+Added: Post-Modifications
+Added: Six months ended June 30,
+Added: Commercial real estate
+Added: Commercial & industrial
+Added: Total commercial
+Added: Residential Real Estate:
+Added: Residential real estate
+Added: Total consumer
+Added: The recorded investment in TDRs consists of unpaid principal balance, net of charge-offs and unamortized deferred loan origination fees and costs, at the time of the restructuring.
+Added: For accruing TDRs, the recorded investment also includes accrued interest.
+Added: The following table presents information on how loans were modified as a TDR:
+Added: (Dollars in thousands)
+Added: Periods ended June 30,
+Added: Below-market interest rate concession
+Added: Payment deferral
+Added: Maturity / amortization concession
+Added: Interest only payments
+Added: Combination (1)
+Added: Loans included in this classification were modified with a combination of any two of the concessions listed in this table .
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
+Added: For the three and six months ended June 30, 2020 , payment defaults on TDRs modified within the previous 12 months occurred on one loan with a carrying value of $ 47 thousand at the time of the default.
+Added: For the three and six months ended June 30, 2019 , there were no payment defaults on TDRs modified within the previous 12 months.
Individually Analyzed Loans
−Removed: Effective January 1, 2020, individually analyzed loans include nonaccrual commercial loans, loans classified as troubled debt restructured loans, and certain other loans based on the underlying risk characteristics and the discretion of management to individually analyze such loans.
−Removed: As of March 31, 2020 , the carrying value of individually analyzed loans amounted to $1.8 million, of which $1.4 million were considered collateral dependent.
+Added: Effective January 1, 2020, individually analyzed loans include nonaccrual commercial loans, loans classified as TDRs, and certain other loans based on the underlying risk characteristics and the discretion of management to individually analyze such loans.
+Added: As of June 30, 2020 , the carrying value of individually analyzed loans amounted to $ 7.1 million , of which $ 4.3 million were considered collateral dependent.
For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the loan as of the measurement date.
2 unchanged sentences
(Dollars in thousands)
−Removed: As of March 31, 2020
+Added: As of June 30, 2020
Carrying Value
11 unchanged sentences
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: Prior to January 1, 2020, a loan was considered impaired when, based on current information and events, it was probable that the Corporation would not be able to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.
−Removed: Impaired loans included nonaccrual loans and loans restructured in a troubled debt restructuring.
+Added: Prior to January 1, 2020, impaired loans included nonaccrual loans and loans restructured in a TDR.
The Corporation identified loss allocations for impaired loans on an individual loan basis.
23 unchanged sentences
The recorded investment in impaired loans consists of unpaid principal balance, net of charge-offs, interest payments received applied to principal and unamortized deferred loan origination fees and costs.
−Removed: For accruing impaired loans (troubled debt restructurings for which management has concluded that the collectibility of the loan is not in doubt), the recorded investment also includes accrued interest.
+Added: For accruing impaired loans (TDRs for which management has concluded that the collectibility of the loan is not in doubt), the recorded investment also includes accrued interest.
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
1 unchanged sentence
(Dollars in thousands)
−Removed: Three months ended March 31, 2019
+Added: For the periods ended June 30, 2019
Average Recorded Investment
Interest Income Recognized
+Added: Average Recorded Investment
+Added: Interest Income Recognized
Commercial real estate
14 unchanged sentences
Superior or very strong credit quality is characterized by a high degree of cash collateralization or strong balance sheet liquidity.
−Removed: Lesser stature loans have an acceptable level of credit quality but exhibit some weakness in various credit metrics such as collateral adequacy, cash flow, secondary sources of repayment, or performance inconsistency or may be in an industry or of a loan type known to have a higher degree of risk.
+Added: Lesser stature loans have an acceptable level of credit quality, but may exhibit some weakness in various credit metrics such as collateral adequacy, cash flow, performance or may be in an industry or of a loan type known to have a higher degree of risk.
+Added: These weaknesses may be mitigated by secondary sources of repayment, including SBA guarantees.
Special Mention - Loans with potential weaknesses that deserve management’s close attention.
5 unchanged sentences
Such loans are apt to be dependent upon collateral liquidation, a secondary source of repayment or an event outside of the normal course of business.
−Removed: The loans are closely watched and are either already on nonaccrual status or may be placed on nonaccrual status when management determines there is uncertainty of collectability.
+Added: The loans are closely watched and are either already on nonaccrual status or may be placed on nonaccrual status when management determines there is uncertainty of collectibility.
A “doubtful” loan is placed on nonaccrual status and has a high probability of loss, but the extent of the loss is difficult to quantify due to dependency upon collateral having a value that is difficult to determine or upon some near-term event which lacks certainty.
3 unchanged sentences
The Corporation’s procedures call for loan ratings and classifications to be revised whenever information becomes available that indicates a change is warranted.
−Removed: On a quarterly basis, management reviews the watched asset list, which generally consists of commercial loans that are risk-rated 6 or worse, highly leverages transaction loans, high-volatility commercial real estate and other selected loans.
+Added: On a quarterly basis, management reviews the watched asset list, which generally consists of commercial loans that are risk-rated 6 or worse, highly leveraged transaction loans, high-volatility commercial real estate and other selected loans.
Management’s review focuses on the current status of the loans and strategies to improve the credit.
6 unchanged sentences
Term Loans Amortized Cost by Origination Year
−Removed: As of March 31, 2020
+Added: As of June 30, 2020
Revolving Loans Amortized Cost
6 unchanged sentences
Total home equity
+Added: Consistent with industry practice, Washington Trust may renew commercial loans at or immediately prior to their maturity.
+Added: Renewals subject to full credit evaluation before being granted are reported as current period originations in the table above.
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
22 unchanged sentences
The Corporation also excludes accrued interest from the estimate of credit losses.
−Removed: Accrued interest receivable on loans totaled $ 11.2 million and $ 11.0 million , respectively, as of March 31, 2020 and December 31, 2019 .
+Added: Accrued interest receivable on loans totaled $ 9.2 million and $ 11.0 million , respectively, as of June 30, 2020 and December 31, 2019 .
The ACL on loans is management’s estimate of expected credit losses over the expected life of the loans at the reporting date.
1 unchanged sentence
The ACL on loans is reduced by charge-offs on loans.
−Removed: Loan charge-offs are recognized when management believes the collectability of the principal balance outstanding is unlikely.
+Added: Loan charge-offs are recognized when management believes the collectibility of the principal balance outstanding is unlikely.
Full or partial charge-offs on collateral dependent individually analyzed loans are generally recognized when the collateral is deemed to be insufficient to support the carrying value of the loan.
7 unchanged sentences
pooling loans into portfolio segments for loans that share similar risk characteristics.
−Removed: Pooled loan portfolio segments include commercial real estate (including commercial construction), commercial and industrial, residential real estate (including homeowner construction), home equity and other consumer loans.
+Added: Pooled loan portfolio segments include commercial real estate (including commercial construction), commercial and industrial (including PPP loans), residential real estate (including homeowner construction), home equity and other consumer loans.
The second component involves individually analyzed loans that do not share similar risk characteristics with loans that are pooled into portfolio segments.
−Removed: Individually analyzed loans include nonaccrual commercial loans, loans classified as troubled debt restructured loans and certain other loans based on the underlying risk characteristics and the discretion of management to individually analyze such loans.
+Added: Individually analyzed loans include nonaccrual commercial loans, loans classified as TDRs and certain other loans based on the underlying risk characteristics and the discretion of management to individually analyze such loans.
For loans that are individually analyzed, the ACL is measured using a discounted cash flow method based upon the loan’s contractual effective interest rate, or at the loan’s observable market price, or, if the loan is collateral dependent, at the fair value of the collateral.
1 unchanged sentence
For collateral dependent loans for which repayment is to be provided substantially through the sale of the collateral, management adjusts the fair value for estimated costs to sell.
−Removed: For collateral dependent loans for which repayment is to be provided substantially through the operation of the collateral, such as accruing troubled debt restructured loans, estimated costs to sell are not incorporated into the measurement.
+Added: For collateral dependent loans for which repayment is to be provided substantially through the operation of the collateral, such as accruing TDRs, estimated costs to sell are not incorporated into the measurement.
Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values for unobservable factors resulting from its knowledge of circumstances associated with the collateral.
For pooled loans, the Corporation utilizes a discounted cash flow (“DCF”) methodology to estimate credit losses over the expected life of the loan.
−Removed: The life of the loan excludes expected extensions, renewal and modifications, unless 1) the extension or renewal options are included in the original or modified contract terms and not unconditionally cancellable by the Corporation, or 2) management reasonably expects at the reporting date that a troubled debt restructuring will be executed with an individual borrower.
−Removed: The methodology incorporates the probability of default and loss given default, which are identified by default triggers such as past due by 90 or more days, whether a charge-off has occurred, the loan is nonaccrual, the loan has been modified in a troubled debt restructuring or the loan is risk-rated as special mention or classified.
+Added: The life of the loan excludes expected extensions, renewal and modifications, unless 1) the extension or renewal options are included in the original or modified contract terms and not unconditionally cancellable by the Corporation, or 2) management reasonably expects at the reporting date that a TDR will be executed with an individual borrower.
+Added: The methodology incorporates the probability of default and loss given default, which are identified by default triggers such as past due by 90 or more days, whether a charge-off has occurred, the loan has been placed on nonaccrual status, the loan has been modified in a TDR or the loan is risk-rated as special mention or classified.
The probability of default for the life of the loan is determined by the use of an econometric factor.
6 unchanged sentences
1) changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;
−Removed: 2) changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the portfolio, including the condition of various market segments;
+Added: 2) changes in international, national, regional, and local economic and business conditions and developments that affect the collectibility of the portfolio, including the condition of various market segments;
3) changes in the nature and volume of the portfolio and in the terms of loans;
7 unchanged sentences
Because the methodology is based upon historical experience and trends, current economic data, reasonable and supportable forecasts, as well as management’s judgment, factors may arise that result in different estimations.
−Removed: While significant deterioration in the economic forecast due to the COVID-19 pandemic was estimated in the ACL on loans as of March 31, 2020 , continued uncertainty regarding the severity and duration of the pandemic and related economic effects will continue to affect the ACL.
+Added: While significant deterioration in the economic forecast due to the COVID-19 pandemic was estimated in the ACL on loans, continued uncertainty regarding the severity and duration of the pandemic and related economic effects will continue to affect the ACL.
Deteriorating conditions or assumptions could lead to further increases in the ACL on loans.
3 unchanged sentences
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: The following table presents the activity in the ACL on loans for the three months ended March 31, 2020 :
+Added: The following table presents the activity in the ACL on loans for the three months ended June 30, 2020 :
(Dollars in thousands)
3 unchanged sentences
Beginning Balance
+Added: Ending Balance
+Added: The following table presents the activity in the ACL on loans for the six months ended June 30, 2020 :
+Added: (Dollars in thousands)
+Added: Total Commercial
+Added: Residential Real Estate
+Added: Total Consumer
+Added: Beginning Balance
Adoption of Topic 326 (1)
2 unchanged sentences
For the accounting policy on the allowance for loan losses that was in effect prior to the adoption of Topic 326, see Note 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
−Removed: The following table presents the activity in the allowance for loan losses for the three months ended March 31, 2019 :
+Added: The following table presents the activity in the allowance for loan losses for the three months ended June 30, 2019 :
(Dollars in thousands)
4 unchanged sentences
Ending Balance
+Added: The following table presents the activity in the allowance for loan losses for the six months ended June 30, 2019 :
+Added: (Dollars in thousands)
+Added: Total Commercial
+Added: Residential Real Estate
+Added: Total Consumer
+Added: Beginning Balance
+Added: Ending Balance
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: The following table presents the Corporation’s loan portfolio and associated allowance for loan losses by portfolio segment and by impairment methodology:
+Added: The following table presents the Corporation’s loan portfolio and associated allowance for loan losses by portfolio segment and by impairment methodology as of December 31, 2019 :
(Dollars in thousands)
−Removed: December 31, 2019
Related Allowance
14 unchanged sentences
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: Note 7 - Federal Home Loan Bank Advances
−Removed: Advances payable to the FHLB amounted to $ 1.2 billion and $ 1.1 billion , respectively, at March 31, 2020 and December 31, 2019 .
−Removed: As of March 31, 2020 and December 31, 2019 , the Bank had access to a $ 40.0 million unused line of credit and also had remaining available borrowing capacity of $ 469.5 million and $ 535.0 million , respectively, with the FHLB.
+Added: Note 7 - Borrowings
+Added: Advances payable to the FHLB amounted to $ 1.0 billion and $ 1.1 billion , respectively, at June 30, 2020 and December 31, 2019 .
+Added: As of June 30, 2020 and December 31, 2019 , the Bank had access to a $ 40.0 million unused line of credit and also had remaining available borrowing capacity of $ 647.9 million and $ 535.0 million , respectively, with the FHLB.
The Bank pledges certain qualified investment securities and loans as collateral to the FHLB.
−Removed: The following table presents maturities and weighted average interest rates on FHLB advances outstanding as of March 31, 2020 :
+Added: The following table presents maturities and weighted average interest rates on FHLB advances outstanding as of June 30, 2020 :
(Dollars in thousands)
−Removed: April 1, 2020 to December 31, 2020
+Added: July 1, 2020 to December 31, 2020
2025 and thereafter
−Removed: Balance at March 31, 2020
+Added: Balance at June 30, 2020
+Added: In June 2020, Washington Trust began participating in the FRB’s Paycheck Protection Program Liquidity Facility ("PPPLF").
+Added: PPPLF extends credit to depository institutions at a fixed interest rate of 0.35 % .
+Added: Only PPP loans can be pledged as collateral to access the facility.
+Added: The maturity date of the PPPLF borrowings matches the maturity date of the pledged PPP loans.
+Added: As of June 30, 2020 , PPPLF borrowings amounted to $ 38.9 million and have a scheduled maturity in April 2022.
+Added: PPP loans totaling $ 38.9 million were pledged as collateral to the FRB as of June 30, 2020 .
Note 8 - Shareholders' Equity
4 unchanged sentences
The 2019 Stock Repurchase Program expires on October 31, 2020 and may be modified, suspended, or discontinued at any time.
−Removed: As of March 31, 2020 , 124,863 shares have been repurchased under the 2019 Stock Repurchase Program, totaling $ 4.3 million , at an average price of $ 34.61 .
+Added: As of June 30, 2020 , 124,863 shares have been repurchased under the 2019 Stock Repurchase Program, totaling $ 4.3 million , at an average price of $ 34.61 .
Due to the economic uncertainty resulting from the COVID-19 pandemic, Washington Trust suspended its 2019 Stock Repurchase Program effective March 25, 2020.
1 unchanged sentence
Regulatory Capital Requirements
−Removed: Capital levels at March 31, 2020 exceeded the regulatory minimum levels to be considered “well capitalized.”
+Added: Capital levels at June 30, 2020 exceeded the regulatory minimum levels to be considered “well capitalized.”
The following table presents the Corporation’s and the Bank’s actual capital amounts and ratios, as well as the corresponding minimum and well capitalized regulatory amounts and ratios that were in effect during the respective periods:
2 unchanged sentences
To Be “Well Capitalized” Under Prompt Corrective Action Provisions
−Removed: March 31, 2020
+Added: June 30, 2020
Total Capital (to Risk-Weighted Assets):
9 unchanged sentences
In addition to the minimum regulatory capital required for capital adequacy purposes outlined in the table above, the Corporation is required to maintain a minimum capital conservation buffer, in the form of common equity, of 2.50% in order to avoid restrictions on capital distributions and discretionary bonuses.
−Removed: The Corporation’s capital levels exceeded the minimum regulatory capital requirements plus the capital conservation buffer at March 31, 2020 and December 31, 2019 .
+Added: The Corporation’s capital levels exceeded the minimum regulatory capital requirements plus the capital conservation buffer at June 30, 2020 and December 31, 2019 .
The Bancorp owns the common stock of two capital trusts, which have issued trust preferred securities.
In accordance with GAAP, the capital trusts are treated as unconsolidated subsidiaries.
−Removed: At both March 31, 2020 and December 31, 2019 , $ 22.0 million in trust preferred securities were included in the Tier 1 Capital of the Corporation for regulatory capital reporting purposes pursuant to the FRB’s capital adequacy guidelines.
+Added: At both June 30, 2020 and December 31, 2019 , $ 22.0 million in trust preferred securities were included in the Tier 1 Capital of the Corporation for regulatory capital reporting purposes pursuant to the FRB’s capital adequacy guidelines.
In response to the recent disruptions in economic conditions caused by the COVID-19 pandemic and the uncertainty of its overall effects on the economy, the FDIC issued an interim final rule (“IFR”) on March 27, 2020 that delays the estimated impact on regulatory capital stemming from the adoption of Topic 326, often referred to as CECL.
17 unchanged sentences
Cash Flow Hedging Instruments
−Removed: As of March 31, 2020 and December 31, 2019 , the Corporation had two interest rate caps with a total notional amount of $ 22.7 million that were designated as cash flow hedges to hedge the interest rate risk associated with our variable rate junior subordinated debentures.
+Added: As of June 30, 2020 and December 31, 2019 , the Corporation had two interest rate caps with a total notional amount of $ 22.7 million that were designated as cash flow hedges to hedge the interest rate risk associated with our variable rate junior subordinated debentures.
For both interest rate caps, the Corporation obtained the right to receive the difference between 3-month LIBOR and a 4.5 % strike.
The caps mature in November and December of 2020.
−Removed: As of March 31, 2020 and December 31, 2019 , the Corporation had two interest rate swap contracts with a total notional amount of $ 60.0 million that were designated as cash flow hedges to hedge the interest rate risk associated with short-term variable rate FHLB advances.
+Added: As of June 30, 2020 and December 31, 2019 , the Corporation had two interest rate swap contracts with a total notional amount of $ 60.0 million that were designated as cash flow hedges to hedge the interest rate risk associated with short-term variable rate FHLB advances.
The interest rate swaps mature in 2021 and 2023.
−Removed: As of March 31, 2020 , the Corporation had two interest rate floor contracts, compared to three interest rate floor contracts as of December 31, 2019 .
−Removed: The total notional amount of the interest rate floor contracts were $ 200.0 million and $300.0 million , respectively, as of March 31, 2020 and December 31, 2019 .
+Added: As of June 30, 2020 , the Corporation had one interest rate floor contract, compared to three interest rate floor contracts as of December 31, 2019 .
+Added: The total notional amount of the interest rate floor contracts were $ 100.0 million and $ 300.0 million , respectively, as of June 30, 2020 and December 31, 2019 .
These contracts were designated as cash flow hedges to hedge the interest rate risk associated with a pool of variable rate commercial loans.
The Corporation obtained the right to receive the difference between 1-month LIBOR and a 1.0 % strike for each of the interest rate floors.
−Removed: During the three months ended March 31, 2020 , one interest rate floor contact matured.
−Removed: The remaining two floors mature in June and September of 2020.
+Added: During the six months ended June 30, 2020 , two interest rate floor contracts matured.
+Added: The remaining floor matures in September of 2020.
The changes in fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income and subsequently reclassified to earnings when gains or losses are realized.
6 unchanged sentences
The Corporation retains the risk that is associated with the potential failure of counterparties and the risk inherent in originating loans.
−Removed: As of March 31, 2020 and December 31, 2019 , Washington Trust had interest rate swap contracts with commercial loan borrowers with notional amounts of $ 960.5 million and $ 813.5 million , respectively, and equal amounts of “mirror” swap contracts with third-party financial institutions.
+Added: As of June 30, 2020 and December 31, 2019 , Washington Trust had interest rate swap contracts with commercial loan borrowers with notional amounts of $ 958.6 million and $ 813.5 million , respectively, and equal amounts of “mirror” swap contracts with third-party financial institutions.
These derivatives are not designated as hedges and therefore, changes in fair value are recognized in earnings.
6 unchanged sentences
Under a risk participation-in agreement, a derivative liability, the Corporation assumes, or participates in, a portion of the credit risk associated with the interest rate swap position with the commercial borrower for a fee received from the other bank.
−Removed: As of March 31, 2020 , the notional amounts of risk participation-out agreements and risk participation-in agreements were $ 61.0 million and $ 88.6 million , respectively, compared to $ 61.2 million and $ 72.9 million , respectively, as of December 31, 2019 .
+Added: As of June 30, 2020 , the notional amounts of risk participation-out agreements and risk participation-in agreements were $ 60.7 million and $ 93.1 million , respectively, compared to $ 61.2 million and $ 72.9 million , respectively, as of December 31, 2019 .
Mortgage Loan Commitments
3 unchanged sentences
Both interest rate lock commitments and forward sale commitments are derivative financial instruments, but do not meet criteria for hedge accounting and therefore, the changes in fair value of these commitments are reflected in earnings.
−Removed: As of March 31, 2020 , the notional amounts of interest rate lock commitments and forward sale commitments were $ 161.7 million and $ 220.3 million , respectively, compared to $ 51.4 million and $ 94.8 million , respectively, as of December 31, 2019 .
+Added: As of June 30, 2020 , the notional amounts of interest rate lock commitments and forward sale commitments were $ 203.5 million and $ 291.7 million , respectively, compared to $ 51.4 million and $ 94.8 million , respectively, as of December 31, 2019 .
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: The following table presents the fair values of derivative instruments in the Corporation’s Unaudited Consolidated Balance Sheets:
+Added: The following table presents the fair values of derivative instruments in the Unaudited Consolidated Balance Sheets:
(Dollars in thousands)
31 unchanged sentences
Washington Trust may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions.
−Removed: The following tables present the effect of derivative instruments in the Corporation’s Unaudited Consolidated Statements of Changes in Shareholders’ Equity and Unaudited Consolidated Statements of Income:
+Added: The following tables present the effect of derivative instruments in the Unaudited Consolidated Statements of Changes in Shareholders’ Equity and Unaudited Consolidated Statements of Income:
(Dollars in thousands)
1 unchanged sentence
Other Comprehensive Income, Net of Tax
−Removed: Three months ended March 31,
+Added: Periods ended June 30,
Derivatives Designated as Cash Flow Hedging Instruments:
8 unchanged sentences
Recognized in Income on Derivatives
−Removed: Three months ended March 31,
+Added: Periods ended June 30,
Statement of Income Location
37 unchanged sentences
Difference between fair value and principal balance
−Removed: Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to an increase of $ 887 thousand in the three months ended March 31, 2020 , compared to a decrease of $ 135 thousand in the three months ended March 31, 2019 .
−Removed: These amounts were partially offset in earnings by the changes in fair value of forward sale commitments
+Added: Changes in fair value of mortgage loans held for sale accounted for under the fair value option election amounted to increases of $ 149 thousand and $ 1.0 million , respectively, in the three and six months ended June 30, 2020 , compared to increases of
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: used to economically hedge them.
+Added: $ 679 thousand and $ 544 thousand , respectively, in the three and six months ended June 30, 2019 .
+Added: These amounts were partially offset in earnings by the changes in fair value of forward sale commitments used to economically hedge them.
The changes in fair value are reported as a component of mortgage banking revenues in the Unaudited Consolidated Statements of Income.
−Removed: There were no mortgage loans held for sale 90 days or more past due as of March 31, 2020 and December 31, 2019 .
+Added: There were no mortgage loans held for sale 90 days or more past due as of June 30, 2020 and December 31, 2019 .
Valuation Techniques
3 unchanged sentences
such items are classified as Level 1.
−Removed: There were no Level 1 debt securities held at March 31, 2020 and December 31, 2019 .
+Added: There were no Level 1 debt securities held at June 30, 2020 and December 31, 2019 .
Level 2 debt securities are traded less frequently than exchange-traded instruments.
3 unchanged sentences
Debt securities not actively traded whose fair value is determined through the use of cash flows utilizing inputs that are unobservable are classified as Level 3.
−Removed: There were no Level 3 debt securities held at March 31, 2020 and December 31, 2019 .
+Added: There were no Level 3 debt securities held at June 30, 2020 and December 31, 2019 .
Mortgage Loans Held for Sale
4 unchanged sentences
For collateral dependent loans for which repayment is to be provided substantially through the sale of the collateral, management adjusts the fair value for estimated costs to sell.
−Removed: For collateral dependent loans for which repayment is to be provided substantially through the operation of the collateral, such as accruing troubled debt restructured loans, estimated costs to sell are not incorporated into the measurement.
+Added: For collateral dependent loans for which repayment is to be provided substantially through the operation of the collateral, such as accruing TDRs, estimated costs to sell are not incorporated into the measurement.
Management may also adjust appraised values to reflect estimated market value declines or apply other discounts to appraised values resulting from its knowledge of the collateral.
13 unchanged sentences
Although the Corporation has determined that the majority of the inputs used to value its interest rate swap, cap and floor contracts fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with interest rate contracts and risk participation agreements utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Corporation and its counterparties.
−Removed: However, as of March 31, 2020 and December 31, 2019 , the Corporation has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments
+Added: However, as of June 30, 2020 and December 31, 2019 , the Corporation has assessed the significance of the impact of the credit
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
−Removed: are not significant to the overall valuation of its derivatives.
+Added: valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.
As a result, the Corporation has classified its derivative valuations in their entirety as Level 2.
10 unchanged sentences
Significant Unobservable Inputs
−Removed: March 31, 2020
+Added: June 30, 2020
Available for sale debt securities:
31 unchanged sentences
Items Recorded at Fair Value on a Nonrecurring Basis
−Removed: The following table presents the carrying value of assets held at March 31, 2020 , which were written down to fair value during the three months ended March 31, 2020 :
+Added: The following table presents the carrying value of assets held at June 30, 2020 , which were written down to fair value during the six months ended June 30, 2020 :
(Dollars in thousands)
4 unchanged sentences
Total assets at fair value on a nonrecurring basis
−Removed: The ACL on all collateral dependent individually analyzed loans amounted to $ 529 thousand at March 31, 2020 .
+Added: The ACL on all collateral dependent individually analyzed loans amounted to $ 233 thousand at June 30, 2020 .
The following table presents the carrying value of assets held at December 31, 2019 , which were written down to fair value during the year ended December 31, 2019 :
14 unchanged sentences
(Weighted Average)
−Removed: March 31, 2020
−Removed: Collateral dependent individually analyzed loans
+Added: June 30, 2020
+Added: Collateral dependent individually analyzed CRE loan
Appraisals of collateral
25 unchanged sentences
(Dollars in thousands)
−Removed: March 31, 2020
+Added: June 30, 2020
Carrying Amount
24 unchanged sentences
As shown below, a substantial portion of our revenues are specifically excluded from the scope of Topic 606.
−Removed: For the three months ended March 31,
+Added: For the three months ended June 30,
(Dollars in thousands)
11 unchanged sentences
Income from bank-owned life insurance
+Added: Net realized losses on securities
Total noninterest income
2 unchanged sentences
Revenue from contracts with customers in scope of ASC 606.
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
+Added: For the six months ended June 30,
+Added: (Dollars in thousands)
+Added: ASC 606 Revenue (2)
+Added: ASC 606 Revenue (2)
+Added: Net interest income
+Added: Noninterest income:
+Added: Asset-based wealth management revenues
+Added: Transaction-based wealth management revenues
+Added: Total wealth management revenues
+Added: Mortgage banking revenues
+Added: Card interchange fees
+Added: Service charges on deposit accounts
+Added: Loan related derivative income
+Added: Income from bank-owned life insurance
+Added: Net realized losses on securities
+Added: Total noninterest income
+Added: Total revenues
+Added: As reported in the Consolidated Statements of Income.
+Added: Revenue from contracts with customers in scope of ASC 606.
The Corporation recognizes revenue that is transactional in nature and such revenue is earned at a point in time.
6 unchanged sentences
Transaction-based revenues include financial planning fees, tax preparation fees, commissions and other service fees.
−Removed: Fee revenue from service charges on deposit accounts represent the service charges assessed to customers who hold deposit accounts at the Bank.
−Removed: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
+Added: Fee revenue from service charges on deposit accounts represent service charges assessed to customers who hold deposit accounts at the Bank.
The following table presents revenue from contracts with customers based on the timing of revenue recognition:
(Dollars in thousands)
−Removed: Three months ended March 31,
+Added: Periods ended June 30,
Revenue recognized at a point in time:
5 unchanged sentences
Total revenues from contracts in scope of Topic 606
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
Receivables for revenue from contracts with customers primarily consist of amounts due for wealth management services performed for which the Corporation’s performance obligations have been fully satisfied.
−Removed: Receivables amounted to $ 4.0 million at March 31, 2020 , compared to $ 4.5 million at December 31, 2019 and were included in other assets in the Unaudited Consolidated Balance Sheets.
+Added: Receivables amounted to $ 4.2 million at June 30, 2020 , compared to $ 4.5 million at December 31, 2019 and were included in other assets in the Unaudited Consolidated Balance Sheets.
Deferred revenues, which are considered contract liabilities under Topic 606, represent advance consideration received from customers for which the Corporation has a remaining performance obligation to fulfill.
Contract liabilities are recognized as revenue over the life of the contract as the performance obligations are satisfied.
−Removed: The balances of contract liabilities were insignificant at both March 31, 2020 and December 31, 2019 and were included in other liabilities in the Unaudited Consolidated Balance Sheets.
+Added: The balances of contract liabilities were insignificant at both June 30, 2020 and December 31, 2019 and were included in other liabilities in the Unaudited Consolidated Balance Sheets.
For commissions and incentives that are in-scope of Topic 606, such as those paid to employees in our wealth management services and commercial banking segments in order to obtain customer contracts, contract cost assets are established.
The contract cost assets are capitalized and amortized over the estimated useful life that the asset is expected to generate benefits.
−Removed: The carrying value of contract cost assets amounted to $ 905 thousand at both March 31, 2020 and December 31, 2019 and were included in other assets in the Unaudited Consolidated Balance Sheets.
−Removed: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
+Added: The carrying value of contract cost assets amounted to $ 1.0 million at June 30, 2020 , compared to $ 905 thousand at December 31, 2019 and were included in other assets in the Unaudited Consolidated Balance Sheets.
Note 12 - Defined Benefit Pension Plans
6 unchanged sentences
Non-Qualified Retirement Plans
−Removed: Three months ended March 31,
+Added: Periods ended June 30,
Net Periodic Benefit Cost:
10 unchanged sentences
Non-Qualified Retirement Plans
−Removed: For the three months ended March 31,
+Added: For the six months ended June 30,
Measurement date
6 unchanged sentences
Note 13 - Share-Based Compensation Arrangements
−Removed: During the three months ended March 31, 2020 , the Corporation granted performance share unit awards and nonvested share unit awards.
+Added: During the six months ended June 30, 2020 , the Corporation granted performance share unit awards and nonvested share unit awards.
Performance share awards were granted to certain key employees of the Corporation to provide them with the opportunity to earn shares of common stock of the Corporation.
3 unchanged sentences
The performance share awards will be earned over a 3 -year performance period and the current performance assumption estimates that 65,632 shares will be earned.
−Removed: The Corporation granted to certain key employees 3,165 nonvested share units, with 3 -year cliff vesting.
+Added: The Corporation granted to certain key employees and non-executive directors 11,765 nonvested share units, with 3 -year cliff vesting.
The weighted average grant date fair value of the nonvested share units was $ 39.56 .
30 unchanged sentences
Consolidated Total
−Removed: Three months ended March 31,
+Added: Three months ended June 30,
Net interest income (expense)
6 unchanged sentences
Total noninterest expenses
−Removed: Income before income taxes
−Removed: Income tax expense
+Added: Income (loss) before income taxes
+Added: Income tax expense (benefit)
+Added: Net income (loss)
Total assets at period end
Expenditures for long-lived assets
+Added: (Dollars in thousands)
+Added: Commercial Banking
+Added: Wealth Management Services
+Added: Consolidated Total
+Added: Six months ended June 30,
+Added: Net interest income (expense)
+Added: Provision for credit losses
+Added: Net interest income (expense) after provision for loan losses
+Added: Noninterest income
+Added: Noninterest expenses:
+Added: Depreciation and amortization expense
+Added: Other noninterest expenses
+Added: Total noninterest expenses
+Added: Income (loss) before income taxes
+Added: Income tax expense (benefit)
+Added: Net income (loss)
+Added: Total assets at period end
+Added: Expenditures for long-lived assets
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
Note 15 - Other Comprehensive Income (Loss)
The following tables present the activity in other comprehensive income (loss):
−Removed: Three months ended March 31,
+Added: Three months ended June 30,
(Dollars in thousands)
3 unchanged sentences
Changes in fair value of available for sale debt securities
−Removed: Net (gains) losses on debt securities reclassified into earnings
+Added: Net losses on debt securities reclassified into earnings (1)
Net change in fair value of available for sale debt securities
1 unchanged sentence
Change in fair value of cash flow hedges
+Added: Net cash flow hedge gains reclassified into earnings (2)
+Added: Net change in fair value of cash flow hedges
+Added: Defined benefit plan obligations:
+Added: Amortization of net actuarial losses (3)
+Added: Amortization of net prior service credits (3)
+Added: Net change in defined benefit plan obligations
+Added: Total other comprehensive (loss) income
+Added: The pre-tax amount is reported in net realized losses on securities in the Unaudited Consolidated Statements of Income.
+Added: The pre-tax amounts are included in interest expense on FHLB advances, interest expense on junior subordinated debentures and interest and fees on loans in the Unaudited Consolidated Statements of Income.
+Added: The pre-tax amounts are included in other expenses in the Unaudited Consolidated Statements of Income.
+Added: Six months ended June 30,
+Added: (Dollars in thousands)
+Added: Pre-tax Amounts
+Added: Pre-tax Amounts
+Added: Securities available for sale:
+Added: Changes in fair value of available for sale debt securities
+Added: Net losses on debt securities reclassified into earnings (1)
+Added: Net change in fair value of available for sale debt securities
+Added: Cash flow hedges:
+Added: Change in fair value of cash flow hedges
Net cash flow hedge gains (losses) reclassified into earnings (2)
5 unchanged sentences
Total other comprehensive income
+Added: The pre-tax amount is reported in net realized losses on securities in the Unaudited Consolidated Statements of Income.
The pre-tax amounts are included in interest expense on FHLB advances, interest expense on junior subordinated debentures and interest and fees on loans in the Unaudited Consolidated Statements of Income.
−Removed: The pre-tax amounts are included in other expenses in the Unaudited Consolidated Statements of Income.
+Added: The pre-tax amounts are included in other expenses in the Unaudited Consolidated Statements of Inc ome.
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
1 unchanged sentence
(Dollars in thousands)
+Added: Net Unrealized Gains (Losses) on Available For Sale Debt Securities
+Added: Net Unrealized (Losses) Gains on Cash Flow Hedges
+Added: Defined Benefit Pension Plan Adjustment
+Added: For the three months ended June 30, 2020
+Added: Balance at March 31, 2020
+Added: Other comprehensive loss before reclassifications
+Added: Amounts reclassified from accumulated other comprehensive income
+Added: Net other comprehensive (loss) income
+Added: Balance at June 30, 2020
+Added: (Dollars in thousands)
Net Unrealized Gains on Available For Sale Debt Securities
1 unchanged sentence
Defined Benefit Pension Plan Adjustment
−Removed: For the three months ended March 31, 2020
−Removed: Balance at January 1, 2020
+Added: For the six months ended June 30, 2020
+Added: Balance at December 31, 2019
Other comprehensive income (loss) before reclassifications
1 unchanged sentence
Net other comprehensive income (loss)
+Added: Balance at June 30, 2020
+Added: (Dollars in thousands)
+Added: Net Unrealized (Losses) Gains on Available For Sale Debt Securities
+Added: Net Unrealized (Losses) Gains on Cash Flow Hedges
+Added: Defined Benefit Pension Plan Adjustment
+Added: For the three months ended June 30, 2019
Balance at March 31, 2019
+Added: Other comprehensive income (loss) before reclassifications
+Added: Amounts reclassified from accumulated other comprehensive income
+Added: Net other comprehensive income (loss)
+Added: Balance at June 30, 2019
(Dollars in thousands)
2 unchanged sentences
Defined Benefit Pension Plan Adjustment
−Removed: For the three months ended March 31, 2019
−Removed: Balance at January 1, 2019
+Added: For the six months ended June 30, 2019
+Added: Balance at December 31, 2018
Other comprehensive income (loss) before reclassifications
1 unchanged sentence
Net other comprehensive income (loss)
−Removed: Balance at March 31, 2019
+Added: Balance at June 30, 2019
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
Note 16 - Earnings per Common Share
The following table presents the calculation of earnings per common share:
−Removed: Three months ended March 31,
+Added: (Dollars and shares in thousands, except per share amounts)
+Added: Periods ended June 30,
Earnings per common share - basic:
10 unchanged sentences
Earnings per common share - diluted
−Removed: Weighted average common stock equivalents, not included in common stock equivalents above because they were anti-dilutive, totaled 152,010 and 87,775 , respectively, for the three months ended March 31, 2020 and 2019 .
+Added: Weighted average common stock equivalents, not included in common stock equivalents above because they were anti-dilutive, totaled 256,721 and 220,305 , respectively for the three and six months ended June 30, 2020 , compared to 87,950 and 87,863 , respectively, for the same periods in 2019 .
Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
1 unchanged sentence
The Corporation has committed to rent premises used in business operations under non-cancelable operating leases and determines if an arrangement meets the definition of a lease upon inception.
−Removed: Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $ 964 thousand and $ 939 thousand , respectively, for the three months ended March 31, 2020 and 2019 .
+Added: Rental expense for operating leases is recognized on a straight-line basis over the lease term and amounted to $ 973 thousand and $ 1.9 million respectively, for the three and six months ended June 30, 2020 , compared to $ 940 thousand and $ 1.9 million , respectively, for the same periods in 2019 .
Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.
3 unchanged sentences
Range of lease expiration dates
−Removed: 1 month - 21 years
+Added: 1 year - 21 years
4 months - 21 years
3 unchanged sentences
Weighted average remaining lease term
−Removed: The following table presents the undiscounted annual lease payments under the terms of the Corporation’s operating leases at March 31, 2020 , including a reconciliation to the present value of operating lease liabilities recognized in the Corporation’s Unaudited Consolidated Balance Sheets:
+Added: The following table presents the undiscounted annual lease payments under the terms of the Corporation’s operating leases at June 30, 2020 , including a reconciliation to the present value of operating lease liabilities recognized in the Unaudited Consolidated Balance Sheets:
(Dollars in thousands)
−Removed: April 1, 2020 to December 31, 2020
+Added: July 1, 2020 to December 31, 2020
2025 and thereafter
6 unchanged sentences
(Dollars in thousands)
−Removed: Three months ended March 31, 2020
+Added: Periods ended June 30,
Lease Expense:
14 unchanged sentences
The updated policy is detailed below.
−Removed: The ACL on unfunded commitments is management’s estimate of expected credit losses over the expected contractual term (or life) in which the Corporation is exposed to credit risk via the a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Corporation.
+Added: The ACL on unfunded commitments is management’s estimate of expected credit losses over the expected contractual term (or life) in which the Corporation is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Corporation.
Unfunded commitments for home equity lines of credit and commercial demand loans are considered unconditionally cancellable for regulatory capital purposes and, therefore, are excluded from the calculation to estimate the ACL on unfunded commitments.
7 unchanged sentences
These financial instruments include commitments to extend credit, standby letters of credit, forward loan commitments, loan related derivative contracts and interest rate risk management contracts.
−Removed: These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Corporation’s Unaudited Consolidated Balance Sheets.
+Added: These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Unaudited Consolidated Balance Sheets.
The contract or notional amounts of these instruments reflect the extent of involvement the Corporation has in particular classes of financial instruments.
12 unchanged sentences
Most standby letters of credit extend for one year.
−Removed: The maximum potential amount of undiscounted future payments, not reduced by amounts that may be recovered totaled $ 9.4 million and $ 13.7 million , respectively, as of March 31, 2020 and December 31, 2019 .
−Removed: At March 31, 2020 and December 31, 2019 , there were no liabilities to beneficiaries resulting from standby letters of credit.
−Removed: Fee income on standby letters of credit was insignificant for the three months ended March 31, 2020 and 2019 .
+Added: The maximum potential amount of undiscounted future payments, not reduced by amounts that may be recovered totaled $ 10.1 million and $ 13.7 million , respectively, as of June 30, 2020 and December 31, 2019 .
+Added: At June 30, 2020 and December 31, 2019 , there were no liabilities to beneficiaries resulting from standby letters of credit.
+Added: Fee income on standby letters of credit was insignificant for the three and six months ended June 30, 2020 and 2019 .
A substantial portion of the standby letters of credit were supported by pledged collateral.
28 unchanged sentences
See Note 9 for additional disclosure pertaining to derivative financial instruments.
−Removed: The ACL on funded commitments amounted to $2.0 million at March 31, 2020 , compared to $ 293 thousand at December 31, 2019 .
−Removed: The activity in the ACL on unfunded commitments for the three months ended March 31, 2020 is presented below:
+Added: The ACL on unfunded commitments amounted to $ 2.2 million at June 30, 2020 , compared to $ 293 thousand at December 31, 2019 .
+Added: The activity in the ACL on unfunded commitments for the three months ended June 30, 2020 is presented below:
(Dollars in thousands)
3 unchanged sentences
Beginning Balance
+Added: Ending Balance
+Added: Condensed Notes to Unaudited Consolidated Financial Statements – (continued)
+Added: The activity in the ACL on unfunded commitments for the six months ended June 30, 2020 is presented below:
+Added: (Dollars in thousands)
+Added: Total Commercial
+Added: Residential Real Estate
+Added: Total Consumer
+Added: Beginning Balance
Adoption of Topic 326 (1)
6 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.